2025: Navigating Increased Scrutiny in Health Care Transactions and Corporate Structures

The new year is bringing fresh laws, especially in health care. Recently, states have begun to closely examine health care transactions. EBG has put together a helpful map that highlights states with existing regulations. As legislators meet across the country, the focus continues to grow on health care transactions and private equity investments in the sector. Here’s a look at some proposed legislation in various states.

California

On February 12, 2025, California introduced SB 351. This bill closely resembles a previously vetoed bill, AB 3129. SB 351 aims to clarify terms related to “hedge funds” and “private equity groups” involved with Management Service Organizations (MSOs) and Dental Service Organizations (DSOs). It includes restrictions on these groups in relation to physician and dental practices in California. An important aspect of this bill is its provision on restrictive covenants which ensures providers can compete in case of termination or resignation. The future of this bill is still uncertain as it moves through the legislature.

Connecticut

Connecticut is also considering several significant bills regarding private equity in health care:

• SB 261 seeks to limit private equity firms’ ability to buy medical facilities and protect clinicians from corporate influences.
• SB 469 aims to improve public health by restricting private equity firms’ acquisitions of hospitals and requiring physician-led ownership for medical groups.
• SB 837 focuses on enhancing competition and health care quality by requiring notification of private equity transactions in group practices.
• HB 6570 would prevent nonmedical entities from consolidating health care services and ensure transparency in ownership structure.
• HB 6873 strengthens notification requirements for material health care transactions, increasing the period from 30 to 60 days.

Illinois

On February 6, 2025, SB 1998 was introduced to amend the Illinois Antitrust Act. It would require that any covered transaction involving private equity financing gets the written consent of the Attorney General.

Indiana

Indiana’s HB 1666 passed by the House on February 13, 2025, aims to broaden reporting requirements for health care mergers and acquisitions. It removes the $10 million threshold, meaning any health care merger will need to notify a new “merger approval board.” This board will determine if the transaction proceeds, and health entities must file annual reports with ownership information.

New Mexico

New Mexico is looking at SB 14, which would create the Health Care Consolidation and Transparency Act. This law would oversee health care mergers and acquisitions, requiring notice and reviews of transactions by state regulators.

New York

New York previously enacted N.Y. Pub. Health Law § 4550-4552, which mandates that health care entities notify the Department of Health about material transactions. The upcoming budget proposes to adjust notice deadlines from 30 to 60 days and ensure a thorough review of impacts on cost, quality, and accessibility of care.

Oregon

Oregon’s SB 951 prohibits specific stakeholders from owning or controlling health care entities associated with MSOs, aiming to prevent conflicts of interest and ensure better management of medical practices.

Texas

In Texas, HB 2747 now requires health care entities to inform the state AG about material transaction changes at least 90 days in advance, allowing for deeper analysis of health care markets.

Vermont

Vermont’s proposed H 71 requires health care providers to gain approval from a designated board before entering certain transactions. It aims to protect clinical decision-making and ensure transparency in ownership of health care entities.

Washington

Washington’s bills HB 1881 and SB 5704 enhance notice requirements for changes in health care operations and governance. Additionally, SB 5387 aims to restrict unlicensed individuals from controlling health care practices, thereby protecting patient care quality.

Massachusetts

Finally, Massachusetts is seeing impactful changes through HB 5159. This new law expands the Health Policy Commission’s authority over various health care transactions, ensuring greater oversight and accountability.

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