An Act to Improve State Oversight of Proposed Health Care Entity Transactions
Maine Legislature, Session 131, LD 1399
Committee: Health and Human Services
Sponsors: MORRIS, GATTINE
Amends: 5 MRSA §194-L

Legislative Document
No. 1399
H.P. 894
House of Representatives, March 28, 2023
An Act to Improve State Oversight of Proposed Health Care Entity 
Transactions
Reference to the Committee on Health and Human Services suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MORRIS of Turner.
Cosponsored by Representative: GATTINE of Westbrook.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §194-L is enacted to read:
§194-L.  Oversight of health care entity transactions
This section governs material change transactions entered into by health care entities. 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Acquisition" means the direct or indirect purchase of a material amount of the 
assets or operations of a health care entity, including, but not limited to, a lease, 
transfer, exchange, receipt of conveyance, creation of a joint venture or other manner 
of purchase by another health care entity, a private equity group or a hedge fund.
B.  "Health care entity" means a health care provider, health care facility or provider 
organization.
C.  "Health care facility" means a licensed institution providing health care services or 
a health care setting, including, but not limited to, a hospital or other inpatient facility, 
an ambulatory surgery facility, a treatment center, a skilled nursing facility, a 
diagnostic facility, a residential treatment center, a medical laboratory and imaging 
center, a freestanding emergency facility, an outpatient clinic, a rehabilitation center 
and any other therapeutic health care setting.
D.  "Health care provider" means any person, corporation, partnership, governmental 
unit, state institution or any other entity qualified or licensed under state law to perform 
or provide health care services.
E.  "Health care services" means services, care or supplies used to treat issues related 
to medical health, behavioral health, mental health and substance use disorder and 
includes services that are surgical, optometric, dental, podiatric, chiropractic, 
psychiatric, therapeutic, diagnostic, preventative, rehabilitative, supportive or geriatric.
F.  "Material change transaction" means any combination of the following, occurring 
during a single transaction or in a series of related transactions involving the same 
health care entity within a 12-month period:
(1) A corporate merger including one or more health care entities;
(2) An acquisition of one or more health care entities;
(3) Any affiliation, arrangement or contract that results in a change of control over 
a health care entity. As used in this subparagraph, "change of control" means an 
arrangement in which any person, corporation, partnership or other entity acquires 
direct or indirect control over the operations of a health care facility or health care 
entity in whole or in substantial part, and "arrangement" includes any agreement, 
association, partnership or joint venture that results in a change of governance or 
control over a health care facility or health care entity;
(4) The formation of a partnership, joint venture, accountable care organization, 
parent organization or management services organization for the purpose of 
administering contracts with carriers, 3rd-party administrators, pharmacy benefits 
managers or providers; or
(5) A sale, purchase, lease or affiliation that results in a transfer of control over a 
board of directors for a hospital;
"Material change transaction" does not include a clinical affiliation of health care 
entities formed for the purpose of collaborating on clinical trials, graduate or medical 
education programs or the hiring of, or offer of employment to, a physician.
G. "Proprietary information" means information that is a trade secret or production, 
commercial or financial information the disclosure of which would impair the 
competitive position of the health care entity or person submitting the information and 
would make available information not otherwise publicly available.
H. "Provider organization" means any corporation, partnership, business trust, 
association or organized group of persons that is in the business of health care delivery 
or management, and that represents one or more health care providers in contracting 
with insurance carriers for the payments of health care services. A provider 
organization includes, but is not limited to, physician organizations, physician-hospital 
organizations, independent practice associations, provider networks, accountable care 
organizations and any other organization that contracts with carriers for payment for 
health care services.
I. "Significant power over the health care market" means that a single entity possesses 
30% or more of the market share for any health care service in the geographic region 
where it is located. The Attorney General may adopt rules establishing additional 
criteria that the Attorney General may use to evaluate whether a health care entity has 
significant power over the health care market.
2.  Prohibition.  A health care entity may not enter into a material change transaction 
unless the transaction is approved by the Attorney General through the process established 
under this section.
3.  Notice required.  A health care entity shall provide written notice to the Attorney 
General of its intent to enter into a material change transaction at least 60 days prior to 
making any commitment to enter into the material change transaction. Written notice under 
this subsection must include, at a minimum, any information related to the material change 
transaction required by the Attorney General by rule. Within 10 days of receiving written 
notice of a material change transaction, the Attorney General shall post on the Office of the 
Attorney General's publicly accessible website the following information:
A.  A summary of the proposed material change transaction;
B.  An explanation of the groups or individuals likely to be affected by the transaction;
C.  Information about health care services currently provided by the health care entity, 
any commitments by the health care entity to continue providing those services after 
the material change transaction and any services that will be reduced or eliminated as 
a result of the material change transaction;
D.  A copy of the written notice and accompanying materials that were submitted to 
the Attorney General under this subsection, except for materials that are confidential 
under subsection 10 and any materials that the Attorney General determines may cause 
harm to the public by being posted; and
E.  The time and location of any public hearing under subsection 5, paragraph A or 
other opportunity for the public to provide comments regarding the material change 
transaction, and instructions for how the public may participate.
4.  Preliminary review.  Within 30 days of receiving written notice under subsection 
3, the Attorney General shall provide written notice to the health care entity that the 
Attorney General has:
A.  Approved the material change transaction and determined that a comprehensive 
review of the transaction is not required;
B.  Approved the material change transaction subject to compliance with specific 
conditions established by the Attorney General, under which the transaction may be 
completed without a comprehensive review of the transaction; or
C.  Determined that the material change transaction is subject to comprehensive review 
under subsection 5 because: 
(1) It will result in the transfer of assets valued at more than $2,000,000;
(2) It will occur in a market that is highly consolidated with regard to any of the 
health care services offered by a party to the material change transaction;
(3) It will result in a significant change in the market share for health care services, 
such that any resulting health care entity will possess significant power over the 
health care market in its region;
(4) A party to the material change transaction already possesses significant power 
over the health care market in its region; or
(5) The Attorney General determines that the material change transaction is likely 
to have a material impact on the cost, quality or access to health care services in 
any region of the State.
5.  Comprehensive review.  Within 30 days of providing notice under subsection 4, 
paragraph C, that a material change transaction is subject to comprehensive review, the 
Attorney General shall:
A.  Hold at least one public hearing to solicit public comment on the material change 
transaction in the county where the health care entity that provided written notice is 
located;
B. Have the projected costs and market impact of the material change transaction 
reviewed by an expert with experience in material change transactions. A review 
required under this subsection may include an examination of factors relating to the 
proposed transaction, the parties to the transaction and the relative market position of 
the health care entities involved in the transaction, including, but not limited to, the 
following:
(1) The market share for health care services held by any of the health care entities 
involved in the transaction;
(2) Any previous material change transaction involving the parties, including, but 
not limited to, mergers or acquisitions of similar health care entities;
(3) The cost of health care services provided by health care entities involved in the 
material change transaction, including the relative price for similar services 
provided by other health care entities in the same geographic region;
(4) The quality of health care services provided by health care entities involved in 
the material change transaction, including the quality of patient experiences;
(5) The cost and cost trends for health care services provided by the health care 
entities involved in the material change transaction, provided in comparison to total 
health care expenditures statewide;
(6) The availability and accessibility of health care services similar to those 
provided, or proposed to be provided, in the geographic region that will be served 
by a health care entity formed as a result of the material change transaction;
(7) The impact of the material change transaction on consumer options for the 
delivery of health care services within the geographic region that will be served by 
a health care entity formed as a result of the material change transaction;
(8) The degree to which a health care entity involved in the material change 
transaction serves at-risk, underserved and government payer patient populations;
(9) The degree to which a health care entity involved in the material change 
transaction provides low-margin or negative-margin services within the 
geographic region that will be served by a health care entity formed as a result of 
the material change transaction;
(10) Consumer concerns including, but not limited to, complaints or other 
allegations that a party involved in the material change transaction has engaged in 
unfair methods of competition or committed unfair or deceptive acts or practices; 
and
(11) Any other factors that the Attorney General determines to be in the public 
interest.
Within 185 days of providing written notice to the parties that the material change 
transaction is subject to a comprehensive review, the expert shall submit the report required 
under this subsection to the Attorney General for review, unless the Attorney General 
determines that more time is necessary to complete the report. The Attorney General may 
request additional information from the parties involved in the material change transaction 
that the Attorney General determines is necessary to conduct the report required under this 
subsection. If the parties involved in the material change transaction fail to respond to the 
Attorney General's request for additional information within 21 days of the request, the 
Attorney General may extend the report deadline as necessary to complete the report, set a 
date by which the parties must respond to the request, impose additional conditions for 
approval of the material change transaction or deny approval of the material change 
transaction under subsection 6. 
6.  Approval authority.  The Attorney General may approve, approve subject to 
specific conditions or deny approval of any material change transaction for which notice is 
provided under subsection 3. In making this determination, the Attorney General may 
consider any factors that the Attorney General determines to be relevant, including, but not 
limited to:
A.  The likely impact, based on the findings in the report required under subsection 5, 
if any, that the material change transaction will have on the:
(1)  Cost of health care services for patients;
(2)  Availability or accessibility of health care services in the geographic region 
served by a health care entity formed as a result of the material change transaction;
(3) Cost trends of health care services provided by the parties involved in the 
material change transaction, as evaluated against statewide costs for comparable 
health care services;
(4) Access to health care services in underserved areas;
(5) Markets for health care services and health care insurance;
(6) Health care outcomes or health care equity for residents of the State; and
(7) Access to essential health care services for residents of the State;
B. Whether the material change transaction violates the provisions of Title 10, chapter 
201;
C. Whether the benefits of the material change transaction to the public are likely to 
outweigh the potential negative market impacts of the material change transaction; and
D. Whether the material change transaction is in the public interest.
For a material change transaction subject to comprehensive review under subsection 5, the 
Attorney General shall provide written notice to the health care entity within 30 days of 
receiving the report required under subsection 5, that the Attorney General has approved, 
approved subject to specific conditions or denied the material change transaction.
7.  Enforcement of conditions.  The Attorney General may monitor ongoing 
compliance with any conditions imposed by the Attorney General on the material change 
transaction. In addition to any other legal remedies that may be available, the Attorney 
General may petition the Superior Court for specific performance, injunctive relief or other 
equitable remedies that the Attorney General deems appropriate. The Attorney General is 
entitled to recover reasonable costs and reasonable attorney's fees incurred in remedying a 
violation of this section.
8.  Reporting requirements.  One year, 2 years and 5 years following the completion 
of a material change transaction subject to comprehensive review under subsection 5, a 
health care entity formed as a result of the material change transaction, or any other entity 
that acquired direct or indirect control over the health care entity, must submit reports to 
the Attorney General that:
A. Demonstrate compliance with any conditions imposed by the Attorney General in 
the course of approving the material change transaction; and
B. Summarize the cost trends and cost growth trends related to health care services 
provided by the parties involved in the material change transaction.
9.  Costs incurred for review and compliance.  The parties involved in the material 
change transaction are liable for all reasonable costs incurred by the Attorney General in 
making a determination to approve or deny a material change transaction under this section. 
The parties to the material change transaction are also liable for all reasonable costs 
incurred by the Attorney General in monitoring ongoing compliance with the terms and 
conditions of the material change transaction, including, but not limited to, administrative 
costs and the costs of contracting with an expert for assistance in monitoring ongoing 
compliance. 
10.  Proprietary information confidential.  All records obtained by the Attorney 
General under this section that contain private proprietary information are confidential and 
may not be disclosed without the consent of the party that provided the information to the 
Attorney General, except that the Attorney General may disclose such information to the 
expert conducting review under subsection 5. The expert may not disclose any of the 
information provided by the Attorney General under this subsection without the approval 
of the Attorney General and the consent of the party that provided the information. 
11.  Authority not limited.  This section may not be construed to limit the authority 
of the Attorney General, the State or any political subdivision of the State to review or 
regulate under any other law a transaction defined as a material change transaction under 
this section or to pursue any other administrative or legal action authorized by law.
12.  Rulemaking.  The Attorney General shall adopt rules necessary to implement this 
section, including, but not limited to, rules that establish the process and requirements for 
a health care entity to follow when providing written notice under subsection 3. Rules 
adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 
375, subchapter 2‑A.
SUMMARY
This bill defines a material change transaction involving a health care entity, creates a 
process for review of a material change transaction and requires the Attorney General to 
review and approve or deny any material change transaction.