Committee passes bill to increase transparency and restrict harmful practices after for‑profit takeovers of nursing homes

ST. PAUL, Minn. — After hours of testimony and debate, the Senate Human Services Committee on Wednesday approved legislation intended to increase transparency and restrict certain practices when nonprofits sell nursing homes or assisted‑living facilities to for‑profit buyers.

Senator John Dibble, the bill’s sponsor, said the bill responds to constituent complaints and national research showing poorer outcomes after private takeovers. "This is from the National Bureau of Economic Research...patient mortality rates during a nursing home stay and subsequent 90 days is 10 higher at facilities owned by private equity firms," Dibble told the committee, summarizing research included with the bill's packet.

Paricha Rudina of the Office of Ombudsman for Long‑Term Care testified in support, describing resident complaints that rose sharply after ownership changes: "Residents have reported to us an overall reduction in quality of care after a takeover of their facility by a for‑profit entity... complaints to our office frequently increase after a takeover by a for‑profit entity, in some cases, by as much as 100% in the months following such a takeover," Rudina said.

Nut graf: The bill seeks notice and transparency before transfers, prohibits asset‑stripping and self‑dealing, limits certain charge increases and requires that a large share of public receipts be spent on patient care. Supporters said the measures protect residents and public dollars; some provider groups warned the bill could reduce investment in struggling facilities and lead to closures.

Major provisions

- Definitions and transparency: The bill adds definitions to clarify who is a "controlling person" (at least a 5% interest) and requires written notice to the attorney general, Department of Health and Department of Human Services at least 120 days before a transfer of a nonprofit facility to a for‑profit entity. Notices must include financial information, balance sheets and affidavits regarding litigation and capital investment plans, among other items, according to the bill summary presented by Dibble.

- Prohibited practices after takeover: The bill lists prohibitions including interfering with providers’ professional judgment, unequal payer treatment, asset stripping and self‑dealing. It would require that at least 75% of public receipts be spent on programs and patient care and prohibit excessive rent or related‑party extractions.

- Enforcement: The Attorney General would be authorized to enforce the statute, and the bill contains mechanisms to require maintenance of facility quality and limit sudden rent or housing cost increases for residents.

Debate and concerns

Organizations representing nursing homes and assisted‑living operators, including the Long Term Care Imperative and provider representatives, testified against the bill or urged changes. Kyle Burnt (Long Term Care Imperative) said the proposal could "result in increased costs, administrative complexity, and reduced flexibility in managing facilities," and warned it might deter private investors needed to keep facilities open.

Aaron Hubert, also with the Long Term Care Imperative, told the committee many facilities are financially fragile post‑pandemic and rely on buyers to stay open: "Most nursing homes, especially post pandemic, were in a very economically fragile position...most nursing homes... were not in a place where they could take on another care center."

Senators asked multiple agencies for data and analysis. Lisa Timmy, legislative director at the Minnesota Department of Health, said MDH had not completed a full analysis and asked for more time to review the proposal.

Committee action and result

Senator Dibble moved the A1 amendment; the committee adopted it. After extended debate and questions from members, Senator Fate moved that Senate File 2972, as amended, be passed and referred to the Committee on Commerce. The motion carried by voice vote.

Ending: Supporters say the bill prevents transfers that prioritize investor returns over resident care and the prudent use of public funds; opponents say the measure could reduce options and capital for struggling homes. The committee advanced the bill to Commerce for further consideration.