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September 16, 2015
Requirements for Group Practices Undergoing a “Material Change”

Group practices (defined as two or more physicians, legally organized in a partnership, professional corporation, limited liability company formed to render professional services, medical foundation, not-for-profit corporation, faculty practice plan or other similar entity) undergoing “material changes” to the business or corporate structure of their practice must be aware of important new notice requirements. The parties to any transaction that results in a “material change” to the business or corporate structure of a group practice must provide written notice not only to the Attorney General of the material change not less than thirty days prior to the effective date of the transaction, as was first required last year by Public Act 14-168. But effective October 1, 2015, in addition, the parties must also submit written notice to the Commissioner of Public Health not later than thirty days after the effective date of such transaction. For purposes of this requirement, a “material change” to the business or corporate structure of a group practice includes but is not limited to the merger, consolidation or other affiliation of a group practice with another group practice that results in a group practice of eight or more physicians, or with a hospital, hospital system, captive professional entity, medical foundation or other entity organized or controlled by such hospital or hospital system. For a complete definition of all transactions constituting a “material change,” see C.G.S. §19a-486i, as amended by Public Act 15-146, Section 27. The written notice to the AG and DPH shall identify each party to the transaction and describe the material change, including a description of the nature of the proposed relationship among the parties to the proposed transaction, the names and specialties of each physician that is a member of the group practice that is the subject of the proposed transaction and who will practice medicine within the resulting group practice, hospital, hospital system or other entity organized by, controlled by, or otherwise affiliated with such hospital or hospital system following the effective date of the transaction, the names of the business entities that are to provide services following the effective date of the transaction, the address for each location where services will be provided, a description of the services to be provided at each location, and the primary service area to be served by each location. If you have any questions or need assistance, please contact Arnold Menchel at (860) 297-4656 or menchel@halloransage.com, or Jennifer Mullen at (860) 437-0370 or mullen@halloransage.com.