Key Takeaways
- • Thirteen states have enacted notice-and-review statutes for healthcare transactions involving a change of ownership, including California, Connecticut, Illinois, Indiana, Maine, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island and Washington, according to Norton Rose Fulbright.
- • Indiana requires 90 days' written notice to the Attorney General before closing transactions involving health care entities where one party holds at least US$10 million in assets, followed by a 45-day review window.
- • Maine's law, effective January 1, 2027, requires 180 days' prior notice and approval from the Department of Health and Human Services, with a comprehensive review that may extend the process by more than eight months.
- • Connecticut SB 196 (signed May 27, 2026) bars hospital sale-leaseback agreements and requires annual attestations that private equity holds no controlling interest; Vermont HB 583 (signed June 15, 2026) limits private equity control over clinical decisions and mandates ownership disclosures by March 1, 2027.
- • Oregon SB 951, effective June 9, 2025, restricts management services organization control of professional medical entities and voids non-compliant agreements.
Summary
State scrutiny of private equity participation in healthcare transactions is intensifying, and a growing body of legislation is shaping the timing, structure, cost and post-closing operations of these deals. Norton Rose Fulbright identifies two dominant regulatory models: mandatory advance notice paired with review by a state agency, typically the Attorney General, and targeted restrictions on private equity involvement, including oversight of management services organizations (MSOs) and "friendly physician" structures.
To date, 13 states have enacted notice or approval statutes modeled loosely on the federal Hart-Scott-Rodino premerger process. Indiana and Maine have the most demanding timelines. Indiana requires written notice to the Attorney General at least 90 days before closing any transaction between health care entities, by merger or acquisition, where one party holds at least US$10 million in assets. The Attorney General then has 45 days to assess antitrust concerns and either issue a civil investigative demand or let the window lapse. The Attorney General is not required to respond and may investigate after the waiting period ends.
Maine's law, effective January 1, 2027, requires 180 days' prior written notice and approval from the Department of Health and Human Services for material change transactions. DHHS has 60 days for preliminary review and may approve unconditionally, approve with conditions, or refer the deal for comprehensive review, which may extend the process by more than eight months. Other state agencies and the Attorney General retain authority to enforce laws including antitrust statutes.
Illinois currently requires 30 days' notice to the Attorney General for covered transactions between healthcare facilities or provider organizations. House Bill 4728, which has passed both chambers and awaits Governor Pritzker's signature, would add a 90-day notice requirement for intellectual and developmental disability service providers owned or managed within asset management funds, filed with the Illinois Health Facilities and Services Review Board. The authors note that the broad reach and extended timelines of these regimes create uncertainty for transaction parties, given the discretion exercised by regulators.
Targeted measures go further. Connecticut Senate Bill 196, signed May 27, 2026, prohibits hospital sale-leaseback agreements and requires annual attestations to the Department of Public Health that no private equity entity holds a controlling interest and that private equity does not influence clinical judgments, including patient volume, discharge timing, diagnosis coding and diagnostic testing. Connecticut Senate Bill 125, signed June 4, 2026, requires nursing homes to disclose investment entities holding at least 5% beneficial ownership to the Commissioner of Social Services. From July 1, 2028, such nursing homes must post a surety bond equal to 90 days of operating costs upon license renewal.
Vermont House Bill 583, signed June 15, 2026, limits control over clinical decisions by private equity groups, hedge funds and their MSOs, permitting non-clinical services only where a licensed provider retains ultimate responsibility. It requires comprehensive ownership disclosures to the Green Mountain Care Board by March 1, 2027 from facilities and MSOs with private equity or hedge fund interests as of June 1, 2026, and attestations from all others. Later acquisitions or modifications will trigger new disclosures.
Oregon Senate Bill 951, effective June 9, 2025, targets the "friendly physician" model by defining MSOs, setting removal criteria for directors and officers, prohibiting MSO ownership or control of professional medical entities, and barring MSO control over clinical operations. Agreements that violate these rules are void, and affected licensees may sue MSOs for losses.
To date, 13 states have enacted notice or approval statutes modeled loosely on the federal Hart-Scott-Rodino premerger process. Indiana and Maine have the most demanding timelines. Indiana requires written notice to the Attorney General at least 90 days before closing any transaction between health care entities, by merger or acquisition, where one party holds at least US$10 million in assets. The Attorney General then has 45 days to assess antitrust concerns and either issue a civil investigative demand or let the window lapse. The Attorney General is not required to respond and may investigate after the waiting period ends.
Maine's law, effective January 1, 2027, requires 180 days' prior written notice and approval from the Department of Health and Human Services for material change transactions. DHHS has 60 days for preliminary review and may approve unconditionally, approve with conditions, or refer the deal for comprehensive review, which may extend the process by more than eight months. Other state agencies and the Attorney General retain authority to enforce laws including antitrust statutes.
Illinois currently requires 30 days' notice to the Attorney General for covered transactions between healthcare facilities or provider organizations. House Bill 4728, which has passed both chambers and awaits Governor Pritzker's signature, would add a 90-day notice requirement for intellectual and developmental disability service providers owned or managed within asset management funds, filed with the Illinois Health Facilities and Services Review Board. The authors note that the broad reach and extended timelines of these regimes create uncertainty for transaction parties, given the discretion exercised by regulators.
Targeted measures go further. Connecticut Senate Bill 196, signed May 27, 2026, prohibits hospital sale-leaseback agreements and requires annual attestations to the Department of Public Health that no private equity entity holds a controlling interest and that private equity does not influence clinical judgments, including patient volume, discharge timing, diagnosis coding and diagnostic testing. Connecticut Senate Bill 125, signed June 4, 2026, requires nursing homes to disclose investment entities holding at least 5% beneficial ownership to the Commissioner of Social Services. From July 1, 2028, such nursing homes must post a surety bond equal to 90 days of operating costs upon license renewal.
Vermont House Bill 583, signed June 15, 2026, limits control over clinical decisions by private equity groups, hedge funds and their MSOs, permitting non-clinical services only where a licensed provider retains ultimate responsibility. It requires comprehensive ownership disclosures to the Green Mountain Care Board by March 1, 2027 from facilities and MSOs with private equity or hedge fund interests as of June 1, 2026, and attestations from all others. Later acquisitions or modifications will trigger new disclosures.
Oregon Senate Bill 951, effective June 9, 2025, targets the "friendly physician" model by defining MSOs, setting removal criteria for directors and officers, prohibiting MSO ownership or control of professional medical entities, and barring MSO control over clinical operations. Agreements that violate these rules are void, and affected licensees may sue MSOs for losses.
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