backHHS Publishes Ownership Data for Hospice and Home Health Agencies
On April 20, 2023, HHS announced that it is releasing ownership data for all Medicare-certified hospice and home health agencies not previously available to the public in this way. There are more than 6,000 hospices and 11,000 home health agencies certified to participate in the Medicare program, whose ownership information is now publicly available on the CMS website.
This data release flows from CMS’s stated desire to make the healthcare industry more transparent. According to CMS, “making ownership information transparent benefits researchers and enforcement agencies by allowing them to identify common owners that have had histories of poor performance, analyze data and trends on how market consolidation impacts consumers with increased costs without necessarily improving quality of care, and evaluate the relationships between ownership and changes in health care costs and outcomes.” In addition, CMS believes that publishing this information “benefits the public by assisting patients, and their loved ones, in making more informed decisions about care.” CMS published similar data for more than 15,000 nursing homes in September 2022, and CMS released ownership information on the 7,000 hospitals enrolled in Medicare in December 2022.
The data elements available for hospice and home health agency ownership include:
- Enrollment information such as organization name, type, practice location addresses, National Provider Identifier (NPI), and CMS Certification Number (CCN);
- Detailed information about each owner such as whether it is an organization or an individual and whether it is a direct owner or indirect owner (that is, there is at least one subsidiary between it and the provider); and
- A numerical associate ID for each owner to enable linkage to the enrollment file.
As part of this release, CMS is also publishing files that include data on mergers, acquisitions, consolidations, and changes of ownership since 2016 for hospices and home health agencies enrolled in Medicare.
Reporter, Amy L. O’Neill, Sacramento, +1 916 321 4812, aoneill@kslaw.com.
Illinois House Passes Legislation to Increase State Oversight of Healthcare Consolidation
On March 24, 2023, the Illinois House of Representatives passed HB 2222. If passed by the Illinois Senate and signed by Illinois’ Governor, HB 2222 would amend the Illinois Antitrust Act (the Act) to add reporting requirements relating to “covered transactions” for healthcare facilities and provider organizations. HB 2222 is intended to go into effect on January 1, 2024.
The Act would prohibit certain anti-competitive trade practices within Illinois and provide the Illinois Attorney General (AG) with the authority to pursue criminal and civil violations of the Act. The intent behind HB 2222 is to establish a review process to assess a healthcare transaction’s impact on cost, quality and access to care. This follows a larger national trend by states to require healthcare entities to seek additional regulatory approval prior to undertaking changes of control or ownership or entering into affiliations with other entities.
Reporting Requirements Under HB 2222
Because there is no minimum transaction value included with the current draft of HB 2222, healthcare facilities and provider organizations subject to HB 2222 would be required to report all “covered transactions” to the AG. Specifically, HB 2222 would require thirty days’ prior notice to the AG of any merger, acquisition or contracting affiliation between two or more “healthcare facilities” or “provider organizations” if such entities were not previously under common ownership or contracting affiliation. “Covered transactions” also includes transactions between an Illinois healthcare entity and an out-of-state healthcare entity when the out-of-state entity generates $10 million or more in annual revenue from patients residing in Illinois.
HB 2222 defines “healthcare facilities” broadly to include the following:
- Ambulatory surgery treatment centers;
- Hospitals and other locations or operations licensed under the Hospital Licensing Act;
- Outpatient surgery centers;
- Kidney disease treatment centers; and
- Any other institution, place, building or room used for provision of healthcare category or services defined under the Illinois Health Facilities Planning Act (HFPA), including cardiac catheterization and open-heart surgery.
HB 2222 defines a “contracting affiliation” as the formation of a relationship between two or more entities that permits the entities to negotiate jointly with health carriers or third-party administrators over rates for professional medical services, or permits one entity to negotiate on behalf of the other entity with health carriers or third-party administrators over rates for professional medical services. Arrangements among entities under common ownership are not included within the definition of “contracting affiliation.”
If signed into law, HB 2222 would require the following:
- If any healthcare facility or provider organization is a party to a covered transaction and files a premerger notification to the federal antitrust enforcement agencies in compliance with the Hart-Scott-Rodino Act (HSR), such healthcare facility or provider organization must simultaneously provide a copy of such filing to the AG.
- If a transaction is not covered by HSR, a healthcare facility or provider organization would file an application for a change of ownership with the Illinois Health Facilities and Services Review Board (Review Board) in compliance with the HFPA. Upon review, the Review Board would provide a copy of the filing to the AG.
- If any healthcare facility or provider organization is party to a transaction that does not require a filing under HSR or a change of ownership filing with the Review Board, such entity would be required to provide written notice to the AG with the following information:
- The names of the parties and their current business addresses;
- Identification of all locations where healthcare services are currently provided by each party;
- A brief description of the nature and purpose of the proposed transaction; and
- The anticipated effective date of the proposed transaction.
Upon review, the AG may request additional information from the healthcare facility or provider organization within thirty days of receiving notice of the covered transaction. If the AG requires additional information from the healthcare facility or provider organization, the covered transaction may not proceed until thirty days after the parties have substantially complied with the request.
Penalties for Failure to Comply with HB 2222
If a healthcare facility or provider organization fails to (1) comply with the notice requirements of HB 2222 or (2) provide responses to the AG’s requests for additional information, such entity would be subject to a $500 penalty for each day in violation, after a ten-day cure period. The AG would also have the right to seek a temporary restraining order or injunctive relief to prevent the organization from continuing noncompliance with HB 2222.
The Health Facilities Planning Act
HB 2222 would also amend the HFPA to add a requirement for notice for change of ownership of a healthcare facility. The proposed legislation would require that, upon the Review Board’s finding that an application for a change of ownership is complete, notice of the same be delivered to the AG in the same manner and at the same time as notice of such transactions is delivered to other stakeholders and posted to the Review Board’s website.
Conclusion
If enacted, Illinois would join California, Connecticut, Massachusetts, Nevada, Oregon, and Washington in requiring pre-approval of healthcare transactions within their respective states. While the Illinois AG currently has authority to investigate transactions and pursue criminal and civil violations of the Act, under HB 2222, the AG would receive notice of covered transactions and have the opportunity to investigate healthcare transactions that have previously not been subject to advance review and reporting requirements.
Reporter, Michelle Huntsman, Houston, +1 713 751 3211, mhuntsman@kslaw.com.