SB1998 104TH GENERAL ASSEMBLY

LRB104 09783 JRC 19849 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1998

Introduced 2/6/2025, by Sen. Graciela Guzmán

SYNOPSIS AS INTRODUCED:

740 ILCS 10/7.2a

Amends the Illinois Antitrust Act. Requires the Attorney General to consent to covered transactions of health care facilities before a covered transaction may take effect.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Antitrust Act is amended by changing Section 7.2a as follows:

(740 ILCS 10/7.2a)

(Section scheduled to be repealed on January 1, 2027)

Sec. 7.2a. Notification to the Attorney General.

(a) As used in this Section:

"Acquisition" means an agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person. "Acquisition" includes the acquisition of voting securities and noncorporate interests, such as assets, capital stock, membership interests, or equity interests.

"Contracting affiliation" means the formation of a relationship between 2 or more entities that permits the entities to negotiate jointly with health carriers or third-party administrators over rates for professional medical services, or for one entity to negotiate on behalf of the other entity with health carriers or third-party administrators over rates for professional medical services. "Contracting affiliation" does not include arrangements among entities under common ownership.

"Covered transaction" means any merger, acquisition, or contracting affiliation between 2 or more health care facilities or provider organizations not previously under common ownership or contracting affiliation.

"Health care facility" means the following facilities, organizations, and related persons:

(1) An ambulatory surgical treatment center required to be licensed under the Ambulatory Surgical Treatment Center Act.

(2) An institution, place, building, or agency required to be licensed under the Hospital Licensing Act.

(3) A hospital, ambulatory surgical treatment center, or kidney disease treatment center maintained by the State or any department or agency thereof.

(4) A kidney disease treatment center, including a free-standing hemodialysis unit required to meet the requirements of 42 CFR 494 in order to be certified for participation in Medicare and Medicaid under Titles XVIII and XIX of the federal Social Security Act of 1935.

(5) An institution, place, building, or room used for the performance of outpatient surgical procedures that is leased, owned, or operated by or on behalf of an out-of-state facility.

(6) An institution, place, building, or room used for provision of a health care category of service, as defined under the Illinois Health Facilities Planning Act, including, but not limited to, cardiac catheterization and open heart surgery.

With the exception of those health care facilities specifically included in this Section, nothing in this Section shall be intended to include facilities operated as a part of the practice of a physician or other licensed health care professional, whether practicing in his or her individual capacity or within the legal structure of any partnership, medical or professional corporation, or unincorporated medical or professional group. Further, this Section shall not apply to physicians or other licensed health care professional's practices where such practices are carried out in a portion of a health care facility under contract with such health care facility by a physician or by other licensed health care professionals, whether practicing in his or her individual capacity or within the legal structure of any partnership, medical or professional corporation, or unincorporated medical or professional groups, unless the entity constructs, modifies, or establishes a health care facility as specifically defined in this Section.

"Health care services revenue" means the total revenue received for health care services in the previous 12 months.

"Health carriers" has the meaning given to that term in Section 10 of the Health Carrier External Review Act.

"Hedge fund" means a pool of funds managed by investors for the purpose of earning a return on those funds, regardless of the strategies used to manage the funds. "Hedge fund" includes, but is not limited to, a pool of funds managed or controlled by private limited partnerships. "Hedge fund" does not include:

(1) Natural persons or other entities that contribute, or promise to contribute, funds to the hedge fund, but otherwise do not participate in the management of the hedge fund or the fund's assets, or in any change in control of the hedge fund or the fund's assets.

(2) Entities that solely provide or manage debt financing secured in whole or in part by the assets of a health care facility, including, but not limited to, banks and credit unions, commercial real estate lenders, bond underwriters, and trustees.

"Illinois health care entity" means a health care facility or provider organization that has an office in or is doing business in this State.

"Merger" means the consolidation of 2 or more organizations, including 2 or more organizations joining through a common parent organization or 2 or more organizations forming a new organization, but does not include a corporate reorganization.

"Out-of-state health care entity" means a health care facility or provider organization that is not headquartered in this State and does not do business in this State.

"Private equity group" means an investor or group of investors who primarily engage in the raising or returning of capital and who invests, develops, or disposes of specified assets. "Private equity group" does not include natural persons or other entities that contribute or promise to contribute funds to the private equity group, but otherwise do not participate in the management of the private equity group or the group's assets, or in any change in control of the private equity group or the group's assets manner, including, but not limited to, lease, transfer, exchange, option, receipt of a conveyance, creation of a joint venture, or any other manner of purchase, by a private equity group or hedge fund of a material amount of the assets or operations, or a change of control, of a health care facility in this State.

"Provider organization" means a corporation, partnership, business trust, association, or organized group of persons, whether incorporated or not, which is in the business of health care delivery or management and that represents 20 or more health care providers in contracting with health carriers or third-party administrators for the payment of health care services. "Provider organization" includes physician organizations, physician-hospital organizations, independent practice associations, provider networks, and accountable care organizations.

"Third-party administrator" means an entity that administers payments for health care services on behalf of a client in exchange for an administrative fee.

(b) Health care facilities or provider organizations that are party to a covered transaction shall provide notice of such transaction to the Attorney General no later than 30 days prior to the transaction closing or effective date of the transaction.

Covered transactions between an Illinois health care entity and an out-of-state health care entity must provide notice under this subsection where the out-of-state entity generates $10,000,000 or more in annual revenue from patients residing in this State.

(c) The written notice provided by the parties under subsection (b) shall be provided as follows:

(1) For any health care facility or provider organization that is a party to a covered transaction and files a premerger notification with the Federal Trade Commission or the United States Department of Justice, in compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, the notice requirement is satisfied by providing a copy of such filing to the Attorney General at the same time as it is provided to the federal government.

(2) For any health care facility that is a party to a covered transaction that is not described in paragraph (1), the notice requirement is satisfied when the healthcare facility files an application for a change of ownership with the Health Facilities and Services Review Board, in compliance with the Illinois Health Facilities Planning Act. The Health Facilities and Services Review Board shall provide a copy of such filing to the Attorney General at the same time as it is provided to the applicable State legislators under subsection (a) of Section 8.5 of the Illinois Health Facilities Planning Act.

(3) For any health care facility or provider organization that is a party to a covered transaction that is not described in paragraph (1) or (2), written notice provided by the parties must include:

(A) the names of the parties and their current business address;

(B) identification of all locations where health care services are currently provided by each party;

(C) a brief description of the nature and purpose of the proposed transaction; and

(D) the anticipated effective date of the proposed transaction.

Nothing in this subsection prohibits the parties to a covered transaction from voluntarily providing additional information to the Attorney General.

(d) The Attorney General may make any requests for additional information from the parties that is relevant to its investigation of the covered transaction within 30 days of the date notice is received under subsections (b) and (c). If the Attorney General requests additional information, the covered transaction may not proceed until 30 days after the parties have substantially complied with the request. Any subsequent request for additional information by the Attorney General shall not further delay the covered transaction from proceeding. Nothing in this Section precludes the Attorney General from conducting an investigation or enforcing State or federal antitrust laws at a later date.

(d-1) The Attorney General must provide written consent to a covered transaction before it may take effect if a private equity group or hedge fund provides any financing to the covered transaction.

(e) Any health care facility or provider organization that fails to comply with any provision of this Section is subject to a civil penalty of not more than $500 per day for each day during which the health care facility or provider organization is in violation of this Section.

Whenever the Attorney General has reason to believe that a health care facility or provider organization has engaged in or is engaging in a covered transaction without complying with the provisions of this Section, the Attorney General may apply for and obtain, in an action in the Circuit Court of Sangamon or Cook County, a temporary restraining order or injunction, or both, prohibiting the health care facility or provider organization from continuing its noncompliance or doing any act in furtherance thereof. The court may make such further orders or judgments, at law or in equity, as may be necessary to remedy such noncompliance.

Before bringing such an action or seeking to recover a civil penalty, the Attorney General shall permit the health care facility or provider organization to come into compliance with this Section within 10 days of being notified of its alleged noncompliance. The right to cure noncompliance does not exist on or after the covered transaction's proposed or actual closing date of the covered transaction, whichever is sooner.

(f) This Section is repealed on January 1, 2027.

(Source: P.A. 103-526, eff. 1-1-24.)