Allow Public Hospital Collaboration Agreements

The act permits a hospital that has fewer than 50 beds and is a county public hospital, a hospital formed by a health service district, or a hospital affiliated with either such hospital (hospital) to enter into collaborative agreements with one or more hospitals. The act declares the general assembly's intent to exempt from state antitrust laws, and to provide state action immunity from federal antitrust laws for, certain activities that might be characterized as anticompetitive or that might result in displacement of competition in the provision of hospital, physician, or other health-care-related services or administrative or general business services. Further, the general assembly declares its intention to provide a system of review of collaborative agreements by the department of health care policy and financing (department), the division of insurance in the department of regulator agencies (division), if applicable, and the attorney general to ensure that any potential benefits of the collaborative agreements are not outweighed by the harm to competition in rural and frontier communities.

Collaborative agreements may include agreements to engage in the following activities:

• Ancillary clinical services, acquisition of equipment, clinic management, or health-care provider recruitment;
• Joint purchasing or leasing arrangements, including medical and general supplies, medical and general equipment, pharmaceuticals, or temporary staffing through staffing agencies;
• Consulting services with a focus on public health in rural and frontier communities and non-hospital-specific innovations in health-care delivery in those communities;
• Joint purchasing of insurance;
• Shared back-office services;
• Shared data services; and
• Negotiating with health insurance or government payers as described in the act.

The act does not grant immunity or other protections to hospitals entering into collaborative agreements that have the effect of setting reimbursement rates or other compensation from any commercial self-insured or commercial health insurance or government payer, dividing or allocating specific markets for the delivery of any general acute care or specialty lines of health-care services, or negotiating compensation for hospital employees that results in a reduction of wages for hospital staff.

Prior to engaging in a collaborative agreement, the hospitals shall jointly submit the proposed collaborative agreement for approval to the department and to the division, if applicable. If approved, the proposed agreement must be submitted to the attorney general's office to determine that the benefits of the collaborative activity are not outweighed by any anticompetitive harm that may arise from the collaborative activity. The act includes time frames for the review of collaborative agreements and allows for a request for reconsideration if the collaborative agreement is denied.

The department, the division, if applicable, or the attorney general may review a collaborative agreement annually to ensure the outcomes related to the collaborative agreement are consistent with the act.

For the 2023-24 state fiscal year, $30,260 is appropriated to the department from the healthcare affordability and sustainability fee cash fund to implement the act. The department anticipates receiving $30,259 in federal funds to implement the act.

APPROVED by Governor June 3, 2023

EFFECTIVE August 7, 2023

NOTE: This act was passed without a safety clause and takes effect 90 days after sine die.
(Note: This summary applies to this bill as enacted.)