In an April 16 report by Nashville, Tenn.-based law firm Bass, Berry & Sims, the authors recount ongoing efforts by several states to increase scrutiny over private equity deals in physician practice deals.
Here are three takeaways from the report:
1. The first legislative session saw several states, including Connecticut, Maine and New York propose legislation that create new or expand existing notice requirements for private equity deals in healthcare, specifically for physician practices and management services organizations.
2. California and Oregon both renewed ongoing efforts to increase regulations on PE investment in healthcare. California’s recently proposed Senate Bill 351, a follow-up to a bill that was vetoed by Gov. Gavin Newsom in 2024, is “substantially the same” as the previous bill, but removed language requiring notice and consent of the state attorney general for certain PE healthcare transactions. The California bill also targets PE firms or hedge funds and prohibits them from becoming “involved in any manner” with interfering with the professional judgement of physicians and their practice.
3. Oregon’s Senate Bill 951 also follows a similar bill that was unsuccessful in 2024. The new bill would prohibit corporations and their physician owners from surrendering control of their assets, business operations, clinical practices and decisions to MSOs. The proposal would require that all MSO agreement renewals, acquisitions, sales or transfers of ownership or membership interests in a professional medical entity be subject to the new statute by Jan. 1, 2026. MSOs and medical entities with current arrangements that are not amended after the passage date have an extended deadline.
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