Vermont Restricts Private Equity Control Of Clinical Decision Making And Introduces Ownership Reporting For Health Care Facilities And MSOs

Vermont has joined the growing number of states placing new limits on private equity investment in health care. Effective July 1, 2026, Act 133 (18 V.S.A. chapter 233) restricts the authority that private equity groups, hedge funds, and their controlled entities may exercise over clinical and certain operational decisions at Vermont health care facilities. The law also requires health care facilities and management services organizations (MSOs) to disclose specified ownership and control information to the Green Mountain Care Board.

Act 133 does not create a general pre-closing notice or approval process. Its practical effects are nevertheless significant. Investors and operators should review existing governance and management arrangements, prepare for an initial reporting deadline of March 1, 2027, and address future ownership reporting in new transaction documents.

Key takeaways

• Clinical decision making must remain with health care providers. Private equity groups and hedge funds may not interfere with provider judgment or control specified clinical and operational decisions.
• Management arrangements require a fresh look. Nonclinical management and administrative services remain permissible, but licensed providers must retain ultimate responsibility or approval, and the arrangement cannot create prohibited de facto control.
• Initial reports or attestations are due March 1, 2027. Health care facilities and MSOs must report applicable private equity and hedge fund interests or submit the required no ownership attestation.
• Future ownership changes are reportable. After March 1, 2027, new or modified private equity and hedge fund interests trigger reporting.
• The law carries both private and governmental remedies. Providers may sue for violations of the clinical control restrictions, while reporting violations may result in civil penalties and Attorney General enforcement. 

Restrictions on investor control over clinical decision making

Act 133 applies to a private equity group or hedge fund “involved in any manner” with a health care facility doing business in Vermont, including as an investor in the facility or an investor or owner of its assets. The organizational form of the facility, whether a sole proprietorship, partnership, foundation, or corporate entity, does not affect the law’s application. Vt. Stat. Ann. tit. 18, § 9772(b), (d)(1).

A covered private equity group or hedge fund may not interfere with a health care provider’s judgment concerning diagnostic tests appropriate for a particular condition, the need for referrals or consultations, a patient’s care plan, including available treatment options, or the number of patients a provider must see or the number of hours the provider must work. Id. § 9772(b)(1).

The investor also may not exercise control over—or be delegated authority to make—decisions concerning:

• clinical standards or policies, including clinical staffing levels;
• the content of patient medical records;
• hiring or terminating health care providers, clinical staff, or medical assistants based in whole or in part on clinical competency or proficiency;
• the parameters under which a provider or facility enters contractual relationships with third-party payers;
• the prices, rates, or amounts that a facility charges for provider services;
• clinical competency or proficiency parameters governing contractual relationships with other providers;
• coding and billing of diagnoses and procedures for patient care services; or
• the selection or approval of medical equipment and supplies. Id. § 9772(b)(2).

These restrictions extend beyond the investor itself. A private equity group, hedge fund, or entity controlled directly, in whole or in part, by either may not enter into an agreement or arrangement with a health care facility if the agreement would enable the investor or controlled entity to engage in prohibited interference or exercise a prohibited power. Id. § 9772(c).

Management and administrative services remain permissible

The law does not prohibit an unlicensed individual or entity from providing nonclinical management, administrative, business, consulting, or assistance services to a Vermont health care facility. This is subject to two substantive limits: First, a licensed health care provider must retain ultimate responsibility for or approval of the relevant decisions and activities. Second, the services may not constitute de facto control over the facility’s administrative, business, or clinical operations in a manner that affects provider clinical decision making or the nature or quality of the health care services delivered by the facility. Id. § 9772(d)(2).

The statute therefore does not prohibit MSO structures as a category. It does, however, require parties to examine whether contractual rights, reserved powers, approval authorities, or practical operational controls leave ultimate authority with licensed providers as the statute requires. Relevant provisions may include rights concerning clinical staffing and performance standards, provider hiring and termination, payer contracting, pricing and rates, coding and billing, medical equipment and supply selection, and patient volume or provider hours requirements.

Investors, facilities, and MSOs should review not only the language of their agreements but also how authority is exercised in practice.

Covered investors and ownership interests

The law uses broad definitions that may reach interests held indirectly through funds, acquisition vehicles, affiliates, or other controlled entities. An “ownership or investment interest” includes direct or indirect possession of more than five percent of an entity’s capital, stock, or profits, as well as certain interests held through investment groups or pooled funds. The statute excludes passive contributors who do not participate in management or changes of control and certain entities that solely provide or manage secured debt financing.

Because these definitions extend beyond the immediate operating entity, parties should analyze the full ownership chain rather than limiting their review to the direct investor.

Initial reporting due March 1, 2027

By March 1, 2027, each covered health care facility and MSO must make one of two submissions. If a private equity group or hedge fund held an ownership or investment interest in the entity as of June 1, 2026, the entity must provide the prescribed ownership, organizational, and financial information. If no such interest existed on June 1, 2026, the entity must attest that it currently has no private equity or hedge fund ownership or investment. Id. § 9773(a).

An entity with a reportable interest must provide:

• the name, business address, and business identification numbers of each person holding an ownership or investment interest or a controlling interest;
• for a health care facility, information identifying its MSO;
• information identifying significant equity investors;
• a current organizational chart showing relevant owners, affiliates, commonly controlled entities, and subsidiaries; and
• the entity’s most recent fiscal year profit-and-loss statement and balance sheet. Id. § 9773(b).

The Green Mountain Care Board must collaborate with relevant stakeholders to develop the reporting processes, and the Vermont Agency of Human Services must provide relevant, necessary data to the Board. The enacted text reviewed does not set out the final reporting form or submission mechanism.

Reporting of new or modified interests

After March 1, 2027, a health care facility or MSO must report the information specified in section 9773(b) whenever a private equity group or hedge fund acquires an ownership or investment interest that was not previously reported to the Green Mountain Care Board, or an existing private equity or hedge fund ownership or investment interest is modified. Id. § 9773(c).

Reporting exemptions

The ownership reporting requirements in section 9773 do not apply to nursing homes, health care staffing companies, federally qualified health centers, or entities whose Vermont health care services are provided exclusively through telehealth, including telemedicine, store-and-forward services, and remote patient monitoring. Id. § 9773(e).

Public disclosure and confidentiality

Most information submitted under section 9773 will be public and will not be considered confidential, proprietary, or a trade secret. The statute protects an individual health care provider’s taxpayer identification number when it is also the provider’s Social Security number, specified nonbusiness contact and address information of an individual provider, and submitted profit-and-loss statements and balance sheets. Id. § 9773(f).

Although financial statements are exempt from public inspection and copying, the Green Mountain Care Board must provide copies of the statements, or information contained in them, to the Vermont Office of the Health Care Advocate. That office may not further disclose the confidential information. Id. § 9773(f)(2).

Beginning July 1, 2027, the Board must publish a report describing reported ownership structures and changes in ownership or control, with updated reports every two years. Id. § 9774(a).

Enforcement and private rights of action

A health care provider aggrieved by conduct violating the clinical control restrictions may bring an action in Vermont Superior Court for appropriate equitable relief, actual damages, reasonable costs and attorneys’ fees. Id. § 9772(e).

A health care facility or MSO that knowingly fails to submit required ownership information may be liable for a civil penalty of up to $50 per day, capped at $10,000 for each year of noncompliance. A material misrepresentation in a required report may result in a civil penalty of up to $25,000 for each material misrepresentation. Id. § 9773(g)(1)–(2).

The Vermont Attorney General may bring an action in Superior Court to collect these penalties and seek appropriate injunctive relief. Id. § 9773(g)(3).

Implications for existing arrangements and new transactions

Health care facilities, MSOs, private equity sponsors, hedge funds, and portfolio companies with Vermont operations should:

• Map the ownership chain. Identify Vermont health care facilities, MSOs, relevant investors, controlled entities, affiliates, and subsidiaries.
• Review governance and management rights. Focus on clinical staffing, provider hiring and termination, payer contracting, pricing, coding and billing, equipment selection, patient volume, and provider hours.
• Test actual practices, not just contract language. Confirm that licensed providers retain ultimate responsibility or approval in practice.
• Prepare for the March 1, 2027 submission. Determine whether the entity must provide a full ownership report or the statutory attestation and begin collecting the necessary organizational and financial information.
• Build future reporting into deal documents. Allocate responsibility for determining whether an ownership event is reportable, collecting information, and submitting the report.
• Plan for public disclosure. Identify which submitted information may become public and which information is expressly protected.

Act 133 sits alongside Vermont’s existing transaction requirements

Existing Vermont law requires a hospital acquiring ownership or control of a medical practice to notify the Vermont Attorney General at least 90 days before the transaction’s effective date, or as soon as practicable. That statute requires notice but does not expressly condition closing on Attorney General approval. 18 V.S.A. § 9405c.

Vermont also maintains a separate approval process for certain conversions of nonprofit hospital assets. A conversion involving at least $1 million and at least 40 percent of a nonprofit hospital’s assets, or one that transfers control of the hospital, generally requires approval from the Green Mountain Care Board and either the Attorney General or the Superior Court. The statute provides for an application, completeness review, public hearing, and substantive regulatory review. 18 V.S.A. § 9420.

Parties should therefore evaluate Act 133 together with any other applicable notice, nonprofit-conversion, certificate of need, licensure, and other facility-specific requirements.

Conclusion

Act 133 does not create a new general pre-closing review process, but it will affect how private equity sponsors, hedge funds, health care facilities, and MSOs structure and operate their Vermont arrangements. The immediate priorities are to review governance and management rights, determine which entities must report by March 1, 2027, and prepare for future reporting when ownership interests change. Affected organizations should also watch for Green Mountain Care Board forms or guidance addressing the reporting process and the timing of event-driven filings.