Connecticut Health Law

Members of the health care community may recall that the 2025 legislative session of the Connecticut General Assembly started out with Governor Lamont signing into law an emergency certificate of need (CON) process for bankruptcy-related hospital ownership transfers (PA 25-2) in light of the well-publicized bankruptcy of Prospect Medical Holdings, Inc. and three of its subsidiary hospitals in Connecticut. The signing of that legislation and other bills that were introduced early in the session promised to usher in a new era of regulatory scrutiny for purchases, sales and joint ventures involving hospitals and other health providers in the state. 

However, while we await the Governor’s signature on a number of other new, and newly amended, statutes that will have direct implications on the manner in which providers of all types conduct their business in Connecticut, we wanted to call attention to three of the more ambitious bills aimed squarely at health care transactions that stalled in the 2025 regular legislative session and will not be enacted unless a special session of the General Assembly is called to address them:

• HB 6873: This bill would have amended Connecticut General Statutes §19a-486i to, among other things, require: (1) the parties to a transaction that involves a material change to the business or corporate structure of a group practice to submit additional information to the Connecticut Attorney General (AG); (2) notice to the AG prior to a transfer that impacts or changes the governance or controlling body of a hospital or hospital system or a transfer of a controlling interest in an entity that possesses or controls at least 20% of a health care facility; and (3) prior notice to the AG of a “material change transaction” involving a health care entity in Connecticut that either met certain financial thresholds or included private equity. If a transaction would not otherwise have required a CON, the bill would have authorized the AG, in consultation with the Commissioner of Health Strategy, to offer the parties conditions for the transaction to proceed or to require a CON.
• SB 1507: Key provisions of this bill included a prohibition on private equity companies or real estate investment trusts from acquiring (or increasing) an ownership interest in, or operational or financial control over, a hospital or health system. The bill would also have explicitly prohibited a licensed health care facility or entity or a management services organization from interfering with, or controlling or otherwise directing the professional judgment or clinical decisions of, a health care practice or clinician with independent practice authority.
• SB 1539: This bill would have amended the CON law to, among other things, require a CON for an investment in a health care facility by a private equity company in which the private equity company acquired a controlling interest in the facility or otherwise obtained the ability to exercise control or decision-making authority over the facility. In addition, the bill would have required the Health Systems Planning Unit (HSPU) to deny a CON application involving the termination of labor and delivery services by a hospital unless those services could be obtained at another hospital located 25 miles or fewer from the applicant hospital. The HSPU would have also been required to develop and implement an expedited (30-day) CON review process for applications for an increase in the licensed bed capacity of a health care facility. Further, the bill would have prohibited the HSPU from granting requests for intervenor status in any public hearing conducted in connection with a CON application filed by a group practice.

We will continue to monitor the status of proposed health care legislation introduced by the Connecticut General Assembly this year and provide updates in future posts.

In the meantime, if you have any questions about your health care practice or facility, please contact one of our Health Care attorneys.