Minnesota

Applies to certain “health care entities”, which include:

• Hospitals;
• Hospital systems;
• Captive professional entities;
• Medical foundations;
• Health care provider group practices;
• Entities organized or controlled by an entity listed above; or
• Entities that owns or exercises control over an entity listed above (1) to (5).

The regulations require notice by a health care entity for the following transactions:

• Merger or exchange of a health care entity with another entity;
• Sale, lease, or transfer of 40% or more of the assets of a health care entity to another entity;
• Granting of a security interest of 40% or more of the property and assets of a health care entity to another entity;
• Transfer of 40% or more of the shares or other ownership of a health care entity to another entity;
• Addition, removal, withdrawal, substitution, or other modification of one or more members of the health care entity's governing body that transfers control, responsibility for, or governance of the health care entity to another entity;
• Creation of a new health care entity;
• Agreement or series of agreements that results in the sharing of 40% or more of the health care entity's revenues with another entity, including affiliates of such other entity;
• Addition, removal, withdrawal, substitution, or other modification of the members of a health care entity formed under chapter 317A that results in a change of 40% or more of the membership of the health care entity; or
• Any other transfer of control of a health care entity to, or acquisition of control of a health care entity by, another entity.

The regulations provide that a covered transaction does not include corporate restructurings, mortgages or secured loans, affiliations for the purposes of clinical trials or graduate education, employment offers, contracts to provide clinical services, or transactions involving nursing homes and certain other residential care facilities.

Health care entities which are a party to a covered transaction must provide notice if they meet either of the following revenue thresholds:

• At least one health care entity involved in the transaction has average revenue between $10 million and $80 million per year or the transaction will produce a final entity with an average revenue between $10 million and $80 million per year when operating at full capacity (“Small Transactions”); or
• The health care entity involved in the transaction has average revenue of at least $80 million per year; or the transaction will result in an entity projected to have average revenue of at least $80 million per year once the entity is operating at full capacity (“Large Transactions”).

For Small Transactions, parties must provide notice to the MDH 30 days prior to closing, or within 10 business days of the date the parties first reasonably anticipate entering into the transaction if closing would be in less than 30 days. The Commissioner of the MDH may request additional information, which must be provided within 14 days of the request.

For Large Transactions, parties must provide notice to the MDH and MN AG at least 60 days prior to closing, which the MN AG may extend by up to an additional 90 days.

Parties to Small Transactions must provide a broad set of information to the MDH, including:

• Description of organization, governance, operational structure (including ownership of or by a healthcare entity) of each entity;
• Types of services provided by each of the health care entity’s locations, along with primary and proposed service areas;
• Information on the relationships between the health care entities and any affected providers;
• Potential areas of expansion in new or existing markets;
• Plans to close facilities, reduce workforce, or reduce services; and
• Information on current staff.

Parties to Large Transactions must provide a broad set of information to the MDH and MN AG. In addition to the information required for Small Transactions, notice for Large Transactions must also include:

• Markets in which the parties expect transaction-related synergies to create a competitive advantage;
• Identification of third party consultants and experts to evaluate the transaction; and
• Transaction documents themselves, along with any third party reports, federal filings, and financial statements.

Information provided to the MDH and MN AG is considered private and/or nonpublic under the statute. MDH is able to share any information with the MN AG, subject to the confidentiality rules under Minn. Stat. § 13.03 and § 13.39.

The parties’ failure to comply with the notification requirements for Large Transactions is sufficient grounds for a court to enjoin or unwind a transaction or provide other equitable relief.