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hb905_00_IN
As Introduced
136th
General Assembly
Regular
Session
H. B. No. 905
2025-2026
Representative Somani
Cosponsors: Representatives Brennan,
Piccolantonio, Rader, Upchurch
To
enact sections 3962.01, 3962.02, 3962.03, 3962.04, 3962.05, 3962.06,
3962.07, 3962.08, 3962.09, 3962.10, 3962.11, and 3962.12 of the
Revised Code
to
prohibit various types of health care entities from being under
common ownership.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 3962.01, 3962.02, 3962.03, 3962.04, 3962.05, 3962.06,
3962.07, 3962.08, 3962.09, 3962.10, 3962.11, and 3962.12 of the
Revised Code be enacted to read as follows:
Sec.
3962.01.
As
used in this section:
(A)
"Health plan issuer" has the same meaning as in section
3922.01 of the Revised Code.
(B)
"Health care provider" means any of the following:
(1)
A hospital licensed under Chapter 3722. of the Revised Code;
(2)
An ambulatory surgical facility or freestanding inpatient
rehabilitation facility licensed under section 3702.30 of the Revised
Code;
(3)
A business entity consisting of physicians licensed under Chapter
4731. of the Revised Code to practice medicine and surgery or
osteopathic medicine and surgery;
(4)
An inpatient or outpatient pharmacy licensed as a terminal
distributor of dangerous drugs under Chapter 4729. of the Revised
Code;
(5)
A home health agency licensed under Chapter 3740. of the Revised
Code;
(6)
Any other entity that has been assigned a national provider
identifier by the national provider system under 45 C.F.R. 162.408.
(C)
"Management services organization" means an entity that has
entered into an agreement with a provider to furnish services to that
provider, including services relating to payroll, human resources,
employment screening, payer contracting, billing and collection,
coding, information technology services, patient scheduling, property
or equipment leasing, and administrative or business services that do
not constitute the practice of medicine.
(D)
"Pharmacy benefit manager" has the same meaning as in
section 3959.01 of the Revised Code.
(E)
"Wholesale distributor of dangerous drugs" means a person
licensed as such under section 4729.52 of the Revised Code.
(F)
"Wholesale distributor of medical devices" means a person
engaged in the sale at wholesale of devices, as defined in section
3715.01 of the Revised Code.
Sec.
3962.02.
Except
as provided in sections 3962.03 and 3962.04 of the Revised Code, both
of the following apply:
(A)
A person shall not simultaneously own entities that are included in
both of the following categories, whether the ownership occurs
directly or indirectly or in whole or in part:
(1)
A health plan issuer or pharmacy benefit manager;
(2)
A health care provider or management services organization.
(B)
A person shall not simultaneously own entities that are included in
both of the following categories, whether the ownership occurs
directly or indirectly or in whole or in part:
(1)
A wholesale distributor of dangerous drugs or wholesale distributor
of medical devices;
(2)
A health care provider or management services organization.
Sec.
3962.03.
Section
3962.02 of the Revised Code does not prohibit a person from operating
in this state and owning entities in a manner that constitutes a
violation of either division (A) or (B) of that section as long as
the person and the entities under the person's ownership provide
services only to or on behalf of persons located outside of this
state.
Sec.
3962.04.
(A)
A person that is in violation of division (A) or (B) of section
3962.02 of the Revised Code on the effective date of this section may
continue to operate in this state and own entities in a manner that
constitutes a violation, but the person shall do either of the
following:
(1)
Not later than one year after the effective date of this section,
divest all entities that cause the person to be in violation;
(2)
Not later than two years after the effective date of this section,
cease providing all services to or on behalf of persons within this
state.
(B)
If a person elects to act under division (A)(2) of this section, the
period before the deadline under that division takes effect shall be
used by the person to take actions necessary to fulfill obligations
under contracts in effect on the effective date of this section and
shall engage in other activities necessary to wind up the person's
business affairs regarding services to or on behalf of persons within
this state.
Sec.
3962.05.
(A)
Not later than thirty days after the effective date of this section,
the secretary of state, through the business services division of the
office of the secretary of state, shall develop guidelines for
persons to follow in complying with section 3962.04 of the Revised
Code. The guidelines shall specify milestones for divestment and
milestones for cessation of services.
(B)
In developing guidelines under division (A) of this section, the
secretary of state and business services division shall collaborate
with, and seek the advice of, all of the following whenever
appropriate: the attorney general, auditor of state, department of
insurance, department of medicaid, department of health, department
of taxation, and state board of pharmacy.
Sec.
3962.06.
A
person described in section 3962.04 of the Revised Code shall not
fail to meet the milestones specified in the guidelines established
under section 3962.05 of the Revised Code.
Sec.
3962.07.
A
person that violates section 3962.06 of the Revised Code is subject
to the same type of civil action described in section 3962.08 of the
Revised Code, except that in the case of an order to disgorge
profits, all of the following apply:
(A)
The amount shall be calculated monthly at a rate of twenty per cent
of the person's profits attained during the immediately preceding
month from providing services to persons in this state.
(B)
The amount collected shall be deposited to the credit of the health
care conglomerate separation fund created under section 3962.12 of
the Revised Code.
(C)
The amount collected shall be returned to the person if the person
meets the deadline that applies under division (A)(1) or (2) of
section 3962.04 of the Revised Code.
Sec.
3962.08.
(A)
If there is reason to believe that a person is in violation of
section 3962.02 of the Revised Code, and except in the circumstances
described in division (A) of section 3962.04 of the Revised Code, the
attorney general may bring a civil action against the alleged
violator in a court of competent jurisdiction. The attorney general
may bring the action in either of the following circumstances:
(1)
While acting on behalf of the residents of this state;
(2)
While acting at the request of the secretary of state, auditor of
state, department of insurance, department of medicaid, department of
health, department of taxation, or state board of pharmacy.
(B)
On a finding that a person is in violation of section 3962.02 of the
Revised Code, the court may do any of the following:
(1)
Issue an order enjoining the person from continuing the violation;
(2)
Issue an order requiring the person to disgorge profits attained from
providing services to residents of this state;
(3)
Grant any other equitable relief that the court considers appropriate
to redress and prevent recurrence of the violation.
(C)
Amounts collected through an order issued under division (B)(2) of
this section shall be deposited into the state treasury to the credit
of the health care conglomerate separation fund created by section
3962.12 of the Revised Code.
Sec.
3962.09.
(A)
Except as provided in division (B) of this section, an individual has
a cause of action against a person that violates section 3962.02 of
the Revised Code for harm to the individual resulting from the
violation. If a court finds that a violation has occurred and that
harm has resulted, the court shall award damages and grant injunctive
or other equitable relief.
(B)
This section does not create a cause of action against a person
described in section 3962.04 of the Revised Code unless the person
fails to meet the deadline that applies to the action the person
elects to take under division (A)(1) or (2) of section 3962.04 of the
Revised Code.
Sec.
3962.10.
If
the attorney general has reason to believe that a person is in the
process of creating ownership interests that will result in a
violation of section 3962.02 of the Revised Code, the attorney
general may file a petition in a court of competent jurisdiction for
an order enjoining the person from continuing that process. On a
finding that the person's actions will result in the violation, the
court shall issue the requested order.
Sec.
3962.11.
In
addition to any other authority granted by the Revised Code, the
department of insurance, department of medicaid, department of
health, and state board of pharmacy may oversee and investigate any
person for an alleged violation of section 3962.02 of the Revised
Code to the extent that the violation involves matters that are
within the jurisdiction of the particular department or the board. In
so doing, the departments and board may collaborate with or seek
assistance from the attorney general, auditor of state, secretary of
state, and other state officers or agencies.
Sec.
3962.12.
(A)
The health care conglomerate separation fund is created, which shall
be in the custody of the treasurer of state but shall not be part of
the state treasury. The fund shall consist of all money collected
from disgorgement orders issued under sections 3962.07 and 3962.08 of
the Revised Code.
(B)
The treasurer of state shall use the money in the fund only for the
following:
(1)
Returning amounts in accordance with division (C) of section 3962.07
of the Revised Code;
(2)
Distributing amounts, as directed by the general assembly, to state
officers and agencies for their use in enforcing this chapter, with
each amount to be allocated according to the state officer or agency
that has jurisdiction over the activity that resulted in the
disgorgement order.
Section
2.
(A)
Not later than fifteen months after the effective date of this
section, the Secretary of State, through the Business Services
Division of the Office of the Secretary of State, shall prepare a
report regarding the impact of the prohibitions established under
section 3962.02 of the Revised Code. In preparing the report, the
Secretary of State and the Business Services Division shall
collaborate with, and seek the advice of, all of the following
whenever appropriate: the Attorney General, Auditor of State,
Department of Insurance, Department of Medicaid, Department of
Health, Department of Taxation, and State Board of Pharmacy.
(B)
The report shall include all of the following information:
(1)
The identities of the persons that, on the effective date of this
section, are subject to the prohibitions established under section
3962.02 of the Revised Code;
(2)
The identities of the entities owned by the persons described in
division (B)(1) of this section;
(3)
Whether the persons described in division (B)(1) of this section
chose divestiture under division (A)(1) of section 3962.04 of the
Revised Code or cessation of services under division (A)(2) of that
section;
(4)
An evaluation of the effect of the required divestitures or cessation
of services on competition within the health care system, the
financial viability of the persons involved, and the interests of the
public;
(5)
Any other information the Secretary of State considers relevant to
the report.
(C)
On completion of the report, the Secretary of State shall submit
copies to the General Assembly in accordance with section 101.68 of
the Revised Code. The Secretary of State also shall make the report
available to the public.