HF 4853

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/21/2024 03:48pm

A bill for an act
relating to health carriers; providing for oversight of health maintenance
organization transactions by the commissioner of health; establishing requirements
for nonprofit health coverage entity conversion transactions; prohibiting certain
conversion transactions; authorizing enforcement; classifying data; amending
Minnesota Statutes 2022, sections 62D.22, by adding a subdivision; 317A.811,
subdivision 1; Minnesota Statutes 2023 Supplement, section 145D.01, subdivision
1; proposing coding for new law in Minnesota Statutes, chapters 62C; 62D; 145D.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

OVERSIGHT OF HEALTH MAINTENANCE ORGANIZATION TRANSACTIONS

Section 1.

new text begin [62D.221] OVERSIGHT OF TRANSACTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Insurance provisions applicable to health maintenance
organizations. new text end

new text begin (a) Health maintenance organizations are subject to sections 60A.135,
60A.136, 60A.137, 60A.16, 60A.161, 60D.17, 60D.18, and 60D.20 and must comply with
the provisions of these sections applicable to insurers. In applying these sections to health
maintenance organizations, "the commissioner" means the commissioner of health. Health
maintenance organizations are subject to Minnesota Rules, chapter 2720, as applicable to
sections 60D.17, 60D.18, and 60D.20, and must comply with those provisions of the chapter
applicable to insurers unless the commissioner of health adopts rules to implement this
subdivision.
new text end

new text begin (b) In addition to the conditions in section 60D.17, subdivision 1, subjecting a health
maintenance organization to filing requirements, no person other than the issuer shall acquire
all or substantially all of the assets of a domestic nonprofit health maintenance organization
through any means unless at the time the offer, request, or invitation is made or the agreement
is entered into the person has filed with the commissioner and has sent to the health
maintenance organization a statement containing the information required in section 60D.17
and the offer, request, invitation, agreement, or acquisition has been approved by the
commissioner of health in the manner prescribed in section 60D.17.
new text end

new text begin Subd. 2. new text end

new text begin Conversion transactions. new text end

new text begin If a health maintenance organization must notify or
report a transaction to the commissioner under subdivision 1, the health maintenance
organization must include information regarding the plan for a conversion benefit entity,
in the form and manner determined by the commissioner, if the reportable transaction
qualifies as a conversion transaction as defined in section 145D.30, subdivision 5. The
commissioner may consider information regarding the conversion transaction and the
conversion benefit entity plan in any actions taken under subdivision 1, including in decisions
to approve or disapprove transactions, and may extend time frames to a total of 90 days,
with notice to the parties to the transaction.
new text end

ARTICLE 2

NONPROFIT HEALTH COVERAGE ENTITY CONVERSION TRANSACTIONS

Section 1.

new text begin [145D.30] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin For purposes of sections 145D.30 to 145D.37, the following
terms have the meanings given unless the context clearly indicates otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner new text end

new text begin "Commissioner" means the commissioner of commerce for a
nonprofit health coverage entity that is a nonprofit health service plan corporation operating
under chapter 62C or the commissioner of health for a nonprofit health coverage entity that
is a nonprofit health maintenance organization operating under chapter 62D.
new text end

new text begin Subd. 3. new text end

new text begin Control. new text end

new text begin "Control," including the terms "controlling," "controlled by," and
"under common control with," means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a nonprofit health coverage
entity, whether through the ownership of voting securities, through membership in an entity
formed under chapter 317A, by contract other than a commercial contract for goods or
nonmanagement services, or otherwise, unless the power is the result of an official position
with, corporate office held by, or court appointment of the person. Control is presumed to
exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or
holds proxies representing 40 percent or more of the voting securities of any other person
or if any person, directly or indirectly, constitutes 40 percent or more of the membership
of an entity formed under chapter 317A. The attorney general may determine that control
exists in fact, notwithstanding the absence of a presumption to that effect.
new text end

new text begin Subd. 4. new text end

new text begin Conversion benefit entity. new text end

new text begin "Conversion benefit entity" means a foundation,
corporation, limited liability company, trust, partnership, or other entity that receives, in
connection with a conversion transaction, the value of any public benefit asset in accordance
with section 145D.32, subdivision 5.
new text end

new text begin Subd. 5. new text end

new text begin Conversion transaction. new text end

new text begin "Conversion transaction" means a transaction otherwise
permitted under applicable law in which a nonprofit health coverage entity:
new text end

new text begin (1) merges, consolidates, converts, or transfers all or substantially all of its assets to any
entity except a corporation that is exempt under United States Code, title 26, section
501(c)(3);
new text end

new text begin (2) makes a series of separate transfers within a 60-month period that in the aggregate
constitute a transfer of all or substantially all of the nonprofit health coverage entity's assets
to any entity except a corporation that is exempt under United States Code, title 26, section
501(c)(3); or
new text end

new text begin (3) adds or substitutes one or more directors or officers that effectively transfer the
control of, responsibility for, or governance of the nonprofit health coverage entity to any
entity except a corporation that is exempt under United States Code, title 26, section
501(c)(3).
new text end

new text begin Subd. 6. new text end

new text begin Corporation. new text end

new text begin "Corporation" has the meaning given in section 317A.011,
subdivision 6, and also includes a nonprofit limited liability company organized under
section 322C.1101.
new text end

new text begin Subd. 7. new text end

new text begin Director. new text end

new text begin "Director" has the meaning given in section 317A.011, subdivision
7.
new text end

new text begin Subd. 8. new text end

new text begin Family member. new text end

new text begin "Family member" means a spouse, parent, child, spouse of
a child, brother, sister, or spouse of a brother or sister.
new text end

new text begin Subd. 9. new text end

new text begin Full and fair value. new text end

new text begin "Full and fair value" means at least the amount that the
public benefit assets of the nonprofit health coverage entity would be worth if the assets
were equal to stock in the nonprofit health coverage entity, if the nonprofit health coverage
entity was a for-profit corporation and if the nonprofit health coverage entity had 100 percent
of its stock authorized by the corporation and available for purchase without transfer
restrictions. The valuation shall consider market value, investment or earning value, net
asset value, goodwill, amount of donations received, and control premium, if any.
new text end

new text begin Subd. 10. new text end

new text begin Key employee. new text end

new text begin "Key employee" means an individual, regardless of title, who:
new text end

new text begin (1) has responsibilities, power, or influence over an organization similar to those of an
officer or director;
new text end

new text begin (2) manages a discrete segment or activity of the organization that represents ten percent
or more of the activities, assets, income, or expenses of the organization, as compared to
the organization as a whole; or
new text end

new text begin (3) has or shares authority to control or determine ten percent or more of the organization's
capital expenditures, operating budget, or compensation for employees.
new text end

new text begin Subd. 11. new text end

new text begin Nonprofit health coverage entity. new text end

new text begin "Nonprofit health coverage entity" means
a nonprofit health service plan corporation operating under chapter 62C or a nonprofit health
maintenance organization operating under chapter 62D.
new text end

new text begin Subd. 12. new text end

new text begin Officer. new text end

new text begin "Officer" has the meaning given in section 317A.011, subdivision
15.
new text end

new text begin Subd. 13. new text end

new text begin Public benefit assets. new text end

new text begin "Public benefit assets" means the entirety of a nonprofit
health coverage entity's assets, whether tangible or intangible, including but not limited to
its goodwill and anticipated future revenue.
new text end

new text begin Subd. 14. new text end

new text begin Related organization. new text end

new text begin "Related organization" has the meaning given in section
317A.011, subdivision 18.
new text end

Sec. 2.

new text begin [145D.31] CERTAIN CONVERSION TRANSACTIONS PROHIBITED.
new text end

new text begin A nonprofit health coverage entity must not enter into a conversion transaction if:
new text end

new text begin (1) doing so would result in less than the full and fair market value of all public benefit
assets remaining dedicated to the public benefit; or
new text end

new text begin (2) an individual who has been an officer, director, or other executive of the nonprofit
health coverage entity or of a related organization, or a family member of such an individual:
new text end

new text begin (i) has held or will hold, whether guaranteed or contingent, an ownership stake, stock,
securities, investment, or other financial interest in an entity to which the nonprofit health
coverage entity transfers public benefit assets in connection with the conversion transaction;
new text end

new text begin (ii) has received or will receive any type of compensation or other financial benefit from
an entity to which the nonprofit health coverage entity transfers public benefit assets in
connection with the conversion transaction;
new text end

new text begin (iii) has held or will hold, whether guaranteed or contingent, an ownership stake, stock,
securities, investment, or other financial interest in an entity that has or will have a business
relationship with an entity to which the nonprofit health coverage entity transfers public
benefit assets in connection with the conversion transaction; or
new text end

new text begin (iv) has received or will receive any type of compensation or other financial benefit from
an entity that has or will have a business relationship with an entity to which the nonprofit
health coverage entity transfers public benefit assets in connection with the conversion
transaction.
new text end

Sec. 3.

new text begin [145D.32] REQUIREMENTS FOR NONPROFIT HEALTH COVERAGE
ENTITY CONVERSION TRANSACTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Notice. new text end

new text begin (a) Before entering into a conversion transaction, a nonprofit
health coverage entity must notify the attorney general according to section 317A.811. In
addition to the elements listed in section 317A.811, subdivision 1, the notice required by
this subdivision must also include: (1) an itemization of the nonprofit health coverage entity's
public benefit assets and an independent third-party valuation of the nonprofit health coverage
entity's public benefit assets; (2) a proposed plan to distribute the value of those public
benefit assets to a conversion benefit entity that meets the requirements of section 145D.33;
and (3) other information contained in forms provided by the attorney general.
new text end

new text begin (b) When the nonprofit health coverage entity provides the attorney general with the
notice and other information required under paragraph (a), the nonprofit health coverage
entity must also provide a copy of this notice and other information to the applicable
commissioner.
new text end

new text begin Subd. 2. new text end

new text begin Nonprofit health coverage entity requirements. new text end

new text begin Before entering into a
conversion transaction, a nonprofit health coverage entity must ensure that:
new text end

new text begin (1) the proposed conversion transaction complies with chapters 317A and 501B and
other applicable laws;
new text end

new text begin (2) the proposed conversion transaction does not involve or constitute a breach of
charitable trust;
new text end

new text begin (3) the nonprofit health coverage entity shall receive full and fair value for its public
benefit assets;
new text end

new text begin (4) the value of the public benefit assets to be transferred has not been manipulated in
a manner that causes or caused the value of the assets to decrease;
new text end

new text begin (5) the proceeds of the proposed conversion transaction shall be used in a manner
consistent with the public benefit for which the assets are held by the nonprofit health
coverage entity;
new text end

new text begin (6) the proposed conversion transaction shall not result in a breach of fiduciary duty;
and
new text end

new text begin (7) the conversion benefit entity that receives the value of the nonprofit health coverage
entity's public benefit assets meets the requirements in section 145D.33.
new text end

new text begin Subd. 3. new text end

new text begin Listening sessions and public comment. new text end

new text begin The attorney general or the
commissioner may hold public listening sessions or forums and may solicit public comments
regarding the proposed conversion transaction, including on the formation of a conversion
benefit entity under section 145D.33.
new text end

new text begin Subd. 4. new text end

new text begin Waiting period. new text end

new text begin (a) Subject to paragraphs (b) and (c), a nonprofit health
coverage entity must not enter into a conversion transaction until 90 days after the nonprofit
health coverage entity has given written notice as required in subdivision 1.
new text end

new text begin (b) The attorney general may waive all or part of the waiting period or may extend the
waiting period for an additional 90 days by notifying the nonprofit health coverage entity
of the extension in writing.
new text end

new text begin (c) The time periods specified in this subdivision shall be suspended while an
investigation into the conversion transaction is pending or while a request from the attorney
general for additional information is outstanding.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of value of assets required. new text end

new text begin As part of a conversion transaction for
which notice is provided under subdivision 1, the nonprofit health coverage entity must
transfer the entirety of the full and fair value of its public benefit assets to one or more
conversion benefit entities that meet the requirements in section 145D.33.
new text end

new text begin Subd. 6. new text end

new text begin Funds restricted for a particular purpose. new text end

new text begin Nothing in this section relieves a
nonprofit health coverage entity from complying with requirements for funds that are
restricted for a particular purpose. Funds restricted for a particular purpose must continue
to be used in accordance with the purpose for which they were restricted under sections
317A.671 and 501B.31. A nonprofit health coverage entity may not convert assets that
would conflict with their restricted purpose.
new text end

Sec. 4.

new text begin [145D.33] CONVERSION BENEFIT ENTITY REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Requirements. new text end

new text begin In order to receive the value of a nonprofit health coverage
entity's public benefit assets as part of a conversion transaction, a conversion benefit entity
must:
new text end

new text begin (1) be: (i) an existing or new domestic, nonprofit corporation operating under chapter
317A, a nonprofit limited liability company operating under chapter 322C, or a wholly
owned subsidiary thereof; and (ii) exempt under United States Code, title 26, section
501(c)(3);
new text end

new text begin (2) have in place procedures and policies to prohibit conflicts of interest, including but
not limited to conflicts of interest relating to any grant-making activities that may benefit:
new text end

new text begin (i) the officers, directors, or key employees of the conversion benefit entity;
new text end

new text begin (ii) any entity to which the nonprofit health coverage entity transfers public benefit assets
in connection with a conversion transaction; or
new text end

new text begin (iii) any officers, directors, or key employees of an entity to which the nonprofit health
coverage entity transfers public benefit assets in connection with a conversion transaction;
new text end

new text begin (3) operate to benefit the health of the people in this state;
new text end

new text begin (4) have in place procedures and policies that prohibit:
new text end

new text begin (i) an officer, director, or key employee of the nonprofit health coverage entity from
serving as an officer, director, or key employee of the conversion benefit entity for the
five-year period following the conversion transaction;
new text end

new text begin (ii) an officer, director, or key employee of the nonprofit health coverage entity or of
the conversion benefit entity from directly or indirectly benefitting from the conversion
transaction; and
new text end

new text begin (iii) elected or appointed public officials from serving as an officer, director, or key
employee of the conversion benefit entity;
new text end

new text begin (5) not make grants or payments or otherwise provide financial benefit to an entity to
which a nonprofit health coverage entity transfers public benefit assets as part of a conversion
transaction or to a related organization of the entity to which the nonprofit health coverage
entity transfers public benefit assets as part of a conversion transaction; and
new text end

new text begin (6) not have as an officer director, or key employee any individual who has been an
officer, director, or key employee of an entity that receives public benefit assets as part of
a conversion transaction.
new text end

new text begin Subd. 2. new text end

new text begin Review and approval. new text end

new text begin The commissioner must review and approve a conversion
benefit entity before the conversion benefit entity receives the value of public benefit assets
from a nonprofit health coverage entity. In order to be approved under this subdivision, the
conversion benefit entity's governance must be broadly based in the community served by
the nonprofit health coverage entity and must be independent of the entity to which the
nonprofit health coverage entity transfers public benefit assets as part of the conversion
transaction. As part of the review of the conversion benefit entity's governance, the
commissioner may hold a public hearing. The public hearing, if held by the commissioner
of health, may be held concurrently with the hearing authorized under section 62D.31. If
the commissioner finds it necessary, a portion of the value of the public benefit assets must
be used to develop a community-based plan for use by the conversion benefit entity.
new text end

new text begin Subd. 3. new text end

new text begin Community advisory committee. new text end

new text begin The commissioner must establish a
community advisory committee for a conversion benefit entity receiving the value of public
benefit assets. The members of the community advisory committee must be selected to
represent the diversity of the community previously served by the nonprofit health coverage
entity. The community advisory committee must:
new text end

new text begin (1) provide a slate of three nominees for each vacancy on the governing board of the
conversion benefit entity, from which the remaining board members must select new
members to the board;
new text end

new text begin (2) provide the conversion benefit entity's governing board with guidance on the health
needs of the community previously served by the nonprofit health coverage entity; and
new text end

new text begin (3) promote dialogue and information sharing between the conversion benefit entity and
the community previously served by the nonprofit health coverage entity.
new text end

Sec. 5.

new text begin [145D.34] ENFORCEMENT AND REMEDIES.
new text end

new text begin Subdivision 1. new text end

new text begin Investigation. new text end

new text begin The attorney general has the powers in section 8.31.
Nothing in this subdivision limits the powers, remedies, or responsibilities of the attorney
general under this chapter; chapter 8, 309, 317A, or 501B; or any other chapter. For purposes
of this section, an approval by the commissioner for regulatory purposes does not impair
or inform the attorney general's authority.
new text end

new text begin Subd. 2. new text end

new text begin Enforcement and penalties. new text end

new text begin (a) The attorney general may bring an action in
district court to enjoin or unwind a conversion transaction or seek other equitable relief
necessary to protect the public interest if:
new text end

new text begin (1) a nonprofit health coverage entity or conversion transaction violates sections 145D.30
to 145D.33; or
new text end

new text begin (2) the conversion transaction is contrary to the public interest.
new text end

new text begin In seeking injunctive relief, the attorney general must not be required to establish irreparable
harm but must instead establish that a violation of sections 145D.30 to 145D.33 occurred
or that the requested order promotes the public interest.
new text end

new text begin (b) Factors informing whether a conversion transaction is contrary to the public interest
include but are not limited to whether:
new text end

new text begin (1) the conversion transaction shall result in increased health care costs for patients; and
new text end

new text begin (2) the conversion transaction shall adversely impact provider cost trends and containment
of total health care spending.
new text end

new text begin (c) The attorney general may enforce sections 145D.30 to 145D.33 under section 8.31.
new text end

new text begin (d) Failure of the entities involved in a conversion transaction to provide timely
information as required by the attorney general or the commissioner shall be an independent
and sufficient ground for a court to enjoin or unwind the transaction or provide other equitable
relief, provided the attorney general notifies the entities of the inadequacy of the information
provided and provides the entities with a reasonable opportunity to remedy the inadequacy.
new text end

new text begin (e) An officer, director, or other executive found to have violated sections 145D.30 to
145D.33 shall be subject to a civil penalty of up to $100,000 for each violation. A corporation
or other entity which is a party to or materially participated in a conversion transaction
found to have violated sections 145D.30 to 145D.33 shall be subject to a civil penalty of
up to $1,000,000. A court may also award reasonable attorney fees and costs of investigation
and litigation.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner of health; data and research. new text end

new text begin The commissioner of health
must provide the attorney general, upon request, with data and research on broader market
trends, impacts on prices and outcomes, public health and population health considerations,
and health care access, for the attorney general to use when evaluating whether a conversion
transaction is contrary to public interest. The commissioner may share with the attorney
general, according to section 13.05, subdivision 9, any not public data, as defined in section
13.02, subdivision 8a, held by the commissioner to aid in the investigation and review of
the conversion transaction, and the attorney general must maintain this data with the same
classification according to section 13.03, subdivision 4, paragraph (c).
new text end

new text begin Subd. 4. new text end

new text begin Failure to take action. new text end

new text begin Failure by the attorney general to take action with
respect to a conversion transaction under this section does not constitute approval of the
conversion transaction or waiver, nor shall failure prevent the attorney general from taking
action in the same, similar, or subsequent circumstances.
new text end

Sec. 6.

new text begin [145D.35] DATA PRACTICES.
new text end

new text begin Section 13.65 applies to data provided by a nonprofit health coverage entity or the
commissioner to the attorney general under sections 145D.30 to 145D.33. Section 13.39
applies to data provided by a nonprofit health coverage entity to the commissioner under
sections 145D.30 to 145D.33. The attorney general or the commissioner may make any
data classified as confidential or protected nonpublic under this section accessible to any
civil or criminal law enforcement agency if the attorney general or commissioner determines
that the access aids the law enforcement process.
new text end

Sec. 7.

new text begin [145D.36] COMMISSIONER OF HEALTH; REPORTS AND ANALYSIS.
new text end

new text begin Notwithstanding any law to the contrary, the commissioner may use data or information
submitted under sections 60A.135 to 60A.137, 60A.17, 60D.18, 60D.20, 62D.221, and
145D.32 to conduct analyses of the aggregate impact of transactions within nonprofit health
coverage entities and organizations which include nonprofit health coverage entities or their
affiliates on access to or the cost of health care services, health care market consolidation,
and health care quality. The commissioner must issue periodic public reports on the number
and types of conversion transactions subject to sections 145D.30 to 145D.35 and on the
aggregate impact of conversion transactions on health care costs, quality, and competition
in Minnesota.
new text end

Sec. 8.

new text begin [145D.37] RELATION TO OTHER LAW.
new text end

new text begin (a) Sections 145D.30 to 145D.36 are in addition to and do not affect or limit any power,
remedy, or responsibility of a health maintenance organization, a service plan corporation,
a conversion benefit entity, the attorney general, the commissioner of health, or the
commissioner of commerce under this chapter; chapter 8, 62C, 62D, 309, 317A, or 501B;
or other law.
new text end

new text begin (b) Nothing in sections 145D.03 to 145D.36 authorizes a nonprofit health coverage entity
to enter into a conversion transaction not otherwise permitted under chapter 317A or 501B
or other law.
new text end

ARTICLE 3

OTHER PROVISIONS

Section 1.

new text begin [62C.045] APPLICATION OF OTHER LAW.
new text end

new text begin Sections 145D.30 to 145D.37 apply to service plan corporations operating under this
chapter.
new text end

Sec. 2.

Minnesota Statutes 2022, section 62D.22, is amended by adding a subdivision to
read:

new text begin Subd. 5a. new text end

new text begin Application of other law. new text end

new text begin Sections 145D.30 to 145D.37 apply to nonprofit
health maintenance organizations operating under this chapter.
new text end

Sec. 3.

Minnesota Statutes 2023 Supplement, section 145D.01, subdivision 1, is amended
to read:

Subdivision 1.

Definitions.

(a) For purposes of this deleted text begin chapter deleted text end new text begin section and section 145D.02 new text end ,
the following terms have the meanings given.

(b) "Captive professional entity" means a professional corporation, limited liability
company, or other entity formed to render professional services in which a beneficial owner
is a health care provider employed by, controlled by, or subject to the direction of a hospital
or hospital system.

(c) "Commissioner" means the commissioner of health.

(d) "Control," including the terms "controlling," "controlled by," and "under common
control with," means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a health care entity, whether through the
ownership of voting securities, membership in an entity formed under chapter 317A, by
contract other than a commercial contract for goods or nonmanagement services, or otherwise,
unless the power is the result of an official position with, corporate office held by, or court
appointment of, the person. Control is presumed to exist if any person, directly or indirectly,
owns, controls, holds with the power to vote, or holds proxies representing 40 percent or
more of the voting securities of any other person, or if any person, directly or indirectly,
constitutes 40 percent or more of the membership of an entity formed under chapter 317A.
The attorney general may determine that control exists in fact, notwithstanding the absence
of a presumption to that effect.

(e) "Health care entity" means:

(1) a hospital;

(2) a hospital system;

(3) a captive professional entity;

(4) a medical foundation;

(5) a health care provider group practice;

(6) an entity organized or controlled by an entity listed in clauses (1) to (5); or

(7) an entity that owns or exercises control over an entity listed in clauses (1) to (5).

(f) "Health care provider" means a physician licensed under chapter 147, a physician
assistant licensed under chapter 147A, or an advanced practice registered nurse as defined
in section 148.171, subdivision 3, who provides health care services, including but not
limited to medical care, consultation, diagnosis, or treatment.

(g) "Health care provider group practice" means two or more health care providers legally
organized in a partnership, professional corporation, limited liability company, medical
foundation, nonprofit corporation, faculty practice plan, or other similar entity:

(1) in which each health care provider who is a member of the group provides services
that a health care provider routinely provides, including but not limited to medical care,
consultation, diagnosis, and treatment, through the joint use of shared office space, facilities,
equipment, or personnel;

(2) for which substantially all services of the health care providers who are group
members are provided through the group and are billed in the name of the group practice
and amounts so received are treated as receipts of the group; or

(3) in which the overhead expenses of, and the income from, the group are distributed
in accordance with methods previously determined by members of the group.

An entity that otherwise meets the definition of health care provider group practice in this
paragraph shall be considered a health care provider group practice even if its shareholders,
partners, members, or owners include a professional corporation, limited liability company,
or other entity in which any beneficial owner is a health care provider and that is formed to
render professional services.

(h) "Hospital" means a health care facility licensed as a hospital under sections 144.50
to 144.56.

(i) "Medical foundation" means a nonprofit legal entity through which health care
providers perform research or provide medical services.

(j) "Transaction" means a single action, or a series of actions within a five-year period,
which occurs in part within the state of Minnesota or involves a health care entity formed
or licensed in Minnesota, that constitutes:

(1) a merger or exchange of a health care entity with another entity;

(2) the sale, lease, or transfer of 40 percent or more of the assets of a health care entity
to another entity;

(3) the granting of a security interest of 40 percent or more of the property and assets
of a health care entity to another entity;

(4) the transfer of 40 percent or more of the shares or other ownership of a health care
entity to another entity;

(5) an addition, removal, withdrawal, substitution, or other modification of one or more
members of the health care entity's governing body that transfers control, responsibility for,
or governance of the health care entity to another entity;

(6) the creation of a new health care entity;

(7) an agreement or series of agreements that results in the sharing of 40 percent or more
of the health care entity's revenues with another entity, including affiliates of such other
entity;

(8) an addition, removal, withdrawal, substitution, or other modification of the members
of a health care entity formed under chapter 317A that results in a change of 40 percent or
more of the membership of the health care entity; or

(9) any other transfer of control of a health care entity to, or acquisition of control of a
health care entity by, another entity.

(k) A transaction as defined in paragraph (j) does not include:

(1) an action or series of actions that meets one or more of the criteria set forth in
paragraph (j), clauses (1) to (9), if, immediately prior to all such actions, the health care
entity directly, or indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, all other parties to the action or series of actions;

(2) a mortgage or other secured loan for business improvement purposes entered into
by a health care entity that does not directly affect delivery of health care or governance of
the health care entity;

(3) a clinical affiliation of health care entities formed solely for the purpose of
collaborating on clinical trials or providing graduate medical education;

(4) the mere offer of employment to, or hiring of, a health care provider by a health care
entity;

(5) contracts between a health care entity and a health care provider primarily for clinical
services; or

(6) a single action or series of actions within a five-year period involving only entities
that operate solely as a nursing home licensed under chapter 144A; a boarding care home
licensed under sections 144.50 to 144.56; a supervised living facility licensed under sections
144.50 to 144.56; an assisted living facility licensed under chapter 144G; a foster care setting
licensed under Minnesota Rules, parts 9555.5105 to 9555.6265, for a physical location that
is not the primary residence of the license holder; a community residential setting as defined
in section 245D.02, subdivision 4a; or a home care provider licensed under sections 144A.471
to 144A.483.

Sec. 4.

Minnesota Statutes 2022, section 317A.811, subdivision 1, is amended to read:

Subdivision 1.

When required.

(a) Except as provided in subdivision 6, the following
corporations shall notify the attorney general of their intent to dissolve, merge, consolidate,
or convert, or to transfer all or substantially all of their assets:

(1) a corporation that holds assets for a charitable purpose as defined in section 501B.35,
subdivision 2; deleted text begin or
deleted text end

(2) a corporation that is exempt under section 501(c)(3) of the Internal Revenue Code
of 1986, or any successor section deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) a nonprofit health coverage entity defined in section 145D.30.
new text end

(b) The notice must include:

(1) the purpose of the corporation that is giving the notice;

(2) a list of assets owned or held by the corporation for charitable purposes;

(3) a description of restricted assets and purposes for which the assets were received;

(4) a description of debts, obligations, and liabilities of the corporation;

(5) a description of tangible assets being converted to cash and the manner in which
they will be sold;

(6) anticipated expenses of the transaction, including attorney fees;

(7) a list of persons to whom assets will be transferred, if known, or the name of the
converted organization;

(8) the purposes of persons receiving the assets or of the converted organization; and

(9) the terms, conditions, or restrictions, if any, to be imposed on the transferred or
converted assets.

The notice must be signed on behalf of the corporation by an authorized person.