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©2014 R EID AND R IEGE, P.C. What is the Purpose? To provide information to the State Attorney General to assess whether proposed transactions violate state antitrust law. Establish regular reporting to better monitor competition.
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©2014 REID AND RIEGE, P.C.
New Connecticut Law Impacting Physician Practice
Acquisitions and MergersSeptember 24, 2014
By: Mindy S. Tompkins, Esq. REID AND RIEGE, P.C.
One Financial PlazaHartford, CT 06103
(860) [email protected]
©2014 REID AND RIEGE, P.C.
New Law = More Regulation for Physician Practices
Public Act 14-168Signed into law on June 3, 2014. Effective October 1, 2014, or earlier.
Three Areas Affecting Physician Practices:1.Required Notice of Physician Practice Mergers and Acquisitions2.New Certificate of Need Requirements for Certain Group Practice Transactions3.Annual Reporting for Certain Physician Practices
©2014 REID AND RIEGE, P.C.
What is the Purpose?
To provide information to the State Attorney General to assess whether proposed transactions violate state antitrust law.
Establish regular reporting to better monitor competition.
©2014 REID AND RIEGE, P.C.
Testimony of Attorney General George Jepsen, March 5, 2014:
Testimony Before the Public Health Committee on the Proposed Bill:“[The Bill] … provide[s] us with important information that will facilitate my legislative mandate to ensure that competitive health care markets are maintained in Connecticut.” “. . . more and more large health systems have acquired their competitors and moved on to buy up physician groups and freestanding clinics.” “. . . we know that for-profit hospitals are eager to expand their presence in the state – through acquisition of community hospitals and independent physician practices.”“These acquisitions and mergers . . . may lead to higher prices, fewer services, and lack of competition.”
©2014 REID AND RIEGE, P.C.
#1 Required Notice
Effective October 1, 2014 Requires 30 days prior written notice to the Attorney General Of a “material change to the business or corporate structure of a
Group Practice”, which includes:– Merger, consolidation or “other affiliation” – Acquisition of all of the assets or equity – Employment of all of the physicians of the group practice– Acquisition of one or more insolvent group practices – “Affiliation” is any relationship that permits joint negotiation of fees
That either:– Involves another Group Practice and results in a Group
Practice of 8 or more physicians, or– The other party is a hospital or entity controlled by a hospital
©2014 REID AND RIEGE, P.C.
Specific Notice Requirements
What is a “Group Practice”?– 2 or more Physicians– Legally organized and integrated practice
What is in the Notice?– Describe the transaction and “nature of the proposed
relationship”– Names and specialties of the physicians that are moving as
part of the deal – Name of entities providing services afterward– Address for each location where services will be provided – Describe services at each location– Primary Service Area served by each location
©2014 REID AND RIEGE, P.C.
#2 Certificate of Need Requirement
Effective July 1, 2014 Certificate of Need is required for a “Transfer of Ownership” of
a “Group Practice” to an entity other than a physician or group of physicians*
Group Practice = – 8 or more full time equivalent physicians– Legally organized and integrated practice
Transfer of Ownership – Transfer that impacts or changes the governance or controlling body
of the Group Practice – Includes “all affiliations, mergers or any sale or transfer of assets”
* Does not apply if agreement signed prior to September 1, 2014.
©2014 REID AND RIEGE, P.C.
New CON Criteria = More Scrutiny for Hospital Acquisitions OHCA will consider if applicant has demonstrated:
– Proposal will not negatively impact diversity of providers and patient choice in the geographic region, and
– Consolidation will not adversely affect health care costs or accessibility to care
BUT, presumption in favor of CON approval, if proposal resulted from:– RFP, or – “similar voluntary offer for sale”
Purpose? – Perhaps to control Facility Fees/Provider-Based Billing
©2014 REID AND RIEGE, P.C.
# 3 Annual Reporting Requirement
Who has to Report?– Group Practices with 30 or more physicians– Hospitals and Hospital Systems
What must be Reported?– Names and specialties of each physician in the group– Name of entities providing services as part of the group practice– Locations where services are provided and description of services
provided there – Primary Service Area of each location – Hospitals must also describe the nature of the relationship with the
Group Practice Where and When to File?
– File with Attorney General and Commissioner of Public Health– First report must be filed by December 31, 2014
©2014 REID AND RIEGE, P.C.
Questions?
©2014 REID AND RIEGE, P.C.
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