Hospital merger acquisition

(The Center Square) – Legislation to impose more regulatory oversight on planned health care mergers and acquisitions may be left for dead after it was shelved following a hearing this week.

House Bill 737, introduced by Buncombe County Democrat Caleb Rudow in April, was withdrawn following discussion in the House Health Committee on Tuesday. A similar bill, Senate Bill 6, hasn’t moved since it was referred to the Committee on Rules and Operations of the Senate in January.

Preserving Competition in Health Care aimed to impose stringent new requirements on mergers, acquisitions, joint operating agreements, and other types of transactions involving North Carolina hospitals.

The legislation would have expanded existing notifications to the attorney general for transactions involving nonprofit hospitals to include any hospital transaction involving a “material amount” or “substantial portion” of assets. The attorney general would have gained discretion to review transactions to vet compliance with antitrust laws, and to consider whether deals are “otherwise in the public interest,” with the ability to seek an injunction to stop transactions.

The legislation comes amid concerns about limited transparency in health system transactions, and a lack of accountability for impacts on local communities, particularly in rural areas.

Attorney General Josh Stein, a Democratic candidate for governor in 2024, has complained about a lack of public engagement with those transactions. Treasurer Dale Folwell, a Republican candidate for governor, has called on Stein to investigate consolidations he says are lowering quality and access to health care while increasing cost.

Folwell has pointed to Mission Health’s merger with HCA as an example.

“I have filed an amicus brief on the HCA Mission Health transaction, and I had to file that as an individual citizen, so that should tell you something about the attorney general’s office’s willingness to advocate,” Folwell said during a call with reporters in March. “They would not represent me as the state treasurer of North Carolina, they would not represent me as the chair of the state health plan, which is the largest purchaser of health care in North Carolina, and they refuse to give us permission to get outside counsel for me to be a co-filer with the mayor of Brevard which happens to be a Democrat.”

Folwell said in December “the attorney general has failed the patients and taxpayers of North Carolina yet again” with the merger of Charlotte-based Atrium Health with Milwaukee’s Advocate Aurora. Folwell said the merger is “just another example of the cartel putting profits and protectionism over patients.”

Stein agreed in a statement that “North Carolina has experienced a large number of hospital closures and combinations resulting in reduced services, particularly affecting rural residents,” but said “the law limits my office’s authority to protect patents’ health care access, quality and costs.”

Stein’s office responded to an inquiry from The Center Square regarding HB737 with a one line statement.

“We’re continuing to work with legislators and stakeholders to improve the bill to protect health care access and quality of care for North Carolinians,” press secretary Nazneen Ahmed wrote in an email.