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General Assembly Substitute Bill No. 1507
January Session, 2025
AN ACT PROHIBITING PRIVATE EQUITY OWNERSHIP AND
CONTROL OF HOSPITALS AND HEALTH SYSTEMS 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 MANAGE 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) "Health system" means: (A) A parent corporation of one or more 2
hospitals and any entity affiliated with such parent corporation through 3
ownership, governance, membership or other means; or (B) a hospital 4
or any entity affiliated with such hospital through ownership, 5
governance, membership or other means; 6
(2) "Hospital" means a facility licensed as a hospital under chapter 7
368v of the general statutes; 8
(3) "Indirect ownership interest" means an ownership interest in an 9
entity that has an ownership interest in a hospital or health system; 10
(4) "Operational control" means to: (A) Influence or direct the actions 11
or policies of any part of a hospital or health system; or (B) choose, 12
appoint or terminate a member of the board, manager, managing 13 Substitute Bill No. 1507
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member, senior employee, consultant or other individual or entity that 14
participates in the operational oversight of a hospital or health system; 15
(5) "Ownership interest" means possession of equity in capital, stock 16
or profits of a hospital or health system or ownership of real estate on 17
which a hospital or health system operates; 18
(6) "Private equity company" means a publicly traded or nonpublicly 19
traded entity that collects capital investments from individuals or 20
entities; and 21
(7) "Real estate investment trust" has the same meaning as provided 22
in 26 USC 856, as amended from time to time. 23
(b) On and after October 1, 2025, no private equity company or real 24
estate investment trust shall (1) acquire (A) any direct or indirect 25
ownership interest in a hospital or health system, or (B) any operational 26
or financial control over a hospital or health system; or (2) increase (A) 27
any direct or indirect ownership interest that the private equity 28
company or real estate investment trust has in a hospital or health 29
system, or (B) any operational or financial control that the private equity 30
company or real estate investment trust has over a hospital or health 31
care system. 32
Sec. 2. (NEW) (Effective July 1, 2025) (a) As used in this section: 33
(1) "Advanced practice registered nurse" means an advanced practice 34
registered nurse licensed pursuant to chapter 378 of the general statutes; 35
(2) "Clinician with independent practice authority" means a 36
physician, an advanced practice registered nurse or any other health 37
care provider who has the authority to engage in the independent 38
practice of such provider's profession pursuant to title 20 of the general 39
statutes; 40
(3) "Health care practice" means a business, regardless of form, 41
through which a licensed health care provider offers health care 42
services. "Health care practice" does not include any entity that holds a 43 Substitute Bill No. 1507
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license to operate a facility issued by the Department of Public Health 44
or the Department of Mental Health and Addiction Services; 45
(4) "Health system" means: (A) A parent corporation of one or more 46
hospitals and any entity affiliated with such parent corporation through 47
ownership, governance, membership or other means; or (B) a hospital 48
and any entity affiliated with such hospital through ownership, 49
governance, membership or other means; 50
(5) "Management services organization" means a business that 51
provides management or administrative services to a health care 52
provider or an organization of health care providers, including, but not 53
limited to, a health care practice, for compensation; and 54
(6) "Physician" means a physician licensed pursuant to chapter 370 of 55
the general statutes. 56
(b) No health care facility or entity that holds a license issued by the 57
Department of Public Health or the Department of Mental Health and 58
Addiction Services and no management services organization shall 59
directly or indirectly interfere with, control or otherwise direct the 60
professional judgment or clinical decisions of a health care practice or a 61
clinician with independent practice authority who provides health care 62
services at or through such facility or entity or at or through a health 63
care practice. 64
(c) Conduct prohibited under subsection (b) of this section shall 65
include, but need not be limited to, controlling, either directly or 66
indirectly, through discipline, punishment, threats, adverse 67
employment actions, coercion, retaliation or excessive pressure any of 68
the following: (1) The amount of time spent with patients or the number 69
of patients seen in a given time period, including, but not limited to, the 70
time permitted to triage patients in the emergency department or 71
evaluate admitted patients; (2) the time period within which a patient 72
must be discharged; (3) decisions involving the patient's clinical status, 73
including, but not limited to, whether the patient should be kept in 74
observation status, whether the patient should receive palliative care 75 Substitute Bill No. 1507
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and where the patient should be placed upon discharge; (4) the 76
diagnosis, diagnostic terminology or codes that are entered into the 77
medical record; (5) the appropriate diagnostic test for medical 78
conditions; or (6) any other conduct the Department of Public Health 79
determines would interfere with, control or otherwise direct the 80
professional judgment or clinical decision of a clinician with 81
independent practice authority. 82
(d) Any nondisclosure or nondisparagement agreement entered into, 83
amended or renewed on or after July 1, 2025, regarding any provision 84
of subdivisions (1) to (6), inclusive, of subsection (c) of this section, to 85
which a clinician with independent practice authority is a party shall be 86
void and unenforceable. 87
(e) Any policy or contract entered into, amended or renewed on or 88
after July 1, 2025, that has the effect of violating any provision of this 89
section shall be void and unenforceable. If a court of competent 90
jurisdiction finds that a policy, contract or contract provision is void and 91
unenforceable pursuant to this subsection, the court shall award the 92
plaintiff reasonable attorney's fees and costs. 93
(f) The Department of Public Health may adopt regulations, in 94
accordance with the provisions of chapter 54 of the general statutes, to 95
implement the provisions of this section. 96
Sec. 3. (Effective from passage) The Commissioner of Health Strategy 97
shall evaluate whether the Attorney General should be authorized to 98
petition the Superior Court for the appointment of a receiver to manage 99
hospitals in financial distress or operational crisis. Not later than 100
October 1, 2026, the commissioner shall report, in accordance with the 101
provisions of section 11-4a of the general statutes, to the joint standing 102
committee of the General Assembly having cognizance of matters 103
relating to public health regarding such evaluation. 104
This act shall take effect as follows and shall amend the following
sections:
Substitute Bill No. 1507
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Section 1 July 1, 2025 New section
Sec. 2 July 1, 2025 New section
Sec. 3 from passage New section
PH Joint Favorable Subst.