HAP Strongly Opposes State Mergers and Acquisitions Bill

October 07, 2024

In a letter today, HAP and the Pennsylvania hospital community strongly opposed legislation that would create new regulatory burdens for hospitals while threatening access to care.

This afternoon, the Senate Human Services Committee advanced House Bill 2344, sponsored by Lisa A. Borowski (D-Delaware). The legislation, which broadens state oversight of hospital mergers and acquisitions, moves to the full Senate for consideration.

In the letter, HAP and the hospital community warned that the bill would create another layer of regulatory burdens for hospitals and would fail to address underlying causes of financial instability that have put some hospitals on the brink of closure.

“We appreciate the intention—and are fundamentally committed to—protecting access to health care in all Pennsylvania communities,” the letter said. “However, HAP does not believe that the legislation addresses the core concerns driving the legislation, nor will it meet the goals intended.”

Here’s what you need to know:

• About:  House Bill 2344 broadens existing powers of the Pennsylvania Office of Attorney General (OAG) in mergers and acquisitions of health care entities, creating new notification requirements and other changes during the review process.
• Duplicative regulations:  OAG already holds extensive authority to investigate and ultimately unwind anticompetitive transactions via federal antitrust laws and state nonprofit requirements, HAP’s letter noted.
  • Hospitals also must comply with requirements at the federal level from the Department of Justice, the Federal Trade Commission, and other substantial mandates related to the Sherman Act, the Clayton Act, and the Hart-Scott-Rodino Act.
• Underlying issues:  Recent data from the Pennsylvania Health Care Cost Containment Council shows more than half of the commonwealth’s acute care hospitals are operating at a loss.
  • The cost to deliver care is outpacing insufficient reimbursement.
  • Average Medicaid reimbursement for hospitals is 82 cents on the dollar.
• The next steps:  A focus on financial sustainability will ensure all Pennsylvanians have access to high-quality care in their communities.
• Quotable:  “Hospitals, big and small, rural and urban, simply cannot keep service lines open and, in the worst cases, are being forced to close their doors. In this environment, mergers and acquisitions are necessary tools to invest in struggling hospitals and preserve access to care in every Pennsylvania community,” the letter noted.

HAP continues to advocate for policies and legislation that will protect access and promote hospital sustainability. HAP’s letter to the Health and Human Services Committee is available online.

For additional information, contact Stephanie Watkins, HAP’s senior vice president, advocacy and policy.