On March 13, 2024, Indiana adopted Senate Bill Number 9 (Senate Bill 9), instituting state notification requirements for health care entities involved in a merger or acquisition.¹ Senate Bill 9 tracks similar statutes enacted in other states and will take effect on July 1, 2024.

Background

Premerger notification requirements have increasingly infiltrated federal and state regulatory landscapes. In 2023, the Federal Trade Commission and the U.S. Department of Justice declared proposed alterations to notification rules enforcing the Hart-Scott-Rodina Antitrust Improvements Act. States have followed a similar trajectory, enacting their own notification requirements. With the passage of Senate Bill 9, Indiana has now joined numerous other states, including, but not limited to, California, Illinois, Minnesota, and New York, in imposing mandatory reporting obligations.

Notice Requirements

Senate Bill 9 adds a new chapter to the Indiana state code centered around premerger notification requirements. Pursuant to this new chapter, an Indiana health care entity involved with another health care entity in a merger or acquisition encompassing a minimum of ten million dollars ($10,000,000) in total assets must provide written notice to the attorney general’s office at least ninety (90) days before the date of the relevant transaction.²

Notice requirements only apply to a “health care entity” as defined by Senate Bill 9. This term includes: (1) an entity that “provides diagnostic, medical, surgical, dental treatment, or rehabilitative care”; (2) an insurer issuing a “policy of accident and sickness insurance”; (3) a “health maintenance organization”; (4) a “pharmacy benefit manager”; (5) an “administrator”; and (6) a “private equity partnership” seeking to merge with or acquire any of the above entities.³ The definition excludes insurers issuing eight types of policies: (1) “accident only, credit, dental, vision, long term care, or disability income” policies; (2) supplemental policies for liability insurance; (3) automobile medical payment policies; (4) policies for a specified disease; (5) policies that provide indemnity benefits not based on expenses incurred — including plans covering either hospital confinement or gaps for deductibles or copayments; (6) workers’ compensation or comparable policies; (7) student health policies; and (8) supplemental policies.⁴

Only certain types of health care transactions trigger the new notice requirements. For reporting obligations to apply, transactions must qualify as either a “merger” or an “acquisition.”⁵ A “merger” entails “any change of ownership,” including asset acquisitions and stock purchases, while an “acquisition” refers to “any agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person.”⁶ Besides exemptions inherent within these definitions, Senate Bill 9 permits no other notice exemptions.

When notice requirements do apply to a transaction, each involved entity must report specified information, certified by a notary.⁷ Such information must include the entity’s address and federal tax number, an entity representative’s name and contact information, a description of the entity, a description of the transaction along with its anticipated timeline, and a copy of any materials sent to federal or state agencies regarding the transaction.⁸

Upon receipt of the above information, the attorney general will maintain confidentiality and review the data.⁹ The attorney general must complete the review process, as well as any optional analysis of antitrust concerns, within forty-five (45) days from the submission of notice.¹⁰ Senate Bill 9 also grants the attorney general authority to seek additional information from notifying entities by issuing a civil investigative demand, an action that could require an entity to produce further documentation, to answer interrogatories, or even to appear to testify.¹¹ While the attorney general’s pre-approval is not required for health care transactions to move forward, this 45-day buffer and potential for further investigation may delay deal closing timelines, making adequate planning essential for health care entities considering future mergers and acquisitions.

Taft strives to provide regular updates regarding legal developments that impact clients. Please contact the authors of this update with any questions.

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¹ Act of March 13, 2024, Pub. L. No. 95 (West).
² Id. at § 8.5(4)(a).
³ Id. at § 8.5(2)(a)-(b).  SB 9 leaves the term “private equity partnership” undefined.
⁴ Id.
⁵ Id. at § 8.5(4)(a).
⁶ Id. at § 8.5(1)-(3).
⁷ Id. at § 8.5(4)(a)-(b).
⁸ Id. at § 8.5(3)(b).
⁹ Id. at § 8.5(4)(c)-(d).
¹⁰Id. at § 8.5(4)(d).
¹¹ Ind. Code Ann. § 4-6-3-3.