Or. Admin. R. 410-141-5265 - CCO ACQUISITIONS AND MERGERS: Procedure For Acquiring Controlling Interest

Current through Register Vol. 60, No. 12, December 1, 2021

(1) An acquiring party shall:
(a) Complete and file Form A which is described in OAR 410-141-5270 with the Authority for approval. If more than one acquiring party must file Form A under this paragraph, any or all acquiring parties that are acting in concert may jointly file Form A.
(b) Deliver or mail to the CCO to which the activity described in OAR 410-141-5260 applies, concurrently with filing the statement under paragraph (a) of this subsection, a statement that has the information specified in this section. A statement mailed under this paragraph must be sent by certified mail, return receipt requested. If a joint statement is filed under paragraph (a) of this subsection, the joint statement must be the statement mailed or delivered under this paragraph;
(2) A person required to file Form A pursuant to OAR 410-141-5260 and this rule shall furnish the required information on Form A which is described in OAR 410-141-5270.
(3) If the person being acquired is considered to be a CCO solely because of the definition of "CCO" in OAR 410-141-5255, the name of the CCO on the cover page shall be indicated as follows: "ABC Company, a subsidiary of XYZ Holding Company."
(4) References to "the CCO" contained in Form A shall refer to both the subsidiary CCO and the person being acquired.
(5) The statement an acquiring party files with the Authority under this section must be made under oath or affirmation and must have the following information:
(a) The name and address of the CCO that is subject to the acquisition and of each acquiring party that must file the statement, additional biographical and business information about each acquiring party that must file the statement, and business plans and information regarding persons who will serve as or perform functions of directors or officers, as required by the Authority.
(b) The source, nature and amount of the consideration used or to be used in effecting the activity, a description of any transaction in which funds were or are to be obtained for the activity and the identity of persons that provide the consideration. If a source of consideration is a loan made in the lender's ordinary course of business, the identity of the lender must remain confidential if the acquiring party filing the statement requests confidentiality.
(c) Fully audited financial information as to the earnings and financial condition of each acquiring party for the acquiring party's preceding five fiscal years, or for as long as the acquiring party and any predecessors of the acquiring party have existed, if the acquiring party and the acquiring party's predecessors have existed for a shorter period of time, and similar unaudited information as of a date not earlier than 90 days before the statement was filed.
(d) Any plan or proposals that each acquiring party that must file a statement has to liquidate the CCO, to sell the CCO's assets or to merge or consolidate the CCO with any person or to make any other material change in the CCO's business, corporate structure or management.
(e) The number of shares of any security of a type described in OAR 410-141-5260 that each acquiring party proposes to acquire, the terms of any offer, request, invitation, agreement or acquisition of any security of a type described in OAR 410-141-5260 and a statement as to the method by which the acquiring party determined the fairness of the proposal.
(f) The amount of each class of any security of a type described in OAR 410-141-5260 that each acquiring party owns beneficially or concerning which each acquiring party has a right to acquire beneficial ownership.
(g) A full description of any contracts, agreements or understandings with respect to any security of a type described in OAR 410-141-5260 in which any acquiring party is involved, including but not limited to contracts, agreements or understandings that govern a transfer of any of the securities or that relate to joint ventures, loan or option arrangements, puts or calls, loan guarantees, guarantees against loss or guarantees of profits, division of losses or profits, or giving or withholding proxies. The description must identify the persons with which each acquiring party has entered into the contract, agreement or understanding.
(h) The names of persons who have purchased any securities of a type described in OAR 410-141-5260 during the 12 months before the date on which the acquiring party files the statement under this section, together with the dates of purchase and the amount and type of consideration the persons paid or agreed to pay.
(i) A description of any recommendations to purchase any securities of a type described in OAR 410-141-5260 that an acquiring party made during the 12 months before the date on which the acquiring party files the statement under this section, or of any recommendations that another person made as a result of interviewing an acquiring party or at an acquiring party's suggestion.
(j) Copies of all tender offers, requests, exchange offers, invitations to tender or agreements to acquire securities of a type described in OAR 410-141-5260, along with any additional material used to solicit the tender offers, requests, exchange offers, invitations to tender or agreements, if any additional material was distributed.
(k) The term of any contract, agreement or understanding for soliciting securities of a type described in OAR 410-141-5260 for tender that is made with or proposed to be made with a broker-dealer, together with the fees, commissions or other compensation the broker-dealer will receive in connection with the solicitation.
(l) Business plans for the CCO after the proposed activity, including analyses of the following (with any relevant supporting documentation):
(A) How, after the proposed activity, the CCO will be able to:
(i) Innovate, coordinate care, provide value, and deliver high-quality services;
(ii) Demonstrate commitment to addressing health disparities and inequities;
(iii) Be strongly connected to the community served by the CCO, including the CCO's community advisory council, community health improvement plan, and the Authority's requirements to engage with the community;
(iv) Provide services cost effectively and within cost growth limits imposed by the Authority or the state;
(v) Support social determinants of health in the community served by the CCO, as required by its Contract with the Authority;
(vi) Perform its responsibilities under the CCO Contract and applicable law;
(vii) Comply with requirements in the CCO Contract and applicable law concerning its governing body; and
(viii) Satisfy the policy priorities adopted by the Oregon Health Policy Board.
(B) If the proposed activity may result in the termination of members from a CCO or the transition of members from one CCO to another CCO, how the acquiring entity and CCO will facilitate those terminations and transitions in compliance with 42 C.F.R. §§ 438.52, 438.56, 438.62 and the CCO's contractual obligations to the Authority.
(C) Cost of, access to and quality of health care for Oregonians, including health care outside of the Medicaid program;
(D) Health equity in Oregon, including data on race, ethnicity, preferred spoken and written languages and disability status (collected in accordance with the practices and standards established in OAR chapter 943, Division 70) of patient populations impacted by the proposed activity;
(E) The financial stability of the CCO and the financial strategies that may influence the CCO; and
(F) The CCO's medical loss ratio.
(m) An agreement to submit an enterprise risk report under OAR 410-141-5330 each year during which the acquiring party controls CCO and an acknowledgment that the acquiring party and all subsidiaries in the holding company system that are within the acquiring party's control will provide, at the director's request, information the director needs to evaluate enterprise risk to the CCO;
(n) Any additional information the Authority may require.
(6) All requests or invitations for tenders or advertisements that make a tender offer or request or invite tenders of securities for control of a CCO made by or on behalf of any acquiring party required to file Form A under this section must have the information specified in subsection (2) of this rule. Copies of the materials must be filed with the Authority at least 10 days before the time the materials are first published or sent or given to security holders. Any additional materials that solicit or request the tenders after the initial solicitation or request must have the information specified in subsection (2) of this rule. Copies of the additional materials must be filed with the Authority at least 10 days prior to the time the materials are first published or sent or given to security holders.
(7) If any acquiring party required to file Form A under this section is a partnership, limited partnership, syndicate or other group, the Authority may require that the information specified in subsection (2) of this rule be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group and each person that controls the partner or member. If any partner, member or person is a corporation or if the acquiring party is a corporation, the Authority may require that the information described in subsection (2) of this rule be given with respect to the corporation and each officer and Authority of the corporation and each person that is directly or indirectly the beneficial owner of more than 10 percent of the outstanding securities of the corporation.
(8) If any material change occurs in the facts set forth in the statement filed under this section, the party that filed the statement shall file with the Authority and send to the CCO, within two business days after the party learns of the change, an amendment that sets forth the change together with copies of all documents and other material relevant to the change.
(9) If an offer, request, invitation, agreement or acquisition described in OAR 410-141-5260 is proposed to be made by means of a registration statement under the Securities Act of 1933, 15 U.S.C.A. § 77a et seq., or in circumstances that require disclosing similar information under the Securities Exchange Act of 1934, 15 U.S.C.A. § 78a et seq., or under a state law that requires a similar registration or disclosure, the party or parties may use the registration statement or disclosure to provide the information the party or parties must provide in the statement required under subsection (1) of this section. Such a registration statement may be used to supply information required by a Form A, not to replace the Form A.

Notes

Or. Admin. R. 410-141-5265
DMAP 60-2019, adopt filed 12/18/2019, effective 1/1/2020; DMAP 3-2020, temporary amend filed 02/12/2020, effective 02/12/2020 through 08/09/2020 DMAP 38-2020, amend filed 08/05/2020, effective 8/7/2020

Statutory/Other Authority: ORS 413.042, 414.615, 414.625, 414.635 & 414.651

Statutes/Other Implemented: ORS 414.610 - 414.685

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