Requirement to File
Under RCW 19.390,
any entity entering into any
transaction that constitutes a material change must submit written notice to the Washington State
Attorney general of such material change.
A
material change includes:
- A merger, acquisition, or contracting affiliation between two or more
entities of the following types: hospitals, hospital systems, or provider organizations.
- Transactions involving any entity or person that result in a change of majority ownership or control of a hospital, hospital system, or provider organization;
-
Acquisitions, sales, or transfers of the majority of the assets of a hospital, hospital system, or provider organization including, but not limited to, real property sale and leaseback transactions; or
-
A conversion of a hospital, hospital system, or provider organization from a nonprofit corporation or a foreign nonprofit corporation to either a domestic or foreign for-profit corporation, or a domestic or foreign unincorporated entity.
A transaction only qualifies as a material change if the parties to the transaction did not previously have common ownership or a contracting affiliation.
Out of State Entities: A material change between a Washington entity and an out-of-state-entity must
only be reported where the out-of-state entity generates $10,000,000 or more in health care
services revenue from patients residing in Washington state.
Helpful Definitions:
“Merger” means a consolidation between two or more organizations, including two or more
organizations joining through a common parent organization or two or more organizations forming a
new organization, but does not include a corporate reorganization.
“Acquisition” means an agreement, arrangement, or activity the consummation of which results in a
person acquiring directly or indirectly the control of another person, and includes the acquisition of
voting securities and noncorporate interests, such as assets, capital stock, membership interests, or
equity interests.
“Contracting affiliation” means the formation of a relationship between two or more entities that
permits the entities to negotiate jointly with carriers or third-party administrators over rates for
professional medical services, or for one entity to negotiate on behalf of the other entity with carriers or
third-party administrators over rates for professional medical services. “Contract affiliation” does not
include arrangements among entities under common ownership.
“Provider organization” means a corporation, partnership, business trust, association, or organized
group of persons, whether incorporated or not, which is in the business of health care services delivery or
management and that represents seven or more health care providers in contracting with carriers or
third-party administrators for the payments of health care services. A "provider organization" includes, but is not limited to,
physician organizations, physician-hospital organizations, independent practice associations, provider
networks, and accountable care organizations.
Additional defined terms can be found at RCW 19.390.020.
Submission of Notice
This notice form must be submitted to the Washington State Attorney General’s Office no later than 60
days prior to the effective date of any transaction that results in a material change.
Filing Fee
A filling fee is requried for each material change transaction. Only one filing fee is required, payable by a single party to the transaction. The filing fee will be based on the anticipated value of the transaction, according to the following schedule:
- $2,500 for transactions up to $1,000,000;
- $7,500 for transactions over $1,000,000 and up to $4,000,000;
- $15,000 for transactions over $4,000,000 and up to $10,000,000;
- $20,000 for transactions over $10,000,000 and up to $20,000,000;
- $25,000 for transactions over $20,000,000; and
- $2,500 for contracting affiliations involving no transfer of assets.
The AGO is developing a system to enable parties to pay the filing fee as part of the submission process. Until that system is available, parties should contact the AGO at healthcarenotice@atg.wa.gov for payment instructions.
Confidentiality
Information submitted to the Washington State Attorney General’s Office pursuant to RCW 19.390,
including this Notice form, shall be maintained and used by the AGO in the same manner and under the
same protections as provided in RCW 19.86.110.
Requests for Additional Information
The Attorney General shall make any additional requests for information from the parties within thirty
days of the date notice is received. If the attorney general requests additional information pursuant, the transaction between the parties subject to the request may not proceed until 30 days after the parties have certified they are in substantial compliance with the attorney general's request.
Any subsequent requests for additional information from the attorney general shall not extend the 30-day waiting period for the parties to close the transaction. This does not preclude the Attorney General from conducting an investigation or enforcing state or federal antitrust laws at a later date.
Post-Filing Update to the Attorney General
Within 30 days of the completion of the transaction, the parties shall submit written notice to the Attorney General that the transaction has been completed, whether consummated, enjoined, or abandoned.
If you have any additional questions, please contact us at healthcarenotice@atg.wa.gov.
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