Oregon Healthcare Market Oversight Program: OR Rev. Stat. §415.500 et seq.
Current Status: Effective since March 1, 2022.
View full legislation
Key Takeaways
- Requires parties to seek approval from the Oregon Health Authority (“OHA”) for certain healthcare mergers, acquisitions, affiliations and other transactions involving “health care entities”.
- Under the statue, approval by OHA is required prior to closing, and parties can expect a filing to delay closing by 180 days or more.
- OHA can seek an injunction to block a transaction or other equitable relief.
Applies to “health care entities,” which include:
- Healthcare professionals licensed or certified in Oregon;
- Hospitals;
- Hospital systems;
- Carriers that offer health benefits plans or Medicare Advantage plans in Oregon;
- Coordinated care organizations or prepaid managed care health services organizations;
- Any other person or business entity that has as a “primary function the provision of health care items or services, including physical, behavioral or dental health items or services”; and
- Parent organizations or entities closely related to entities that provide health care items or services (including private equity).
Health care entities which are a party to a covered transaction must provide notice if:
- At least one party had average annual revenue of $25 million or more in the three most recent fiscal years; and
- Another party to the transaction had either a) average annual revenue of $10 million or more in the three most recent fiscal years, or b) for newly organization entities, is projected to have an annual revenue of at least $10 million over its first full year of operation.
The statutory language does not specify whether revenue calculations are based only on revenue generated from Oregon.
The regulations require notice by a health care entity for certain types of transactions, including the following:
- Acquisitions, mergers, or consolidation of health care entities with another entity;
- A transaction which forms new contracts, new clinical affiliations, or new contracting affiliations between or among healthcare entities that will eliminate or significantly reduce essential services;
- The formation of a corporate affiliation involving at least one health care entity; or
- A transaction which forms a new partnership, joint venture, accountable care organization, parent organization or management services organization among health care entities that will (a) eliminate or significantly reduce essential services; (b) consolidate or combine providers of essential services when contracting with payers, insurers, or coordinated care organizations; or (c) consolidate or combine insurers when establishing health benefit premiums.
The parties must provide OHA with notice 180 days prior to closing.
OHA has 30 days to conduct its preliminary review and determine whether to approve a transaction or initiate a comprehensive 180 day review.
OHA has the ability to “stop the clock” for incomplete filings or requests for information during the process, so transactions can (and have) been subject to review greater than 180 days.
The initial notice to be provided to OHA requires a substantial amount of information and supporting documentation, including:
- The nature and objectives of the proposed transaction;
- Services and staffing of the impacted entity/facility;
- Public impact of the transaction, including quality and equity measures;
- Competitive dynamics / market competition;
- The cost impact to the state and to consumers;
- Post-transaction changes to operations; and
- Copies of the definitive agreements and financial statements (if requested by OHA).
OHA publishes transaction notices and reviews on its public webpage.
Parties may designate portions of a notice and any documents as confidential and file two versions: a confidential version and a public redacted version (along with a redaction log).
OHA can seek civil penalties up to $10,000 for any violation of the statute, including the failure to file. In addition, OHA may refer a matter to the Oregon Department of Justice for failure to file a timely notice.
[View source.]
