An Act amending the act of July 19, 1979 (P.L.130, No.48), known as the Health Care Facilities Act, providing for Attorney General notification; and promulgating regulations.

PRINTER'S NO. 807
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 708
Session of
2025
INTRODUCED BY BROOKS, KEEFER, FONTANA, HUTCHINSON, BAKER, DUSH
AND MASTRIANO, MAY 16, 2025
REFERRED TO INSTITUTIONAL SUSTAINABILITY AND INNOVATION,
MAY 16, 2025
AN ACT
Amending the act of July 19, 1979 (P.L.130, No.48), entitled "An
act relating to health care; prescribing the powers and
duties of the Department of Health; establishing and
providing the powers and duties of the State Health
Coordinating Council, health systems agencies and Health Care
Policy Board in the Department of Health, and State Health
Facility Hearing Board in the Department of Justice;
providing for certification of need of health care providers
and prescribing penalties," providing for Attorney General
notification; and promulgating regulations.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of July 19, 1979 (P.L.130, No.48), known
as the Health Care Facilities Act, is amended by adding a
chapter to read:
CHAPTER 8-D
ATTORNEY GENERAL NOTIFICATION
Section 801-D. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Acquired entity." The entity, or portion of an entity,
acquired under an agreement or transaction.
"Acquisition." An agreement, arrangement or activity the
consummation of which results in a health care facility
acquiring direct or indirect control of another health care
facility . The term includes the acquisition of voting securities
and noncorporate interests, including assets, capital stock or
membership interests or equity interests.
"Against the public interest." A determination that an
action is against the welfare or well-being of the general
public of this Commonwealth.
"Agreement or transaction." An agreement or transaction as
described under section 803-D(a).
"Attorney General." The Office of Attorney General of the
Commonwealth.
"Capital distribution." A payment made, liability incurred
or other consideration given by a target firm health system to a
health care facility for the purchase, acquisition, redemption,
repurchase, payment or retirement of capital stock or other
equity interest of the target firm health system or as a
dividend, return of capital or other distribution in respect of
the target firm health system's capital stock or other equity
interest.
"Community health needs assessment." An assessment that
complies with the requirements of 26 U.S.C. § 501(r)(3)
(relating to exemption from tax on corporations, certain trusts,
etc.).
"Contracting affiliation." As follows:
(1) The formation of a relationship between two or more
entities that permits any of the following:
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(i) The entities to negotiate jointly with carriers
or third-party administrators over rates for professional
medical services.
(ii) One entity to negotiate on behalf of the other
entity with carriers or third-party administrators over
rates for professional medical services.
(2) The term does not include an arrangement among
entities under common ownership.
"Health care facility." As defined in section 103.
"Health system." As defined in section 809.2.
"Material amount." An amount of the purchase price paid or
total gross assets being acquired, whichever is higher, of:
(1) $10,000,000 in a solo transaction; or
(2) $35,000,000 in the aggregate during one calendar
year.
"Material change." Any of the following:
(1) The sale, transfer, lease or other encumbrance of a
material amount of a health system's assets or operations,
including real property, employment groups, emergency
departments or other units.
(2) A merger, an acquisition or a contracting
affiliation with another health system that is valued at a
material amount.
(3) A capital distribution or similar reduction of a
health system's equity capital by a material amount or the
incursion of an obligation that commits the health system to
making a capital distribution or similar reduction of equity
by a material amount.
"Merger." A consolidation of two or more organizations,
including two or more organizations joining through a common
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parent organization, or two or more organizations forming a new
organization. The term does not include a corporate
reorganization.
"Person." As defined in 1 Pa.C.S. § 1991 (relating to
definitions).
Section 802-D. Notification .
(a) General rule.--Except as provided under subsection (b),
a person may not enter into an agreement or transaction
involving a material change with another health care facility
unless the first health care facility complies with the
notification requirements under this chapter.
(b) Exception.--An action prohibited under subsection (a)
may be permitted when, as determined by the Attorney General,
there is no feasible alternative to prevent a health system's
closure or a greater loss of health services.
Section 803-D. Filing.
(a) Duty to file.--A health care facility shall file a
notification in accordance with subsection (b) prior to entering
into an agreement or transaction that results in a material
change.
(b) Waiting period.--A health system or provider
organization shall undergo a waiting period prior to entering
into an agreement or transaction, which shall:
(1) begin on the date of receipt by the Attorney General
of:
(i) the notification required under subsection (c);
or
(ii) if notification is not completed, the
notification to the extent completed and a statement of
the reasons for noncompliance with subsection (c) from
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both persons; and
(2) end:
(i) forty-five days following the date of receipt
under paragraph (1) for all agreements or transactions;
or
(ii) on a later date if extended as prescribed under
section 806-D(2) .
(c) Notice.--The notification of the transaction or
agreement required under subsection (a) shall be submitted to
the Attorney General on a form and in a manner developed by the
Attorney General. The notification shall include all of the
information required under 15 U.S.C. § 18a (relating to
premerger notification and waiting period) and regulations
promulgated under the law.
(d) Additional information.--The Attorney General may
require the submission of additional information or documentary
material, including a community health needs assessment, from a
health care facility required to file notification under
subsection (b) , or from any officer, director, partner, agent or
employee of the health care facility .
(e) Right-to-Know Law.-- A document provided to the Attorney
General under this chapter shall be exempt from inspection and
copying under the act of February 14, 2008 (P.L.6, No.3), known
as the Right-to-Know Law.
(f) Confidentiality of and restrictions on use of
materials.--The Attorney General may not use, as grounds for a
prosecution or civil action unrelated to the transaction,
materials provided to or disclosed under this act to the
Attorney General.
Section 804-D. Public hearings and notice.
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(a) Authority to conduct.-- Prior to the expiration of the
respective waiting period under Federal law, along with any
extension granted under Federal law, the Attorney General may
conduct one or more public hearings on the proposed agreement or
transaction.
(b) Format.--A public hearing under subsection (a) shall be
live-streamed on the Attorney General's publicly accessible
Internet website. A video recording of the public hearing shall
be posted on the Attorney General's publicly accessible Internet
website.
(c) Specific entities.--If an agreement or transaction
involves acquiring a health care facility , the Attorney General
may hold a public hearing in any county in which the acquired
entity is located to hear comments from interested parties.
Interested parties shall include legal aid and health advocacy
organizations within a county in which the acquired entity is
located. The Attorney General may request testimony at a hearing
from State agencies subject to section 807-D(b).
(d) Notice.-- The Attorney General shall provide written
notice of the date, time and place of the public hearing:
(1) on the Attorney General's publicly accessible
Internet website;
(2) through social and broadcast media;
(3) through publication in one or more newspapers of
general circulation in the affected community; and
(4) to the governing body of each county in which the
acquired entity is located.
(e) Substantive changes to proposal.--If a substantive
change in the agreement or transaction is submitted to the
Attorney General after the initial public hearing, the Attorney
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General may conduct an additional public hearing to hear
comments from interested parties with respect to the change.
Section 805-D. Determination and restraining prohibited
transactions.
(a) Material change against public interest.-- The Attorney
General shall determine whether the proposed agreement or
transaction is likely to create a material change that is
against the public interest.
(b) Action.--If the Attorney General determines that the
proposed agreement or transaction is against the public interest
under subsection (a), the Attorney General may commence an
action in a court of competent jurisdiction to enjoin the
agreement or transaction.
(c) Licensing.--A State license of a health care facility
may not be revoked, denied, impeded or cited for noncompliance
due solely to a filing or review under this chapter.
Section 806-D. Compliance and power of court.
A health care facility , or any officer, director, partner,
agent or employee of the health care facility , that
substantially fails to comply with the notification requirement
under this chapter or any request for the submission of
additional information or documentary material under this
chapter within the respective waiting period, the court may, in
its discretion, do any or all of the following:
(1) Order compliance.
(2) Extend the waiting period until there has been
substantial compliance.
(3) Grant other equitable relief as the court determines
necessary or appropriate.
Section 807-D. Powers and duties of Attorney General.
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(a) Rules and regulations.--The Attorney General, in
consultation with the department, shall adopt and promulgate
rules and regulations as may be necessary to carry out and
enfor ce th is chapter. The Attorney General and the department
shall ensure that the rules and regulations of the Office of
Attorney General and the department are not in conflict.
(b) Agency cooperation.--
(1) T he department, the Department of Aging, the
Department of Human Services and the Insurance Department
shall assist the Attorney General in reviewing the proposed
agreement and transaction, if requested, and shall promptly
comply with any request for testimony or information.
(2) The Attorney General may share information with the
Insurance Department as may be permissibly necessary and
appropriate for the Insurance Department to concurrently
review a proposed transaction under Article XIV of the act of
May 17, 1921 (P.L.682, No.284), known as The Insurance
Company Law of 1921. Documents provided by the Attorney
General to the Insurance Department under this paragraph
shall be treated as confidential and are not public records
subject to inspection and copying under the act of February
14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.
Section 808-D. Nonapplicability.
This chapter does not apply to a physician or psychiatric
practice, whether a sole proprietorship, partnership, foundation
or corporate entity of any kind.
Section 809-D. Expiration.
This act shall expire four years after the effective date of
this section.
Section 810-D. Study and report by Health Care Cost Containment
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Council.
Within three years of the effective date of this section, the
Health Care Cost Containment Council, as authorized under 35
Pa.C.S. § 3309 (relating to special studies and reports), shall
perform a study on the effects of this chapter and shall report
its findings to the chairperson and minority chairperson of the
Health and Human Services Committee of the Senate and the
chairperson and minority chairperson of the Health Committee of
the House of Representatives.
Section 811-D . Construction.
This chapter shall not be construed to:
(1) narrow, abrogate or otherwise alter the authority of
the Attorney General to maintain competitive markets and
prosecute or enforce violations of antitrust and unfair trade
practices laws; or
(2) prohibit any Federal agency, Commonwealth agency or
other state agency from regulating an agreement or
transaction or joining as party in an action seeking to
enjoin an agreement or transaction , including the Insurance
Department's jurisdiction to review an exposed transaction
under Article XIV of the act of May 17, 1921 (P.L.682,
No.284), known as The Insurance Company Law of 1921.
Section 812 -D . Severability.
The provisions of this chapter are severable. If any
provision of this chapter or its application to any health care
facility or circumstance is held invalid, the invalidity shall
not affect other provisions or applications of this chapter
which can be given effect without the invalid provision or
application.
Section 2. This act shall take effect in 180 days.
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