A new Connecticut bill aims to bolster the state's involvement in deals between private equity firms and healthcare facilities.
The bipartisan legislation, HB 5319, was introduced into the state's General Assembly Feb. 28 by physician co-sponsors: Sen. Jeff Gordon, MD, a Republican, and Sen. Saud Anwar, MD, a Democrat. It calls for an act "requiring a plan concerning private equity firms acquiring or holding an ownership interest in healthcare facilities."
The plan in question would include an assessment of whether a certificate of need should be required for a private equity firm to acquire an ownership interest in a healthcare facility. It would also explore the feasibility of other limitations that could be placed on these private equity firms, and make recommendations regarding disclosure requirements for healthcare facilities they acquire or own.
If the bill is inked, the executive director of the state's Office of Health Strategies would be required to develop the plan and report it to the joint standing committee of the General Assembly no later than Jan. 1, 2025.
At a public hearing March 6, a number of stakeholders — including the Connecticut Hospital Association and Kathleen Silard, BSN, RN, president and CEO of Stamford (Conn.) Health — voiced support for the bill. State Sen. Martin Looney, President Pro Tempore, said he is currently working with Attorney General William Tong on language that would "beef up oversight of acquisitions and mergers including those involving private equity."
In a March 18 news release, Dr. Gordon, the bill's co-sponsor, termed the matter a "common sense issue." He referred to the Los Angeles-based private equity company Prospect Medical Holdings, which currently oversees three Connecticut hospitals that it is working to sell to Yale New Haven (Conn.) Health. The Department of Revenue Services recently submitted liens indicating the three hospitals owe a collective $67.39 million in taxes, and that Prospect has not paid taxes since March 2022.
"We have all seen the mismanagement of Manchester, Rockville and Waterbury hospitals by Prospect Medical Holdings," Dr. Gordon said. "We must pass policies to improve oversight over healthcare acquisitions while improving access to care, particularly in rural areas."