Caldier bill requiring AG to be notified before hospital mergers become effective clears House

A bill that would provide more transparency and protection for consumers when a hospital, hospital systems or provider organizations are acquired or merged passed the House of Representatives Friday, 63 – 35.

House Bill 1607, prime sponsored by Rep. Michelle Caldier, would require written notice to be given to the state attorney general (AG) at least 60 days before the effective date of a hospital or provider organization acquisition or merger.

Caldier says the measure grew out of concerns over mergers and acquisitions in 2016 involving CHI Franciscan, The Doctors Clinic (TDC) and WestSound Orthopaedics in Kitsap County.

“What happened is that patients could not get care anywhere in the area without being affiliated with this health care group. Once they secured a monopoly, they jacked up the rates and constituents began to email us,” said Caldier, R-Port Orchard. “We contacted the attorney general’s office and an investigation began.”

In 2017, state Attorney General Bob Ferguson filed a federal lawsuit against the three health care organizations, alleging the merger and affiliation agreements were unlawful and violated state and federal antitrust laws. Ferguson had obtained documents and emails in which CHI Franciscan and TDC privately touted the Kitsap transactions as a boon to their bottom line and harmful to patient care.

Caldier read one of the emails on the House floor.

“They wrote, ‘You could now get your outpatient care in a complex, relatively unsafe and vastly more expensive location. You’re welcome, Kitsap County,'” Caldier read from the email.

Caldier said the lawsuit filed by Ferguson was the first anti-trust action against any hospital in Washington’s history.

“It’s the attorney general’s job to protect Washington consumers. As the primary anti-trust enforcement officer in the state, the AG’s office works to ensure competition remains robust in the health care marketplace,” said Caldier. “The problem is once these mergers and acquisitions are completed, they can’t be undone. This bill requires the AG to be notified in time to determine whether there are any anti-trust concerns so that the public can be protected.”

The bill now goes to the Senate for further consideration.


Washington State House Republican Communications