Committee Substitute February 13,2025 in SHPAC
SB14cs Consolidation and Transparency Act 
Senate Bill14  (SB14) Relates to health care by enacting the Health Care Consolidation and Transparency Act, by providing oversight of acquisitions, mergers, affiliations and other transactions that involve direct or indirect changes of control or assets of hospitals and other health care entities. Also, providing powers and duties by providing preliminary and comprehensive reviews of proposed transactions and providing approval, approval with conditions or disapproval of proposed transactions while limiting confidentiality and providing protections for whistleblowers and providing for penalties.
Senate Bill 14cs (SB14cs ) modifies the New Mexico Insurance Code by adding a new Section that is sited as the "Health Care Consolidation and Transparency Act"." 
This Act will provide oversight of business transactions for  certain health care facilities which would mean hospitals or other facilities licensed by the authority to provide health care services in a health care setting,  including inpatient facilities; health systems consisting of one or more health care entities that are jointly owned or managed; ambulatory surgery or treatment centers; residential treatment centers; diagnostic, laboratory and imaging centers; freestanding emergency facilities' outpatient clinics; and rehabilitation and other therapeutic health settings; provided that "health care facility" does not include adult daycare facilities, freestanding birth centers, skilled nursing facilities, intermediate care facilities, boarding homes, child care facilities or shelter care homes.
Also, the Act would provide oversight powers for "health care provider organization" which would mean a person that is in the business of delivering or managing the delivery of health care services, whether incorporated or not, including physician organizations, physician-hospital organizations, independent practice associations, provider networks, accountable care organizations, dental services organizations and any other organization that contracts with health insurers for payment for health care services.
The parties to a proposed transaction shall submit to the Office at least sixty days prior to the anticipated effective date of the proposed transaction a written notice of the proposed transaction in the form and manner prescribed by the Office along with an attestation as to the accuracy and completeness of the notice by the Officers who will be the signatories to the material transaction documents or other appropriate Officer of each party acceptable to the Office.  
Unless otherwise determined by the Superintendent, the parties shall be jointly and severally responsible for and shall pay, within thirty days of invoice by or on behalf of the Office, the reasonable costs and expenses of the professional services of outside experts incurred by the Office in the performance of the Office's or the authority's duties pursuant to the Health Care Consolidation and Transparency Act.  The Office shall notify parties of the identity of such outside experts. 
Entry into a binding agreement before a transaction is effectuated is not a violation of the Health Care Consolidation and Transparency Act if the transaction remains subject to regulatory review and approval.  
The notice of the proposed transaction shall include information required by the Office to perform its duties under the Health Care Consolidation and Transparency Act in a form and manner prescribed by the Office; such information shall include at a minimum: 
(1)  a list of the parties and the identifying information required for reporting in SubSection A of Section 59A-63-20 NMSA 1978; 
(2)  a summary of the material terms and copies of all transaction agreements between any of the parties; 
(3)  a statement describing the goals of the proposed transaction and the anticipated impact on the current and future provision of essential services in New Mexico; 
(4)  a list of the health care entities and their geographic service areas that will be affected by the proposed transaction; 
(5)  a description of the patients, employees and other persons who are likely to be affected by the transaction.
(6)  a description of whether and how the proposed transaction is anticipated to impact current and future wages, benefits, working conditions, employment protections and restrictions and other terms and conditions of employment for employees of the New Mexico health care entities that are parties to, or the subject of, the proposed transaction; 
(7)  a summary of the essential services currently provided by applicable New Mexico health care entities and the other parties; commitments of the parties and the health care entity to continue those services; and essential services that will be added, reduced or eliminated, including an explanation of why any services will be reduced or eliminated in the service area in which they are currently provided; 
(8)  a summary of the plans of the parties with respect to any real estate owned by the health care entity following the closing of the transaction; (9)  organizational charts for each of the parties to the proposed transaction identifying all of the direct and indirect parents, subsidiaries and affiliates of each of the parties, including any significant equity investors; and 
(10)  copies of all agreements between any of the parties related to the proposed transaction, including any memoranda of understanding, letters of intent or other documents setting forth the negotiated terms and conditions of the proposed transaction, signed by parties to the proposed transaction.
Other requirements provides that the Office may consult with the Authority about the potential effects of the proposed transaction, and can provide all documents to the Authority and to the Attorney General, in addition the Office may consult with any other agency of state government. The term”Office” refers to the Office of the Superintendent of Insurance. Authority refers to the “Health Care Authority”
The Office may retain the services of accountants, attorneys, or other professionals including actuaries.
 The parties shall not effectuate a transaction without the Superintendent's written determination that no comprehensive review is needed or without the written approval, with or without conditions, of the Superintendent following a comprehensive review.  If the approval following a comprehensive review contains conditions, the parties shall comply with such conditions.  The submitting party shall notify the Office in the form and manner prescribed by the Office when the transaction has been effectuated. 
The Office may waive the requirement of premilinary or comprehensive review of a transaction if an emergency situation exist. Rules and procedures for requesting an emergency request will be provided by the Office. 
Parties to a transaction may request a pre notice conference to determine if they are required to file a notice or to discuss the potential extent of the review.  The Office has thirty days to schedule the conference. 
Nothing in the Health Care Consolidation and Transparency Act shall amend, modify, abrogate or otherwise affect the applicability of or obligations of a party to a transaction under any other state or federal law.
Preliminary revies of a proposed transaction shall take place in no less than sixty days. The purpose of which is to determine if a comprehensive review is required of the transaction.
Elements for this review include: 
(1)  is in the interest of patients and consumers of health care services; (2)  is necessary to maintain the solvency of a health care entity; 
(3)  may have negative effects on the availability, accessibility, affordability or quality of health care for patients and other consumers of health care services, including the reduction or elimination of essential services; 
(4)  may have negative effects on current and future wages, benefits, working conditions, employment protections and restrictions and other terms and conditions of employment for employees of the New Mexico health care entities that are parties to the proposed transaction; 
(5)  may impose practice restrictions on health care providers; and 
(6)  has such other factors as the Office deems necessary or appropriate to complete its preliminary review. 
The Office is to consider the experience, competence and integrity of the parties that will acquire control following the transaction. 
Following the conclusion of the preliminary review the Office shall notify  in writing that:
 1)  a comprehensive review is not required and they may proceed with the transaction, subject to the post closing reporting requirements set forth in Section 59A-63-20 NMSA 1978; or 
(2)  the transaction is subject to a comprehensive review and include the reasons for that determination.
The reference to 59A-63-20 NMSA 1978 requires certain information to be provided annually going forward after comprehensive review is completed.
If the Office determines that a comprehensive review is necessary, the Office shall confer with the authority and the attorney general and complete the review within ninety days following its determination that a comprehensive review is necessary; provided that if after review the Office is considering disapproval of the proposed transaction, the Office shall hold an administrative hearing before the Superintendent makes the final decision.  
The Superintendent is to notify the submitting parties in writing that a comprehensive review is necessary, and that the review period may be extended, that additional information may be requested, and that a public comment forum is to be provided.
In conducting a comprehensive review of a proposed transaction, the Office may consider the likely effect in New Mexico of the proposed transaction on: 
(1)  the potential reduction of, elimination of, loss of or material change in access to essential services; 
(2)  the availability, accessibility and quality of current and future health care services and health care provider networks to any community affected by the transaction, including the accessibility of culturally responsive care; (
3)  the quality of current and future health care services provided to any of the communities affected by the transaction; 
(4)  the health care market share of a party and whether the transaction is likely to foreclose competitors of a party from a segment of the market or otherwise likely to increase barriers to entry in a health care market; 
(5)  the labor market and competition for health care workers; (
6)  wages, salaries, benefits and working conditions of employees of health care entities that are parties to the transaction. 
(7)  changes in practice restrictions for licensed health care providers who work at the hospital; 
(8)  employment protections, restrictions and other terms and conditions of employment for employees of health care entities that are parties to the transaction; 
(9)  contract provisions involving labor conditions that are required to comply with state and federal law; 
(10)  patient and payer costs; 
(11)  the potential for the proposed transaction to affect health outcomes for New Mexico residents; 
(12)  cost trends and containment of total state health care spending; (13)  access to services in medically underserved areas; 
(14)  quality, incident and similar reports or filings and related litigation involving any of the health care entities owned by any of the parties that will acquire control following the transaction and each person who controls such parties or their provision of health care services within or without New Mexico that is relevant to an understanding of the availability, accessibility, affordability or quality of care or coverage in the markets served by such health care entities, parties or persons; 
(15)  whether the transaction is contrary to or violates any applicable law; and 
(16)  such other factors the Office deems necessary or appropriate to complete its comprehensive review.  
Within ten days of a complete notice of transaction, a posting on the Office website containing information to include: 
(1)  the summaries, descriptions and statements provided in the written notice; and 
(2)  details about how to submit comments regarding the transaction.


A summary of information is to be provided and different avenues for comment is to be made available. Ten days before the forum, information is to be published on the Office website. A notice is to also be published in a newspaper or other media. Notice is to be provided to various entities that may have an interest in the transaction. 
The Office may audit the books, documents, records and data of a person that is party to a transaction that is subject to a conditional approval to confirm compliance and contract with experts to affirm such compliance.
The parties or the health care entity subject to the transaction that was approved or conditionally approved following comprehensive review shall submit one-, two- and five-year reports to the Office, the attorney general and the authority in the form and manner prescribed by the Office and upon future intervals determined at the discretion of the Office.  Reports shall: 
(1)  describe compliance with conditions placed on the transaction, if any; 
(2)  describe the growth, decline and other changes in health care services provided in New Mexico by the health care entity; 
(3)  provide analyses of cost trends of the health care entity; 
(4)  describe any material changes to the information provided in the original notice of the transaction; 
(5)  provide any other information required by the Office to monitor compliance with the conditions."
Without limitation to SubSection B of this Section, a person who violates a material or substantive provision of the Health Care Consolidation and Transparency Act or order or rule of the Superintendent issued or adopted in accordance with that Act may be assessed an administrative fine by the Superintendent of not more than five thousand dollars ($5,000) for each instance of violation unless the violation is willful and intentional, in which case the Superintendent may assess a fine of not more than ten thousand dollars ($10,000) for each violation, except as provided in Paragraph (2) of SubSection D of this Section.  
For purposes of calculating the fine, the Superintendent shall determine what constitutes an "instance of violation". Varius criteria are listed in the Act. 
Money collected from the imposition of an administrative fine pursuant to the Health Care Consolidation and Transparency Act shall be deposited in the current school fund.
Each health care entity shall report the following information to the Office and the authority on an annual basis in a form and manner required by the Office, some of which will include : the legal name of the health care entity and any other names under which the health care entity conducts, their business address, the addresses of the other locations of the business, tax identification, the name and contact information of a representative of the health care entity, and other forms of identifying information.
Certain health care entities are exempt from reporting the above information
Nothing in the Health Care Consolidation and Transparency Act limits the authority of the attorney general to protect consumers in the health care market or to protect the economy of the state or any significant part of the state insofar as health care is concerned under any state or federal law.  
A Section is dedicated to whistleblowing and describes one as a “whistleblower" which means a health care provider; patient; patient's representative or guardian; or Officer, employee, contractor, subcontractor or authorized agent of a health care entity who reveals information about an unlawful or improper act by a health care entity.
Every health care entity shall adopt, promulgate and enforce a whistleblower protection policy that, at a minimum, meets the requirements of SubSection B of this Section to protect whistleblowers from any form of retaliatory action by the health care entity. SubSection B refers to the prohibition of retaliatory action. 
The Superintendent may levy a ten thousand dollar fine for acts of retaliatory action. The health care entity may request a hearing and a finding may be appealed to a district court. The rights and privileges provided in this Section cannot be waived by any prior agreement or arbitration. Each retaliatory action or each day of violation may be considered a separate violation. If the Superintendent finds the health care entity willfully or repeatedly violated or continues to violate the prohibition against retaliatory actions, the Superintendent may assess an administrative fine not to exceed one hundred thousand dollars ($100,000) for each violation.
The effective date for this Act Is July 1, 2025. 



Committee Substitute February 13,2025
SHPACcs/SB14 The Senate Health and Public Affairs Committee passed a Committee Substitute for SB14.
New language in the Committee Substitute In Section 2, Subparagraph B, will now read:"affiliate" or "affiliated with" means: (1)  a person that directly, indirectly or through one or more intermediaries controls, is controlled by or is under common control or ownership of another person; (2)  a person whose business is operated under a lease, management, license or similar agreement by another person; (3)  a hospital that has all or substantially all of its patient care facilities operated under a lease, management, license or similar agreement by another person; or (4)  a person that operates the business or substantially all of the patient care facilities of another person under a lease, management, operating, license or similar agreement.
SB14cs will now read as rewritten:  "control", "controlling", "controlled by" and "under common control with" means the power to direct or cause the direction of the management and policies of a person, in whole or in substantial part, whether directly or indirectly, through the ownership of voting securities, through license or lease agreements, by contract or otherwise.
Other new language in Section 2 includes: G.  "health care provider" means a person certified, registered, licensed or otherwise authorized under state law to perform or provide health care services to persons in New Mexico; H.  "health care provider organization" means a person that is in the business of delivering or managing the delivery of health care services, whether incorporated or not,  including physician organizations and independent health care providers, but does not include hospitals; I.  "health care services" means the care, prevention, diagnosis, treatment or relief of an illness, injury, disease or other medical, mental or behavioral health or substance use disorder condition; 
J.  "health care staffing company" means a person engaged in the business of providing, procuring for employment or contracting health care personnel for a hospital, but does not include a health care provider who independently provides the provider's own services to a hospital as an employee or contractor; 
K.  "health insurer" means a person required to be licensed or subject to the Insurance Code or the insurance laws of any other state in connection with the business of health insurance, excluding insurance producers;
M.  "independent health care provider" means a corporation, partnership, limited liability company, nonprofit organization, trust, association or other legal entity entirely owned or controlled by health care providers who provide health care services to patients in New Mexico; N.  "management services organization" means aperson that contracts with a hospital to perform or provide personnel to perform all or substantially all of the administrative or management services relating to supporting or facilitating the provision of health care services of the hospital as a whole or those provided by a hospital division, department or subsidiary; 
Q.  "transaction" means any of the following: (1)  a merger with a hospital or with a person controlling a hospital; (2)  an acquisition of a hospital or a person controlling a hospital; (3)  an affiliation, agreement or other arrangement: (a)  that results in the change of control of a hospital; (b)  that results in a change of control of a hospital department, division or subsidiary that provides health care services; (c)  between a hospital and a management services organization; or (d)  involving a hospital that may eliminate or significantly reduce essential services in New Mexico; or (4)  a sale, mortgage, lease, license, transfer or other agreement involving all or substantially all the patient care facilities of a hospital or the real estate on which the hospital is located."
Section 3 of the cs is now written as :
A.	The oversight power of the office pursuant to the Health Care Consolidation and Transparency Act applies only to: (1)  proposed transactions between two or more parties, whether or not domiciled or otherwise located in New Mexico, that involve a change in control of a New Mexico hospital; (2)  proposed acquisitions of health care provider organizations by a hospital or a person that is owned by or affiliated with a hospital; and (3)  proposed acquisitions of one or more health care provider organizations located, whether in whole or in part, in New Mexico, or the employment of a health care provider by a health insurer or by a person that is owned or 

Section B, (3)  transactions in which the hospital directly, or indirectly through one or more intermediaries, already controls, is controlled by or is under common control with all other parties to the transaction; (4)  a change in control of a hospital resulting from the election of new members of the governing body of a public hospital or the appointment of new members of a governing body of a public hospital by the governor or other elected official or elected body; (5)  the hiring, offer of employment, agreement or contract with an independent health care provider, physician or other health care provider to provide health care services; or .230523.2 (6)  nonconsecutive agreements between or on behalf of a health care staffing company and hospital to provide health care providers for a period not to exceed twelve months and that do not renew, extend or replace another substantially similar agreement with the same health care staffing company.

Subparagraphs C and D are now
 written to C.  Control is presumed to exist if a person directly or indirectly owns, controls or holds fifteen percent or more of the power to vote or holds proxies representing fifteen percent or more of the voting securities of any other entity.  This presumption may be rebutted by a showing that control does not in fact exist in the manner provided by Section 59A-37-19 NMSA 1978. D.  After furnishing a notice to all parties and providing them an opportunity to be heard, the superintendent may determine that control exists in fact, notwithstanding the absence of a presumption to that effect, if the determination is based on specific findings of fact in its support."
In reference to notice of a transaction the parties can request a pre notice conference , notice of a transaction must be provided at sixty days prior to the proposed transaction, the parties will be responsible fo rhte cost of outside experts who provide services to the Office, The notice of a proposed transaction or acquisition shall include information required by the office to perform its duties under the Health Care Consolidation and Transparency Act in a form and manner prescribed by the office, and such information shall include,
A list of parties to the transaction, a summary of terms of acquisyition or transaction. A description of patients and the service area, geography and the impact of those to be served. 
The Office may tun over all materials to the Attorney General, the Office may determine that no comprehensive review is necessary and may waive any preliminary or comprehensive review.
With-in fifteen days the Office must notify the parties that the notice is complete. The Office has sixty days to complete its review. Within thirty days of an administrative hearing the Office must notify the parties of its decision. The parties may agree to ana extension and the Attorney General may have up to ninety days to review the transaction.
A Section is devoted to public hearings, with in ten days the Office must post on its website the notice of a forum, a notice must be published in a public media. Experts may be retained for post transaction oversight and monitoring.
A Section on whistleblowers’ rights and protections unde the Act is provided. Every hospital is to publish rules for reporting malfeasance so they will appear to employees. Fines may be imposed for improper acts by the Office. Retaliatory actions are prohibited. 

Other fines may be imposed for violations of the Act. Each hospital and health care provider organization shall report the following information to the office and the authority on an annual basis in a form and manner required by the office. Nothing in the Health Care Consolidation and Transparency Act limits the authority of the attorney general to protect consumers in the health care market or to protect the economy of the state or any significant part of the state insofar as health care is concerned under any state or federal law.
An additional Section is added for continual transaction oversight for post transactions or conditionally approved transactions.
The effective date of the Act is July 1, 2025.