A law passed in Illinois that takes effect January 1, 2024 that may have an effect on your dental practice sale to a dental support organization (DSO). This legislation implements notice requirements for healthcare facilities and healthcare provider entities engaging in “covered transactions.” Notice must be given to the Illinois Attorney General 30 days in advance of the effective date of the transaction.

What Types of Transactions Must Be Disclosed Under These Laws?

In Illinois, the disclosure law does not have a minimum transaction value to trigger the notice requirement. Instead, a covered transaction is “any merger, acquisition, or contracting affiliation between two or more healthcare facilities or provider organizations.”

Additionally, the definition of provider organization and healthcare facility likely would not apply to a relationship with a DSO. A “provider organization” is an organized group of persons in the business of healthcare delivery or management and that represents twenty or more healthcare providers in contracting with healthcare carriers or administrators in the payment of healthcare services.

“Healthcare facilities” are defined as hospitals, ambulatory surgery centers, kidney disease treatment centers, and outpatient surgery used to provide healthcare services, as defined under the Illinois Health Facilities Planning Act, and do not include healthcare facilities operated in the practice of other licensed healthcare professions, such as dentistry.

What Must the Disclosures Include and What Is the Review Process?

Written notice must be provided to the Illinois Attorney General at least 30 days in advance of the effective date of the transaction. The notice must:

1. Identify the parties.
2. Identify the impacted facility locations.
3. Identify the effective date of the transaction.
4. Include a description of the nature and purpose of the transaction.

Once the notice is given, the Illinois Attorney General will have 30 days to request any additional information. If the state asks for additional information, the transaction cannot close until 30 days after this additional information is provided.

Why Does This Matter to Me and What’s Next?

Even though the Illinois requirements would not apply to DSO transactions, the adoption of the Illinois laws may foreshadow similar restrictions being approved in other states, especially in states that already have strict MSO or DSO requirements. For example, similar disclosure requirements recently went into effect in New York that we discussed in our last blog post. Additionally, it may foreshadow similar requirements to be implemented on DSO transactions.

The Illinois governor recently signed the notification requirements into law and additional information has not been released yet. To the extent any individual dentist, dental practice, or DSO has a question related to this, or if we can assist in any way, please give us a call.

Vince Nardone is a partner with Benesch, with a focus in Benesch’s healthcare practice, and specifically a leader in the dental industry. He is a thought leader and regular speaker in the dental industry. He may be reached at (614) 223-9326 or vnardone@beneschlaw.com.

Angelina Campin is an associate with Benesch, and focuses her practice on healthcare matters in both transactional and regulatory areas. She may be reached at (312) 506-3424 or acampin@beneschlaw.com.