SB 708 — An Act amending the act of July 19, 1979 (P.L.130, No.48), known as the Health Care Facilities Act, providing for Attorney General notification; and promulgating regulations.

PRINTER'S NO.   807

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 708
                                                Session of
                                                  2025

     INTRODUCED BY BROOKS, KEEFER, FONTANA, HUTCHINSON, BAKER, DUSH
        AND MASTRIANO, MAY 16, 2025

     REFERRED TO INSTITUTIONAL SUSTAINABILITY AND INNOVATION,
        MAY 16, 2025


                                      AN ACT
 1   Amending the act of July 19, 1979 (P.L.130, No.48), entitled "An
 2      act relating to health care; prescribing the powers and
 3      duties of the Department of Health; establishing and
 4      providing the powers and duties of the State Health
 5      Coordinating Council, health systems agencies and Health Care
 6      Policy Board in the Department of Health, and State Health
 7      Facility Hearing Board in the Department of Justice;
 8      providing for certification of need of health care providers
 9      and prescribing penalties," providing for Attorney General
10      notification; and promulgating regulations.
11      The General Assembly of the Commonwealth of Pennsylvania
12   hereby enacts as follows:
13      Section 1.    The act of July 19, 1979 (P.L.130, No.48), known
14   as the Health Care Facilities Act, is amended by adding a
15   chapter to read:
16                                CHAPTER 8-D
17                       ATTORNEY GENERAL NOTIFICATION
18   Section 801-D.    Definitions.
19      The following words and phrases when used in this chapter
20   shall have the meanings given to them in this section unless the
21   context clearly indicates otherwise:
 1      "Acquired entity."    The entity, or portion of an entity,
 2   acquired under an agreement or transaction.
 3      "Acquisition."    An agreement, arrangement or activity the
 4   consummation of which results in a health care facility
 5   acquiring direct or indirect control of another health care
 6   facility. The term includes the acquisition of voting securities
 7   and noncorporate interests, including assets, capital stock or
 8   membership interests or equity interests.
 9      "Against the public interest."       A determination that an
10   action is against the welfare or well-being of the general
11   public of this Commonwealth.
12      "Agreement or transaction."     An agreement or transaction as
13   described under section 803-D(a).
14      "Attorney General."    The Office of Attorney General of the
15   Commonwealth.
16      "Capital distribution."     A payment made, liability incurred
17   or other consideration given by a target firm health system to a
18   health care facility for the purchase, acquisition, redemption,
19   repurchase, payment or retirement of capital stock or other
20   equity interest of the target firm health system or as a
21   dividend, return of capital or other distribution in respect of
22   the target firm health system's capital stock or other equity
23   interest.
24      "Community health needs assessment."      An assessment that
25   complies with the requirements of 26 U.S.C. § 501(r)(3)
26   (relating to exemption from tax on corporations, certain trusts,
27   etc.).
28      "Contracting affiliation."    As follows:
29            (1)   The formation of a relationship between two or more
30      entities that permits any of the following:

20250SB0708PN0807                    - 2 -
 1                (i)    The entities to negotiate jointly with carriers
 2          or third-party administrators over rates for professional
 3          medical services.
 4                (ii)   One entity to negotiate on behalf of the other
 5          entity with carriers or third-party administrators over
 6          rates for professional medical services.
 7          (2)     The term does not include an arrangement among
 8      entities under common ownership.
 9      "Health care facility."     As defined in section 103.
10      "Health system."     As defined in section 809.2.
11      "Material amount."     An amount of the purchase price paid or
12   total gross assets being acquired, whichever is higher, of:
13          (1)     $10,000,000 in a solo transaction; or
14          (2)     $35,000,000 in the aggregate during one calendar
15      year.
16      "Material change."     Any of the following:
17          (1)     The sale, transfer, lease or other encumbrance of a
18      material amount of a health system's assets or operations,
19      including real property, employment groups, emergency
20      departments or other units.
21          (2)     A merger, an acquisition or a contracting
22      affiliation with another health system that is valued at a
23      material amount.
24          (3)     A capital distribution or similar reduction of a
25      health system's equity capital by a material amount or the
26      incursion of an obligation that commits the health system to
27      making a capital distribution or similar reduction of equity
28      by a material amount.
29      "Merger."    A consolidation of two or more organizations,
30   including two or more organizations joining through a common

20250SB0708PN0807                     - 3 -
 1   parent organization, or two or more organizations forming a new
 2   organization. The term does not include a corporate
 3   reorganization.
 4      "Person."      As defined in 1 Pa.C.S. § 1991 (relating to
 5   definitions).
 6   Section 802-D.         Notification.
 7      (a)    General rule.--Except as provided under subsection (b),
 8   a person may not enter into an agreement or transaction
 9   involving a material change with another health care facility
10   unless the first health care facility complies with the
11   notification requirements under this chapter.
12      (b)    Exception.--An action prohibited under subsection (a)
13   may be permitted when, as determined by the Attorney General,
14   there is no feasible alternative to prevent a health system's
15   closure or a greater loss of health services.
16   Section 803-D.         Filing.
17      (a)    Duty to file.--A health care facility shall file a
18   notification in accordance with subsection (b) prior to entering
19   into an agreement or transaction that results in a material
20   change.
21      (b)    Waiting period.--A health system or provider
22   organization shall undergo a waiting period prior to entering
23   into an agreement or transaction, which shall:
24             (1)   begin on the date of receipt by the Attorney General
25      of:
26                   (i)    the notification required under subsection (c);
27             or
28                   (ii)    if notification is not completed, the
29             notification to the extent completed and a statement of
30             the reasons for noncompliance with subsection (c) from

20250SB0708PN0807                           - 4 -
 1            both persons; and
 2            (2)   end:
 3                  (i)    forty-five days following the date of receipt
 4            under paragraph (1) for all agreements or transactions;
 5            or
 6                  (ii)    on a later date if extended as prescribed under
 7            section 806-D(2).
 8      (c)   Notice.--The notification of the transaction or
 9   agreement required under subsection (a) shall be submitted to
10   the Attorney General on a form and in a manner developed by the
11   Attorney General. The notification shall include all of the
12   information required under 15 U.S.C. § 18a (relating to
13   premerger notification and waiting period) and regulations
14   promulgated under the law.
15      (d)   Additional information.--The Attorney General may
16   require the submission of additional information or documentary
17   material, including a community health needs assessment, from a
18   health care facility required to file notification under
19   subsection (b), or from any officer, director, partner, agent or
20   employee of the health care facility.
21      (e)   Right-to-Know Law.--A document provided to the Attorney
22   General under this chapter shall be exempt from inspection and
23   copying under the act of February 14, 2008 (P.L.6, No.3), known
24   as the Right-to-Know Law.
25      (f)   Confidentiality of and restrictions on use of
26   materials.--The Attorney General may not use, as grounds for a
27   prosecution or civil action unrelated to the transaction,
28   materials provided to or disclosed under this act to the
29   Attorney General.
30   Section 804-D.        Public hearings and notice.

20250SB0708PN0807                       - 5 -
 1      (a)     Authority to conduct.--Prior to the expiration of the
 2   respective waiting period under Federal law, along with any
 3   extension granted under Federal law, the Attorney General may
 4   conduct one or more public hearings on the proposed agreement or
 5   transaction.
 6      (b)     Format.--A public hearing under subsection (a) shall be
 7   live-streamed on the Attorney General's publicly accessible
 8   Internet website. A video recording of the public hearing shall
 9   be posted on the Attorney General's publicly accessible Internet
10   website.
11      (c)     Specific entities.--If an agreement or transaction
12   involves acquiring a health care facility, the Attorney General
13   may hold a public hearing in any county in which the acquired
14   entity is located to hear comments from interested parties.
15   Interested parties shall include legal aid and health advocacy
16   organizations within a county in which the acquired entity is
17   located. The Attorney General may request testimony at a hearing
18   from State agencies subject to section 807-D(b).
19      (d)     Notice.--The Attorney General shall provide written
20   notice of the date, time and place of the public hearing:
21            (1)   on the Attorney General's publicly accessible
22      Internet website;
23            (2)   through social and broadcast media;
24            (3)   through publication in one or more newspapers of
25      general circulation in the affected community; and
26            (4)   to the governing body of each county in which the
27      acquired entity is located.
28      (e)     Substantive changes to proposal.--If a substantive
29   change in the agreement or transaction is submitted to the
30   Attorney General after the initial public hearing, the Attorney

20250SB0708PN0807                    - 6 -
 1   General may conduct an additional public hearing to hear
 2   comments from interested parties with respect to the change.
 3   Section 805-D.     Determination and restraining prohibited
 4                  transactions.
 5      (a)   Material change against public interest.--The Attorney
 6   General shall determine whether the proposed agreement or
 7   transaction is likely to create a material change that is
 8   against the public interest.
 9      (b)   Action.--If the Attorney General determines that the
10   proposed agreement or transaction is against the public interest
11   under subsection (a), the Attorney General may commence an
12   action in a court of competent jurisdiction to enjoin the
13   agreement or transaction.
14      (c)   Licensing.--A State license of a health care facility
15   may not be revoked, denied, impeded or cited for noncompliance
16   due solely to a filing or review under this chapter.
17   Section 806-D.     Compliance and power of court.
18      A health care facility, or any officer, director, partner,
19   agent or employee of the health care facility, that
20   substantially fails to comply with the notification requirement
21   under this chapter or any request for the submission of
22   additional information or documentary material under this
23   chapter within the respective waiting period, the court may, in
24   its discretion, do any or all of the following:
25            (1)   Order compliance.
26            (2)   Extend the waiting period until there has been
27      substantial compliance.
28            (3)   Grant other equitable relief as the court determines
29      necessary or appropriate.
30   Section 807-D.     Powers and duties of Attorney General.

20250SB0708PN0807                       - 7 -
 1      (a)   Rules and regulations.--The Attorney General, in
 2   consultation with the department, shall adopt and promulgate
 3   rules and regulations as may be necessary to carry out and
 4   enforce this chapter. The Attorney General and the department
 5   shall ensure that the rules and regulations of the Office of
 6   Attorney General and the department are not in conflict.
 7      (b)   Agency cooperation.--
 8            (1)   The department, the Department of Aging, the
 9      Department of Human Services and the Insurance Department
10      shall assist the Attorney General in reviewing the proposed
11      agreement and transaction, if requested, and shall promptly
12      comply with any request for testimony or information.
13            (2)   The Attorney General may share information with the
14      Insurance Department as may be permissibly necessary and
15      appropriate for the Insurance Department to concurrently
16      review a proposed transaction under Article XIV of the act of
17      May 17, 1921 (P.L.682, No.284), known as The Insurance
18      Company Law of 1921. Documents provided by the Attorney
19      General to the Insurance Department under this paragraph
20      shall be treated as confidential and are not public records
21      subject to inspection and copying under the act of February
22      14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.
23   Section 808-D.    Nonapplicability.
24      This chapter does not apply to a physician or psychiatric
25   practice, whether a sole proprietorship, partnership, foundation
26   or corporate entity of any kind.
27   Section 809-D.    Expiration.
28      This act shall expire four years after the effective date of
29   this section.
30   Section 810-D.    Study and report by Health Care Cost Containment

20250SB0708PN0807                     - 8 -
 1                Council.
 2      Within three years of the effective date of this section, the
 3   Health Care Cost Containment Council, as authorized under 35
 4   Pa.C.S. § 3309 (relating to special studies and reports), shall
 5   perform a study on the effects of this chapter and shall report
 6   its findings to the chairperson and minority chairperson of the
 7   Health and Human Services Committee of the Senate and the
 8   chairperson and minority chairperson of the Health Committee of
 9   the House of Representatives.
10   Section 811-D.    Construction.
11      This chapter shall not be construed to:
12          (1)     narrow, abrogate or otherwise alter the authority of
13      the Attorney General to maintain competitive markets and
14      prosecute or enforce violations of antitrust and unfair trade
15      practices laws; or
16          (2)     prohibit any Federal agency, Commonwealth agency or
17      other state agency from regulating an agreement or
18      transaction or joining as party in an action seeking to
19      enjoin an agreement or transaction, including the Insurance
20      Department's jurisdiction to review an exposed transaction
21      under Article XIV of the act of May 17, 1921 (P.L.682,
22      No.284), known as The Insurance Company Law of 1921.
23   Section 812-D.    Severability.
24      The provisions of this chapter are severable. If any
25   provision of this chapter or its application to any health care
26   facility or circumstance is held invalid, the invalidity shall
27   not affect other provisions or applications of this chapter
28   which can be given effect without the invalid provision or
29   application.
30      Section 2.    This act shall take effect in 180 days.

20250SB0708PN0807                      - 9 -