Other LanguagesIn 2019, the Washington State Legislature enacted Attorney General's backed House Bill 1607, that established a new chapter, RCW 19.390 requiring that prior notice be given to the Attorney General before the effective date of a proposed material change, such as a merger or acquisition, involving hospitals, hospital systems, and provider organizations.
The notice requirement provides the Antitrust Division the information necessary to determine whether an investigation is warranted for potential anticompetitive conduct and consumer harm, ensuring that competition in health care markets across Washington remains vigorous and robust. Parties should err on the side of providing notice of proposed transactions. The fact that notification is required is not itself indicative of anticompetitive concerns.
Which transactions fall under the notice requirement?
Those transactions with an Effective Date of January 1, 2020 or later, between two or more Healthcare provider organizations, hospitals, and hospital systems that result in a material change, as defined by RCW 19.390.020 and RCW 19.390.030.
A notice is required for qualified transactions between two Washington State entities (meaning licensed or operating in Washington State), or between a Washington State entity and an out-of-state entity (meaning no presence in Washington State), if the out-of-state entity generates US$10M or more in health care services revenue from patients residing in Washington state.
A notice is not required for transactions involving entities that had common ownership or a contracting affiliation prior to the transaction. Common ownership means the parties are controlled directly or indirectly by the same ultimate parent entity, with control meaning holding at least 50% of outstanding voting securities, having the right to designate 50% or more of the profits, or having contractual power to designate 50% or more of the entities directors, as applicable.
In addition, any provider or provider organization conducting business in Washington that files a premerger notification with the Federal Trade Commission or United States Department of Justice pursuant to 15 U.S.C. § 18a, the Hart-Scott-Rodino Antitrust Improvements Act, must provide a copy of that filing to the Washington Attorney General’s Office.
If you are unsure of whether notification is required for a proposed transaction, parties should err on the side of providing notice.
When should the notice be filed?
At least 60 days prior to the effective date of the transaction.
How should the notice be filed?
Notices should be submitted using the AGO’s Notice of Material change form, linked here.
For questions, please contact the AGO’s Healthcare Notification program at HealthcareNotice@atg.wa.gov.