In a prior blog post, we noted the trend of states enacting legislation implementing reporting requirements for certain healthcare transactions. On March 13, 2024, Indiana joined this trend as Indiana Governor Eric Holcomb enacted Senate Enrolled Act No. 9 (the Act). The Act mandates that, effective July 1, 2024, Indiana health care entities involved in a merger or acquisition with another health care entity with total assets of at least ten million dollars ($10,000,000) must notify the Office of the Indiana Attorney General of the transaction at least ninety (90) days prior to closing. Indiana joins several other states with previously passed notice laws, including California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, Nevada, New York, Oregon, Rhode Island, and Washington.

However, the Act’s scope is broader than similar legislation recently enacted in other states. For example, the ten-million-dollar ($10,000,000) threshold is lower than the threshold included in legislation from other states, and the definition of “health care entity” applies to a wide array of entities. The definition of “health care entity” within the Act includes “any organization or business that provides diagnostic, medical, surgical, dental treatment, or rehabilitative care” and also includes various types of insurers. The term “health care entity” additionally encompasses private equity partnerships seeking to enter into a merger or acquisition with an Indiana health care entity regardless of where the private equity partnership is located.

The notice required by the Act must include the following information from each health care entity: business address and federal tax number, name and contact information of a representative of the health care entity concerning the merger or acquisition, description of the health care entity, description of the merger or acquisition, including the anticipated timeline, and a copy of any materials that have been submitted to a federal or state agency concerning the merger or acquisition. The notice submitted must be certified before a notary public.

Not later than forty-five (45) days from the submission of notice, the Office of the Indiana Attorney General is required to review the information submitted with the notice and may analyze any antitrust concerns in writing. The Office of the Indiana Attorney General is granted the authority to issue a civil investigative demand for additional information as needed and is required to keep confidential all nonpublic information that is submitted.

The Act also contains strict penalties for noncompliance. If a health care entity fails to comply with a written demand, the Act grants the Office of the Indiana Attorney General authority to file an order to enforce the demand. If an entity fails to comply with a final order or an order imposing sanctions, the court may hold the person in contempt. Additionally, if a court finds that a party has acted in bad faith in resisting the demand, it may order that person to pay the other parties’ reasonable expenses including attorney’s fees.

In the face of this growing trend of increased transaction oversight of healthcare transactions, it is essential for healthcare entities to continue to closely monitor these developments in various states and ensure subsequent compliance. We will continue to monitor developments across the country regarding additional states adopting such laws as well as changes to those laws already adopted.