Text of WA SB 5241 (2024)

AN ACT Relating to material changes to the operations and 1 governance structure of participants in the health care marketplace; 2 amending RCW 19.390.010, 19.390.020, 19.390.030, 19.390.040, 3 19.390.050, 19.390.080, and 19.390.070; adding new sections to 4 chapter 19.390 RCW; creating a new section; providing an effective 5 date; and providing an expiration date. 6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON: 7 NEW SECTION. Sec. 1. The legislature finds and declares that: 8 (1) The existence of accessible and affordable health care 9 services that are responsive to the needs of the community is an 10 important public policy goal. 11 (2) The COVID-19 pandemic laid bare both the crucial importance 12 of our health care systems and the inequities that exist and 13 exacerbate harm to marginalized communities, including in access to 14 and delivery of affordable, quality care. 15 (3) Health entity mergers, acquisitions, and contracting 16 affiliations impact cost, quality, and access to health care, and 17 affect working conditions and employee benefits. 18 (4) Health entity mergers, acquisitions, and contracting 19 affiliations have been shown to result in anticompetitive 20 consequences, including higher prices and a lack of any meaningful 21 S-0215.2 SENATE BILL 5241 State of Washington 68th Legislature 2023 Regular Session By Senators Randall, Rolfes, Kuderer, Trudeau, Pedersen, Shewmake, Hunt, Saldaña, Kauffman, Valdez, Lovick, Robinson, Lovelett, and Liias p. 1 SB 5241 choice among health care providers within a community or geographic 1 region. These negative outcomes are exacerbated for those in rural 2 areas with few health care providers. 3 (5) The legislature is committed to ensuring that Washingtonians 4 have access to the full range of reproductive, end-of-life, and 5 gender affirming health care services. Yet, Washingtonians continue 6 to experience difficulty accessing gender affirming care, and health 7 entity mergers and acquisitions in Washington state have resulted in 8 material reductions in reproductive and end-of-life health care 9 services, to the detriment of communities and patients. 10 (6) Health entity mergers, acquisitions, and contracting 11 affiliations must improve rather than harm access to affordable 12 quality health care. 13 Sec. 2. RCW 19.390.010 and 2019 c 267 s 1 are each amended to 14 read as follows: 15 (1) It is the intent of the legislature to ensure that 16 competition beneficial to consumers in health care markets across 17 Washington remains vigorous and robust and that health care be 18 affordable and accessible. The legislature supports ((that intent)) 19 these intents through this chapter, which provides the attorney 20 general with notice of all material health care transactions in this 21 state so that the attorney general has the information necessary to 22 determine whether an investigation under the consumer protection act 23 is warranted for potential anticompetitive conduct and consumer harm. 24 This chapter is intended to supplement the federal Hart-Scott-Rodino 25 antitrust improvements act, Title 15 U.S.C. Sec. 18a, by requiring 26 notice of transactions not reportable under Hart-Scott-Rodino 27 reporting thresholds and by providing the attorney general with a 28 copy of any filings made pursuant to the Hart-Scott-Rodino act. In 29 addition to ensuring vigorous and robust competition in health care 30 markets, this chapter is also intended to ensure material change 31 transactions result in the affected communities having the same or 32 greater access to quality, affordable care, including emergency care, 33 primary care, reproductive care, end-of-life care including services 34 provided in accordance with chapter 70.245 RCW, and gender affirming 35 care. 36 (2) Notwithstanding the language in this chapter regarding the 37 attorney general's authority to determine the effect of a material 38 change transaction on access to care, nothing in this chapter is 39 p. 2 SB 5241 intended to derogate from or otherwise affect in any way the attorney 1 general's authority to conduct an investigation, or the process of 2 any investigation, under chapter 19.86 RCW. Nothing in this section 3 is intended to change or affect in any way any substantive law 4 regarding the antitrust analysis of a material change transaction. 5 Sec. 3. RCW 19.390.020 and 2019 c 267 s 2 are each amended to 6 read as follows: 7 The definitions in this section apply throughout this chapter 8 unless the context clearly requires otherwise. 9 (1) "Acquisition" means an agreement, arrangement, or activity 10 the consummation of which results in a person acquiring directly or 11 indirectly the control of another person, and includes the 12 acquisition of voting securities and noncorporate interests, such as 13 assets, capital stock, membership interests, or equity interests. 14 (2) "Carrier" means the same as in RCW 48.43.005. 15 (3) "Contracting affiliation" means the formation of a 16 relationship between two or more entities that permits the entities 17 to negotiate jointly with carriers or third-party administrators over 18 rates for professional medical services, or for one entity to 19 negotiate on behalf of the other entity with carriers or third-party 20 administrators over rates for professional medical services. 21 "Contracting affiliation" does not include arrangements among 22 entities under common ownership. 23 (4) "Gender affirming care" means a service or product that a 24 health care provider, as defined in RCW 70.02.010, prescribes to an 25 individual to treat any condition related to the individual's gender 26 identity and is prescribed in accordance with generally accepted 27 standards of care. Gender affirming care must be covered in a manner 28 compliant with the federal mental health parity and addiction equity 29 act of 2008 and the federal patient protection and affordable care 30 act of 2010. Gender affirming care can be prescribed to two spirit, 31 transgender, nonbinary, intersex, and other gender diverse 32 individuals. 33 (5) "Health care services" means medical, surgical, chiropractic, 34 hospital, optometric, podiatric, pharmaceutical, ambulance, mental 35 health, substance use disorder, therapeutic, preventative, 36 diagnostic, curative, rehabilitative, palliative, custodial, and any 37 other services relating to the prevention, cure, or treatment of 38 p. 3 SB 5241 illness, injury, or disease. Health care services may be provided 1 virtually, on-demand, or in brick and mortar settings. 2 (((5))) (6) "Health care services revenue" means the total 3 revenue received for health care services in the previous twelve 4 months. 5 (((6))) (7) "Health maintenance organization" means an 6 organization receiving a certificate of registration pursuant to 7 chapter 48.46 RCW which provides comprehensive health care services 8 to enrolled participants of such organization on a group practice per 9 capita prepayment basis or on a prepaid individual practice plan, 10 except for an enrolled participant's responsibility for copayments 11 and deductibles, either directly or through contractual or other 12 arrangements with other institutions, entities, or persons, and which 13 qualifies as a health maintenance organization pursuant to RCW 14 48.46.030 and 48.46.040. 15 (((7))) (8) "Hospital" means a facility licensed under chapter 16 70.41 or 71.12 RCW. 17 (((8))) (9) "Hospital system" means: 18 (a) A parent corporation of one or more hospitals and any entity 19 affiliated with such parent corporation through ownership or control; 20 or 21 (b) A hospital and any entity affiliated with such hospital 22 through ownership. 23 (((9))) (10) "Merger" means a consolidation of two or more 24 organizations, including two or more organizations joining through a 25 common parent organization or two or more organizations forming a new 26 organization, but does not include a corporate reorganization. 27 (((10))) (11) "Person" means, where applicable, natural persons, 28 corporations, trusts, and partnerships. 29 (((11))) (12) "Provider" means a natural person who practices a 30 profession identified in RCW 18.130.040. 31 (((12))) (13) "Provider organization" means a corporation, 32 partnership, business trust, association, or organized group of 33 persons, whether incorporated or not, which is in the business of 34 health care delivery or management and that represents seven or more 35 health care providers in contracting with carriers or third-party 36 administrators for the payments of health care services. A "provider 37 organization" includes physician organizations, physician-hospital 38 organizations, independent practice associations, provider networks, 39 and accountable care organizations. 40 p. 4 SB 5241 (((13))) (14) "Reproductive health care" means any medical 1 services or treatments, including pharmaceutical and preventive care 2 services or treatments, directly involved in the reproductive system 3 and its processes, functions, and organs involved in reproduction, in 4 all stages of life. 5 (15) "Successor persons" means persons formed by, resulting from, 6 or surviving any material change transaction under this chapter. 7 (16) "Third-party administrator" means an entity that administers 8 payments for health care services on behalf of a client in exchange 9 for an administrative fee. 10 Sec. 4. RCW 19.390.030 and 2019 c 267 s 3 are each amended to 11 read as follows: 12 (1) Not less than ((sixty)) 120 days prior to the effective date 13 of any transaction that results in a material change, the parties to 14 the transaction shall submit written notice to the attorney general 15 of such material change transaction. 16 (2) For the purposes of this ((section)) chapter, a material 17 change transaction includes a merger, acquisition, or contracting 18 affiliation between two or more entities of the following types: 19 (a) Hospitals; 20 (b) Hospital systems; or 21 (c) Provider organizations. 22 (3) A material change transaction includes proposed changes 23 identified in subsection (2) of this section between a Washington 24 entity and an out-of-state entity where the out-of-state entity 25 generates ((ten million dollars)) $10,000,000 or more in health care 26 services revenue from patients residing in Washington state, and the 27 entities are of the types identified in subsection (2) of this 28 section. Any party to a material change transaction that is licensed 29 or operating in Washington state shall submit a notice as required 30 under this section. 31 (4) For purposes of subsection (2) of this section, a merger, 32 acquisition, or contracting affiliation between two or more 33 hospitals, hospital systems, or provider organizations only qualifies 34 as a material change transaction if the hospitals, hospital systems, 35 or provider organizations did not previously have common ownership or 36 a contracting affiliation. 37 p. 5 SB 5241 Sec. 5. RCW 19.390.040 and 2019 c 267 s 4 are each amended to 1 read as follows: 2 (1) ((The)) For material change transactions where none of the 3 parties are hospitals or hospital systems and none of the parties 4 have generated $10,000,000 or more in health care services revenue 5 from patients residing in Washington state in any of their preceding 6 three fiscal years, the written notice provided by the parties, as 7 required by RCW 19.390.030, must include: 8 (a) The names of the parties and their current business 9 addresses; 10 (b) Identification of all locations where health care services 11 are currently provided by each party; 12 (c) A brief description of the nature and purpose of the proposed 13 material change transaction; and 14 (d) The anticipated effective date of the proposed material 15 change transaction. 16 (2) For material change transactions where none of the parties 17 are hospitals or hospital systems and all of the parties serve 18 predominantly low-income, medically underserved individuals, and all 19 of the parties had for each of their preceding three fiscal years at 20 least 50 percent of their total patient revenue come from medicaid or 21 local, state, or federal funding to provide care to uninsured or 22 underinsured individuals, and the material change transaction would 23 not result in materially lowering the overall level of care the 24 successor persons' provide to individuals on medicaid or who are 25 uninsured or underinsured, or cause, for the successor persons, the 26 percentage of total patient revenue that comes from medicaid or 27 local, state, or federal funding to provide care to uninsured or 28 underinsured individuals to drop below 50 percent, the written notice 29 provided by the parties, as required by RCW 19.390.030, must include: 30 (a) The information and documentation required under subsection 31 (1)(a) through (d) of this section; and 32 (b) Documentation demonstrating that all the parties to the 33 material change transaction had for each of their preceding three 34 fiscal years at least 50 percent of their total patient revenue come 35 from medicaid or local, state, or federal funding to provide care to 36 uninsured or underinsured individuals, and a statement from the 37 parties describing how the material change transaction will result in 38 the successor persons complying with the requirements under this 39 subsection. 40 p. 6 SB 5241 (3) For all material change transactions other than those 1 specified under subsections (1) and (2) of this section, the written 2 notice provided by the parties, as required by RCW 19.390.030, must 3 include: 4 (a) The information and documentation required under subsection 5 (1)(a) through (d) of this section; 6 (b) A copy of the material change transaction agreement; 7 (c) If applicable, a statement from each of the parties' board of 8 directors that explains the effect the material change transaction 9 will likely have on delivery and cost of health-related services to 10 the communities impacted by the material change transaction, and the 11 basis for this opinion. The statement must also describe all 12 dissenting viewpoints of which the boards of directors are aware; 13 (d) If applicable, a copy of the two most recent community needs 14 assessments or any similar evaluations or assessments prepared by or 15 for any of the hospitals, hospital systems, or provider organizations 16 that are the subject of the material change transaction, and the 17 identity of all persons who assisted or contributed to any of the 18 evaluations or assessments; 19 (e) A description of all charity care provided in the last three 20 years, as well as denials, and the projected charity care for three 21 years following the material change transaction by the parties to the 22 material change transaction, or any successor persons. This 23 description must include: 24 (i) Annual total charity care spending; 25 (ii) Inpatient, outpatient, and emergency room charity care 26 spending; 27 (iii) A description of how the amount of charity care spending 28 was calculated; 29 (iv) Annual charity care inpatient discharges, outpatient visits, 30 and emergency visits; 31 (v) A description of the types of charity care services provided 32 annually; 33 (vi) The number of charity care denials and reasons for denial; 34 and 35 (vii) A description of the policies, procedures, and eligibility 36 requirements for the provision of charity care; 37 (f) A description of the health care services currently provided 38 at each hospital, hospital system, or provider organization that is 39 the subject of the material change transaction; 40 p. 7 SB 5241 (g) A description of all services provided in the past five years 1 by each hospital, hospital system, and provider organization that is 2 the subject of the material change transaction to apple health 3 patients, qualified health plan patients, and indigent patients. This 4 description must include, but is not limited to, the type and volume 5 of services provided, the payors for the services provided, the 6 demographic characteristics of and zip code data for the patients 7 served by the hospital, hospital system, or provider organization, 8 and the costs and revenues for the services provided; 9 (h) All policies, procedures, and other training materials 10 related to registration, admission, and collections, including 11 upfront, point-of-service, and postservice billing and collections; 12 (i) The following current policies for any hospital and, to the 13 extent they exist, the following current policies for any provider 14 organization that is the subject of the material change transaction: 15 (i) Admission policies; (ii) nondiscrimination policies; (iii) end- 16 of-life policies; (iv) reproductive health policies; and (v) the 17 reproductive health care services form as required under RCW 18 70.41.520; 19 (j) The following proposed policies that will apply after the 20 material change transaction for any hospital or provider organization 21 that is the subject of the material change transaction: (i) Admission 22 policies; (ii) nondiscrimination policies; (iii) end-of-life 23 policies; (iv) reproductive health policies; and (v) for hospitals, 24 the reproductive health care services form as required under RCW 25 70.41.520; 26 (k) To the extent they exist, any policies concerning the 27 information and referrals medical providers are required to provide 28 or are restricted from providing to patients regarding end-of-life 29 care, including services provided in accordance with chapter 70.245 30 RCW; 31 (l) If the material change transaction will have any impact on 32 reproductive health care services provided by any hospital, hospital 33 system, or provider organization that is the subject of the material 34 change transaction, or any impact on the availability or 35 accessibility of reproductive health care services in Washington 36 state, a description of the reproductive health care services 37 provided in the last five years by each hospital, hospital system, or 38 provider organization that is the subject of the material change 39 transaction and a description of the effect the material change 40 p. 8 SB 5241 transaction will have on available reproductive health care services. 1 This description must include the types and levels of reproductive 2 services provided in the last five years and those proposed to be 3 provided after the material change transaction, including, but not 4 limited to, information about contraception provision, pregnancy 5 terminations, tubal ligations, and fertility treatments provided, and 6 a description of how this information was compiled; 7 (m) If the material change transaction will have any impact on 8 end-of-life health care services provided by any hospital, hospital 9 system, or provider organization that is the subject of the material 10 change transaction, including services provided in accordance with 11 chapter 70.245 RCW, or any impact on the availability or 12 accessibility of end-of-life health care services in Washington 13 state, including services provided in accordance with chapter 70.245 14 RCW, a description of the end-of-life health care services provided 15 in the last five years by each hospital, hospital system, or provider 16 organization that is the subject of the material change transaction 17 and a description of the effect the material change transaction will 18 have on available end-of-life care services. This description must 19 include the types and levels of end-of-life services provided in the 20 last five years and those proposed to be provided after the material 21 change transaction including, but not limited to, information about 22 the number of occasions in which doctors served as consulting or 23 attending physicians at the hospital, hospital system, or provider 24 organization under chapter 70.245 RCW, a description of the end-of- 25 life health care services expected to be available at the hospitals, 26 hospital systems, or provider organizations that are the subject of 27 the material change transaction, and a description of how this 28 information was compiled; 29 (n) If the material change transaction will have any impact on 30 gender affirming health care services provided by any hospital, 31 hospital system, or provider organization that is the subject of the 32 material change transaction, or any impact on the availability or 33 accessibility of gender affirming health care services in Washington 34 state, a description of all gender affirming health care services 35 provided in the last five years by each hospital, hospital system, or 36 provider organization that is the subject of the material change 37 transaction and a description of the effect the material change 38 transaction will have on available gender affirming care. This 39 description must include the types and levels of gender affirming 40 p. 9 SB 5241 health care provided in the last five years and those proposed to be 1 provided after the material change transaction including, but not 2 limited to, facial gender affirming care, body gender affirming care, 3 and primary sex characteristics care, and a description of how this 4 information was compiled; 5 (o) A description of any anticipated changes in health care 6 services provided after the material change transaction by any 7 hospital, hospital system, or provider organization that is the 8 subject of the material change transaction. If anticipated 9 alterations include a reduction, relocation, or elimination of a 10 service, the following information should be included: (i) The need 11 the population presently has for the service; (ii) how the need will 12 be adequately met by the proposed alteration; and (iii) alternative 13 arrangements designed to meet the identified need; 14 (p) A description of each measure proposed by the parties to 15 mitigate or eliminate any potential adverse effect on the 16 availability or accessibility of health care services to the affected 17 communities that may result from the material change transaction; 18 (q) A description of any changes to sexual assault nurse examiner 19 and forensic nurse examiner programs after the material change 20 transaction at any hospital, hospital system, or provider 21 organization that is the subject of the material change transaction 22 and any measures proposed by the parties to mitigate or eliminate any 23 potential adverse effects to these programs; 24 (r) A description of any community benefit program provided by 25 any of the parties to the material change transaction during the past 26 five years with an annual cost of at least $10,000 and the annual 27 cost of each program for the past five years; 28 (s) For each hospital, hospital system, or provider organization 29 that is the subject of the material change transaction, a description 30 of current policies and procedures on staffing for patient care 31 areas; employee input on health quality and staffing issues; and 32 employee wages, salaries, benefits, working conditions, and 33 employment protections. This description must include a list of all 34 existing staffing plans, policy and procedure manuals, employee 35 handbooks, collective bargaining agreements, or similar employment- 36 related documents; 37 (t) For each hospital, hospital system, or provider organization 38 that is the subject of the material change transaction, all existing 39 documents setting forth any guarantees made by any entity that would 40 p. 10 SB 5241 be taking over operation or control of each hospital, hospital 1 system, or provider organization relating to employee job security 2 and retraining, or the continuation of current staffing levels and 3 policies, employee wages, salaries, benefits, working conditions, and 4 employment protections; 5 (u) For each hospital, hospital system, or provider organization 6 that is the subject of the material change transaction, a statement 7 as to whether, after the material change transaction, neutrality will 8 be maintained through all communications and usage of funds regarding 9 nonunion employees forming a union; 10 (v) For each hospital, hospital system, or provider organization 11 that is the subject of the material change transaction, a statement 12 as to whether any successor of the employer or union will be bound to 13 any existing union certification and any existing collective 14 bargaining agreement; 15 (w) For each hospital, hospital system, or provider organization 16 that is the subject of the material change transaction, a description 17 of current debt collection practices and a description of any 18 anticipated changes to debt collection practices following the 19 material change transaction; 20 (x) If applicable, a detailed statement and documents relating to 21 the parties' plans for assuring the continuance of existing hospital 22 privileges after the material change transaction; 23 (y) If applicable, a detailed statement and documents relating to 24 the parties' plans for ensuring the maintenance of appropriate health 25 science research and health care provider education after the 26 material change transaction; 27 (z) A detailed statement and documents relating to the parties' 28 plans for ensuring safeguards to avoid conflict of interest in 29 patient referral after the material change transaction; 30 (aa) A detailed statement and documents relating to the parties' 31 commitment and plans to provide health care to the disadvantaged, the 32 uninsured, and the underinsured, and how benefits to promote improved 33 health in the affected community will be provided after the material 34 change transaction; and 35 (bb) A list of the primary languages spoken by patients at each 36 hospital, hospital system, or provider organization that is the 37 subject of the material change transaction. 38 (4) The attorney general shall charge an applicant fee sufficient 39 to cover the costs of implementing this chapter. 40 p. 11 SB 5241 (5) The attorney general may request additional information that 1 is necessary to implement the goals of this chapter. 2 (6) Nothing in this section prohibits the parties to a material 3 change transaction from voluntarily providing additional information 4 to the attorney general. 5 Sec. 6. RCW 19.390.050 and 2019 c 267 s 5 are each amended to 6 read as follows: 7 ((The)) For the purpose of conducting an investigation under 8 chapter 19.86 RCW or federal antitrust laws, the attorney general 9 shall make any requests for additional information from the parties 10 under RCW 19.86.110 within ((thirty)) 30 days of the date notice is 11 received under RCW 19.390.030 and 19.390.040. ((Nothing)) Regardless 12 of whether the attorney general requests additional information from 13 the parties, nothing in this section precludes the attorney general 14 from conducting an investigation or enforcing any state or federal 15 ((antitrust)) laws at a later date. 16 NEW SECTION. Sec. 7. (1) The attorney general shall determine 17 if the notice required under RCW 19.390.030 and 19.390.040 is 18 complete for the purposes of review. If the attorney general 19 determines that a notice is incomplete, it shall notify the parties 20 within 30 working days after the date the notice was received stating 21 the reasons for its determination of incompleteness. 22 (2) A completed notice shall be deemed received on the date when 23 all the information required by RCW 19.390.040 has been submitted to 24 the attorney general's office. 25 (3) For all material change transactions included under RCW 26 19.390.040(3), the attorney general shall, within five working days 27 after receipt of a completed notice, include information about the 28 notice on the attorney general's website and in a newspaper of 29 general circulation in the county or counties where communities 30 impacted by the material change transaction are located. In addition, 31 the attorney general shall notify by first-class United States mail, 32 email, or facsimile transmission, any person who has requested notice 33 of the filing of such notices. The information must state that a 34 notice has been received, state the names of the parties to the 35 material change transaction, describe the contents of the written 36 notice in clear and simple terms, and state the date and process by 37 p. 12 SB 5241 which a person may submit written comments about the notice to the 1 attorney general's office. 2 (4) The attorney general is not required to make public any 3 information submitted pursuant to its investigative authority under 4 chapter 19.86 RCW, or any information or analysis associated with an 5 investigation under chapter 19.86 RCW. 6 Sec. 8. RCW 19.390.080 and 2019 c 267 s 8 are each amended to 7 read as follows: 8 Any person who fails to comply with ((any provision of this 9 chapter)) RCW 19.390.030 or 19.390.040 is liable to the state for a 10 civil penalty of ((not more than two hundred dollars per day for each 11 day during which such person is in violation of this chapter)) up to 12 15 percent of the value of the material change transaction, in the 13 discretion of the attorney general. 14 NEW SECTION. Sec. 9. (1) No material change transaction under 15 this chapter may take place if it would detrimentally affect the 16 continued existence of accessible, affordable health care in 17 Washington state for at least 10 years after the transaction occurs. 18 To this end the material change transaction must result in the 19 affected communities having the same or greater access to quality, 20 affordable care, including but not limited to emergency care, primary 21 care, reproductive health care, gender affirming care, and end-of- 22 life care including services provided in accordance with chapter 23 70.245 RCW. 24 (2) The material change transaction must also result in: 25 (a) Reducing the growth in patient and health plan sponsor costs; 26 (b) Increasing access to services in medically underserved areas; 27 (c) Rectifying historical and contemporary factors contributing 28 to a lack of health equities or access to services; or 29 (d) Improving health outcomes for residents of this state. 30 (3) The material change transaction must not result in the 31 revocation of hospital privileges and must establish sufficient 32 safeguards to maintain appropriate capacity for health provider 33 education. 34 (4) The material change transaction must not result in a 35 reduction in staffing capacity for the provision of medically 36 necessary services to the extent such reductions would diminish 37 patients' access to quality care. 38 p. 13 SB 5241 (5) Nothing in this chapter is intended to derogate from or 1 otherwise affect in any way the attorney general's authority to 2 conduct an investigation, or the process of any investigation, under 3 chapter 19.86 RCW. Nothing in this section is intended to change or 4 affect in any way any substantive law regarding the antitrust 5 analysis of a material change transaction. 6 NEW SECTION. Sec. 10. (1) For all material change transactions 7 included under RCW 19.390.040(3), the attorney general shall review 8 the completed notice and, if the attorney general determines the 9 material change transaction will not fulfill the requirements under 10 section 9 of this act, the attorney general shall within 120 days of 11 receiving the completed notice: 12 (a) Impose conditions or modifications on the material change 13 transaction to ensure the requirements of section 9 of this act are 14 met and that sufficient safeguards are in place to ensure communities 15 have continued or improved access to affordable quality care; or 16 (b) Disapprove the material change transaction, which shall 17 constitute a final decision. 18 (2) The attorney general may not make its decision to disapprove 19 the material change transaction subject to any condition not directly 20 and rationally related to the requirements under section 9 of this 21 act and any condition or modification must bear a direct and rational 22 relationship to the notice under review and the requirements under 23 section 9 of this act. 24 (3) Nothing in this chapter is intended to derogate from or 25 otherwise affect in any way the attorney general's authority to 26 conduct an investigation, or the process of any investigation, under 27 chapter 19.86 RCW. Nothing in this section is intended to change or 28 affect in any way any substantive law regarding the antitrust 29 analysis of a material change transaction. 30 NEW SECTION. Sec. 11. During the course of review of notices of 31 material change transactions under RCW 19.390.040(3), the attorney 32 general shall conduct one or more public hearings, at least one of 33 which must be in a county where one of the communities impacted by 34 the material change transaction is located. At the hearings, anyone 35 may file written comments and exhibits or appear and make a 36 statement. The attorney general may subpoena additional information 37 or witnesses, require and administer oaths, require sworn statements, 38 p. 14 SB 5241 take depositions, and use related discovery procedures for purposes 1 of the hearing and at any time prior to making a decision on the 2 material change transaction. 3 (1) A public hearing must be held no later than 30 days after the 4 health equity assessment required under section 12 of this act is 5 completed. 6 (2) At least 15 days prior to the public hearing, the attorney 7 general shall provide notice of the time and place of the hearing on 8 its website and to any person who has requested notice of the hearing 9 in writing. 10 (3)(a) At least 15 days prior to the public hearing, the parties 11 to the material change transaction shall provide notice of the time 12 and place of the hearing. The notice must be provided: 13 (i) Through publication in a newspaper of general circulation in 14 the communities that will be impacted by the material change 15 transaction; 16 (ii) At the public entrance and on the bulletin board designated 17 for legal or public notices of any hospital, hospital system, 18 provider organization, and other health care facility that is the 19 subject of the material change transaction; 20 (iii) Prominently on the website available to the public of any 21 hospital, hospital system, provider organization, and other health 22 care facility that is the subject of the material change transaction; 23 and 24 (iv) On the website available to the employees of any hospital, 25 hospital system, provider organization, and other health care 26 facility that is the subject of the material change transaction. 27 The notice of the time and place of the meeting must be provided in 28 English and in the languages spoken in the county or counties in 29 which the hospitals, hospital systems, provider organizations, or 30 other health care facilities that are the subject of the material 31 change transaction are located. 32 (b) For purposes of this section, "health care facility" means a 33 hospital, clinic, nursing home, laboratory, office, or similar place 34 where a health care provider provides health care to patients. 35 (4) Within 15 business days of the last hearing, the attorney 36 general shall compile a summary report of each public hearing 37 proceeding and post the summary report on its website. 38 (5) If after the initial public hearing there is any change in 39 the terms of the material change transaction that materially alters 40 p. 15 SB 5241 any of the information that the parties to the material change 1 transaction provided under RCW 19.390.040(3), the attorney general 2 shall conduct an additional public hearing to ensure adequate public 3 comment regarding the proposed change. 4 (6) Nothing in this chapter is intended to derogate from or 5 otherwise affect in any way the attorney general's authority to 6 conduct an investigation, or the process of any investigation, under 7 chapter 19.86 RCW. Nothing in this section is intended to change or 8 affect in any way any substantive law regarding the antitrust 9 analysis of a material change transaction. 10 NEW SECTION. Sec. 12. (1) For any material change transaction 11 included under RCW 19.390.040(3), the attorney general must hire an 12 independent contractor to prepare a health equity assessment. In 13 creating a health equity assessment, the independent contractor must 14 engage with and provide input in the assessment from public health 15 experts, organizations representing employees of the applicant, 16 health care advocates, and community members who reside in the 17 service areas of the parties to the material change transaction. 18 (2) The health equity assessment must contain information to 19 better inform the attorney general as to whether the parties meet the 20 requirements for a material change transaction under section 9 of 21 this act. 22 (3) The health equity assessment must include, but is not limited 23 to, the following information: 24 (a) An assessment of whether the material change transaction will 25 improve or reduce access to health services in the communities 26 impacted by the material change transaction, including but not 27 limited to emergency care services, primary care services, 28 reproductive health care services, gender affirming health care, and 29 end-of-life services including services provided in accordance with 30 chapter 70.245 RCW; 31 (b) An assessment of whether the material change transaction will 32 reduce health disparities with particular reference to members of 33 medically underserved groups in the parties' service areas; 34 (c) An assessment of the effect of the material change 35 transaction on the affordability and provision of health care 36 services to individuals eligible for medical assistance under chapter 37 74.09 RCW or medicare, indigent individuals, individuals with 38 disabilities, women, racial and ethnic minorities, lesbian, gay, 39 p. 16 SB 5241 bisexual, transgender, gender diverse, or queer individuals, 1 terminally ill individuals, and other underserved or marginalized 2 populations; 3 (d) An assessment of the effect of the material change 4 transaction on the level and type of charity care the parties to the 5 material change transaction will provide; 6 (e) An assessment of the effect of the material change 7 transaction on any community benefit program that the parties to the 8 material change transaction have historically funded or operated; 9 (f) An assessment of the effect of the material change 10 transaction on staffing for patient care and areas of patient care 11 within facilities as it may affect availability of care, on the 12 likely retention of employees as it may affect continuity of care, 13 and on the rights of employees to provide input on health quality and 14 staffing issues; 15 (g) An assessment of the effect of the material change 16 transaction on the cost of patient care; 17 (h) An assessment of the prior performance of the parties to the 18 material change transaction in meeting state and federal requirements 19 to provide uncompensated care, community services, and access by 20 minorities and people with disabilities to programs receiving federal 21 financial assistance, including the existence of any civil rights 22 access complaints against any of the parties, and how the material 23 change transaction will impact the fulfillment of these requirements; 24 (i) An assessment of whether the material change transaction will 25 have a positive or negative impact on effective communication between 26 the hospitals, hospital systems, or provider organizations and people 27 with limited English-speaking ability and those with speech, hearing, 28 or visual impairments; 29 (j) An assessment of whether the material change transaction will 30 reduce architectural barriers for people with mobility impairments; 31 (k) A review of how the parties to the material change 32 transaction will maintain or improve the quality of health services 33 including a review of: 34 (i) Demographics of the parties' service areas; 35 (ii) Economic status of the population of the parties' services 36 area; 37 (iii) Physician and professional staffing issues related to the 38 material change transaction; 39 p. 17 SB 5241 (iv) Availability of similar services at other institutions in or 1 near the parties' services area; and 2 (v) Historical and projected market shares of hospitals, hospital 3 systems, and provider organizations in the parties' service area; 4 (l) A financial and economic assessment that includes a 5 description of current costs and competition in the relevant 6 geographic and product market and any anticipated changes in such 7 costs and competition as a result of the material change transaction; 8 and 9 (m) A discussion of alternatives to the material change 10 transaction, including: (i) Closure of any of the health facilities 11 that are the subject of the material change transaction; and (ii) 12 recommendations for additional feasible mitigation measures that 13 would reduce or eliminate any significant adverse effect on health 14 care services and affordability identified in the health equity 15 assessment. 16 (4) The information contained in the independent heath equity 17 assessment must be used by the attorney general's office in 18 determining under section 10 of this act whether to impose conditions 19 or modifications or disapprove the material change transaction. 20 (5) The health equity assessment must be posted on the attorney 21 general's website. 22 NEW SECTION. Sec. 13. (1) The attorney general may at its 23 discretion appoint a review board of stakeholders to conduct a 24 comprehensive review and make recommendations as to whether a 25 material change transaction under RCW 19.390.040(3) fulfills the 26 requirements under section 9 of this act. 27 (2) A review board convened by the attorney general under this 28 section must consist of members of the communities affected by the 29 material change transaction, consumer advocates, and health care 30 experts. 31 (3) No more than one-third of the members of the review board may 32 be representatives of institutional health care providers. The 33 attorney general may not appoint to a review board an individual who 34 is employed by or has a contract with a party to the material change 35 transaction or is employed by a competitor that is of a similar size 36 to a party to the material change transaction. 37 (4) A member of a review board shall file a notice of conflict of 38 interest and the notice shall be made public. 39 p. 18 SB 5241 NEW SECTION. Sec. 14. (1) The secretary of state may not accept 1 any forms or documents in connection with any material change 2 transaction if the attorney general, in accordance with section 10 of 3 this act, disapproved the material change transaction or the parties 4 to the material change transaction have not agreed to any conditions 5 or modifications imposed by the attorney general in accordance with 6 section 10 of this act. 7 (2) The attorney general may seek an injunction to prevent any 8 material change transaction that has been disapproved by the attorney 9 general in accordance with section 10 of this act or that does not 10 incorporate any conditions or modifications imposed by the attorney 11 general in accordance with section 10 of this act. 12 NEW SECTION. Sec. 15. For any material change transaction 13 included under RCW 19.390.040(3), the following apply: 14 (1) Once a material change transaction is finalized the parties 15 shall inform the attorney general in the form and manner prescribed 16 by the attorney general. 17 (2) For at least 10 years, the attorney general shall monitor the 18 parties' and any successor persons' ongoing compliance with this 19 chapter. 20 (3) The attorney general shall, for 10 years, require annual 21 reports from the parties to the material change transaction or any 22 successor persons to ensure compliance with section 9 of this act and 23 any conditions or modifications the attorney general imposed on the 24 material change transaction. The attorney general may request 25 information and documents and conduct on-site compliance audits at 26 the parties' or successor persons' expense. 27 (4) To effectively monitor ongoing compliance, the attorney 28 general shall regularly provide the opportunity for the public to 29 submit written comments, and may, in its discretion, contract with 30 experts and consultants. Contract costs must not exceed an amount 31 that is reasonable and necessary to conduct the review and 32 evaluation. 33 (5) The attorney general is entitled to reimbursement from the 34 parties or any successor persons for all actual and direct costs 35 incurred in monitoring ongoing compliance for 10 years, including 36 contract and administrative costs. 37 (6) The attorney general may bill the parties or successor 38 persons and the parties or successor billed by the attorney general 39 p. 19 SB 5241 shall promptly pay. If the parties or successor fail to pay within 30 1 days, the attorney general may assess a civil fine of five percent of 2 the billed amount for each day the party does not pay. 3 (7) If the attorney general has reason to believe that the 4 parties or successor persons' of a material change transaction no 5 longer satisfy the requirements of section 9 of this act, or are not 6 complying with any conditions or modifications imposed by the 7 attorney general under section 10 of this act, the attorney general 8 shall conduct an investigation. As part of the investigation the 9 attorney general will provide public notice of the investigation and 10 obtain input from community members impacted by the material change 11 transaction. Following the investigation, the attorney general shall 12 publish a report of its findings. 13 (8) If after the investigation, the attorney general determines 14 that the parties or successor persons no longer satisfy the 15 requirements of section 9 of this act, or are not complying with 16 conditions or modifications imposed under section 10 of this act, the 17 attorney general shall issue an order directing the parties or 18 successor persons to come into compliance with this chapter and a 19 timeline by which the parties must enter into compliance. 20 (9) If the parties or successor persons do not enter into 21 compliance with the attorney general's order, the attorney general 22 may impose civil fines of no less than $10,000 per day until the 23 parties or successor persons comply with the order, and may take 24 legal action under section 17 of this act. 25 (10) The cost of the investigation and any on-site reviews 26 related to determining the validity of the information will be borne 27 by the parties to the material change transaction or successor 28 persons. 29 NEW SECTION. Sec. 16. The attorney general, in consultation 30 with provider organizations, will develop a simple form that parties 31 or successor persons subject to RCW 19.390.040(2) will submit yearly 32 for 10 years to demonstrate that the successor persons' overall level 33 of care to individuals on medicaid or who are uninsured or 34 underinsured has not materially lowered and that the successor 35 persons' percentage of total patient revenue that comes from medicaid 36 or local, state, or federal funding to provide care to uninsured or 37 underinsured individuals has not dropped below 50 percent. 38 p. 20 SB 5241 NEW SECTION. Sec. 17. The attorney general has the authority to 1 ensure compliance with commitments that inure to the public interest. 2 The attorney general may take legal action to enforce this chapter, 3 any conditions or modifications the attorney general imposes on a 4 material change transaction, or any order the attorney general issues 5 under section 15 of this act. The attorney general may obtain 6 restitution, injunctive relief, civil penalties, disgorgement of 7 profits, attorneys' fees, and such other relief as the court deems 8 necessary to ensure compliance. The remedies provided under this 9 chapter are in addition to any other remedy that may be available 10 under any other provision of law. 11 Sec. 18. RCW 19.390.070 and 2019 c 267 s 7 are each amended to 12 read as follows: 13 (1) Information submitted to the attorney general ((pursuant to 14 this chapter)) under RCW 19.390.050 shall be maintained and used by 15 the attorney general in the same manner and under the same 16 protections as provided in RCW 19.86.110. The information, including 17 documentary material, answers to written interrogatories, or 18 transcripts of oral testimony produced pursuant to a demand or 19 copies, must not, unless otherwise ordered by a superior court for 20 good cause shown, be produced for inspection or copying pursuant to 21 chapter 42.56 RCW by the person who produced the material, answered 22 written interrogatories or gave oral testimony. 23 (2) All materials provided in response to RCW 19.390.040(3) (a) 24 through (bb) and all materials provided during public hearings are 25 considered public records for purposes of chapter 42.56 RCW. 26 (3) Nothing in this chapter limits the attorney general's 27 authority under RCW 19.86.110 or 19.86.115. Nothing in this chapter 28 expands the attorney general's authority under chapter 19.86 RCW, 29 federal or state antitrust law, or any other law. Failure to comply 30 with this chapter does not provide a private cause of action. 31 NEW SECTION. Sec. 19. No provision of chapter 19.390 RCW 32 derogates from the common law or statutory authority of the attorney 33 general. 34 NEW SECTION. Sec. 20. The attorney general may adopt rules 35 necessary to implement chapter 19.390 RCW and may contract with and 36 provide reasonable reimbursement to qualified persons to assist in 37 p. 21 SB 5241 determining whether parties or successor persons are in compliance 1 with the requirements under this chapter. 2 NEW SECTION. Sec. 21. If a material change transaction is also 3 subject to review under chapter 70.38 or 70.45 RCW, the review under 4 those chapters shall be concurrent with the review under this 5 chapter, to the extent practicable. 6 NEW SECTION. Sec. 22. Every four years, the attorney general 7 shall commission a study of the impact of material change 8 transactions in Washington state. The study must review material 9 change transactions occurring during the previous four-year period 10 and include an analysis of: 11 (1) The impact on costs to consumers and health sponsors for 12 health care; and 13 (2) Any increases or decreases in the quality of care, including: 14 (a) Improvement or reductions in morbidity; 15 (b) Improvement or reductions in the management of population 16 health; 17 (c) Improvement or reductions in access to emergency care 18 services, primary care services, reproductive health care services, 19 gender affirming care services, and end-of-life care services 20 including services provided in accordance with chapter 70.245 RCW; 21 and 22 (d) Changes to health and patient outcomes, particularly for 23 underserved and uninsured individuals, recipients of medical 24 assistance and other low-income individuals, and individuals living 25 in rural areas, as measured by nationally recognized measures of the 26 quality of health care, such as measures used or endorsed by the 27 national committee for quality assurance, the national quality forum, 28 the physician consortium for performance improvement, or the agency 29 for health care research and quality. 30 (3) The attorney general shall commission the first study under 31 this section no later than January 1, 2028. 32 NEW SECTION. Sec. 23. (1) By January, 2025, the attorney 33 general shall complete a study on the impact of health care mergers 34 and acquisitions in Washington state between health carriers as 35 defined in RCW 48.43.005 and hospitals, hospital systems, or provider 36 organizations. The study shall include: 37 p. 22 SB 5241 (a) The impact on costs to consumers and health sponsors for 1 health care; and 2 (b) Any increases or decreases in the quality of care, including: 3 (i) Improvement or reductions in morbidity; 4 (ii) Improvement or reductions in the management of population 5 health; 6 (iii) Improvement or reductions in access to emergency care 7 services, primary care services, reproductive health care services, 8 gender affirming care services, and end-of-life care services 9 including services provided in accordance with chapter 70.245 RCW; 10 and 11 (iv) Changes to health and patient outcomes, particularly for 12 underserved and uninsured individuals, recipients of medical 13 assistance and other low-income individuals, and individuals living 14 in rural areas, as measured by nationally recognized measures of the 15 quality of health care, such as measures used or endorsed by the 16 national committee for quality assurance, the national quality forum, 17 the physician consortium for performance improvement, or the agency 18 for health care research and quality. 19 (2) This section expires July 1, 2025. 20 NEW SECTION. Sec. 24. This act may be known and cited as the 21 keep our care act. 22 NEW SECTION. Sec. 25. Sections 7, 9 through 17, and 19 through 23 24 of this act are each added to chapter 19.390 RCW. 24 NEW SECTION. Sec. 26. This act takes effect January 1, 2024. 25 --- END --- p. 23 SB 5241