SB1766 103RD GENERAL ASSEMBLY

LRB103 30579 LNS 57016 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1766

Introduced 2/9/2023, by Sen. Ann Gillespie

SYNOPSIS AS INTRODUCED:

30 ILCS 105/5.990 new
740 ILCS 10/7.2	from Ch. 38, par. 60-7.2
740 ILCS 10/7.2a new
740 ILCS 10/13 new

Amends the Illinois Antitrust Act. Provides that documentary material, transcripts of oral testimony, or answers to interrogatories obtained in an investigation of a violation of the Act may be used by the Attorney General in any administrative or judicial action or proceeding. Provides that information voluntarily produced to the Attorney General for purposes of an investigation of a violation of the Act or information provided to the Attorney General under a notice requirement shall be treated as if produced pursuant to a subpoena for purposes of maintaining the confidentiality of such information. Provides that health care facilities that are party to a covered transaction shall provide notice of such transaction to the Attorney General no later than 60 days prior to the transaction closing or effective date of the transaction. Provides that any health care facility that fails to comply with the notice requirement is subject to a civil penalty of not more than $500 per day for each day during which the health care facility is in violation of the requirement. When the Attorney General has reason to believe that a health care facility has engaged in or is engaging in a covered transaction without complying with the notice requirement, allows the Attorney General to apply for and obtain a temporary restraining order or injunction prohibiting the health care facility from continuing its noncompliance or doing any act in furtherance thereof. Makes a conforming change in the State Finance Act. Effective January 1, 2024.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Finance Act is amended by adding Section 5.990 as follows:

(30 ILCS 105/5.990 new)

Sec. 5.990. The Antitrust Enforcement Fund.

Section 10. The Illinois Antitrust Act is amended by changing Section 7.2 and by adding Sections 7.2a and 13 as follows:

(740 ILCS 10/7.2) (from Ch. 38, par. 60-7.2)

Sec. 7.2. (1) Whenever it appears to the Attorney General that any person has engaged in, is engaging in, or is about to engage in any act or practice prohibited by this Act, or that any person has assisted or participated in any agreement or combination of the nature described herein, he may, in his discretion, conduct an investigation as he deems necessary in connection with the matter and has the authority prior to the commencement of any civil or criminal action as provided for in the Act to subpoena witnesses, and pursuant to a subpoena (i) compel their attendance for the purpose of examining them under oath, (ii) require the production of any books, documents, records, writings or tangible things hereafter referred to as "documentary material" which the Attorney General deems relevant or material to his investigation, for inspection, reproducing or copying under such terms and conditions as hereafter set forth, (iii) require written answers under oath to written interrogatories, or (iv) require compliance with a combination of the foregoing. Any subpoena issued by the Attorney General shall contain the following information:

(a) The statute and section thereof, the alleged violation of which is under investigation and the general subject matter of the investigation.

(b) The date and place at which time the person is required to appear or produce documentary material in his possession, custody or control or submit answers to interrogatories in the office of the Attorney General located in Springfield or Chicago. Said date shall not be less than 10 days from date of service of the subpoena.

(c) Where documentary material is required to be produced, the same shall be described by class so as to clearly indicate the material demanded.

The Attorney General is hereby authorized, and may so elect, to require the production, pursuant to this section, of documentary material or interrogatory answers prior to the taking of any testimony of the person subpoenaed. Said documentary material shall be made available for inspection and copying during normal business hours at the principal place of business of the person served, or at such other time and place, as may be agreed upon by the person served and the Attorney General. When documentary material is demanded by subpoena, said subpoena shall not:

(i) contain any requirement which would be unreasonable or improper if contained in a subpoena duces tecum issued by a court of this State; or

(ii) require the disclosure of any documentary material which would be privileged, or which for any other reason would not be required by a subpoena duces tecum issued by a court of this State.

(2) The production of documentary material in response to a subpoena served pursuant to this Section shall be made under a sworn certificate, in such form as the subpoena designates, by the person, if a natural person, to whom the demand is directed or, if not a natural person, by a person or persons having knowledge of the facts and circumstances relating to such production, to the effect that all of the documentary material required by the demand and in the possession, custody, or control of the person to whom the demand is directed has been produced and made available to the custodian. Answers to interrogatories shall be accompanied by a statement under oath attesting to the accuracy of the answers.

While in the possession of the Attorney General and under such reasonable terms and conditions as the Attorney General shall prescribe: (A) documentary material shall be available for examination by the person who produced such material or by any duly authorized representative of such person, (B) transcript of oral testimony shall be available for examination by the person who produced such testimony, or his or her counsel and (C) answers to interrogatories shall be available for examination by the person who swore to their accuracy.

Except as otherwise provided in this Section, no documentary material, transcripts of oral testimony, or answers to interrogatories, or copies thereof, in the possession of the Attorney General shall be available for examination by any individual other than an authorized employee of the Attorney General or other law enforcement officials, federal, State, or local, without the consent of the person who produced such material, transcripts, or interrogatory answers. Such documentary material, transcripts of oral testimony, or answers to interrogatories, or copies thereof may be used by the Attorney General in any administrative or judicial action or proceeding.

For purposes of this Section, all documentary materials, transcripts of oral testimony, or answers to interrogatories obtained by the Attorney General from other law enforcement officials, information voluntarily produced to the Attorney General for purposes of any investigation conducted under subsection (1), or information provided to the Attorney General pursuant to the notice requirement of Section 7.2a shall be treated as if produced pursuant to a subpoena served pursuant to this Section for purposes of maintaining the confidentiality of such information.

(3) No person shall, with intent to avoid, evade, prevent, or obstruct compliance in whole or in part by any person with any duly served subpoena of the Attorney General under this Act, knowingly remove from any place, conceal, withhold, destroy, mutilate, alter, or by any other means falsify any documentary material that is the subject of such subpoena. A violation of this subsection is a Class A misdemeanor. The Attorney General, with such assistance as he may from time to time require of the State's Attorneys in the several counties, shall investigate suspected violations of this subsection and shall commence and try all prosecutions under this subsection.

(Source: P.A. 96-751, eff. 1-1-10; 96-1000, eff. 7-2-10.)

(740 ILCS 10/7.2a new)

Sec. 7.2a. Notification to the Attorney General.

(a) It is the intent of the General Assembly to ensure that competition beneficial to consumers and workers in health care markets across the State is vigorous and robust. When health care businesses compete, consumers benefit from higher quality services at reasonable prices, and health care workers benefit from higher wages and better conditions of employment which in turn improves patient care. The General Assembly supports that intent through this Section, which provides the Attorney General with notice of all material health care facility transactions in this State. The notice requirement will give the Attorney General information necessary to determine whether an investigation under this Act is warranted to determine whether a proposed transaction may substantially lessen competition, result in anticompetitive conduct, or potentially harm consumers or workers. This Section is intended to supplement the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, by requiring notice of transactions not reportable under Hart-Scott-Rodino reporting thresholds and by providing the Attorney General with a copy of any filings made pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

(b) As used in this Section:

"Acquisition" means an agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes the acquisition of voting securities and noncorporate interests, such as assets, capital stock, membership interests, or equity interests.

"Contracting affiliation" means the formation of a relationship between 2 or more entities that permits the entities to negotiate jointly with health carriers or third-party administrators over rates for professional medical services, or for one entity to negotiate on behalf of the other entity with health carriers or third-party administrators over rates for professional medical services. "Contracting affiliation" does not include arrangements among entities under common ownership.

"Covered transaction" means any merger, acquisition, or contracting affiliation between 2 or more health care facilities not previously under common ownership or contracting affiliation.

"Health care facility" has the same meaning as provided in Section 3 of the Health Facilities Planning Act. "Health care facility" includes provider organizations as defined in this Section.

"Health care services revenue" means the total revenue received for health care services in the previous 12 months.

"Health carriers" has the same meaning as provided in Section 10 of the Health Carrier External Review Act.

"Illinois health care facility" means a health care facility that has an office in or is doing business in this State.

"Merger" means the consolidation of 2 or more organizations, including 2 or more organizations joining through a common parent organization or 2 or more organizations forming a new organization, but does not include a corporate reorganization.

"Out-of-state health care facility" means a health care facility that is not headquartered in this State and does not do business in this State.

"Provider organization" means a corporation, partnership, business trust, association, or organized group of persons, whether incorporated or not, which is in the business of health care delivery or management and that represents 7 or more health care providers in contracting with health carriers or third-party administrators for the payment of health care services. "Provider organization" includes physician organizations, physician-hospital organizations, independent practice associations, provider networks, and accountable care organizations.

"Third-party administrator" means an entity that administers payments for health care services on behalf of a client in exchange for an administrative fee.

(c) Health care facilities that are party to a covered transaction shall provide notice of such transaction to the Attorney General no later than 60 days prior to the transaction closing or effective date of the transaction.

Covered transactions between an Illinois health care facility and an out-of-state health care facility must provide notice under this subsection where the out-of-state entity generates $10,000,000 or more in annual revenue from patients residing in this State.

(d) The written notice provided by the parties under subsection (c) must include:

(1) the names of the parties and their current business addresses;

(2) identification of all locations where health care services are currently provided by each party;

(3) a brief description of the nature and purpose of the proposed transaction;

(4) the anticipated effective date of the proposed transaction;

(5) all proposed agreements relating to the proposed transaction;

(6) all agreements regarding collateral transactions that relate to the principal transaction; and

(7) any reports of financial and economic analysis that the party reviewed or relied on in negotiating the proposed transaction.

Nothing in this subsection prohibits the parties to a covered transaction from voluntarily providing additional information to the Attorney General.

(e) Any health care facility conducting business in this State that files a premerger notification with the Federal Trade Commission or the United States Department of Justice, in compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, shall provide a copy of such filing to the Attorney General at the same time as it is provided to the federal government. Providing a copy of the Hart-Scott-Rodino filing to the Attorney General satisfies the notice requirement under subsections (c) and (d).

(f) The Attorney General may make any requests for additional information from the parties within 30 days of the date notice is received under subsections (c) and (d). If the Attorney General requests additional information, the merger may not proceed until 30 days after the parties have substantially complied with the request. Nothing in this Section precludes the Attorney General from conducting an investigation or enforcing State or federal antitrust laws at a later date.

(g) Any health care facility that fails to comply with any provision of this Section is subject to a civil penalty of not more than $500 per day for each day during which the health care facility is in violation of this Section.

Whenever the Attorney General has reason to believe that a health care facility has engaged in or is engaging in a covered transaction without complying with the provisions of this Section, the Attorney General may apply for and obtain, in an action in the Circuit Court of Sangamon or Cook County, a temporary restraining order or injunction, or both, prohibiting the health care facility from continuing its noncompliance or doing any act in furtherance thereof. The court may make such further orders or judgments, at law or in equity, as may be necessary to remedy such noncompliance.

(740 ILCS 10/13 new)

Sec. 13. Antitrust Enforcement Fund. Any penalties collected from an entity for violations of this Act shall be deposited into the Antitrust Enforcement Fund, a special fund created in the State treasury that is dedicated to enforcing this Act.

Section 99. Effective date. This Act takes effect January 1, 2024.