Session’s Out! Summary Of State Health Care Transaction Legislative Updates Since January 1, 2026

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Key Takeaways

Eight states have enacted laws or regulations impacting health care transactions that include new or expanded notice and/or approval requirements, “mini-HSR” notice requirements, corporate practice of medicine restrictions, and ownership/control reporting requirements.
Most of these laws and regulations capture transactions involving private equity groups, hedge funds, management services organizations (MSOs) and real estate investment trusts (REITs).
Transaction parties will need to account for notice and review periods when structuring deal timelines and be aware that state agencies may impose penalties for noncompliance.

Following the close of the legislative sessions in most states, below we summarize key developments in state-level health care transaction notice and approval laws since January 1, 2026.

California

As discussed in our prior coverage here and here, California recently enacted two additional transaction notice and/or approval requirements potentially implicating certain health care transactions.

Assembly Bill 1415

California’s Assembly Bill 1415, the California Health Care Quality and Affordability Act, was signed into law on October 11, 2025, and became effective January 1, 2026. The law expands the existing notification requirement to cover “noticing entities,” defined as private equity groups; hedge funds; newly created entities formed for the purpose of entering into agreements with health care entities; MSOs; and entities that own, operate, or control a provider. These noticing entities must provide written notice to the Office of Health Care Affordability (OHCA) at least 90 days prior to entering into agreements or transactions that sell, transfer, or dispose of a material amount of assets or that transfer control of a material amount of assets or operations. MSOs must also separately provide written notice of agreements or transactions with any other entity that meet these criteria. Most recently in May 2026, OHCA published proposed regulations to implement AB 1415’s requirements for noticing entities. The public comment period on the proposed changes closed on June 11, 2026, and final regulations are expected to be adopted soon.

Senate Bill 25

California’s Senate Bill 25, the California Uniform Antitrust Premerger Notification Law, was signed into law on February 10, 2026, and will take effect on January 1, 2027. The new law will require parties filing a federal Hart-Scott-Rodino (HSR) premerger notification to submit a complete electronic copy of the HSR form to the California Attorney General within one business day of filing with the federal government if: (1) the person filing has its principal place of business in California; or (2) the person filing, or a person it directly or indirectly controls, had annual net sales in California of the goods or services involved in the transaction of at least 20% of the HSR size of transaction threshold. The Attorney General is authorized to impose filing fees of $1,000 for filings based on a principal place of business in California and $500 for filings based on the amount of net sales in California. Additionally, after written notice and a three-business-day cure period, the Attorney General may impose civil penalties of up to $25,000 per day of noncompliance on parties that fail to file.

Connecticut

Connecticut Governor Ned Lamont recently signed into law two bills that increase health care industry oversight in the state and target private equity involvement with hospitals and nursing home operators.

Senate Bill 196

Connecticut’s Senate Bill 196 was signed into law on May 27, 2026. Starting July 1, 2027, hospitals will be prohibited from entering into sale-leaseback transactions involving the hospital’s main campus unless the hospital is experiencing financial distress (e.g., bankruptcy, failure to meet debt service payments for two consecutive payment periods, or an auditor’s negative going concern opinion). A “sale-leaseback transaction” is defined as a transaction in which a hospital enters into an agreement with a person or another entity to sell and lease back hospital-owned real property that constitutes the main campus of a hospital. A hospital undergoing financial distress may only enter the sale-leaseback transaction if: (1) the governing board has authorized the sale-leaseback to generate revenue to remove the financial distress; and (2) the hospital has notified the Connecticut Attorney General at least 10 days prior to the sale-leaseback transaction.

The law will also require that, by February 15, 2027, and annually thereafter, hospitals in the state submit to the Commissioner of Public Health an attestation that a private equity entity does not: (1) have a controlling interest in the hospital; (2) influence hospital policy or procedure; or (3) interfere with the professional judgment or clinical decisions of clinicians in the hospital. The hospital must also attest that the licensed hospital entity maintains full governance control and authority over the assets and activities of the hospital, including clinical and operational matters. The penalty for violating this section is $2,000 per violation.

Senate Bill 125

Governor Lamont also signed Senate Bill 125 into law on June 4, 2026, imposing new transparency and governance requirements on Connecticut nursing homes with private equity or REIT involvement. The law will require that nursing homes annually disclose to the Commissioner of the Department of Social Services detailed ownership information for any “investment entity” holding a 5% or greater beneficial interest. Investment entities are entities that pool capital to acquire nursing home ownership interests and REITs. The initial filings are due by February 15, 2027. Required disclosures include the names and business addresses of such investment entities, audited and certified financial statements, descriptions of financing arrangements, and copies of purchase agreements.

Additionally, beginning July 1, 2028, affected nursing homes must obtain a surety bond (or equivalent security) covering 90 days of operating costs. By February 1, 2028, all licensed nursing home operators must certify that they retain full governance authority over facility operations — including clinical, financial, and administrative matters — and that no investment entity exercises control over resident health, safety, or care.

Illinois

House Bill 5000

House Bill 5000 passed both chambers of the Illinois legislature on May 28, 2026. It was signed by Governor JB Pritzker on August 7, 2026, and becomes effective on January 1, 2027. The bill amends the Illinois Antitrust Act (Act) to make the Act’s transaction notification requirements permanent by repealing the Act’s initial expiration date of January 1, 2027.

In addition, the bill expands the scope of transactions subject to the Act’s notification requirement. The Act currently applies to transactions between two or more health care facilities (e.g., ambulatory surgical treatment centers, hospitals, kidney disease treatment centers, cardiac catheterization labs) or provider organizations (defined as an entity in the business of health care delivery or management that represents 20 or more health care providers in contracting with carriers or third-party administrators for the payment of health care services) not previously under common ownership. The amended language revises the definition of a “covered transaction” subject to the Act to now include transactions involving two or more health care facilities or provider organizations not previously under common ownership, including where the parties are not themselves health care facilities or provider organizations, but are entities that own or control, directly or indirectly, one or more of the health care facilities or provider organizations that will be under common ownership or contracting affiliation upon the transaction’s closing. Covered transactions will also include those involving “private equity companies,” defined to mean any company or partnership that collects capital investments and purchases, as a parent company at any level of corporate ownership, a direct or indirect ownership share of an Illinois health care facility or provider organization or an out-of-state health care facility or provider organization generating $10 million or more in annual revenue from Illinois patients.

The law will also add definitions for previously undefined terms, including “health care provider” (defined as an individual or entity duly licensed or legally authorized to provide health care services) and “health care services” (defined as health care services or products rendered or sold by a health care provider within the scope of the health care provider’s license or legal authorization, including, but not limited to, hospital, medical, surgical, dental, vision, and pharmaceutical services or products).

Maine

Two bills recently signed into law by Maine Governor Janet Mills at the close of the state’s legislative session significantly expand the state’s oversight of health care transactions.

H.P. 1480

H.P. 1480 implements a notice and approval process for material change transactions involving health care entities, with a particular focus on private equity companies, hedge funds, and MSOs. A “material change transaction” is defined as the acquisition of a majority interest or operational control of a health care entity (i.e., a health care provider, a health care facility, or a provider organization) by a private equity company, hedge fund, or MSO, occurring in a single transaction or a series of related transactions.

Health care entities involved in such transactions must provide written notice to the Department of Health and Human Services (DHHS) at least 180 days before the proposed transaction date. After notice is submitted, DHHS conducts a preliminary review within 60 days and may approve, deny, impose conditions, or request a comprehensive review.

A comprehensive review is procedurally required if the transaction exceeds $100 million in value, will reduce competition, or is likely to materially impact cost, quality, equity of, or access to health care services. During a comprehensive review, DHHS conducts public hearings and may request the Office of Affordable Health Care to conduct a cost and market impact analysis, which must be completed within 150 days.

The acquiring entity must also submit post-transaction reports to DHHS at one, two, and five years after completion if the transaction underwent comprehensive review. Failure to comply with any of these requirements carries an administrative penalty of $10,000 per day. H.P. 1480 takes effect January 1, 2027.

H.P. 1481

H.P. 1481 requires health care entities undergoing a merger that meets the filing thresholds under the HSR Act to simultaneously file a premerger notice with the Maine Attorney General. The notice requirement applies when the health care entity has its principal place of business in Maine or, during the most recent calendar year, had annual revenue in the state of at least 20% of the HSR filing threshold from the goods or services involved in the transaction. Failure to comply also carries a $10,000 per day penalty. H.P. 1481 will take effect on July 29, 2026.

These laws represent Maine’s shift from implementing an outright moratorium on private equity and REIT ownership of hospitals last year (which expired on June 15, 2026) toward a regulated framework that permits, but closely monitors, private equity involvement in health care.

Massachusetts

958 CMR 7.00

On April 16, 2026, the Massachusetts Health Policy Commission (HPC) approved amended regulations that expand the scope of the agency’s Notice of Material Change and Cost and Market Impact Review (CMIR) processes for providers (i.e., persons or entities qualified under the laws of the Commonwealth to perform or provide health care services) and provider organizations (i.e., entities in the business of health care delivery or management, that represent one or more health care providers in contracting with payers for the payments of health care services). The changes to 958 CMR 7.00 are primarily intended to align the regulations with statutory changes that became effective last year and serve to broaden the definition of “material change.”

Under the new regulations, the following types of transactions or arrangements will be considered material changes:

Real property sales and lease-back arrangements of a provider or provider organization.
Mergers, acquisitions, corporate affiliations, or contracting affiliations for establishing contracts with a carrier or third-party administrator (TPA), or employment of health care professionals, when the affiliation would: (1) result in an increase in annual “net patient service revenue” of an amount equal to or greater than the “revenue increase threshold” (i.e., $10 million as of April 16, 2026) for any provider, provider organization, or entity representing providers of health care services in a state other than Massachusetts, or a provider or provider organization having dominant market share; and (2) such affiliation is with provider(s), provider organizations, including a MSO that provides support for negotiating or establishing contracts with carriers or TPAs, or an entity representing providers of health care services who are qualified under a state other than Massachusetts law in contracting with payers for health care services, if the entity proposes an acquisition or other affiliation with or on behalf of a Massachusetts provider, provider organization, or MSO.
Expansion or capacity increases requiring a Determination of Need application or resulting in a provider or provider organization increasing net patient service revenue by an amount equal to or greater than the “revenue increase threshold,” which, as of April 16, 2026, is $10 million but is subject to future changes.
Clinical affiliations between two or more providers or provider organizations that each had net patient service revenue equal to or greater than the “MCN Filing Threshold,” which, as of April 16, 2026, is $25 million but is subject to future changes. Note that regulations also expand the definition of “clinical affiliation” to include complete or substantial staffing of an acute hospital service line, the provision of funds to establish or enhance EHR interconnectivity, establishment of a preferred provider relationship, regular and ongoing provision of telemedicine services, and establishment of a discount arrangement. However, the term excludes affiliations solely for collaborating on clinical trials or graduate medical education programs.
Any transaction involving a significant equity investor, including a private equity company, that results in a partial or complete change of ownership or control of a provider, provider organization, or MSO that provides support for negotiating or establishing contracts with carriers or TPAs.
Nonprofit to for-profit conversions of a provider or provider organization.

Pharmacies licensed in Massachusetts also need to be aware that their transactions can now be subject to the material change notification and CMIR processes, as the new regulations also expand the definition of “health care services” to explicitly include pharmacy services. The term is now defined as “supplies, care and services of medical, behavioral health, substance use disorder, mental health, surgical, optometric, dental, podiatric, chiropractic, psychiatric, therapeutic, diagnostic, preventative, rehabilitative, supportive or geriatric nature including, but not limited to, inpatient and outpatient acute hospital care and services, pharmacy services, services provided by a community health center home health and hospice care provider, or by a sanatorium, as included in the definition of ‘hospital’ in Title XVIII of the federal Social Security Act, and treatment and care compatible with such services or by a health maintenance organization.”

Providers and provider organizations are still required to provide written notice of the material change to HPC, the Center for Health Information and Analysis, and the Office of the Attorney General at least 60 days before the proposed effective date of a material change using the form designated by HPC on its website. HPC retains the authority to initiate a CMIR for certain transactions. In addition, the executive director may now independently initiate a CMIR, provided that HPC subsequently approves its continuation. A transaction may not close until either HPC has provided notice that it will not initiate a CMIR, or, if a CMIR is conducted, at least 30 days have elapsed since HPC issued its final report.

Rhode Island

110-RICR-30-00-5

As discussed in our prior coverage, Rhode Island’s Attorney General adopted a new rule, effective January 28, 2026, requiring written notification of any transaction resulting in a material change to the business or corporate structure of a medical-practice group at least 60 days prior to the effective date of the transaction. Under 110-RICR-30-00-5, a “material change” means a merger, consolidation, or affiliation of a medical-practice group with another group resulting in eight or more physicians, physician assistants, and/or nurse practitioners, or with a hospital or hospital system; an acquisition of substantially all assets, stock, or equity interests; or a transaction involving a “significant equity investor” (i.e., private equity companies with a financial interest in a medical-practice group or MSO, or any investor or group of investors, or other entity with more than 10% equity). The Attorney General may pursue injunctive relief in Superior Court to pause any transaction that does not comply with the 60-day notification requirement, and penalties of up to $100,000 may be imposed for failure to provide pre-merger notification after a transaction’s effective date.

Vermont

House Bill 583

House Bill 583 passed the Vermont legislature on May 20, 2026, and was signed into law on June 15, 2026. The law took effect on July 1, 2026. This new law includes corporate practice of medicine restrictions, as well as health care facility and MSO reporting requirements.

The law prohibits unlicensed individuals or entities (e.g., private equity groups and hedge funds) involved in any manner with a health care entity from exerting influence or control over clinical decision-making. In addition, private equity groups, hedge funds, and their controlled entities may not enter into arrangements with health care facilities in Vermont if doing so would enable the entity to interfere with the facility’s clinical decision-making. The law also expressly permits unlicensed individuals and entities to perform various nonclinical services, such as management, administrative, business, and consultation services, so long as the activities and services provided do not amount to de facto control over the administrative, business, or clinical operations of the health care facility.

Further, the law’s new reporting requirements for health care facilities and MSOs will require these entities to report ownership and control information to the Green Mountain Care Board (Board) on or before March 1, 2027. Such information must also be updated upon a change in ownership involving a private equity group or hedge fund. In addition, the Board is required to publish ownership and control reports for health care entities and MSOs on its website by July 1, 2027.

Washington

House Bill 2548

Washington’s House Bill 2548, signed into law on March 25, 2026, significantly broadens the state’s health care transaction notice framework. Under prior law, a “material change” triggering the 60-day notice requirement was limited to mergers, acquisitions, or contracting affiliations between two or more hospitals, hospital systems, or provider organizations. The bill adds three new categories of covered transactions:

Any transaction that results in a change of majority ownership or control of a hospital, hospital system, or provider organization (i.e., a corporation, partnership, business trust, association, or organized group of persons, whether incorporated or not, which is in the business of health care services delivery or management and that represents seven or more health care providers in contracting with carriers or third-party administrators for the payments of health care services.) — whether structured as a merger, acquisition, contracting affiliation, or otherwise — now triggers the notice requirement.
Acquisitions, sales, or transfers of the majority of assets of such entities — expressly including real property sale-leaseback transactions — are now covered.
Conversions of a hospital, hospital system, or provider organization from nonprofit to for-profit status (whether as a domestic or foreign corporation or unincorporated entity) also now require notice.

The 60-day pre-transaction notice requirement to the Washington Attorney General remains in effect for all material change transactions. Under the amended law, however, the Attorney General may now request supplemental information from the transaction parties. Once such a request is made, closing is paused until 30 days after the parties certify substantial compliance. Notably, any follow-up requests by the Attorney General do not further extend this 30-day period. The law also imposes a new post-closing obligation: parties must notify the Attorney General within 30 days after the transaction is completed.

The new law also requires the Attorney General to publish a quarterly notice of pending and completed transactions on its website. Failure to comply with the material change transaction notification requirement can incur civil penalties of up to $200 per day of noncompliance.

What Should Health Care Deal Teams Expect Next?

The pace of legislative activity in this area continues to accelerate, with a growing number of states targeting private equity involvement, MSO arrangements, REIT transactions, and corporate practice of medicine structures. Transactional oversight continues to be a trend in state legislatures with proposals for new or expanded notification and approval requirements or “mini-HSR” laws. Stakeholders should monitor these developments closely given their potential impact on transaction timelines, structuring, and compliance obligations. In particular, parties to health care transactions should build into their deal timelines the possibility of multiple state-level notice and approval requirements, which vary significantly in scope, timing, and enforcement mechanisms.

Bass, Berry & Sims is actively tracking these legislative trends via our interactive health care transactions map, available here. If you have any questions about the laws discussed herein or any other state health care transaction notice requirements, please contact the authors.