Illinois Legislature Passes Bill to Increase Healthcare Transaction Oversight

Arnall Golden Gregory LLP

The Illinois Legislature recently passed HB2222, new antitrust legislation that will require advance notice to the attorney general for “covered transactions” between healthcare facilities and healthcare provider entities. If signed by the Illinois governor, the legislation will amend the Illinois Antitrust Act and go into effect January 1, 2024.

“Covered transactions” are defined as “any merger, acquisition, or contracting affiliation between two or more healthcare facilities or provider organizations not previously under common ownership or contracting affiliations.” As defined by the proposed legislation, “healthcare facility” includes ambulatory surgical centers, an institution or agency required to be licensed under the Illinois Hospital License Act, a kidney disease treatment center, an institution or building used for outpatient surgical procedures leased, owned, or operated on behalf of an out-of-state facility, and an institution or building used for the provision of a healthcare category of service as defined under the Illinois Health Facilities Planning Act (such as cardiac catheterization and open heart surgery).

As proposed, HB2222 would require notice to the attorney general no later than 30 days prior to the covered transaction’s effective date or closing. To the extent the covered transaction is between an Illinois healthcare entity and an out-of-state entity (i.e., a facility or provider organization not headquartered in Illinois and that does not do business in Illinois), notice is required where the out-of-state entity generates $10,000,000 or more in annual revenue from patients within Illinois.

For transactions that require notice under the Hart-Scott-Rodino Act, the notice to attorney general is satisfied when the parties provide a copy of the filing to the attorney general. For transactions that do not meet the threshold requiring notice under the Hart-Scott-Rodino Act, notice to the attorney general can be accomplished by a change of ownership application to the Illinois Health Facilities and Services Review Board (if required) or providing a notice letter as described in the legislation. Failing to provide notice of a covered transaction can subject the parties to a civil penalty of up to $500 per day while in violation of the legislation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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