On February 12, 2025, the Texas House of Representatives introduced Texas House Bill 2747 (H.B. 2747), which requires healthcare entities to submit written notice to the Texas attorney general ninety days prior to a material change transaction. On February 25, 2025, the Texas Senate introduced Texas Senate Bill 1595 (S.B. 1595), which requires certain healthcare entities to report ownership and control information, and establishes civil penalties and fees related to this process. If passed, both H.B. 2747 and S.B. 1595 are set to take effect on September 1, 2025.
H.B. 2747
The purpose of H.B. 2747 is to “promote competitive markets by strengthening the state’s ability to enforce laws and prevent anti-competitive behavior” and provides for civil penalties of up to $10,000 per violation for the failure to comply with the notice requirements.
H.B. 2747 requires that healthcare entities (defined in both bills as “a healthcare provider, healthcare facility, provider organization, pharmacy benefit manager, or health carrier that offers a health benefit plan in th[e] state”) provide ninety days’ notice to the Texas attorney general prior to a material change transaction (defined in both bills as “a transaction that entails a material change to ownership, operations, or governance structure of a legal entity”). Additionally, H.B. 2747 authorizes the attorney general to conduct studies on health care markets and request documents and information from healthcare entities. An administrative penalty of up to $1,000 per day may be assessed for failing to provide the requested information within thirty days.
S.B. 1595
S.B. 1595 requires that healthcare entities follow certain reporting requirements to the secretary of state both annually and during a material change transaction. The reporting requirements outline the required information, including information relating to identification, ownership and control, organizational structure, affiliated facilities, and financial reports.
The reporting requirement for a material change transaction only applies to material change transactions involving Texas healthcare entities with total assets and revenue of at least $10 million. This includes both in-state and out-of-state transactions and includes new entities that are anticipated to have at least $10 million in revenue. There are a few exemptions to this requirement, including where a healthcare entity is controlled by (or under common control with) all parties involved. The annual reporting requirement includes a few exemptions as well.
S.B. 1595 also imposes penalties for failing to comply with reporting requirements. For entities with less than $10 million in annual revenue (with ten or fewer physicians and no third-party control), a penalty of up to $50,000 per violation could be imposed. A penalty of up to $500,000 per violation could be imposed for all other healthcare entities.
Texas House Bill 2747 can be found here. Texas Senate Bill 1595 can be found here.
