The Maine event: Two new laws reshape healthcare transaction oversight and reporting

HP 1480

What is a material change transaction?

Under this new rule, material change transactions require 180 days’ pre-closing notice to be submitted to the Maine Department of Health and Human Services (DHHS).

A “material change transaction” occurs when a private equity company, hedge fund, or MSO owned or controlled by either a private equity company or a hedge fund acquires either a majority interest in or operational control of a healthcare entity in Maine. Covered healthcare entities include healthcare providers (i.e., individuals or entities qualified to provide healthcare services, including medical practices), licensed healthcare facilities (including hospitals, ambulatory surgery centers, outpatient clinics, labs, and imaging centers), and provider organizations (including accountable care organizations, physician-hospital organizations, independent practice associations, and MSOs). The law expressly excludes:

• Licensed nursing facilities
• Dental services providers and dental service organizations (DSOs)
• Independent provider organizations with fewer than seven providers that lack ownership or control by another entity.

Unlike other states, Maine’s new rule does not include a threshold requirement relating to healthcare services revenues or value of assets held by the provider. Any transaction involving a private equity, hedge fund, or MSO acquirer and a Maine healthcare facility, provider, or provider organization that is not otherwise exempt must make a filing.

Notice requirements

The covered healthcare entity must give written notice to DHHS at least 180 days prior to closing a material change transaction.

The notice must include:

• Transaction agreements between the parties.
• The goals and anticipated effects of the transaction.
• The geographic service area of any hospital to be affected.
• The groups or individuals expected to be affected.
• A summary of healthcare services to be added, reduced, or eliminated.

All submitted information will be treated as public unless the submitter requests confidentiality and DHHS approves that designation. Within 10 days of receipt, DHHS must publish a summary of the transaction on its website.

The statute directs DHHS to set filing fees between $2,000 and $10,000.

Preliminary review

DHHS, in coordination with the Office of Affordable Health Care (OAHC), has 60 days from receipt of the notice to conduct a preliminary review. A notice is considered received on the first business day after DHHS deems it complete. At the conclusion of the 60-day review period, DHHS must either approve the transaction with or without conditions, or decide to perform a comprehensive review.

Comprehensive review

A comprehensive review is required if the transaction is expected to:

• Involve the transfer of assets valued at more than $100 million
• Lessen competition
• Materially affect the cost, quality, or access to healthcare services.

As part of the comprehensive review, DHHS must hold a public hearing or meeting to hear comments from interested parties. DHHS may then request that OAHC conduct a cost and market impact review (CMIR) and produce a corresponding report, which must be completed within 150 days of DHHS’s request.

DHHS may recover the costs of conducting the comprehensive review and CMIR from the transacting parties.

Approval and post-transaction oversight

No more than 60 days after receiving the CMIR report, DHHS must approve the transaction with or without conditions or deny approval.
Following closing, the acquiring entity must submit reports to DHHS after years one, two, and five demonstrating compliance with any conditions, analyzing cost and cost growth trends, and assessing the transaction’s impacts. DHHS retains discretion to require additional reporting beyond the fifth year.

Enforcement

The Maine attorney general has enforcement authority, including the power to subpoena records and seek equitable relief such as an injunction or specific performance. Noncompliance may result in administrative penalties of $10,000 per day, and DHHS can refer noncompliant entities to the attorney general.

HP 1481

By passing HP 1481, Maine joins a growing number of states that have adopted so-called “mini-HSR” laws. Currently, just Colorado and Washington have mini-HSR laws in effect, but California’s mini-HSR law becomes effective January 1, 2027. However, unlike these other states, whose mini-HSR regimes apply across all industries, Maine’s law is limited to transactions involving healthcare entities.

HP 1481 requires a healthcare entity to concurrently submit a copy of its HSR filing (both the HSR form and all documentary attachments) to the Maine attorney general if either:

• The healthcare entity’s principal place of business (i.e., the headquarters address of the healthcare entity making the HSR filing) is in Maine; or
• The healthcare entity (or a person or entity controlled directly or indirectly by the healthcare entity) had annual revenue in Maine in the most recent calendar year of at least 20% of the HSR filing threshold for the “goods or services involved in the transaction.”

The HSR size-of-transaction threshold for 2026 is $133.9 million, and therefore the HP 1481 revenue threshold is currently $26.78 million. The HSR threshold changes each year (typically in February and usually increasing). The revenues figure refers to sales in, into, and from Maine. Washington has published guidance on how HSR filing parties should interpret the meaning of the same phrase “goods or services involved in the transaction” in its mini-HSR law, and this guidance can be applied to interpret the same language in other state mini-HSR laws, including the new Maine law. For a seller, the determination is based on the sales of the target. For a buyer, the determination is based only on the buyer’s sales of products that overlap with what it is acquiring from the target (i.e., healthcare services that derive revenue in overlapping North American Industry Classification System codes used in HSR filings).

Failure to provide this notice could result in civil penalties of up to $10,000 per day of noncompliance.

Key takeaways

• Unlike other material change notices, HP 1480 focuses only on acquisitions (as opposed to a broader range of contractual and clinical affiliations) and only targets transactions where a private equity, hedge fund, or MSO is involved.
  • While the number of healthcare entities subject to the law is large, dental providers and DSOs are explicitly carved out, unlike in certain other states.
• The timeframe for reporting (180 days) is significantly longer than most material change notices, with a preliminary review concluded within 60 days of the filing. Additionally, if regulators determine that a transaction warrants a CMIR review process, such review is likely to extend transaction timelines even further.
• DHHS and the attorney general are granted significant enforcement authority, including authority to impose monetary penalties and equitable remedies.
• HP 1481 defines “healthcare entities” broadly to include healthcare providers, provider organizations, and healthcare facilities. Such entities with any nexus to Maine that make HSR filings should assess whether submitting their filing to the Maine attorney general is now required. This law, like other state mini-HSR laws, does not require entities to observe a separate waiting period or obtain approval from the Maine attorney general. The only requirement is to submit the HSR filing if the thresholds are met, and everything submitted to the Maine attorney general under this law is kept confidential.
• Parties contemplating transactions involving Maine healthcare entities should conduct an early analysis to determine any applicable notice requirements or mini-HSR filing obligations.