Bill to regulate healthcare private equity lands on desk of Mass. governor
A bill in Massachusetts that would regulate private equity firms has reached the governor’s desk after passing the state House and Senate in 2024. If passed, the law would require investors to make certain financial disclosures, designed to improve regulatory oversight.
The bill, which was stripped of its title by the Senate Ways and Means Committee, is now officially referred to as "An Act enhancing the health care market review process." Supporters argue that its provisions would prevent many of the corrupt business practices that led to the collapse of Steward Health Care, which filed for bankruptcy in May of last year.
Under the current terms of the bill, medical provider groups backed by private equity firms would be required to provide the state with audited financial statements, disclosures on ownership structures, and other financial progress reports.
With the act arriving on her desk just before the new year, Democratic Gov. Maura Healey now has until Jan. 9 to either sign it into law or use her veto power, which would send it back to the legislature.
During its journey through the state House of Representatives and Senate, the bill lost some of its teeth. The version passed on Dec. 30 and sent to the governor lacks provisions from the original draft, including bans on certain private equity purchases and debt limits for investor-backed medical providers.
Those provisions, along with other similar measures, were stripped out by the Massachusetts Senate.
Regulators cracking down on private equity
Last June, Senators Ed Markey (D-Mass.) and Elizabeth Warren (D-Mass.) introduced the Corporate Crimes Against Health Care Act in the U.S. Senate. The bill would allow federal prosecutors to seek criminal charges against private equity investors if their business interests cause the death of a patient.
The bill has yet to gain significant traction.
In California, a proposed law that would have given the state Attorney General’s office direct oversight of private equity transactions in healthcare was vetoed by Gov. Gavin Newsom last September. Critics of the bill argued that the regulation was redundant.
As for the pending act in Massachusetts, Healey has yet to publicly comment on whether she will pass it into law.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.