Governor's Bill No. 35
February Session, 2014
LCO No. 567
Referred to Committee on PUBLIC HEALTH
SEN. WILLIAMS, 29th Dist.
SEN. LOONEY, 11th Dist.
REP. SHARKEY, 88th Dist.
REP. ARESIMOWICZ, 30th Dist.
AN ACT CONCERNING NOTICE OF ACQUISITIONS, JOINT VENTURES AND AFFILIATIONS OF GROUP MEDICAL PRACTICES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective October 1, 2014) (a) As used in this section:
(1) "Hospital" has the same meaning as provided in section 19a-490 of the general statutes;
(2) "Hospital system" means an organization or entity that owns one or more hospitals or is affiliated with one or more hospitals and has financial or administrative control over the hospitals and their operations;
(3) "Health care provider" has the same meaning as provided in section 19a-17b of the general statutes;
(4) "Physician" has the same meaning as provided in section 20-13a of the general statutes;
(5) "Person" has the same meaning as provided in section 35-25 of the general statutes;
(6) "Group practice" means two or more physicians, legally organized in a partnership, professional corporation, foundation, not-for-profit corporation, faculty practice plan, or similar association (A) in which each physician who is a member of the group provides substantially the full range of services which the physician routinely provides, including, but not limited to, medical care, consultation, diagnosis or treatment, through the joint use of shared office space, facilities, equipment or personnel; (B) for which substantially all of the services of the physicians who are members of the group are provided through the group and are billed in the name of the group and amounts so received are treated as receipts of the group; or (C) in which the overhead expenses of and the income from the practice are distributed in accordance with methods previously determined by members of the group. An entity that otherwise meets the definition of group practice under this section shall be considered a group practice although its shareholders, partners or owners of the group practice include single-physician professional corporations or other legal entities in which beneficial owners are individual physicians; and
(7) "Primary service area" means the smallest number of municipalities from which the group practice draws at least seventy-five per cent of its patients.
(b) At the same time that any person conducting business in this state that files merger, acquisition or any other information regarding market concentration with the Federal Trade Commission or the United States Department of Justice, in compliance with the Hart-Scott-Rodino Antitrust Improvements Act, 15 USC 18a, where a hospital or other health care provider is a party to the merger or acquisition that is the subject of such information, such persons shall provide written notification to the Attorney General of such filing and, upon the request of the Attorney General, provide a copy of such merger, acquisition or other information.
(c) Not less than ninety days prior to the effective date of any transaction that results in a material change to the business or corporate structure of a group practice, the parties to the transaction shall submit written notice to the Attorney General of such material change. For purposes of this subsection, a material change includes a group practice's: (1) Merger or other affiliation with a hospital or hospital system; (2) acquisition by a hospital or hospital system; (3) acquisition of one or more insolvent group practices; (4) merger with, or acquisition of, another group practice; and (5) formation of a partnership, joint venture, common entity, accountable care organization or parent corporation for the purpose of contracting on behalf of one or more group practices. The written notice required under this subsection shall identify each party to the transaction and describe the material change to the business or corporate structure of the group practice, including: (A) A description of the nature of the proposed relationship among the parties to the proposed transaction; (B) the names and specialties of each physician that intends to practice medicine with the resulting group practice; (C) the names of the business entities that are to provide services as part of the resulting group practice and the address for each location where such services are to be provided; (D) a description of the services to be provided at each such location; and (E) the primary service area to be served by each such location.
(d) Written information submitted to the Attorney General pursuant to subsections (b) and (c) of this section shall be maintained and used by the Attorney General in the same manner as provided in section 35-42 of the general statutes.
(e) Not later than December 31, 2014, and annually thereafter, each hospital and hospital system shall file with the Attorney General and the Commissioner of Public Health a written report describing the activities of the group practices owned or affiliated with such hospital or hospital system. Such report shall include, for each such group practice: (1) A description of the nature of the relationship between the hospital or hospital system and the group practice; (2) the names and specialties of each physician practicing medicine with the group practice; (3) the names of the business entities that provide services as part of the group practice and the address for each location where such services are provided; (4) a description of the services provided at each such location; and (5) the primary service area to be served by each such location.
This act shall take effect as follows and shall amend the following sections:
October 1, 2014
Statement of Purpose:
To implement the Governor's recommendations concerning notice of acquisitions, joint ventures and affiliations of group medical practices.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]