On Jan. 8, Gov. Maura Healey signed a bill into law that will increase scrutiny of healthcare transactions, according to a Jan. 10 report from The National Law Review.
Here are five key points to understand regarding the new legislation:
1. The legislation is designed to enhance oversight of private equity sponsors, major equity investors, health care real estate investment trusts, management services organizations, and pharmacy benefits firms operating within the state.
2. The passage of the current law follows waves of debate last year over similar bills.
3. The legislation further expands the types of transactions that must comply with the material-change notice requirements set by the state's Health Policy Commission. This includes major increases in ownership capacity, transactions that involve a substantial equity investor leading to a shift in ownership of a healthcare entity, real estate sale-leaseback agreements, and other notable acquisitions, as well as the conversion of a provider or organization from nonprofit to for-profit status.
4. The HPC will now necessitate additional documentation for these transactions, which will include details about capital structure, financial status, ownership and management framework, as well as the audited financial statements of equity investors.
5. The legislation additionally lowers the market share threshold for mergers and acquisitions that must comply with the material-change notice requirement and broadens the criteria for evaluating costs and market impacts.
