Senate Health and Welfare reviews bill to bar private equity from directing clinical care, require ownership reporting

The Senate Health and Welfare Committee on April 29 reviewed a draft bill that would bar private equity groups and hedge funds from exercising control over clinical decision‑making and would require covered healthcare facilities and management services organizations to report ownership and investment interests to the Green Mountain Care Board.

The measure, described by Jen of the Office of Legislative Council, would create a new chapter in Title 18 meant "to ensure that clinical decision‑making and treatment decisions are exclusively in the hands of health care providers," and to "safeguard against non‑licensed individuals or entities such as private equity groups and hedge funds exerting influence or control over healthcare delivery," she said.

Why it matters: Sponsors and staff said the bill aims to preserve clinicians’ authority over diagnostic and treatment decisions and to increase transparency about who ultimately owns or controls health care entities. Committee members flagged concerns about enforcement, budget‑review processes, and exemptions for certain providers.

What the bill would do: The draft explicitly prohibits an investor or fund that holds ownership or control interest in a facility from interfering with clinicians’ judgment on matters such as which diagnostic tests are appropriate, referrals and consultations, care plans and treatment options, and the number of patients or hours a provider must work. The text also forbids investors from exercising control over clinical standards or staffing levels, hiring or firing based on clinical competency, controlling medical‑record content, or directing coding and billing when those actions would interfere with clinical decision‑making, Jen said.

Permitted business activities: The bill allows unlicensed entities to provide nonclinical management, administrative or consulting services if a licensed healthcare provider retains ultimate responsibility and approval and if the services do not amount to de facto control over clinical operations.

Transparency and reporting: Covered facilities and management services organizations in which private equity groups or hedge funds hold ownership or investment interests must report by the statute’s baseline and update the Green Mountain Care Board when ownership changes. Jen described reporting requirements for names, addresses, business identification numbers, organizational charts, affiliates, and the most recent fiscal year profit and loss statement and balance sheet. A June 1, 2026 baseline and a July 1, 2026 initial reporting deadline were discussed in the hearing as the dates that would determine the initial universe of filers.

Public access and confidentiality: Most reporting would become public, but the bill carves out confidentiality for individual providers’ taxpayer/SSNs and individual contact details. The measure also exempts the public release of submitted profit/loss statements and balance sheets while allowing the board to provide those items to the Office of the Healthcare Advocate, which is under state contract and bound by state confidentiality rules rather than HIPAA, committee members were told.

Penalties and enforcement: A healthcare provider who believes an investor has violated the prohibitions could sue for equitable relief, actual damages, reasonable costs and attorney fees. The bill also proposes civil penalties for failure to report (up to $50 per day, capped at $10,000 per year) and for material misrepresentations (up to $25,000 per misrepresentation), and empowers the attorney general to pursue collection and injunctive relief.

Exemptions and outstanding questions: The draft exempts certain entities from reporting (nursing homes, healthcare staffing companies, federally qualified health centers, and entities that deliver services exclusively via telehealth). Committee members asked whether some entities—particularly hospitals subject to budget review—could involve investors in budget processes and noted that nursing homes’ reporting obligations may already be subject to federal rules; staff recommended inviting the Green Mountain Care Board, Office of the Healthcare Advocate, the attorney general’s office and Agency of Human Services to clarify oversight and enforcement questions.

Next steps: Committee members asked for expert testimony (researchers at Brown and Harvard and other private equity experts were referenced) and signaled plans to invite witnesses about the bill’s likely effects and enforceability. The committee paused to take up other bills on the calendar after the briefing.

Sources: Committee staff briefing by Jen, Office of Legislative Council, and committee discussion (transcript of Senate Health and Welfare, April 29).