New Requirements for Certain Health Care Entity Transactions

On May 26, 2023, Governor Walz signed into law specific reporting requirements for certain health care entity transactions. Minnesota Statutes sections 145D.01 (Requirements for Certain Health Care Entity Transactions), 145D.02 (Data Reporting of Certain Health Care Transactions) and 309.715 (Ownership or Control of University of Minnesota Health Care Facilities). These requirements took effect May 26, 2023.

The information provided below is a general description of the new requirements specific to the Office of the Minnesota Attorney General. Information regarding compliance with Minnesota Department of Health requirements are available here. Inquiries about those requirements should be directed to that agency. Health care entities should seek legal advice from an attorney regarding specific compliance. Members of the public seeking to provide feedback about a health care transaction are encouraged to contact the Attorney General’s Office through the Health Care Transaction Community Input Form or by phone at (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota).

What type of health care entities may be subject to the reporting requirements?

Hospital systems, health care provider group practices, medical foundations, captive professional entities, or an entity that owns or controls or is owned or controlled by any of those previously listed. See Minn. Stat. § 145D.01, subd. 1.

Both for-profit and nonprofit health care entities are subject to the notice requirement. Minnesota nonprofit corporations may be subject to separate and additional AGO transaction reporting requirements under Minnesota Statutes section 317.811. A nonprofit’s submission under Minnesota Statutes section 145D.01, subdivision 1 does not satisfy these separate statutory notice requirements. For more information, click here.

What types of transactions may be subject to the reporting requirements?

A health care entity, as described above, that intends to enter into a transaction with another health care entity such as for the merger, sale, or purchase of some or all of an entity’s assets. A transaction can be a single action, or a series of actions within a five-year period, which occurs in part within the state of Minnesota or involves a health care entity formed or licensed in Minnesota. See Minn. Stat. § 145D.01, subd. 1.

What size of health care entities may be subject to the Attorney General reporting requirements?

When at least one health care entity involved in the transaction has average revenue of at least $80,000,000 per year OR the transaction will result in an entity projected to have average revenue of at least $80,000,000 per year once the entity is operating at full capacity. See Minn. Stat. § 145D.01, subd. 2.

When must notice of the proposed transaction be provided by?

Notice must be provided at least 60 days before the proposed completion date of the transaction, subject to waiver of all or any part of the waiting period or any part of the submission requirements. See Minn. Stat. § 145D.01, subd. 2(b). The notice period may be extended up to 90 days by the Minnesota Attorney General’s Office by written notification. See Minn. Stat. § 145D.01, subd. 2(e).

How should notice and/or information be provided?

Contact the Minnesota Attorney General’s Office’s at [email protected] and the Minnesota Department of Health at [email protected] for instructions on how to submit the information and documents required under the law. Inquiries about submissions should be sent to both email addresses.

How is the information provided to Minnesota Attorney General’s Office under this law classified?

Generally, data provided by a health care entity to the Attorney General under this law is civil investigative data. Minn. Stat. 145D.01, Subd. 7; Minnesota Government Data Practices Act (MGDPA), Minn. Stat. § 13. Minnesota Statutes Section 13.39, subd. 2 applies to data provided by a health care entity and the commissioner to the attorney general and data provided by a health care entity to the commissioner under this section. The attorney general or the commissioner may make any data classified as confidential or protected nonpublic under this subdivision accessible to any civil or criminal law enforcement agency if the attorney general or commissioner determines that the access will aid the law enforcement process.

Is there information that can be provided in advance of submitting all the notice requirements?

Yes, entities are encouraged to provide the following statutorily required information in advance of its full submission in order to facilitate timely review of materials:

Minn. Stat. § 145D.01 Subd. 2(c)

(1) the entities involved in the transaction (and whether the entities are non-profit)

(2) the leadership of the entities involved in the transaction, including all board members, managing partners, member managers, and officers;

(3) the services provided by each entity and the attributed revenue for each entity by location;

(4) the primary service area for each location;

(6) (partial)

the current relationships between the entities and the affected health care providers and practices,
the locations of affected health care providers and practices,
the services provided by affected health care providers and practices

(12) the brokers, experts, and consultants used to facilitate and evaluate the transaction;

(13) (partial)

the number of full-time equivalent positions at each location before the transaction by job category, including administrative and contract positions; and

Minn. Stat. § 145D.01 Subd. 2(d)

(1) the current governing documents for all entities involved in the transaction and any amendments to these documents;

(8) all documents reflecting the purposes of or restrictions on any related nonprofit entity's charitable assets;

(9) copies of all filings submitted to federal regulators, including any filing the entities submitted to the Federal Trade Commission under United States Code, title 15, section 18a, in connection with the transaction; (if any have been submitted)

(11) audited and unaudited financial statements from all entities involved in the transaction and tax filings for all entities involved in the transaction covering the preceding five fiscal years