Rhode Island

For Medical Groups:

• Applies to transactions between Rhode Island medical practice groups and other healthcare entities, including:
  • Hospitals;
  • Hospital Systems;
  • Management Service Organizations (MSOs); and
  • Significant Equity Investors such as Private Equity Groups and other investors in medical practice groups and MSOs.

For Hospitals:

• Applies to hospitals licensed to operate in Rhode Island.

For Medical Groups:

• The rule requires parties to certain transactions involving medical practice groups, including:
  • Mergers, stock acquisitions, or employment of all or substantially all physicians of a medical practice group by:
    • Another medical practice group resulting in a combined entity with 8 or more physicians, or
    • A hospital, hospital system, or other affiliated entity.
  • Transactions involving significant equity investors that result in a change of control of a medical practice group
  • Any formation of a partnership, joint venture, accountable care organization, parent corporation, management services organization, or other organization created for administering contracts with health insurance carriers or third-party administrators or current or future contracting on behalf of one or more medical practice groups

For Hospitals:

• Parties must seek approval from the RI AG and DOH for any transaction involving the transfer of 20% or more of any ownership interests or assets of a hospital.

For Medical Groups:

• There are no specific revenue thresholds under the rule.

For Hospitals:

• There are no specific revenue thresholds required under the statute.

For Medical Groups:

• Parties must provide notice of transactions at least 60 days before the effective date of a transaction to the RI AG.

For Hospitals:

• Parties must provide notice to the RI AG and DOH before closing a transaction. Within 30 days of receiving notice, the RI AG and DOH must either accept the filing, or request additional information. The parties have an additional 30 days, if necessary, to submit any additional information and address any deficiencies in the application. The RI AG and DOH then have 10 working days to determine if the application is sufficient.
• A decision must be issued within 180 days of the acceptance of the application.

For Medical Groups:

• The RI AG will require the notification to include the following information:
  • Names and contact information of the parties to the transaction;
  • A brief description of the nature and purpose of the transaction;
  • An identification of all of the parties’ locations;
  • An identification of any new services and locations contemplated following the finalization of the transaction; and
  • Anticipated effective data for the transaction.

For Hospitals:

• Parties must provide a broad set of information on the relevant hospitals in the notice, including:
  • Organizational documents;
  • Board minutes and documents; and
  • Financial, operational, and employee records and patient statistics for the prior 3 years.

For Medical Groups:

• The RI AG is required to keep all information and materials shared under the statute confidential.

For Hospitals:

• The RI AG and DOH are required to publish a notice of the filing in a newspaper of general circulation in the state, including:
  • A statement that a filing has been received and accepted for review;
  • The names of the parties;
  • The date by which any person may submit written comments to the RI AG or DOH; and
  • The date, time, and place of a public information meeting to be held within 60 days of the notice.

For Medical Groups:

• The RI AG can seek penalties of $200 per day prior to the effective date of the transaction and $100,000 after the effective date for failure to provide pre-merger notification. The RI AG can also seek injunctive relief in RI Superior Court to prevent a transaction from closing.

For Hospitals:

• The RI AG can seek to revoke the relevant hospital’s license and assess fines of up to $2 million.