PESP state healthcare policy roundup

In 2025, multiple states are attempting to tackle private equity in healthcare, with mixed results

2025 has seen a frenzy of state legislative activity in which lawmakers in over a dozen states have proposed and debated bills aimed at bringing greater oversight and transparency to healthcare mergers and acquisitions, regulating certain private equity business strategies, and updating corporate practice of medicine (CPOM) law. Much of this legislation is in direct response to private equity’s harmful impacts in healthcare systems around the country.

PESP has submitted testimony in support of thirteen bills across ten states, as well as provided informational testimonies in Pennsylvania and Vermont to lawmakers seeking to better understand private equity’s role in healthcare and potential policy options to address its negative impacts. 

So far this year, six states have successfully passed legislation that would bring greater oversight to private equity in healthcare and five more states are still debating bills before their legislative sessions end. Many states were not able to get legislation across the finish line this session, including in Connecticut where a local hospital system’s parent company is in bankruptcy proceedings in part due to financial extraction that occurred while it was owned by private equity-firm Leonard Green & Partners. 

Keep reading to learn more about the states that passed legislation, states where legislation is still being debated, and states that had bills on the table but failed to get them across the finish line this year. 

Passed

Indiana

 In April, Indiana lawmakers passed House Bill 1666, which was signed into law by the governor on May 6th. HB 1666, a Republican-sponsored bill, expands ownership reporting requirements for hospitals and certain healthcare entities and strengthens the Attorney General’s oversight of healthcare consolidation. The law includes specific requirements for private equity investors to report ownership in relevant healthcare entities. PESP submitted testimony in support of the bill.

This legislation also builds upon a healthcare antitrust law Indiana passed last year which created healthcare transaction notice requirements. Transactions valued at $10 million or more involving certain healthcare entities must be reported to the Attorney General’s office in advance, with the goal of ensuring the AG has the information necessary to identify prospective mergers and acquisitions that may substantially lessen competition as well as information concerning trends in health care sector transactions that may inform future enforcement priorities.

Maine

In June, Maine lawmakers passed LD 985, “An Act to Impose a Moratorium on the Ownership or Operation of Hospitals in the State by Private Equity Companies or Real Estate Investment Trusts.” This bill bans private equity companies and real estate investment trusts from acquiring or increasing a direct or indirect ownership interest or operational control or financial control in a hospital for a one year period that expires June 2026. This legislation will buy time for legislators to consider longer term proposals to guard against the risks of private equity ownership of hospitals in their state.

PESP submitted testimony in support of the bill.

Massachusetts 

On January 8, 2025, Governor Maura Healey signed H.5159 into law. H.5159 increases transparency and oversight of healthcare providers that participate in the Commonwealth’s health system – and importantly – their investors. The new law also expands the amount of and types of information these entities may need to provide to regulators both routinely and upon request. It also may make it easier for the Attorney General to pursue claims against private equity investors in False Claims Act (i.e. Medicare/Medicaid fraud) lawsuits. Importantly, it makes Massachusetts the first state to effectively prohibit the future sale-leasebacks of certain types of hospital real estate. Many provisions in the new law are a direct response to Steward Health Care’s collapse in Massachusetts following its pillaging by a private equity firm and hospital landlord. To read more about the new law, see PESP’s analysis here. Massachusetts currently has a second bill under consideration (S. 868) which is discussed below.

New Mexico

Last year, New Mexico lawmakers passed a temporary bill (Senate Bill 15) that gave the NM Office of Superintendent of Insurance (OSI) limited oversight power over hospital mergers, acquisitions, and changes of ownership. Some legislators were wary of passing legislation they feared would deter investment in their state health system, and so they opted to pass this temporary bill that expired in July 2025.

In February, legislators re-introduced the proposal as Senate Bill 14, “Health Care Consolidation & Transparency Act,” but the bill nearly died when a whittled down version advanced to the Senate Judiciary Committee with the qualifier, “ “Do Not Pass but without recommendation on Committee Substitution.” The Senate Judiciary Committee then struck down the bill in a 5-4 vote, where two Democrats voted no with their Republican colleagues.

The House Majority Leader, Reena Szczepanski (D), responded by drafting an Emergency Bill, HB 586, that built upon 2024’s temporary bill. As reported by KUNM, Szczepanski and its Senate co-sponsor, Senator Katy Duhigg (D) “had to make concessions to garner support, and HB586 does not contain nearly as much detail on oversight and regulation as SB14. For example, Duhigg said she wishes the definitions around the language used in the SB14 would have made it through to the final bill.” 

Overall the bill is more comprehensive than the temporary bill passed in 2024, but less comprehensive than the proposed Senate update. New Mexico lawmakers can choose to build upon it in future legislative sessions

PESP published a blog post in February on the earlier version of the bill..

Oregon

In June 2025, Oregon passed the strictest limits to date on the corporate practice of medicine (CPOM) – Senate Bill 951. A similar bill died in the legislature last year after aggressive industry lobbying and Republican opposition. After the reintroduced bill passed this May, its sponsors issued a press release that named private equity as one of the primary reasons for the need to shore up Oregon’s limits on the CPOM:

“In Oregon and across the country, there has been a sharp rise in private equity firms and large for-profit corporations acquiring medical practices in the last decade. These entities have exploited loopholes by employing or contracting with physicians who are listed as owners to be in compliance with CPOM on paper, but who lack true control over the practice. Senate Bill 951 closes that loophole, restoring the intent of CPOM and protecting the integrity of patient care in Oregon.”

See PESP’s testimony in support of Senate Bill 951 here.

Washington

First introduced in January, Washington legislators passed HB 1686 in April and it went into effect in July. HB 1686 creates a plan for a healthcare registry, citing a changing landscape of for-profit providers, including the growing role of private equity, as a need to require greater transparency and information sharing. The new law requires the Department of Health to develop a plan and recommendations, with input from a group of stakeholders, to create a complete and interactive registry of the health care landscape in Washington. An earlier and more robust version of the bill required a public-facing interactive registry tool to be created by January 2028. 

PESP submitted testimonies to multiple committees in support of HB 1686, including to the Senate Ways & Means Committee.

Legislation under consideration

Currently, at least 5 states are debating legislation that would in one way or another regulate private equity in healthcare.

• California has two bills under consideration that would increase regulation and enforcement of private equity investors in the state. Both bills are sitting on Governor Gavin Newsom’s desk after being passed in the state legislature. 
  • Senate Bill 351 seeks to clarify existing prohibitions on the corporate practice of medicine. The bill would prohibit private equity groups and hedge funds from interfering with the professional judgment of physicians or dentists in making health care decisions or exercising control or power over specified activities in violation of the existing bar on the corporate practice of medicine or dentistry, and would subject private equity groups and hedge funds to enforcement by the Attorney General for violations of those specific prohibitions.” PESP has submitted testimonies in support of this bill to the Senate’s Appropriations Committee, Judiciary Committee, and Business, Professions, and Economic Development Committee. The bill advanced out of the legislature to Governor Newsom’s desk on September 15.
  • Assembly Bill 1415 includes enhanced oversight of transactions involving healthcare providers, including management services organizations. PESP submitted testimonies to both the Assembly Committee on Health and the Senate Health Committee in support of the bill, with a recommendation to strengthen its provisions, writing: “AB 1415 would address lack of transparency by bringing greater oversight to private equity transactions involving California’s healthcare providers. However, we encourage the legislature to grant approval authority to the [Office of Healthcare Affordability] over applicable healthcare transactions as well. Without such authority, for-profit healthcare transactions will be able to proceed without sufficient regulatory safeguards, with potential impacts on prices, care quality, and access.”
  • On September 8, AB1415 passed its final floor vote and was sent to Governor Newsom.
• This February in Illinois, legislators introduced Senate Bill 1998, an amendment to the Illinois Antitrust Act that would require the Attorney General to consent to covered transactions of health care facilities, including ones involving private equity and hedge funds, before a covered transaction may take effect. This legislation builds on previous legislation signed into law in 2023 that expanded the AG’s scope of review for certain healthcare transactions. Illinois has seen the shutdowns of at least two safety net hospitals following private equity ownership – Westlake Hospital in 2019 and Weiss Memorial hospital in 2025. Both hospitals were previously owned by Pipeline Health, a private equity-owned hospital company. To read more about Pipeline and the impacts it had in Chicago, see PESP’s 2023 report here.
• After the passage of H.B. 5159 earlier this year, Massachusetts lawmakers are considering a second bill that would bring greater regulation to private equity in healthcare. S. 868 contains anti-looting measures that would prohibit excessive leverage, management fees, debt-funded dividends, and real estate transactions that are likely to place a provider in financial distress. PESP submitted testimony in support of the bill.
• In North Carolina, legislators introduced Senate Bill 570, which would “restore the supremacy of medical providers’ professional judgement” and prohibit the corporate practice of medicine. The bill would prohibit a physician from owning shares in a management services organization that provides non-clinical services to the physician’s practice. Law firm Parker Poe wrote that, by doing so, the bill “appears to target a popular structure used by private equity and similar investors in physician-owned medical practices in the state.”
• In Pennsylvania, the Health System Protection Act (HB 1460) sits in the Senate after bipartisan passage in the House in a 121-82 vote.  Earlier this year, the state saw the devastating closure of Crozer Health resulting in the layoffs of over 2,600 workers after its parent company, former private equity-owned Prospect Medical Holdings, filed for bankruptcy in January. In a statement made on April 21, Pennsylvania Governor Josh Shapiro said that Prospect had “pillaged these hospitals for their own gain – and today, we see the result of their greed and mismanagement with the announced closure and loss of critical health care services for the people of Delaware County… we must ensure this never happens again by passing legislation to get private equity out of the health care business in Pennsylvania.” In May, his office called on the General Assembly to pass the Health System Protection Act. 
  • If passed, HB 1460 ​​would ban sale-leaseback schemes that siphon resources from hospitals and inflate long-term costs, give the Office of the Attorney General authority to review and block health care acquisitions that put communities at risk, and protect hospitals, nursing homes, and other care facilities from predatory business practices that put profits over patients.
  • Pennsylvania’s Senate’s last regular session date will be December 10 and so there is still time for the bill to advance. However, the bill faces industry pushback and although it was passed with bipartisan support, the majority of its supporters were Democrat representatives. The Republican-controlled Senate presents new challenges to this bill’s passage. Senator Tim Kearney told WHYY in June that “We’re really counting on the fact that there’s an awful lot of Republican senators who have hospitals in their district that are running on incredibly tight margins and are really sort of prime fodder for the private equity playbook.”
  • PESP has engaged with elected officials in Pennsylvania around Crozer’s closure and potential policy solutions. In March, PESP’s healthcare director Mary Bugbee gave virtual testimony about the negative impacts of private equity in Pennsylvania’s healthcare system at a hearing hosted by the Pennsylvania Senate Democratic Policy Committee. In May, she presented at a Delaware County Council meeting about the devastating impact of private equity practices on the Crozer Health system.

Unsuccessful bills

• In Colorado, legislators introduced Senate Bill 25-198, “Concerning Transparency in Transactions Involving Medical Care Entities” in March. which would address lack of transparency by bringing greater oversight to many private equity transactions in healthcare and dental care and afford the Attorney General’s office greater regulatory powers to challenge transactions that may be contrary to the public interest. The bill was drafted with input from the Colorado Attorney General’s Office and other stakeholders. In April, the Senate Committee on Health & Human Services voted to postpone the bill indefinitely. 
  • PESP submitted testimony in support of the bill and will continue to support future legislative efforts in the state to bring greater oversight to healthcare transactions that could harm competition and be against the public interest.

• Connecticut had multiple bills on the table aimed at addressing private equity in Connecticut’s healthcare system. HB 6873 sought to strengthen the state’s authority to review health care transactions. PESP submitted testimony in support of this bill. SB 1507 sought to ban private equity ownership of hospitals altogether. A third bill (Senate Bill 1332) sought to prohibit private equity companies and real estate investment trusts from acquiring or increasing (1) any direct or indirect ownership interest in a nursing home, and (2) any operational or financial control in a nursing home.
  • Despite the high profile bankruptcy of Prospect Medical Holdings legislators were unable to get any of the three bills across the finish line. A report Sen. Chris Murphy (D-CT) released in August places blame on industry pressures. In regards to the bill that would have banned private equity, one state legislator quoted in the report said lobbyists “showed up the second to last day or the last day of session…ten of them, or twelve of them, objecting to the current version of the bill.” She saw it not as a change of heart, but as a calculated move by some to kill the bill, “as is often a strategy, just wait until the end to raise their objections.”
• In Louisiana, a legislative effort that focused on real estate investment trusts that have helped for-profit hospital operators, like private equity-owned health systems, siphon resources from hospitals to line investor pockets, ultimately was unsuccessful this session. State representative Michael Echols introduced HB 317 in April, aiming to hold board members of real estate investment trusts personally liable for any financial distress of their tenants if caused by “unreasonable lease terms, over-leveraging, or financial extractions.” The bill would have given the Attorney General’s office more power to investigate violations and pursue penalties. 
  • However, industry lobbying prevailed and the bill failed in a Senate committee in a 4-1 vote. 
  • Louisiana is home to a former Steward hospital, Glenwood Regional Medical Center, that has continued to experience financial issues under hospital landlord, Medical Properties Trust. Last year Echols testified at the September 2024 Senate HELP hearing focused on Steward’s bankruptcy and financial mismanagement. In his testimony, he shared how at Glenwood Regional Medical Center, some patients had gotten infections and even died because the hospital lacked the basic medical supplies needed to safely care for them. He exclaimed, “It is glowingly clear to me that the executives of Steward Health [Care] are healthcare terrorists. They are killing our patients. They are killing our communities. And they need to be held accountable.” His testimony also emphasized the role that hospital landlord Medical Properties Trust played in Glenwood’s tragic decline.
• Minnesota’sHealthcare Accountability Act (SF 2939/HF 2779), which called for greater transparency requirements around healthcare entity ownership and transactions, died in committee during this legislative session. PESP submitted testimonies to both the House and Senate in support of the bill.
• In Texas this February, Republican representative James Frank introduced HB 2747, a bill designed to bring greater oversight to certain healthcare entity transactions by requiring notice to the attorney general and granting the attorney general authority to request information and potentially impose civil and administrative penalties for entities that fail to comply. However, the bill died in chamber in May.
• In January, Vermont legislators proposed House Bill 71, which proposed requirements for health care entities to provide notice to the Green Mountain Care Board and Attorney General before entering into certain types of transactions, including ones involving private equity and hedge funds. The bill also granted authority to the Board and Attorney General to approve, approve with conditions, or disapprove certain transactions. Additionally, the included prohibitions on the corporate practice of medicine and required public reporting on ownership and control of certain health care entities. The bill died in Committee.
  • In March, PESP Senior Research and Campaign Coordinator, Michael Fenne, provided informational testimony to the Vermont House Committee on Healthcare to help educate lawmakers on the risks of private equity and potential policy solutions. More information about the hearing can be accessed here.
• Washington, which passed HB 1686 in April, had a second bill under consideration related to private equity ownership that would have strengthened the prohibition on the corporate practice of medicine. SB 5387 did not pass before the legislative session ended in April. PESP submitted testimony in support of the bill.
• Tucked into Wisconsin’s 2025-2027 appropriations bill was 26-1647 – “Health Care Entity Oversight,” which PESP submitted testimony in support of. 25-1647 would have facilitated greater transparency around ownership and material transactions in the health sector. It also would have granted review power to the Department of Health Services (DHS) to approve, conditionally approve, or disapprove material change transactions that could lead to anticompetitive impacts, increased costs, the loss or reduction of healthcare services, and other negative outcomes. A major strength of the bill was that its expansive definition of material change transactions went beyond capturing standard merger and acquisition strategies to also capture joint venture arrangements and sale-leasebacks of healthcare real estate with real estate investment trusts (REITs). The inclusion of language to incorporate rulemaking for DHS to better ensure that providers are in compliance with Wisconsin’s prohibitions on the corporate practice of medicine was also a key strength. Ultimately, 25-1647 did not make it into the final appropriations bill.

Conclusion

2025 has seen unprecedented activity in state legislatures working to tackle private equity’s risks and impacts in healthcare. For the states that have passed legislation, they are now faced with the challenge of implementation and enforcement. While needed reform has failed in some states this year, multiple states are still in active legislative sessions where policymakers have the chance to get meaningful policy change across the finish line. As Senator Chris Murphy pointed out in a recent report on Prospect Medical Holdings, lawmakers face an uphill battle in the face of intense industry lobbying and pressures: 

“At the end of the day, proposing effective bipartisan reforms is only half the battle. Our legislature must have the fortitude to stand up to corporate interests until the very end. Otherwise, corporate greed will continue to hijack our health care system.” (Sen. Chris Murphy)

PESP will continue to track important developments in the state policymaking space around private equity in healthcare. To view PESP’s policy recommendations, visit our policy report from 2024. And stay tuned for an end-of-year report analyzing this year’s state legislative efforts to address private equity in healthcare, and for the launch of a first-of-its kind policy tracking tool.