Committee hears model to expand state oversight of private equity in health care

The committee heard presentations on proposals to increase state oversight of private equity activity in health care, including a model bill that would require prior notice of large transactions, strengthen corporate-practice-of-medicine protections for clinicians and mandate reporting of ownership and control.

Maureen Hensley Quinn of the National Academy for State Health Policy told the panel the model is built from work NASHP began tracking hospital and health system consolidation and private-equity activity and that it bundles three primary policy approaches: enhanced review of material transactions, stronger corporate-practice-of-medicine rules, and ownership/control transparency. "It allows prior notice of a proposed transaction" and, she said, gives a state office a broader lens than antitrust alone to assess effects on cost, access, equity and quality.

The nut graf: supporters said states increasingly need tools to know who controls health-care decisions when private-equity firms, managed-service organizations, real-estate investors or other outside entities buy or manage providers. Advocates and state officials said existing statutes in some states are decades old and may not capture modern transaction forms such as MSOs, PBM arrangements, leasebacks or layered corporate…