Connecticut Requires Pre-Acquisition Notice of Physician Practices and Hospitals

October 20, 2014

Effective October 1, 2014, Connecticut requires prior notification of any transaction that will result in a material change of the business or corporate structure of a medical group practice. A “material change” includes a group practice’s merger or consolidation with, or acquisition of all or substantially all of the stock of or by, another group practice. Under the bill, “group practice” means two or more physicians organized to: (A) render professional services, including medical care, diagnosis or treatment; (B) bill for services in the name of the group; or (C) share overhead expenses.

At least 30 days prior to the transaction’s effective date, the parties to such a transaction must submit written notice of the transaction to Connecticut’s Office of the Attorney General (AG) for the AG to consider the competitive effects of the proposed transaction. This notice is required regardless of whether the transaction meets the premerger filing thresholds under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). The Connecticut Notice of Material Change form and filing instructions are available here.

The new Connecticut legislation also requires that whenever a hospital, hospital system or other healthcare provider is a party to a merger or acquisition that requires a filing with the FTC or the DOJ in compliance with the HSR Act, that provider must simultaneously give the Connecticut AG written notice of such filing and, upon the AG’s request, also provide a copy of the information submitted to the federal agencies. Connecticut is unique in that it requires similar notification of transactions involving the sale or acquisition of businesses in the motor fuel industry, such as gas stations. 

McGuireWoods’ Antitrust and Trade Regulation Department has substantial experience in mergers and acquisitions, and its lawyers can assist you in reporting any potential transaction in compliance with Connecticut law and the HSR Act.