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General Assembly Raised Bill No. 1507
January Session, 2025
LCO No. 6266
Referred to Committee on PUBLIC HEALTH
Introduced by:
(PH)
AN ACT PROHIBITING PRIVATE EQUITY OWNERSHIP AND
CONTROL OF CERTAIN HEALTH CARE INSTITUTIONS AND THE
CONTROLLING OF OR INTERFERENCE WITH THE PROFESSIONAL
JUDGMENT AND CLINICAL DECISIONS OF CERTAIN HEALTH CARE
PROVIDERS AND REQUIRING AN EVALUATION OF THE
APPOINTMENT OF A RECEIVER TO MANAGER HOSPITALS IN
FINANCIAL DISTRESS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2025) (a) As used in this section: 1
(1) "Group practice" means two or more physicians, legally organized 2
in a partnership, professional corporation, limited liability company 3
formed to render professional services, medical foundation, not-for-4
profit corporation, faculty practice plan or other similar entity (A) in 5
which each physician who is a member of the group provides 6
substantially the full range of services that the physician routinely 7
provides, including, but not limited to, medical care, consultation, 8
diagnosis or treatment, through the joint use of shared office space, 9
facilities, equipment or personnel; (B) for which substantially all of the 10
services of the physicians who are members of the group are provided 11
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through the group and are billed in the name of the group practice and 12
amounts received from such bills are treated as receipts of the group; or 13
(C) in which the overhead expenses of, and the income from, the group 14
are distributed in accordance with methods previously determined by 15
members of the group. An entity that otherwise meets the definition of 16
group practice under this section shall be considered a group practice 17
although its shareholders, partners or owners of the group practice 18
include single-physician professional corporations, limited liability 19
companies formed to render professional services or other entities in 20
which beneficial owners are individual physicians; 21
(2) "Health system" means: (A) A parent corporation of one or more 22
hospitals and any entity affiliated with such parent corporation through 23
ownership, governance, membership or other means; or (B) a hospital 24
or any entity affiliated with such hospital through ownership, 25
governance, membership or other means; 26
(3) "Hospital" means a facility licensed as a hospital under chapter 27
368v of the general statutes; 28
(4) "Indirect ownership interest" means an ownership interest in an 29
entity that has an ownership interest in a group practice, hospital or 30
health system; 31
(5) "Operational control" means to: (A) Influence or direct the actions 32
or policies of any part of a group practice, hospital or health system; or 33
(B) choose, appoint or terminate a member of the board, manager, 34
managing member, senior employee, consultant or other individual or 35
entity that participates in the operational oversight of a group practice, 36
hospital or health system; 37
(6) "Ownership interest" means possession of equity in capital, stock 38
or profits of a group practice, hospital or health system, or ownership of 39
real estate on which a group practice, hospital or health system operates; 40
(7) "Private equity company" means a publicly traded or nonpublicly 41
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traded entity that collects capital investments from individuals or 42
entities; and 43
(8) "Real estate investment trust" has the same meaning as provided 44
in 26 USC 856, as amended from time to time. 45
(b) On and after October 1, 2025, no private equity company or real 46
estate investment trust shall (1) acquire (A) any direct or indirect 47
ownership interest in a group practice, hospital or health system, or (B) 48
any operational or financial control over a group practice, hospital or 49
health system; or (2) increase (A) any direct or indirect ownership 50
interest that the private equity company or real estate investment trust 51
has in a group practice, hospital or health system, or (B) any operational 52
or financial control that the private equity company or real estate 53
investment trust has over a group practice, hospital or health care 54
system. 55
Sec. 2. (NEW) (Effective July 1, 2025) (a) As used in this section: 56
(1) "Advanced practice registered nurse" means an advanced practice 57
registered nurse licensed pursuant to chapter 378 of the general statutes; 58
(2) "Clinician with independent practice authority" means a 59
physician, an advanced practice registered nurse or any other health 60
care provider who has the authority to engage in the independent 61
practice of such provider's profession pursuant to title 20 of the general 62
statutes; 63
(3) "Health care practice" means a business, regardless of form, 64
through which a licensed health care provider offers health care 65
services. "Health care practice" does not include any entity that holds a 66
license to operate a facility issued by the Department of Public Health 67
or the Department of Mental Health and Addiction Services; 68
(4) "Health system" means: (A) A parent corporation of one or more 69
hospitals and any entity affiliated with such parent corporation through 70
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ownership, governance, membership or other means; or (B) a hospital 71
and any entity affiliated with such hospital through ownership, 72
governance, membership or other means; 73
(5) "Management services organization" means a business that 74
provides management or administrative services to a health care 75
provider or an organization of health care providers, including, but not 76
limited to, a health care practice, for compensation; and 77
(6) "Physician" means a physician licensed pursuant to chapter 370 of 78
the general statutes. 79
(b) No health care facility or entity that holds a license issued by the 80
Department of Public Health or the Department of Mental Health and 81
Addiction Services and no management services organization shall 82
directly or indirectly interfere with, control or otherwise direct the 83
professional judgment or clinical decisions of a health care practice or a 84
clinician with independent practice authority who provides health care 85
services at or through such facility or entity or at or through a health 86
care practice. 87
(c) Conduct prohibited under subsection (b) of this section shall 88
include, but need not be limited to, controlling, either directly or 89
indirectly, through discipline, punishment, threats, adverse 90
employment actions, coercion, retaliation or excessive pressure any of 91
the following: (1) The amount of time spent with patients or the number 92
of patients seen in a given time period, including, but not limited to, the 93
time permitted to triage patients in the emergency department or 94
evaluate admitted patients; (2) the time period within which a patient 95
must be discharged; (3) decisions involving the patient's clinical status, 96
including, but not limited to, whether the patient should be kept in 97
observation status, whether the patient should receive palliative care 98
and where the patient should be placed upon discharge; (4) the 99
diagnosis, diagnostic terminology or codes that are entered into the 100
medical record; (5) the appropriate diagnostic test for medical 101
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conditions; or (6) any other conduct the Department of Public Health 102
determines would interfere with, control or otherwise direct the 103
professional judgment or clinical decision of a clinician with 104
independent practice authority. 105
(d) Any nondisclosure or nondisparagement agreement entered into, 106
amended or renewed on or after July 1, 2025, regarding any provision 107
of subdivisions (1) to (6), inclusive, of subsection (c) of this section, to 108
which a clinician with independent practice authority is a party shall be 109
void and unenforceable. 110
(e) Any policy or contract entered into, amended or renewed on or 111
after July 1, 2025, that has the effect of violating any provision of this 112
section shall be void and unenforceable. If a court of competent 113
jurisdiction finds that a policy, contract or contract provision is void and 114
unenforceable pursuant to this subsection, the court shall award the 115
plaintiff reasonable attorney's fees and costs. 116
(f) The Department of Public Health may adopt regulations, in 117
accordance with the provisions of chapter 54 of the general statutes, to 118
implement the provisions of this section. 119
Sec. 3. (Effective from passage) The Commissioner of Health Strategy 120
shall evaluate whether the Attorney General should be authorized to 121
petition the Superior Court for the appointment of a receiver to manage 122
hospitals in financial distress or operational crisis. Not later than 123
October 1, 2026, the commissioner shall report, in accordance with the 124
provisions of section 11-4a of the general statutes, to the joint standing 125
committee of the General Assembly having cognizance of matters 126
relating to public health regarding such evaluation. 127
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2025 New section
Sec. 2 July 1, 2025 New section
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Sec. 3 from passage New section
Statement of Purpose:
To prohibit private equity ownership and control of certain health care
institutions and the controlling of or interference with the professional
judgment and clinical decisions of certain health care providers.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]