Category: Healthcare

Why Texas Should Slow Down On Healthcare Merger Bills
Law360
By John Saran, Harshita Rathore and Robbie Allen
May 21, 2025

Texas is the national focal point in the bipartisan debate over state efforts to regulate healthcare consolidation. The fate of pending legislation since early this year, which drew widespread opposition from Texas facilities, provider groups and other stakeholders, comes to a head on June 2, the final day of the legislative session.

On the docket are three bills — H.B. 2747, S.B. 1595 and H.B. 4408 — aimed at studying the effects of healthcare consolidation to increase affordability and access to healthcare.

However, many stakeholders believe that if enacted, these bills could have the opposite effect.[1] They argue that rather than fostering a more affordable and accessible system, the laws could place significant burdens on independent providers, deter investment in local communities and reduce patient access to services, especially in rural and underserved areas.

They also posit that the impact of these broad oversight efforts could cause smaller providers to have fewer options to sell or consolidate, which would dramatically reduce the value creation built into these small businesses and severely limit downstream opportunity.

“Oversight efforts that are too broad, too costly, or too disconnected from the real sources of cost pressures risk chilling investment, undermining innovation, and reducing patient access — particularly in the communities that can least afford it,” said Regan Parker, CEO of the Association for Responsible Healthcare Investment, in written testimony to the Texas House Committee on Public Health on H.B. 2747.

Texas legislators may need more time to study these sweeping proposals and feedback from the market. Market studies and ultimately, targeted legislation, if needed, could avoid unintended consequences that could stifle the Texas healthcare industry. What happens in the Lone Star State this year could influence legislative processes across the country.

Overview of the Three Bills

H.B. 2747 proposes a transaction reporting framework that requires certain healthcare entities to notify the Texas attorney general at least 90 days before a material change transaction occurs, such as mergers, acquisitions or sales.

The bill also authorizes the attorney general to study healthcare market conditions, including ownership concentration, competitive forces on price and quality, trends in service price and availability, and the effects of material change transactions. Notably, H.B. 2747 includes confidentiality protections for submitted materials.

S.B. 1595 and H.B. 4408 also require a notice for material change transactions involving entities with assets or revenue of at least $10 million. However, it also mandates annual ownership and financial disclosures to the Texas secretary of state, with no confidentiality safeguards.

These disclosures include detailed organizational charts, affiliated providers and facilities, ownership structures, contact information, and comprehensive financial reports, including audited financials.

Below are specific concerns raised by various stakeholders, but the general sentiment of the bills’ opponents is reflected in the following written testimony by the Patient Choice Coalition, dated April 7, “[f]ollowing the lead of California or Massachusetts may not be what is needed here. Texas should understand the likely impacts and unintended consequences of any proposed bill on our independent providers and physician-owned
facilities.”

Small practices and providers already have significant regulatory compliance burdens that often drive them to seek assistance or partnerships to navigate — reducing physician income and limiting growth potential. The bills’ potential to incentivize practices to remain small and under the reporting threshold is contrary to the need for the required scale and care coordination necessary to deliver the quality levels patients expect and deserve.

H.B 2747

Low Dollar Thresholds for Applicability

H.B. 2747 sets a low threshold ($5 million in annual revenue) for the size of the largest party involved in the transaction, making it one of the broadest transaction reporting bills in the country. While Texas has many private practice physicians that are part of consolidating entities, the majority are still local care delivery businesses, and the reporting thresholds introduce a very low dollar threshold that triggers a number of compliance steps.

To illustrate, a five-physician cardiology group could easily have a value/revenue over $10 million, triggering a variety of reporting requirements. There also is no transaction size threshold. A low bar for transactions could also strain the resources of the Texas attorney general’s office and delay small and low-impact transactions that are vital for healthcare in local communities.

Potential for Extraterritorial Impact and Broad Attorney General Discretion

The absence of geographic limitations could allow Texas to assert authority over transactions involving out-of-state parties with limited presence in Texas. This overreach could hinder national healthcare transactions, and encourage closure or divestiture of investment in rural and underserved communities.

There also is concern by stakeholders that the law grants too much discretion to the Texas attorney general without any clear parameters — questions were also raised by Committee members during live testimony on April 7 about whether the attorney general reviews consolidation in other industries.

Notice Period

The 90-day notice requirement exceeds the time frame of the Hart-Scott-Rodino Act. As a result, a transaction cleared at the federal level could still face additional delays in Texas.

This extended timeline increases legal and administrative costs, and may shift investor interest to less burdensome jurisdictions.

Potentially Redundant Reporting Requirements

H.B. 2747 does not account for existing regulatory processes that already require changeof-control notifications. Many facilities in Texas already comply with such requirements under state or federal law. Imposing duplicative requirements only adds complexity and cost.

H.B. 4408 and S.B. 1595

Annual Reporting Requirements

S.B. 1595 and H.B. 4408 establish an expansive and burdensome healthcare annual reporting process. Healthcare entities with $10 million or more in assets or revenue would be required to submit detailed ownership and financial data annually, in addition to
reporting material change transactions.

These requirements would effectively treat private healthcare entities similar to minipublic companies, placing a significant administrative burden on providers and potentially discouraging investment in Texas.

Broad regulatory oversight of smaller healthcare practices may result in reduced competition in the marketplace by forcing them to either sell or consolidate into large healthcare systems that are better equipped to handle the reporting obligations.

This dramatically reduces the value creation built into these small businesses and severely limits downstream opportunity. Though some healthcare entities already report certain ownership information for licensure or payer purposes, H.B. 4408 and S.B. 1595 go significantly further. Indiana and Massachusetts adopted reporting measures this year, but these bills would be broader.[2]

No Confidentiality

Unlike H.B. 2747, H.B. 4408 does not protect the confidentiality of sensitive business information. All reports submitted to the secretary of state would be made publicly available. This gap could expose proprietary business strategies, complex corporate structures and financial data to competitors, media and advocacy groups, undermining business negotiations and deterring strategic partnerships.

Ambiguity in Key Definitions

The bill requires annual reporting upon execution of a material change transaction, but it is unclear whether this refers to signing a letter of intent, a purchase agreement or closing the transaction.

There is also no time frame for a transaction notice. These ambiguities could lead to confusion, inadvertent violations and increased legal exposure. The bill’s vague definition of “material change” also could capture numerous transactions that are insignificant to healthcare consolidation.

Considerations as the Texas Legislative Session Winds Down

H.B. 2747, H.B. 4408 and S.B. 1595 attempt to address important issues related to consolidation and competition in the healthcare market. However, stakeholders believe that the current proposals are too broad, too burdensome and too disconnected from the real challenges facing Texas healthcare providers.

Though Texas has many private practice physicians who are part of consolidating entities, the majority are still local care delivery businesses, and the reporting thresholds introduce a very low dollar threshold that triggers compliance steps.

The current provider base is just beginning to recover from the record burnout of the COVID-19 era, and there is a need to evaluate where the financial threshold for reporting requirements actually affects care, competition and access — not simply assign an arbitrary dollar amount.

Parker from the Association for Responsible Healthcare Investment commented that:

ARHI supports more research and studies on the impact of private investments in healthcare. There are well founded concerns about some of these investments and their impacts across the country. However, understanding how to create a framework to prevent bad actors in this space while not stifling important investments in underserved communities will take thoughtful consideration. We welcome continued conversations and opportunities to educate stakeholders.

Any regulatory framework, if needed, could be further narrowed to focus on specific transactions or conduct that meaningfully affects competition in Texas. The framework could include appropriate thresholds to exempt small providers and low-risk transactions.

These measures also could avoid creating unnecessary concern in the marketplace by respecting the confidentiality of proprietary business information and avoiding duplicating existing reporting processes.

______________________________________________________________________________________________________

John Saran is a partner at Holland & Knight LLP.

Harshita Rathore is an associate at the firm.

Robbie Allen is the chief executive officer at U.S. Heart and Vascular.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] See written stakeholder testimonies, including Written Testimony on HB 2747 by Patient Choice Coalition, compiled on April 7, 2025; written testimony on HB 4408 by Patient Choice Coalition; and written testimony on HB 2747 by Regan Parker, Chief Executive Officer, Association for Responsible Healthcare Investment, in each case to or in front of the Committee.

[2] Ind. Code §16-21-6-3; Mass. Gen. Laws Ann. ch. 6D, §13.

Testimony of Regan Parker
CEO, Association for Responsible Healthcare Investment
Before the Oregon Legislature – Expert Panel on SB 951
April 29, 2025

Chair Nosse, Members of the Committee:

Thank you for the opportunity to be with you today. My name is Regan Parker, and I serve as the CEO of the Association for Responsible Healthcare Investment. We are a coalition of responsible investors dedicated to supporting high-quality, patient-centered healthcare across the country. Every member of our organization agrees to a set of core principles that focus on ethical practices, transparency and patient centered care. 

Let me start by stating very clearly – we fully share your commitment to ensuring that clinical decisions remain with licensed medical professionals. Patients deserve care that is guided by doctors and nurses—not by business pressures.

The complexities of running a healthcare practice are becoming increasingly more difficult to navigate. There are pressures coming from a multitude of sources, and often private investment is what allows practices to remain open. In Oregon, and in other communities across the country, private investments have supported the opening of new urgent care centers, specialty clinics, and telehealth programs that provide access for patients who otherwise might have to wait months for care or drive hours to find a provider. 

Private investment plays a critical role in sustaining and improving healthcare, particularly at a time when workforce shortages, rising costs, and evolving patient needs are placing tremendous strain on healthcare organizations. Private capital enables practices—especially independent and community-based practices—to modernize their operations, invest in technology, expand access to underserved communities, and support healthcare workers through better training and development​.

We believe that there are ways to curtail the bad acts that lawmakers and communities are concerned about without stifling the critical investments that enable innovation and access that Oregon’s healthcare system desperately needs. 

The stated purpose of the bill makes sense, and we support keeping the doctor – patient relationship separate from business interests. The challenge is always in the details of how this is accomplished and the potential unintended consequences of the language. This bill has already undergone several rounds of amendments, trying to get it to a place where it balances the intention of the bill sponsors and the concerns from those in the industry. 

We are still concerned, however, that certain provisions in the amended version of SB 951 could unintentionally discourage responsible investments in Oregon’s healthcare system. In particular:

• The restrictions on management arrangements could make it difficult for practices to access the administrative, technological, and financial support they need to stay viable—especially in rural and underserved areas. Doctors and nurses do this work to impact patients, not necessarily to run a business. If they have access to technology or processes that make operating their business easier, they can focus more on delivering patient care- which is what we all care most about.

• The broad classification of violations under the Unlawful Trade Practices Act could create uncertainty and liability risks even for responsible investors acting in good faith. These measures would risk discouraging the partnerships and private sector support needed to expand access to care. Additional compliance costs and other requirements could especially impact independent practices, physician groups, and clinics that already face tight margins as they serve high-need populations. This could deter the types of partnerships that strengthen Oregon’s healthcare system.

• Rather than fostering access and innovation, these kinds of proposals could create a chilling effect on responsible investments that help grow healthcare services and strengthen rural infrastructure.

We respectfully suggest that any reforms in this area balance two important goals:

• First, preserving and reinforcing the autonomy of licensed medical professionals in clinical decision-making—which we strongly support.
• Second, maintaining a framework that allows responsible investment to continue expanding access to care, improving infrastructure, and supporting innovation across Oregon.

Concerns about oversight are certainly justified. Recent examples of exploitation and mismanagement by bad actors have created reasonable questions around the influence of certain private capital investors in our healthcare system. However, private investment, done responsibly and transparently, can be a vital tool for enhancing—not undermining—patient care. We would welcome the opportunity to work with you on thoughtful approaches that protect patients and providers while allowing Oregon’s healthcare system to thrive.

Thank you again for the opportunity to appear today, and I am happy to answer any questions.

WRITTEN TESTIMONY ON HB 2747
Submitted by Regan Parker, CEO, Association for Responsible Healthcare Investment (ARHI)
Texas House Public Health Committee | April 2025

Members of the Committee:

Thank you for the opportunity to submit testimony regarding HB 2747.

My name is Regan Parker, and I am the CEO of the Association for Responsible Healthcare Investment (ARHI).

ARHI is a national coalition of organizations committed to strengthening healthcare through responsible private investment. Our members are deeply invested in the success of healthcare providers, the well-being of patients, and the resilience of the healthcare system as a whole.

At ARHI, we believe that when conducted responsibly, private investment can — and should — be a positive force in healthcare. Our members adhere to a set of core principles that guide all investment activity:

• Patient-centered care, ensuring that every investment expands access, improves quality, and delivers better outcomes for patients, especially in underserved and rural communities;
• Transparency and accountability, maintaining clear and ethical business practices, including governance disclosures and impacts on patient care;
• Preservation of clinical independence, safeguarding the ability of licensed healthcare professionals to make decisions in the best interests of their patients, free from inappropriate financial influence;
• Support for the healthcare workforce, including investments that promote fair compensation, training opportunities, and strategies to address burnout and shortages;
• Innovation and modernization, enabling the deployment of new technologies and care models that improve system efficiency and patient outcomes; and
• Long-term value creation, ensuring that investments strengthen the financial stability of healthcare organizations and create lasting benefits for communities.

These values reflect a commitment to building a healthcare system that is more equitable, more resilient, and more responsive to the needs of patients across Texas and the nation.

While we share the Committee’s interest in fostering a fair, competitive, and patient-centered healthcare marketplace, we must respectfully oppose HB 2747. As currently drafted, the bill would impose substantial new regulatory burdens on providers and investors without adequately targeting or fully understanding the root causes of rising healthcare costs in rural Texas.

Specifically, we are concerned that HB 2747 would:

• Impose significant compliance and reporting burdens on independent practices, physician groups, clinics, and small facilities — organizations that are often already operating on tight margins and serving high-need populations;
• Discourage investment in rural and underserved areas by creating uncertainty and new regulatory hurdles for prospective partners seeking to support healthcare expansion;
• Fail to meaningfully address the true drivers of rural healthcare costs, such as geographic monopolies and market distortions that limit patient choice and inflate prices; and
• Grant broad and undefined regulatory authority to the Attorney General’s office, without clear parameters or protections for sensitive, confidential business information, raising the risk of regulatory overreach.

Rather than achieving the intended goals of affordability and access, HB 2747 risks producing the opposite effect — making it harder for independent providers to thrive, harder for communities to attract investment, and ultimately harder for patients to access the care they need.

We respectfully urge policymakers to first understand more clearly the causes of the issues in Texas’ healthcare system, and to use those findings to create a data-driven approach to any proposed legislation. We encourage more research and dialogue to ensure that any legislation is focused on more effective, targeted strategies that directly address healthcare access and affordability challenges without imposing sweeping, costly burdens on responsible providers and innovators.

Such approaches could include:

• Promoting competition and innovation through incentive structures that reward quality and value;
• Expanding access to community-based healthcare models that bring services closer to patients in rural and underserved areas;
• Strengthening enforcement of existing laws against anti-competitive behavior, rather than layering broad new reporting requirements across the entire healthcare system.

Transparency and oversight are important tools in ensuring a healthy healthcare marketplace, but they must be deployed carefully and thoughtfully, using a data-driven approach. Oversight efforts that are too broad, too costly, or too disconnected from the real sources of cost pressures risk chilling investment, undermining innovation, and reducing patient access — particularly in the communities that can least afford it.

At ARHI, we are committed to working with policymakers to find solutions that uphold accountability while also protecting the essential pillars of access, innovation, and clinical autonomy that Texas patients and providers depend on. For these reasons, we respectfully urge the Committee to reconsider HB 2747 and to work collaboratively with healthcare stakeholders to craft more targeted, effective solutions. Texas deserves policies that strengthen its healthcare system without inadvertently creating barriers to investment, modernization, or patient-centered growth.

Thank you for your time and consideration, and for your leadership in working to improve healthcare for all Texans.

Respectfully submitted,

Regan Parker

CEO, Association for Responsible Healthcare Investment (ARHI)

Association for Responsible Healthcare Investment (ARHI) to Promote Transparency, Ethical Practices, and Patient-Centered Initiatives

Washington D.C. – A coalition of leading private capital investors in America’s healthcare system has launched the Association for Responsible Healthcare Investment (ARHI). The coalition is committed to promoting responsible private investment in healthcare that enhances patient care, strengthens the healthcare system, and upholds the highest ethical standards. ARHI will showcase the positive impact of private capital in American healthcare to policymakers, media, key stakeholders, and the broader public. The coalition aims to establish a sustainable framework for private investment in healthcare that prioritizes accountability, promotes innovation, and enhances access to care. By driving responsible practices and engaging in advocacy, the coalition seeks to strengthen the healthcare system for patients, communities, and providers.

Regan Parker will serve as ARHI’s Chief Executive Officer. She currently serves as Chief Legal and Public Affairs Officer at ShiftKey, the largest technology marketplace for independent professionals in the healthcare industry today. 

“We need a strong, unified voice that is committed to providing better care for patients, building a better healthcare system, and upholding the highest ethical standards,” said Parker. “As private capital investment is becoming an increasingly critical foundation of today’s healthcare ecosystem, policymakers are starting to take notice. Bad actors and exploitative practices must stop and cannot undermine the positive private capital investments that are a force for good, creating a healthier society and a stronger, more accessible healthcare system. Our goal is to promote the highest standards, demonstrate how responsible private capital is a vital asset to healthcare that benefits patients and communities, and establish a sustainable framework that prioritizes accountability and better access to care.”

Eric Hargan will serve as a Co-Chair of ARHI. Hargan previously served as Acting Secretary of the Department of Health and Human Services and on the Board of Operation Warp Speed, helping to develop the project and coordinate HHS agencies.

“As private capital investment continues to play an increasingly integral role in shaping the future of our healthcare system, it is critical that private sector leaders and policymakers work together towards high standards that deliver the best outcomes for patients,” said Hargan. “I am excited to work together with private capital investors and policymakers towards a stronger, healthier, higher quality, more innovative, and more accessible system.”

David Berman, a founding member of ARHI and Managing Partner at Lorient Capital, emphasized the importance of responsible investment in healthcare: “The healthcare investment community must take the lead in setting clear standards for ethical, transparent, and patient-focused investment. ARHI is committed to proactive governance and partnering with regulators to ensure capital is deployed responsibly by supporting innovation, expanding access, and strengthening healthcare for the long term. By holding ourselves accountable, we can be a catalyst for fixing a fragmented and inefficient healthcare system in a way that doesn’t rely on increased government spending or higher taxpayer burdens, ensuring private capital drives meaningful, lasting improvements for patients and providers alike.”

Responsible private capital investment is a critical foundation of today’s healthcare system. ARHI will showcase how private capital investments are transforming healthcare by:

• Ensuring the delivery of affordable, accessible, and sustainable health services close to home in local communities across America.
• Modernizing medical practices, allowing doctors and other healthcare professionals to remain independent from vertical integration if they wish and focused on patient care.
• Allowing centralization of ever-increasing and complex administrative, legal, and regulatory requirements to alleviate the demands placed on individual healthcare innovators, providers, and systems.
• Providing much-needed funds to advance the discovery and commercialization of new treatments and technologies to improve the health of all Americans.
• Creating patient access. Patients in countless rural and urban communities already suffer from limited availability of providers and operational facilities and would lose even more access to critical healthcare services without private capital.
• Supporting the growth of new technologies, streamlined delivery, and quality care for patients across urban, rural, and underserved communities.
• Boosting innovation. Without private capital, there would be far less funding available for research and development related to new innovative drugs and treatments.

ARHI’S Core Principles

ARHI is committed to promoting responsible private investment in healthcare that enhances patient care, strengthens the healthcare system, and upholds the highest ethical standards. These principles serve as a framework for ARHI members and demonstrate the coalition’s dedication to addressing criticism and ensuring that private investment is a force for good in healthcare. ARHI is launching on the foundation of the following core principles:

Patient-Centered Care: ARHI prioritizes patient well-being above all else. ARHI member investments enhance access, improve health outcomes, and support providers in delivering high-quality, compassionate care to all patients, especially in underserved and rural areas.

Disparities and Access: ARHI prioritizes investments that reduce health disparities and promote better access to care for all populations, regardless of socioeconomic status, geography, or other barriers.

Transparency and Accountability: ARHI is committed to transparency in ownership and operations. ARHI member investors provide clear information about governance structures, financial and management practices, and the impact of their investments on patient care and community health.

Ethical Business Practices: Private investment in healthcare should adhere to the highest ethical standards. ARHI members do not engage in exploitative practices such as unnecessary billing to payors or limiting patient care options. ARHI promotes responsible business models that align with long-term sustainability and public trust.

Independence of Clinical Decision-Making: ARHI believes physicians and healthcare providers must retain autonomy in clinical decision-making. Investments should empower providers to focus on delivering accepted standards of care, free from undue influence by financial interests.

Commitment to Workforce Development: ARHI member investments foster more positive work environments for healthcare professionals by supporting fair compensation, training opportunities, and measures to address workforce shortages and burnout.

Promotion of Innovation and Technology: ARHI member investments drive innovation in healthcare, enabling the development and deployment of transformative technologies, therapies, and care delivery models that improve patient outcomes and system efficiency.

Long-Term Value Creation: ARHI member investments create sustainable value for patients, providers, and communities. This includes support for healthcare organizations in maintaining financial stability and adapting to the evolving needs of the healthcare system.

Regulatory Compliance and Good Governance: ARHI members are in strict compliance with all applicable laws and regulations. ARHI members are committed to strong governance practices, including ethical leadership and accountability mechanisms to ensure responsible decision-making.

Collaboration with Stakeholders: ARHI believes in fostering collaboration between investors, providers, policymakers, and communities to ensure that private investment in healthcare aligns with the broader goals of a healthier, more resilient society.

For more details about ARHI, please visit: https://investinhealthcare.org/

Contact:

Regan Parker
CEO
Association for Responsible Healthcare Investment
regan@investinhealthcare.org