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11 April 20246 minute read

Indiana passes law requiring prior notice of healthcare transactions

On March 13, 2024, Indiana Governor Eric Holcomb enacted Senate Enrolled Act No. 9 (SEA 9), making Indiana the tenth state[1] to begin reviewing certain transactions with healthcare entities (ie, other entities in addition to hospitals).[2]

With the enactment of SEA 9, Indiana joins a growing number of states seeking to monitor and regulate private equity involvement in healthcare transactions.  The latest measure is one of the most broadly enacted healthcare transaction review laws to date and may apply to a comparatively higher volume of transactions.  

SEA 9 stems from Indiana’s Health Care Cost Oversight Task Force’s initiative to tackle the state’s high healthcare costs, which national experts note are partly driven by limited competition in the healthcare industry resulting from increased transactional activity in the space.

Starting July 1, 2024, Indiana will require 90-day advance written notice to the Indiana Attorney General when:

An Indiana health care entity [is] involved in a merger or acquisition with another health care entity with total assets, including combined entities and holdings, of at least ten million dollars ($10,000,000).

The state’s materiality threshold under SEA 9 is generally lower than those of other states that have enacted similar transaction review laws.[3]  Notably, the law specifies that $10 million “total assets” include “combined entities and holdings.” SEA 9 does not include any language predicating that dollar amount on Indiana-generated revenue or Indiana-located assets.  Further, under SEA 9, “health care entity” is defined broadly to include: 

  1. Any organization or business that provides diagnostic, medical, surgical, dental treatment, or rehabilitative care

  2. An insurer that issues a policy of accident and sickness insurance (as defined in Indiana Code), except for certain types of coverage

  3. A health maintenance organization (HMO), as defined in Indiana Code

  4. A pharmacy benefit manager (PBM), as defined in Indiana Code

  5. An administrator, as defined in IC Indiana Code, and 

  6. A private equity partnership, regardless of where the private equity partnership is located, seeking to enter into a merger or acquisition with an entity described in (1) through (5). 

Private equity is explicitly included in the definition of “health care entity” to the extent it will enter into a merger or acquisition with organizations that provide diagnostic, medical, surgical, dental treatment, or rehabilitative care (as well as HMOs, PBMs, administrators, and certain insurers).  Many other states do not explicitly include private equity in the definition of healthcare entity and limit the applicability of the notice or reporting requirements to transactions with larger medical practices or healthcare facilities, while excluding transactions with other healthcare providers such as small physician practices and dental practices.  Folding private equity into the definition of “health care entity” will likely be another contributing factor to Indiana’s notice requirement applying to a higher volume of healthcare transactions.

In totality, SEA 9, absent additional regulatory guidance, could be broadly interpreted as applying to a private equity investor even when it is not organized in Indiana and does not generate any revenue in Indiana.  Given that the transaction threshold is based on the dollar value of all assets of holding and combined entities and the breadth of the definition of “health care entity,” many smaller transactions that would not trigger other states’ transaction review laws will require notice in Indiana.  

SEA 9 will require each healthcare entity to include in the notice general information on the entities, description, and anticipated timeline of the transaction, and copy of any materials concerning the transaction that have been submitted to a state or federal agency (eg, Hart-Scott-Rodino Antitrust Improvements Act of 1976).  Additionally, the new law authorizes the Indiana Attorney General to take two actions with respect to the notice: 1) issue a written analysis of antitrust concerns with the transaction within 45 days from submission and 2) issue a civil investigative demand to the submitter for additional information.   

SEA 9 only requires notice and does not explicitly permit the Indiana Attorney General to enjoin the transaction or otherwise withhold approval or consent for the parties to consummate the transaction.  However, nothing precludes the Indiana Attorney General, after finding anticompetitive concerns, from invoking its authority under other statutes.[4]  Accordingly, although SEA 9 is a “true” notice requirement, complying with the law’s reporting obligation could potentially serve as a basis for the Indiana Attorney General to exercise its authority to seek an injunction or other penalties with respect to reported healthcare transactions.

In all, carrying over last year’s momentum, states may continue to enact new, or supplement existing,[5] transaction review laws in 2024.  Private equity firms looking to invest in healthcare businesses in Indiana, and other states, are encouraged to carefully analyze these new laws to ensure compliance with each state’s unique requirements well in advance of any transaction consummation. DLA Piper is monitoring developments in existing and new state laws and related regulatory guidance.

Please contact the authors for more information.


[1] Nine other states – California, Connecticut, Illinois, Massachusetts, Minnesota, New York, Nevada, Oregon, and Washington – have enacted advance notice requirements for healthcare transactions.

[2] This article generally refers to mergers and acquisitions involving healthcare entities as “healthcare transaction” for ease of reading.

[3] For example, New York carves out “de minimis transaction” from the definition of “material transaction” therefore  excluding “a transaction, or a series of transactions, [resulting] in a health care entity increasing total gross in-state revenues by less than [$25 million]” from required prior notice; and Massachusetts requires “[a]ny Provider or Provider Organization with $25 million or more in Net Patient Service Revenue in the preceding fiscal year” to provide notice of any material change, as defined in regulation.

[4] See Indiana Code 24-1-2-5.1. 

[5] See eg, California Assembly Bill 3129.