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SB 978

Healthcare Competition Reforms.

2025-2026 Session Introduced by Jim Burgin

Imposes a formal state review regime and penalties for hospital transactions over thresholds to preserve competition and public interest in NC healthcare.

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Bill Summary · SB 978

Summary of SB 978 (North Carolina, Session 2025) – Healthcare Competition Reforms

SB 978, titled Healthcare Competition Reforms, aims to increase competition in health care markets, provide whistleblower and employment protections for health care workers, and limit CEO compensation at certain nonprofit hospitals that receive state funds. The bill is organized into four parts addressing competition, whistleblower protections, nonprofit hospital compensation limits, and general effective dates.

1) Preserving Competition in Healthcare (Part I)

  • Establishes Article 11C, “Preserving Competition in Healthcare Act,” within Chapter 131E.
  • Key definitions (e.g., hospital entity, acquiring entity, transaction) set thresholds for review. A transaction triggers review if it involves assets, control, or governance equal to or exceeding $5 million and meets criteria such as selling/disposing of 50%+ of a hospital entity’s assets, transfer of control, or other arrangements that would fall under review.
  • Joint review by three state officials: State Auditor, Attorney General, and State Treasurer. A majority opinion governs.
  • Applicability: Not applicable if the transaction is in the usual course of business and waived in writing by the three officials.
  • Notification and review process:
    • Pre-notice: Hospitals must notify and certify that the article has been provided to their governing boards.
    • Notice: Hospitals must publish notice in newspapers within 10 days, including basic transaction details and public hearing information, or risk an objection.
    • Public hearing: Requires hearings in relevant counties; can be conducted remotely with approvals; parties cover hearing costs.
    • Timeline: Complete notice triggers a 90-day review window, with a 60-day review period (extendable up to 30 days) to decide to object or take no action.
  • Decision criteria (131E-214.32): Consider market value manipulation, provider ownership interests, reasonableness of contracts, impact on costs/availability/quality, commitments to community benefits, potential loss of hospital privileges, capacity for health science and education, and overall public interest. Special considerations apply for tax-exempt or publicly owned hospitals.
  • Post-transaction reporting: If not objected, acquiring entity must submit annual compliance reports; hospitals may face civil penalties for violations.
  • Fees: State may impose up to $50,000 in review fees on the acquiring entity to cover review costs; public hearing costs borne by parties.
  • Penalties for violations: Civil penalties up to $50,000 per transaction, or up to $1,000,000 for willful disregard; penalties accompany enforcement provisions including potential injunctions or rescission.
  • Effective dates: Subsection (a) effective January 1, 2027 (review provisions); subsection (b) effective July 1, 2026 (fee provisions).

2) Whistleblower and Employment Protections for Healthcare Professionals (Part II)

  • Amends existing whistleblower protections to explicitly cover health care professionals, defining relevant providers (physicians, PAs, advanced practice RNs, RNs) and hospitals (including hospital-owned practices and certain CMS-designated rural emergency hospitals).
  • Prohibits adverse actions against health care professionals for reporting violations of medical staff bylaws or comments concerning patient care.
  • Strengthens anti-retaliation protections for health care workers under the broader retaliation provisions (NC’s existing civil rights protections).
  • Effective date: Applies to actions on or after the law’s general effective date.

3) Nonprofit Hospital CEO Compensation Limits (Part III)

  • Adds new § 131E-99.1, “Hospital compensation fairness.”
  • Definition of minimum compensation: based on the lowest-paid full-time hospital employee, with the minimum used to cap CEO pay.
  • Limitation: No CEO of a qualifying hospital may receive annual compensation more than 400 times the minimum compensation.
  • Penalty: Civil penalty equal to the CEO’s annual compensation if the cap is exceeded.
  • Reporting: Qualifying hospitals must report minimum and CEO compensation annually by March 1; penalties issued by April 1 and must be paid by May 1.
  • Rules-making authority given to the Commission to implement details.

4) Effective Date (Part IV)

  • General effective date: SB 978 becomes law when enacted, with specified components taking effect as noted above.

Potential Impact

  • Healthcare competition: Creates a formal state review regime for sizable hospital transactions, potentially slowing deals that could harm competition or patient access, and increasing transparency around hospital consolidations.
  • Patient access and affordability: Consideration of community impact, pricing, and access to care may influence transaction outcomes and commitments to charitable activities or community benefits.
  • Employee protections: Expanded whistleblower protections may encourage reporting of violations without fear of retaliation.
  • Hospital governance and finances: CEO pay limits on qualifying nonprofits may affect executive compensation practices; annual reporting requirements increase transparency.
  • Fiscal and administrative: New review fees and potential enforcement actions add to regulatory oversight and administrative costs.

If you want, I can provide a section-by-section comparison with current North Carolina statute language or draft a one-page briefing for policymakers or the public.

Compiled from official sources — confirm details with the bill’s official record.

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