On March 24, 2023, the Illinois House of Representatives passed HB 2222. If passed by the Illinois Senate and signed by Illinois’ Governor, HB 2222 would amend the Illinois Antitrust Act (the Act) to add reporting requirements relating to “covered transactions” for healthcare facilities and provider organizations. HB 2222 is intended to go into effect on January 1, 2024.

The Act would prohibit certain anti-competitive trade practices within Illinois and provide the Illinois Attorney General (AG) with the authority to pursue criminal and civil violations of the Act. The intent behind HB 2222 is to establish a review process to assess a healthcare transaction’s impact on cost, quality and access to care. This follows a larger national trend by states to require healthcare entities to seek additional regulatory approval prior to undertaking changes of control or ownership or entering into affiliations with other entities.

Reporting Requirements Under HB 2222

Because there is no minimum transaction value included with the current draft of HB 2222, healthcare facilities and provider organizations subject to HB 2222 would be required to report all “covered transactions” to the AG. Specifically, HB 2222 would require thirty days’ prior notice to the AG of any merger, acquisition or contracting affiliation between two or more “healthcare facilities” or “provider organizations” if such entities were not previously under common ownership or contracting affiliation. “Covered transactions” also includes transactions between an Illinois healthcare entity and an out-of-state healthcare entity when the out-of-state entity generates $10 million or more in annual revenue from patients residing in Illinois.

HB 2222 defines “healthcare facilities” broadly to include the following:

• Ambulatory surgery treatment centers;
• Hospitals and other locations or operations licensed under the Hospital Licensing Act;
• Outpatient surgery centers;
• Kidney disease treatment centers; and
• Any other institution, place, building or room used for provision of healthcare category or services defined under the Illinois Health Facilities Planning Act (HFPA), including cardiac catheterization and open-heart surgery.

HB 2222 defines a “contracting affiliation” as the formation of a relationship between two or more entities that permits the entities to negotiate jointly with health carriers or third-party administrators over rates for professional medical services, or permits one entity to negotiate on behalf of the other entity with health carriers or third-party administrators over rates for professional medical services. Arrangements among entities under common ownership are not included within the definition of “contracting affiliation.”

If signed into law, HB 2222 would require the following:

• If any healthcare facility or provider organization is a party to a covered transaction and files a premerger notification to the federal antitrust enforcement agencies in compliance with the Hart-Scott-Rodino Act (HSR), such healthcare facility or provider organization must simultaneously provide a copy of such filing to the AG.
• If a transaction is not covered by HSR, a healthcare facility or provider organization would file an application for a change of ownership with the Illinois Health Facilities and Services Review Board (Review Board) in compliance with the HFPA. Upon review, the Review Board would provide a copy of the filing to the AG.
• If any healthcare facility or provider organization is party to a transaction that does not require a filing under HSR or a change of ownership filing with the Review Board, such entity would be required to provide written notice to the AG with the following information:
  • The names of the parties and their current business addresses;
  • Identification of all locations where healthcare services are currently provided by each party;
  • A brief description of the nature and purpose of the proposed transaction; and
  • The anticipated effective date of the proposed transaction.

Upon review, the AG may request additional information from the healthcare facility or provider organization within thirty days of receiving notice of the covered transaction. If the AG requires additional information from the healthcare facility or provider organization, the covered transaction may not proceed until thirty days after the parties have substantially complied with the request.

Penalties for Failure to Comply with HB 2222

If a healthcare facility or provider organization fails to (1) comply with the notice requirements of HB 2222 or (2) provide responses to the AG’s requests for additional information, such entity would be subject to a $500 penalty for each day in violation, after a ten-day cure period. The AG would also have the right to seek a temporary restraining order or injunctive relief to prevent the organization from continuing noncompliance with HB 2222.

The Health Facilities Planning Act

HB 2222 would also amend the HFPA to add a requirement for notice for change of ownership of a healthcare facility. The proposed legislation would require that, upon the Review Board’s finding that an application for a change of ownership is complete, notice of the same be delivered to the AG in the same manner and at the same time as notice of such transactions is delivered to other stakeholders and posted to the Review Board’s website.

Conclusion

If enacted, Illinois would join California, Connecticut, Massachusetts, Nevada, Oregon, and Washington in requiring pre-approval of healthcare transactions within their respective states. While the Illinois AG currently has authority to investigate transactions and pursue criminal and civil violations of the Act, under HB 2222, the AG would receive notice of covered transactions and have the opportunity to investigate healthcare transactions that have previously not been subject to advance review and reporting requirements.