Text of WA SB 5704 (2026)

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; and providing an 5 effective 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-1264.1 SENATE BILL 5704 State of Washington 69th Legislature 2025 Regular Session By Senators Dhingra, Alvarado, Trudeau, Pedersen, Lovelett, Valdez, Saldaña, Krishnadasan, C. Wilson, Shewmake, Riccelli, Nobles, Ramos, Kauffman, and Slatter p. 1 SB 5704 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 and health care authority with notice of all material health 21 care transactions in this state so that the attorney general has the 22 information necessary to determine whether an investigation under the 23 consumer protection act is warranted for potential anticompetitive 24 conduct and consumer harm. This chapter is intended to supplement the 25 federal Hart-Scott-Rodino antitrust improvements act, Title 15 U.S.C. 26 Sec. 18a, by requiring notice of transactions not reportable under 27 Hart-Scott-Rodino reporting thresholds and by providing the attorney 28 general with a copy of any filings made pursuant to the Hart-Scott- 29 Rodino act. In addition to ensuring vigorous and robust competition 30 in health care markets, this chapter is also intended to ensure 31 material change transactions result in the affected communities 32 having the same or greater access to quality, affordable care 33 including, but not limited to, emergency care, primary care, 34 reproductive care, end-of-life care including services provided in 35 accordance with chapter 70.245 RCW, and gender-affirming care. 36 (2) Notwithstanding the language in this chapter regarding the 37 health care authority's and the attorney general's authority to 38 determine the effect of a material change transaction on access to 39 p. 2 SB 5704 care, 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 review 5 of a material change transaction. 6 Sec. 3. RCW 19.390.020 and 2019 c 267 s 2 are each amended to 7 read as follows: 8 The definitions in this section apply throughout this chapter 9 unless the context clearly requires otherwise. 10 (1) "Access, affordability, quality, and equity review" means the 11 analysis performed by the health care authority under section 12 of 12 this act. 13 (2) "Acquisition" means an agreement, arrangement, or activity 14 the consummation of which results in a person acquiring directly or 15 indirectly the control of another person, and includes the 16 acquisition of voting securities and noncorporate interests, such as 17 assets, capital stock, membership interests, or equity interests. 18 (((2))) (3) "Antitrust review" means the review conducted by the 19 attorney general to determine if a transaction may violate state or 20 federal antitrust laws. 21 (4) "Carrier" means the same as in RCW 48.43.005. 22 (((3))) (5) "Contracting affiliation" means the formation of a 23 relationship between two or more entities that permits the entities 24 to negotiate jointly with carriers or third-party administrators over 25 rates for professional medical services, or for one entity to 26 negotiate on behalf of the other entity with carriers or third-party 27 administrators over rates for professional medical services. 28 "Contracting affiliation" does not include arrangements among 29 entities under common ownership or arrangements where at least one 30 entity in the arrangement is owned or operated by a state entity. 31 (((4))) (6) "Gender-affirming care" means a service or product 32 that a health care provider, as defined in RCW 70.02.010, prescribes 33 to an individual to treat any condition related to the individual's 34 gender identity and is prescribed in accordance with generally 35 accepted standards of care. "Gender-affirming care" must be covered 36 in a manner compliant with state law and the federal mental health 37 parity and addiction equity act of 2008 and the federal patient 38 protection and affordable care act of 2010 and implementing 39 p. 3 SB 5704 regulations in effect as of January 1, 2025. "Gender-affirming care" 1 can be prescribed to two spirit, transgender, nonbinary, intersex, 2 and other gender-diverse individuals. 3 (7) "Health care authority" means the Washington state health 4 care authority. 5 (8) "Health care services" means medical, surgical, chiropractic, 6 hospital, optometric, podiatric, pharmaceutical, ambulance, mental 7 health, substance use disorder, therapeutic, preventative, 8 diagnostic, curative, rehabilitative, palliative, custodial, and any 9 other services relating to the prevention, cure, or treatment of 10 illness, injury, or disease in humans. "Health care services" may be 11 provided virtually, on-demand, or in brick and mortar settings. 12 (((5))) (9) "Health care services revenue" means ((the total 13 revenue received for health care services in the previous twelve 14 months)) combined Washington-derived revenue from health care 15 services or administration from a party and all of its affiliates 16 including, but not limited to, patient revenue and premiums paid to 17 carriers, as applicable. 18 (((6))) (10) "Health maintenance organization" means an 19 organization receiving a certificate of registration pursuant to 20 chapter 48.46 RCW which provides comprehensive health care services 21 to enrolled participants of such organization on a group practice per 22 capita prepayment basis or on a prepaid individual practice plan, 23 except for an enrolled participant's responsibility for copayments 24 and deductibles, either directly or through contractual or other 25 arrangements with other institutions, entities, or persons, and which 26 qualifies as a health maintenance organization pursuant to RCW 27 48.46.030 and 48.46.040. 28 (((7))) (11) "Hospital" means a facility licensed under chapter 29 70.41 or 71.12 RCW. 30 (((8))) (12) "Hospital system" means: 31 (a) A parent corporation of one or more hospitals and any entity 32 affiliated with such parent corporation through ownership or control; 33 or 34 (b) A hospital and any entity affiliated with such hospital 35 through ownership. 36 (((9))) (13) "Merger" means a consolidation of two or more 37 organizations, including two or more organizations joining through a 38 common parent organization or two or more organizations forming a new 39 organization, but does not include a corporate reorganization. 40 p. 4 SB 5704 (((10))) (14) "Person" means, where applicable, natural persons, 1 corporations, trusts, and partnerships. 2 (((11))) (15) "Provider" means a natural person who practices a 3 profession identified in RCW 18.130.040. 4 (((12))) (16) "Provider organization" means a corporation, 5 partnership, business trust, association, or organized group of 6 persons, whether incorporated or not, which is in the business of 7 health care delivery or management and that represents seven or more 8 health care providers in contracting with carriers or third-party 9 administrators for the payments of health care services. A "provider 10 organization" includes physician organizations, physician-hospital 11 organizations, independent practice associations, provider networks, 12 and accountable care organizations. 13 (((13))) (17) "Reproductive health care" means any medical 14 services or treatments, including but not limited to pharmaceutical 15 and preventive care services or treatments, directly involved in the 16 reproductive system and its processes, functions, and organs involved 17 in reproduction, in all stages of life. 18 (18) "Successor persons" means persons formed by, resulting from, 19 or surviving any material change transaction under this chapter. 20 (19) "Third-party administrator" means an entity that administers 21 payments for health care services on behalf of a client in exchange 22 for an administrative fee. 23 Sec. 4. RCW 19.390.030 and 2019 c 267 s 3 are each amended to 24 read as follows: 25 (1) Not less than ((sixty)) 90 days prior to the effective date 26 of any transaction that results in a material change transaction, the 27 parties to the transaction shall submit written notice to the health 28 care authority and the attorney general of such material change 29 transaction. 30 (2) For the purposes of this ((section)) chapter, a material 31 change transaction includes a merger, acquisition, or contracting 32 affiliation between two or more entities of the following types: 33 (a) Hospitals; 34 (b) Hospital systems; ((or)) 35 (c) Provider organizations; or 36 (d) Between the following entities: 37 p. 5 SB 5704 (i) An entity described in (a) of this subsection and a carrier 1 or an insurance holding company system, as defined in RCW 48.31B.005; 2 or 3 (ii) An entity described in (a) of this subsection and any other 4 person or entity that has as its primary function the provision of 5 health care services or that is a pending or actual parent 6 organization of, has control over, or governance of, an entity that 7 has as its primary function the provision of health care services. 8 (3) A material change transaction includes proposed changes 9 identified in subsection (2) of this section between ((a Washington 10 entity and an out-of-state entity where the out-of-state entity 11 generates ten million dollars or more in health care services revenue 12 from patients residing in Washington state, and the entities are of 13 the types identified in subsection (2) of this section)) Washington 14 entities, as well as between Washington entities described in 15 subsection (2) of this section and out-of-state entities. Any party 16 to a material change transaction that is licensed or operating in 17 Washington state shall submit a notice as required under this 18 section. 19 (4) For purposes of subsection (2) of this section, a merger, 20 acquisition, or contracting affiliation between two or more 21 hospitals, hospital systems, or provider organizations only qualifies 22 as a material change transaction if the hospitals, hospital systems, 23 or provider organizations did not previously have common ownership or 24 a contracting affiliation. 25 (5) The attorney general shall determine whether a specific 26 transaction qualifies as a material change transaction. 27 (6)(a) In a case of an extraordinary emergency situation that 28 threatens access to health care services and has the potential to 29 immediately harm consumers, the attorney general may allow parties to 30 a transaction to submit notice less than 90 days before the effective 31 date of any transaction. 32 (b) If the parties to a material change transaction seek to 33 submit notice less than 90 days before the effective date of a 34 transaction, the parties shall provide documentation to the attorney 35 general and health care authority demonstrating the existence of an 36 extraordinary emergency situation, including a complete statement of 37 facts, circumstances, and conditions which demonstrate the 38 extraordinary emergency situation. 39 p. 6 SB 5704 (c) No later than 45 days after receiving notice under (b) of 1 this subsection, the attorney general must notify the parties and the 2 health care authority whether the material change transaction is 3 subject to emergency review or is subject to preliminary review 4 requiring parties to provide documentation pursuant to RCW 5 19.390.040. If the material change transaction is accepted for 6 emergency review, the attorney general's office must approve, approve 7 with conditions or modifications, or deny the transaction within 90 8 days. If the attorney general denies emergency review, the 9 transaction shall be subject to preliminary review by the health care 10 authority. 11 Sec. 5. RCW 19.390.040 and 2019 c 267 s 4 are each amended to 12 read as follows: 13 (1) ((The)) For material change transactions where no parties are 14 hospitals or hospital systems and no parties have generated 15 $10,000,000 or more in health care services revenue in any of their 16 preceding three fiscal years or if any of the parties is a federally 17 qualified health center or rural health clinic as those terms are 18 defined by 42 U.S.C. Sec. 1395x(aa) or safety net nonprofit family 19 planning providers specializing in the provision of the full range of 20 reproductive health options, the written notice provided by the 21 parties to the health care authority and attorney general, as 22 required by RCW 19.390.030, must include: 23 (a) The names of the parties and their current business 24 addresses; 25 (b) Identification of all locations where health care services 26 are currently provided by each party; 27 (c) A brief description of the nature and purpose of the proposed 28 material change transaction; and 29 (d) The anticipated effective date of the proposed material 30 change transaction. 31 (2) For material change transactions where no parties are 32 hospitals or hospital systems, all of the parties serve predominantly 33 low-income medically underserved individuals, all of the parties had 34 for each of their preceding three fiscal years at least 50 percent of 35 their total patient revenue come from medicaid or local, state, or 36 federal funding to provide care to uninsured or underinsured 37 individuals, and the material change transaction would not result in 38 materially lowering the overall level of care the successor persons 39 p. 7 SB 5704 provide to individuals on medicaid or who are uninsured or 1 underinsured, or cause, for the successor persons, the percentage of 2 total patient revenue that comes from medicaid or local, state, or 3 federal funding to provide care to uninsured or underinsured 4 individuals to drop below 50 percent, the written notice provided by 5 the parties to the health care authority and attorney general, as 6 required by RCW 19.390.030, must include: 7 (a) The information and documentation required under subsection 8 (1) of this section; and 9 (b) Documentation demonstrating that all the parties to the 10 material change transaction had for each of their preceding three 11 fiscal years at least 50 percent of their total patient revenue come 12 from medicaid or local, state, or federal funding to provide care to 13 uninsured or underinsured individuals, and a statement from the 14 parties describing how the material change transaction will result in 15 the successor persons complying with the requirements under this 16 subsection. 17 (3)(a) For all material change transactions other than those 18 specified under subsections (1) and (2) of this section, and except 19 for transactions that fall under subsection (4) of this section, the 20 written notice provided by the parties to the health care authority 21 and attorney general, as required by RCW 19.390.030, must include the 22 following information, unless the attorney general agrees to narrow 23 the scope of information needed relevant to the material change 24 transaction: 25 (i) The information and documentation required under subsection 26 (1) of this section; and 27 (ii) Additional documentation established by rule making by the 28 health care authority including, but not limited to, information 29 about the parties' organizational structure, finances, and the 30 potential impact of the transaction on health care services, patient 31 access and affordability, policies and procedures, community benefit, 32 and staffing. 33 (b) When documents are readily available from a publicly 34 available source for state or federal agencies, the parties may 35 indicate the public availability to the health care authority and 36 attorney general with information on how to access the documents 37 rather than providing the documents directly. 38 (4)(a) In cases of an extraordinary emergency situation that 39 threatens access to health care services and has the potential to 40 p. 8 SB 5704 immediately harm consumers, the attorney general may limit the 1 information otherwise required by subsection (3) of this section for 2 the sole purpose of expediting the review process. 3 (b) If the parties to a material change transaction seek 4 expedited review under (a) of this subsection, the parties shall 5 provide documentation to the attorney general and health care 6 authority demonstrating the existence of an extraordinary emergency 7 situation including a complete statement of facts, circumstances, and 8 conditions which demonstrate the extraordinary emergency situation. 9 (c) The attorney general shall respond within 10 days to advise 10 the parties and the health care authority as to whether any 11 information otherwise required by subsection (3) of this section may 12 be waived. 13 (d) Nothing in this subsection alters the preliminary or 14 comprehensive review and oversight required under RCW 19.390.050, 15 19.390.070, and 19.390.080 and sections 7 and 9 through 16 of this 16 act. 17 (e) Nothing in this subsection alters the information collection 18 requirements in other sections of this chapter including the 19 requirement of a public hearing under section 11 of this act. 20 (5) The attorney general and health care authority shall charge 21 an applicant fees to assist in covering the costs of implementing 22 this chapter. The attorney general and health care authority may 23 adopt rules to set the applicable fees. 24 (6) The attorney general and the health care authority may 25 request additional information that is necessary to implement the 26 goals of this chapter. 27 (7) Nothing in this section prohibits the parties to a material 28 change transaction from voluntarily providing additional information 29 to the attorney general or the health care authority. 30 Sec. 6. RCW 19.390.050 and 2019 c 267 s 5 are each amended to 31 read as follows: 32 ((The)) For the purpose of conducting an antitrust investigation 33 under chapter 19.86 RCW or federal antitrust laws, the attorney 34 general shall make any requests for additional information from the 35 parties under RCW 19.86.110 within ((thirty)) 30 days of the date 36 notice is received under RCW 19.390.030 and 19.390.040. ((Nothing)) 37 Regardless of whether the attorney general requests additional 38 information from the parties, nothing in this section precludes the 39 p. 9 SB 5704 attorney general from conducting an investigation or enforcing any 1 state or federal ((antitrust)) laws at a later date. 2 NEW SECTION. Sec. 7. (1) The attorney general shall determine 3 if the notice required under RCW 19.390.030 and 19.390.040 is 4 complete for the purpose of transaction review. If the attorney 5 general determines that a notice is incomplete, it shall notify the 6 parties within 30 days after the date the notice was received stating 7 the reasons for its determination of incompleteness. 8 (2) A completed notice shall be deemed received on the date when 9 all the information required by RCW 19.390.040 has been submitted to 10 the attorney general's office. 11 (3) For all material change transactions included under RCW 12 19.390.040(3), the attorney general shall, within seven days after 13 receipt of a completed notice, include information about the notice 14 on the attorney general's website. The information must state that a 15 notice has been received, state the names of the parties to the 16 material change transaction, describe the contents of the written 17 notice in clear and simple terms, and state the date and process by 18 which a person may submit written comments about the notice to the 19 attorney general's office. 20 (4) The attorney general is not required to make public any 21 information submitted pursuant to its investigative authority under 22 chapter 19.86 RCW, or any information or analysis associated with an 23 investigation under chapter 19.86 RCW. 24 Sec. 8. RCW 19.390.080 and 2019 c 267 s 8 are each amended to 25 read as follows: 26 Any person who fails to comply with ((any provision of this 27 chapter)) RCW 19.390.030 or 19.390.040 is liable to the state for a 28 civil penalty of ((not more than two hundred dollars per day for each 29 day during which such person is in violation of this chapter)) up to 30 10 percent of the value of the material change transaction, in the 31 discretion of the attorney general. 32 NEW SECTION. Sec. 9. (1) No material change transaction under 33 this chapter may take place if it would detrimentally affect the 34 continued existence of accessible, affordable health care in 35 Washington state for at least five years after the transaction 36 occurs. To this end the material change transaction must result in 37 p. 10 SB 5704 the affected communities having the same or greater access to 1 quality, affordable care, including but not limited to emergency 2 care, primary care, specialty care, behavioral health care, 3 reproductive health care, gender-affirming care, and end-of-life care 4 including services provided in accordance with chapter 70.245 RCW, 5 and essential health benefit categories as defined in RCW 48.43.005. 6 (2) The material change transaction must also result in at least 7 one of the following: 8 (a) Maintaining or reducing the rate of growth in patient and 9 health plan sponsor costs; 10 (b) Maintaining or increasing access to services in medically 11 underserved areas; 12 (c) Rectifying historical and contemporary factors contributing 13 to a lack of health equities or access to services; or 14 (d) Maintaining or improving health outcomes for residents of 15 this state. 16 (3) The material change transaction must not result in the 17 revocation of hospital privileges and must establish sufficient 18 safeguards to maintain appropriate capacity for health provider 19 education. 20 (4) The material change transaction must not result in a 21 reduction in staffing capacity for the provision of medically 22 necessary services to the extent such reductions would diminish 23 patients' access to quality care. 24 (5) 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. 10. (1) For all material change transactions 31 included under RCW 19.390.040(3), the health care authority shall 32 conduct a preliminary review of the completed notice to determine if 33 the material change transaction will fulfill the requirements under 34 section 9 of this act. The review must include, but is not limited 35 to, an analysis of the information and documentation provided under 36 RCW 19.390.040 and one public hearing. 37 (2) After conducting the preliminary review, if the health care 38 authority determines that the material change transaction is likely 39 p. 11 SB 5704 to fulfill the requirements under section 9 of this act, the health 1 care authority may not conduct a comprehensive review of the material 2 change transaction as provided under this section and section 12 of 3 this act. 4 (3) The health care authority shall, within 60 days of receiving 5 a completed notice, inform parties to a material change transaction 6 as to whether a comprehensive review of the material change 7 transaction is required. If the health care authority determines a 8 comprehensive review of the material change transaction is not 9 required, the health care authority shall prepare a report and 10 recommendation for the attorney general and provide it to the 11 attorney general within 10 days of making its determination. The 12 report and recommendation must include a recommendation as to whether 13 the material change transaction should be approved, approved with 14 conditions or modifications, or rejected, and provide the basis for 15 the recommendation. 16 (4) For all material change transactions included under RCW 17 19.390.040(3) that are not limited to the preliminary review, the 18 health care authority shall review the completed notice; conduct a 19 comprehensive review in collaboration with the Washington office of 20 the insurance commissioner, Washington health benefit exchange, and 21 Washington department of health; and prepare a report and 22 recommendation for the attorney general and provide it to the 23 attorney general within 30 days of making its determination. The 24 report and recommendation must include a recommendation as to whether 25 the material change transaction should be approved, approved with 26 conditions or modifications, or rejected, and provide the basis for 27 the recommendation. 28 (5) After reviewing the health care authority's report and 29 recommendation, the attorney general shall within 30 days of 30 receiving the health care authority's report and recommendation: 31 (a) Approve the material change transaction in writing if the 32 attorney general determines that the transaction does not violate the 33 requirements of section 9 of this act. The approval of a material 34 change transaction pursuant to this chapter does not constitute 35 approval for the purpose of RCW 19.86.170, or any other provision of 36 state or federal consumer protection or antitrust law. Such approval 37 pursuant to this chapter does not preclude the attorney general from 38 taking any action to enforce state or federal consumer protection or 39 antitrust laws; 40 p. 12 SB 5704 (b) Impose conditions or modifications on the material change 1 transaction to ensure the requirements of section 9 of this act are 2 met and that sufficient safeguards are in place to ensure communities 3 have continued or improved access to affordable quality care. The 4 imposition of such conditions or modifications shall be in writing 5 and constitute a final decision subject to all appellate rights 6 contained within this chapter; or 7 (c) Disapprove the material change transaction in writing with 8 written justification, which shall constitute a final decision 9 subject to all appellate rights contained within this act. 10 (6) Whenever the attorney general approves, approves with 11 conditions or modifications, or disapproves a material change 12 transaction, it shall promptly inform the parties and the health care 13 authority of its decision. 14 (7) Within 30 days after a final decision of the attorney general 15 either denying or approving with modifications a material change 16 transaction, any party to the material change transaction may appeal 17 the decision to the superior court. An appeal to the superior court 18 shall be to the superior court of a county in which the material 19 change transaction is to have occurred or to the superior court for 20 Thurston county. Such appeal shall be perfected by filing with the 21 clerk of the court a notice of appeal and by serving a copy thereof 22 by mail, or personally, on the attorney general or their appointed 23 designee. The attorney general shall, in all cases within 15 days 24 after the receipt of such notice of appeal, serve and file its notice 25 of appearance and such appeal shall thereupon be deemed at issue. The 26 attorney general shall serve upon the appealing party and file with 27 the clerk of the court within 30 days of the filing of the appeal, a 28 certified copy of the attorney general's official record which shall 29 include the final decision, and all accompanying documents, subject 30 to the same confidentiality protections provided to such documents in 31 the underlying act. These shall become the record in the case subject 32 to leave of the court. The superior court shall review the final 33 decision of the attorney general, subject to the statutory 34 requirements of the underlying act and chapter 34.05 RCW. 35 (8) The attorney general may not make its decision to disapprove 36 the material change transaction subject to any condition not directly 37 and rationally related to the requirements under section 9 of this 38 act and any condition or modification must bear a direct and rational 39 p. 13 SB 5704 relationship to the notice under review and the requirements under 1 section 9 of this act. 2 (9) Nothing in this chapter is intended to derogate from or 3 otherwise affect in any way the attorney general's authority to 4 conduct an investigation, or the process of any investigation, under 5 chapter 19.86 RCW. Nothing in this section is intended to change or 6 affect in any way any substantive law regarding the antitrust review 7 of a material change transaction. 8 NEW SECTION. Sec. 11. (1) During the course of review of 9 notices of material change transactions under RCW 19.390.040(3), the 10 health care authority shall conduct at least one public hearing, 11 which may occur remotely. At each hearing, anyone may file written 12 comments and exhibits or appear and make a statement. The attorney 13 general may subpoena additional information or witnesses, require and 14 administer oaths, require sworn statements, take depositions, and use 15 related discovery procedures for purposes of the hearing and at any 16 time prior to making a decision on the material change transaction. 17 (2) If a public hearing is scheduled, at least 15 days prior to 18 the hearing, the health care authority shall provide notice of the 19 time and place of the hearing on its website and to any person who 20 has requested notice of the hearing in writing, and the parties to 21 the material change transaction shall provide notice of the time and 22 place of the hearing on their websites, and to all employees and 23 patients of affected health care providers. Notice under this 24 subsection shall be provided in English, Spanish, and the three most 25 common other languages spoken in the affected community. 26 (3) Within 15 business days of the last hearing, the health care 27 authority shall compile a summary report of each public hearing 28 proceeding and post the summary report on its website. 29 (4) If after the initial public hearing there is any change in 30 the terms of the material change transaction that materially alters 31 any of the information that the parties to the material change 32 transaction provided under RCW 19.390.040(3), the health care 33 authority shall conduct an additional public hearing to ensure 34 adequate public comment regarding the proposed change. 35 (5) Nothing in this chapter is intended to derogate from or 36 otherwise affect in any way the attorney general's authority to 37 conduct an investigation, or the process of any investigation, under 38 chapter 19.86 RCW. Nothing in this section is intended to change or 39 p. 14 SB 5704 affect in any way any substantive law regarding the antitrust review 1 of a material change transaction. 2 NEW SECTION. Sec. 12. (1) For any material change transaction 3 included under RCW 19.390.040(3), the health care authority shall 4 conduct an access, affordability, quality, and equity review and 5 prepare a written assessment, which it must include as part of its 6 report and recommendation to the attorney general regarding a 7 specific material change transaction. In creating this written 8 assessment, the health care authority must engage with and provide 9 input in the assessment from public health experts, organizations 10 representing employees of the applicant, health care advocates, and 11 community members who reside in the service areas of the parties to 12 the material change transaction. 13 (2) The health care authority's written assessment must contain 14 information to better inform the health care authority and attorney 15 general as to whether the parties meet the requirements for a 16 material change transaction under section 9 of this act. 17 (3) The health care authority's written assessment must include, 18 but is not limited to, the following information: 19 (a) An assessment of whether the material change transaction will 20 improve or reduce access to health services in the communities 21 impacted by the material change transaction including, but not 22 limited to, emergency care services, primary care services, specialty 23 care services, behavioral health care services, reproductive health 24 care services, gender-affirming health care, and end-of-life services 25 including services provided in accordance with chapter 70.245 RCW; 26 (b) An assessment of whether the material change transaction will 27 reduce health disparities with particular reference to members of 28 medically underserved groups in the parties' service areas; 29 (c) An assessment of the effect of the material change 30 transaction on the affordability and provision of health care 31 services to individuals eligible for medical assistance under chapter 32 74.09 RCW or medicare, indigent individuals, individuals with 33 disabilities, women, racial and ethnic minorities, lesbian, gay, 34 bisexual, transgender, gender diverse, or queer individuals, 35 terminally ill individuals, and other underserved or marginalized 36 populations; 37 p. 15 SB 5704 (d) An assessment of the effect of the material change 1 transaction on the level and type of charity care the parties to the 2 material change transaction will provide; 3 (e) An assessment of the effect of the material change 4 transaction on any community benefit program that the parties to the 5 material change transaction have historically funded or operated; 6 (f) An assessment of the effect of the material change 7 transaction on staffing for patient care and areas of patient care 8 within facilities as it may affect availability of care, on the 9 likely retention of employees as it may affect continuity of care, 10 and on the rights of employees to provide input on health quality and 11 staffing issues; 12 (g) An assessment of the effect of the material change 13 transaction on the cost of patient care; 14 (h) An assessment of the prior performance of the parties to the 15 material change transaction in meeting state and federal requirements 16 to provide uncompensated care, community services, and access by 17 minorities and people with disabilities to programs receiving federal 18 financial assistance, including the existence of any civil rights 19 access complaints against any of the parties, and how the material 20 change transaction will impact the fulfillment of these requirements; 21 (i) An assessment of whether the material change transaction will 22 have a positive or negative impact on effective communication between 23 the hospitals, hospital systems, or provider organizations and people 24 with limited English-speaking ability and those with speech, hearing, 25 or visual impairments; 26 (j) An assessment of whether the material change transaction will 27 reduce architectural barriers for people with mobility impairments; 28 (k) A review of how the parties to the material change 29 transaction will maintain or improve the quality of health services 30 including a review of: 31 (i) Demographics of the parties' service areas; 32 (ii) Economic status of the population of the parties' services 33 area; 34 (iii) Physician and professional staffing issues related to the 35 material change transaction; 36 (iv) Availability of similar services at other institutions in or 37 near the parties' services area; 38 (v) Existing referral patterns and projected changes to referral 39 patterns; and 40 p. 16 SB 5704 (vi) Historical and projected market shares of hospitals, 1 hospital systems, and provider organizations in the parties' service 2 area; 3 (l) A financial and economic assessment that includes a 4 description of current costs and competition in the relevant 5 geographic and product market and any anticipated changes in such 6 costs and competition as a result of the material change transaction; 7 (m) A discussion of alternatives to the material change 8 transaction, including: (i) Closure of any of the health facilities 9 that are the subject of the material change transaction; and (ii) 10 recommendations for additional feasible mitigation measures that 11 would reduce or eliminate any significant adverse effect on health 12 care services and affordability identified in the access, 13 affordability, quality, and equity review; 14 (n) An assessment of the effect the material change transaction 15 will have on workforce patterns, including the number of provider and 16 full-time equivalent employees, and patient to staff ratios, by 17 provider type as relevant to the transaction; and 18 (o) An assessment of the effect the material change transaction 19 will have on quality of care, including patient safety, changes in 20 the occurrence of complications, changes in the occurrence of 21 unnecessary procedures, population health, disease prevalence, and 22 quality of care performance in the parties' services area. 23 (4) The information contained in the access, affordability, 24 quality, and equity review must be used by the attorney general's 25 office in determining under section 9 of this act whether to approve, 26 approve with conditions or modifications, or disapprove the material 27 change transaction. 28 (5) The health care authority's written assessment prepared as 29 part of its access, affordability, quality, and equity review must be 30 posted on the health care authority's website. 31 NEW SECTION. Sec. 13. (1) The secretary of state may not accept 32 any forms or documents in connection with any material change 33 transaction if the attorney general, in accordance with section 10 of 34 this act, disapproved the material change transaction or the parties 35 to the material change transaction have not agreed to any conditions 36 or modifications imposed by the attorney general in accordance with 37 section 10 of this act. 38 p. 17 SB 5704 (2) The attorney general may seek an injunction to prevent any 1 material change transaction that has been disapproved by the attorney 2 general in accordance with section 10 of this act or that does not 3 incorporate any conditions or modifications imposed by the attorney 4 general in accordance with section 10 of this act. 5 NEW SECTION. Sec. 14. For any material change transaction 6 included under RCW 19.390.040(3), the following apply: 7 (1) Once a material change transaction is finalized the parties 8 shall inform the attorney general in the form and manner prescribed 9 by the attorney general. 10 (2) For at least five years, the attorney general shall monitor 11 the parties' and any successor persons' ongoing compliance with this 12 chapter, and may request information and documents, and conduct on- 13 site compliance audits at the parties' or successor persons' expense. 14 The attorney general is authorized to continue monitoring the parties 15 and any successor person's ongoing compliance for a period of time 16 beyond five years for good cause. 17 (3) The attorney general shall, for five years, require annual 18 reports from the parties to the material change transaction or any 19 successor persons to ensure compliance with section 9 of this act and 20 any conditions or modifications the attorney general imposed on the 21 material change transaction. 22 (4) To effectively monitor ongoing compliance, the attorney 23 general shall regularly provide the opportunity for the public to 24 submit written comments, and may, in its discretion, engage with the 25 health care authority, and contract with experts and consultants. 26 Contract costs should not exceed an amount that is reasonable and 27 necessary to conduct the review and evaluation. 28 (5) The attorney general is entitled to reimbursement from the 29 parties or any successor persons for all actual and direct costs 30 incurred in monitoring ongoing compliance for five years, including 31 contract and administrative costs. 32 (6) The attorney general may bill the parties or successor 33 persons, and the parties or successor billed by the attorney general 34 shall promptly pay. If the parties or successor fail to pay within 30 35 days, the attorney general may assess a civil fine of five percent of 36 the billed amount for each day the party does not pay. 37 (7) If the attorney general has reason to believe that the 38 parties or successor persons of a material change transaction no 39 p. 18 SB 5704 longer satisfy the requirements of section 9 of this act, or are not 1 complying with any conditions or modifications imposed by the 2 attorney general under section 10 of this act, the attorney general 3 shall notify the health care authority and conduct an investigation. 4 As part of the investigation the attorney general will provide public 5 notice of the investigation and obtain input from community members 6 impacted by the material change transaction. Following the 7 investigation, the attorney general shall publish a report of its 8 findings. 9 (8) If after the investigation, the attorney general determines 10 that the parties or successor persons no longer satisfy the 11 requirements of section 9 of this act, or are not complying with 12 conditions or modifications imposed under section 10 of this act, the 13 attorney general shall notify the health care authority and issue an 14 order directing the parties or successor persons to come into 15 compliance with this chapter and provide a timeline by which the 16 parties must enter into compliance. 17 (9) If the parties or successor persons do not enter into 18 compliance with the attorney general's order, the attorney general 19 shall notify the health care authority and may assess a civil fine of 20 up to one percent of the total value of the material change 21 transaction for each day the parties or successor persons fail to 22 enter into compliance, and may take legal action under section 16 of 23 this act. 24 (10) The cost of the investigation and any on-site reviews 25 related to determining the validity of the information will be borne 26 by the parties to the material change transaction or successor 27 persons. 28 NEW SECTION. Sec. 15. The attorney general, in consultation 29 with provider organizations, will develop a simple form that parties 30 or successor persons subject to RCW 19.390.040(2) will submit yearly 31 for five years to demonstrate that the successor persons' overall 32 level of care to individuals on medicaid or who are uninsured or 33 underinsured has not materially lowered and that the successor 34 persons' percentage of total patient revenue that comes from medicaid 35 or local, state, or federal funding to provide care to uninsured or 36 underinsured individuals has not dropped below 50 percent. 37 p. 19 SB 5704 NEW SECTION. Sec. 16. 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. 17. 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 and (b) 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 (4)(a) The parties to a material change transaction may designate 32 portions of documents submitted pursuant RCW 19.390.040(3) and any 33 documents thereafter submitted by the parties as confidential if the 34 information is sensitive financial, commercial, or proprietary 35 information or is protected from disclosure by state or federal law. 36 The applicant shall provide two versions of any document designated 37 as confidential. The first version shall be marked as "CONFIDENTIAL" 38 and contain the full unredacted version of the document, shall be 39 p. 20 SB 5704 provided to the health care authority and the attorney general, and 1 shall be maintained as confidential by the health care authority and 2 the attorney general. The second version shall be marked as "PUBLIC" 3 and contain a redacted version of the materials from which the 4 confidential portions have been removed or obscured, shall be 5 provided to the health care authority and the attorney general, and 6 shall be made available to the public by the attorney general. An 7 applicant claiming confidentiality in respect to documents shall 8 provide the health care authority and the attorney general with a 9 redaction log that provides a reasonably detailed statement of the 10 grounds on which confidentiality is claimed, citing the applicable 11 basis for confidentiality of each portion. 12 (b) Confidential materials provided by a party to a material 13 change transaction that is subject to review by the attorney general 14 or health care authority shall be maintained as confidential 15 materials and not subject to disclosure under chapter 42.56 RCW. 16 NEW SECTION. Sec. 18. No provision of this chapter derogates 17 from the common law or statutory authority of the attorney general. 18 NEW SECTION. Sec. 19. The attorney general and health care 19 authority may adopt rules necessary to implement this chapter, 20 including creation of an applicant fee structure, and may contract 21 with and provide reasonable reimbursement to qualified persons to 22 assist in determining whether parties or successor persons are in 23 compliance with the requirements under this chapter. 24 NEW SECTION. Sec. 20. If a material change transaction is also 25 subject to review under chapter 70.38 or 70.45 RCW, the review under 26 those chapters shall be concurrent with the review under this 27 chapter, to the extent practicable. 28 NEW SECTION. Sec. 21. This act may be known and cited as the 29 keep our care act. 30 NEW SECTION. Sec. 22. This act does not apply to any pending 31 material change transaction with a letter of intent signed before the 32 effective date of this section. 33 p. 21 SB 5704 NEW SECTION. Sec. 23. Sections 7, 9 through 16, and 18 through 1 22 of this act are each added to chapter 19.390 RCW. 2 NEW SECTION. Sec. 24. This act takes effect January 1, 2026. 3 NEW SECTION. Sec. 25. If any provision of this act or its 4 application to any person or circumstance is held invalid, the 5 remainder of the act or the application of the provision to other 6 persons or circumstances is not affected. 7 --- END --- p. 22 SB 5704