Healthcare transactions, including private equity healthcare transactions, are under review from both federal and state regulators and legislators. In particular, new state competition, quality, access and cost laws are creating additional requirements on healthcare entities considering new transactions, from private-equity backed entities to management services organizations. These laws and regulations are highlighted below and discussed in greater detail in our podcast series, which also offers ways to mitigate their impact.
These laws require the review of health care transactions that historically fell outside of review by the states under existing facility licensure, certificate of need, non-profit and insurance laws.
* See additional failed legislation below.
This page was last updated on April 17, 2024. While we will endeavor to keep this page up to date with the most recent changes in state regulation of health care transactions, we note that this is a rapidly evolving area, and our map may not in real time capture the latest legislative and regulatory updates.
Legislation
California: As of April 1, 2024, health care entities must notify the Office of Health Care Affordability (“OHCA”) of proposed material change transactions at least 90 days prior to closing. From there, OHCA will either i) within 45 days, issue a waiver to a cost and market impact review (“CMIR”), or ii) within 60 days, notify parties of its decision to conduct a CMIR, which could extend the review period to over eight months. OHCA issued regulations in December 2023 that further clarify the entities and transactions subject to review, details regarding comprehensive reviews, and other details of the notice process. OHCA will start accepting notices on January 1, 2024. Cal. Health & Saf. Code § 127500 et seq; 22 CCR 97431 et seq.
Connecticut: The state Attorney General requires 30-day pre-closing notice of any material change transaction involving health care group practices, hospitals or hospital systems. If the Attorney General determines that the transaction will adversely impact competition, it may open a deeper inquiry or seek to postpone the transaction. While no strict timeline is given, transaction review may take up to, or greater than, 200 days after the notice is received. Conn. Gen. Stat. § 19a-486i.
Illinois: As of January 1, 2024, Illinois requires health care facilities and provider organizations to provide 30-day pre-closing notice to the state Attorney General’s Office of any merger, acquisition or contracting affiliation between two or more health care facilities or provider organizations. Illinois’ review process applies to all applicable in-state entities, and out-of-state entities with sufficient patient revenue in Illinois. While transaction “approval” is not explicitly required, the Attorney General has discretion to open an investigation and challenge conduct the Attorney General deems anti-competitive. A link to the healthcare transaction notice form can be found here. 740 Ill. Comp. Stat. 10/7.2a.
Indiana: Beginning July 1, 2024, Indiana will require health care entities, including but not limited to medical and dental providers, insurers, administrators, and private equity partnerships entering into transactions with health care companies, to notify the Office of the Attorney General ninety (90) days before undergoing a merger or acquisition with another health care entity with a value of at least $10 million. While transaction “approval” is not explicitly required, the Attorney General has discretion to 1) analyze in writing any antitrust concerns; or 2) issue a civil investigative demand for additional information. IC §§ 25-1-8.5-1 — 25-1-8.5-4.
Massachusetts: Health care service providers and provider organizations with more than $25 million in annual patient revenue in Massachusetts must provide 60 days pre-closing notice of any material change transaction to the state Attorney General, the Center for Health Information and Analysis, and the Health Policy Commission (“HPC”). Guidancereleased in January 2024 clarifies that management services organizations that negotiate contracts with payers are captured by the law as provider organizations. HPC has 30 days to either approve the transaction or initiate a more in depth cost and market impact review (“CMIR”), which may delay closing up to 215 days from the initial notice date. Mass. Gen. Laws Ch. 6D § 13; 958 CMR 7.00.
Minnesota:Beginning May 27, 2023, health care entities formed or licensed in the state of Minnesota with average annual revenue of $80 million or more must provide 60-day pre-closing notice to the state Attorney General’s Office and Commissioner of Health for covered transactions, which includes mergers, transfers of ownership and the creation of new health care entities. SeeMinn. Stat. § 145D.01. The Attorney General has authority to commence an action blocking or unwinding the transaction if determined necessary to protect the public interest. Additionally, beginning January 1, 2024, health care entities with average annual revenue between $10 million and $80 million must submit notice to the Commissioner of Health of covered transactions 30 days pre-closing (or within 10 business days of the date the parties reasonably anticipated entering into the transaction). SeeMinn. Stat. § 145D.02. The Commissioner of Health will use this data to analyze the impact of transactions in Minnesota on cost, quality, and access to health care.
Nevada: Entities must inform the state Attorney General (30 days pre-closing) and/or the Nevada Department of Health and Human Services (60 days post-closing) of proposed health care transactions. The state does not have approval authority under either framework, but may initiate an investigation if it identifies any violations during the pre-closing review. Notice requirements are generally not triggered unless transaction parties have a large Nevada presence. Nev. Rev. Stat. § 598A.290 et seq.; Nev. Rev. Stat. § 439A.126.
New York: As of August 1, 2023, health care entities including physicians practices, physician groups, and management services organization must provide 30 day pre-closing notice to the New York Department of Health for transactions that result in a $25 million or more increase in a health care entity’s total gross in-state revenue. The legislation does not grant the Department of Health approval authority, but requires that the Department post a summary of proposed transactions on its website and allow for public comment. N.Y. Pub. Health Law § 4550 et seq.
Oregon: The Health Care Market Oversight Program, administered by the Oregon Health Authority (“OHA”), requires 30-day pre-closing notice and approval of material health care transactions. If OHA determines a comprehensive review is needed, it then has up to 180 days to review transactions in detail for their impacts on cost, equity, access and quality of care. OHA has broadly enforced its review authority and captured several national platform transactions to date. OHA has also imposed conditions on certain transactions and plans to maintain oversight of the impacts of transactions for up to five years after closing. Or. Rev. Stat. § 415.500 et seq.; Or. Admin. R. 409-070-0000 through -0085.
Rhode Island: Under the Hospital Conversions Act, transfers of at least 20% of ownership or control of a hospital in Rhode Island require approval by both the Department of Health (“DOH”) and the Attorney General (“AG”). The law captures both for-profit and not-for-profit hospitals, though the review process varies slightly depending on entity type. DOH and the AG have 180 days from the date of acceptance of the application to either approve, approve with conditions, or disapprove the application, though not-for-profit hospitals may be eligible for an expedited review. R.I. Gen. Laws § 23-17.14.
Washington: Hospitals, hospital systems and provider organizations must provide notice to the state Attorney General of material transactions at least 60 days prior to closing. Washington’s review process applies to in-state entities, and out-of-state entities with sufficient patient revenue in Washington. Wash. Rev. Code § 19.390.
California: Proposed legislation in California would require private equity groups and hedge funds to (i) provide 90 days pre-closing notice to and obtain consent from the Attorney General prior to a change of control or an acquisition of a health care facility or provider group, and (ii) provide pre-closing notice to the Attorney General of a change of control or an acquisition of either a nonphysician provider with an annual revenue of less than $4,000,0000 or a provider with annual revenue between $4,000,000-10,000,000. The legislation also provides for additional restrictions on a private equity or hedge fund’s ability to control or contract with certain health care entities, including a prohibition on controlling physician practices or entering into certain management contracts. See AB 3129 (as amended on April 11, 2024).
Connecticut: Proposed legislation in Connecticut would require, by January 1, 2025, that the Office of Health Strategies develop a plan concerning private equity ownership of Connecticut-licensed health care facilities, including (1) assessing whether a certificate of need should be required for a private equity firms’ acquisition of a health care facility; and (2) recommending requirements for the disclosure of information by a health care facility that has private equity ownership. SeeHB 5319.
Minnesota: Proposed legislation in Minnesota would prohibit private equity companies or real estate investment trusts from either (i) acquiring or increasing direct or indirect ownership interest in a provider or (ii) acquiring or increasing any operational or financial control over a provider. See HF 4206.
Pennsylvania:Proposed legislation in Pennsylvania would require provider organizations and for-profit entities who own or operate hospitals, hospice agencies, or nursing homes to notify the state Attorney General’s Office 90 days before entering into certain transactions or agreements that result in a material change. See Senate Bill 584. The Attorney General may utilize the full 90 days (with an option to extend an additional 30 days) to determine whether the proposed transaction is against the public interest. If passed, the legislation would take effect 60 days after enactment.
Washington: In January 2024, Washington re-introduced proposed legislation that seeks to expand the scope of the current review process, including lengthening the notice period, broadening the scope of entities subject to notice requirements, and enhancing the Attorney General’s enforcement authority. The bill was amended in February 2024 to further provide for a preliminary and comprehensive review process, an expedited review process, and a process for requesting confidentiality. Similar proposed legislation had previously been introduced during the 2023 regular session, but did not pass. SeeSenate Bill 5241.
California: Proposed legislation requiring certain health care entities entering into transactions resulting in a material change with a value of at least $15,000,000 to submit pre-closing notice and obtain approval from the Attorney General failed in 2024. SeeAB 1091.
Florida: Proposed legislation requiring health care entities to submit pre-closing notice to the state Attorney General’s Office of certain transactions failed in 2020 and 2021. See H.B. 711; S.B. 1064.
Maine: Proposed legislation requiring health care entities to submit pre-closing notice of certain health transactions and obtain approval from the state Attorney General’s Office failed in 2023. SeeH.B. 894.
North Carolina: Proposed legislation requiring hospital entities and their affiliates to provide pre-closing notice to the state Attorney General’s Office of certain transactions failed in 2023. See Senate Bill 16.
