The last several years have seen a significant expansion of private equity activity in healthcare, and with that, a new wave of state-level legislation aimed at placing more scrutiny on PE deals.
Here are five states that implemented or proposed new healthcare private equity laws in 2025:
1. California
In October, Governor Gavin Newsom signed a piece of legislation that codified restrictions on PE firms and hedge funds from influencing the decision-making of physicians in the state. The law specifies that private equity firms, hedge funds and their affiliates may not interfere with the professional judgement of healthcare professionals in clinical decision-making, contractually or otherwise. This includes decisions about diagnostic tests, treatment options, patient volume or referral requirements.
3. Maine
In June, the state legislature placed a one-year moratorium on the purchase of hospitals by PE or real estate investment trusts. It also created a legislative commission to make recommendations about a path forward with a report to the Health Care, Insurance and Financial Services Committee. Those recommendations were due Dec. 10, according to Bangor Daily News.
3. Massachusetts
In January, Gov. Maura Healey signed a bill into law that aims to increase scrutiny of private equity sponsors, significant equity investors, health care real estate investment trusts, management services organizations and pharmacy benefits companies in the state.
4. Oregon
Oregon Gov. Tina Kotek signed a bill June 9 that enacted the strictest regulatory framework in the country on private equity and corporate ownership of medical practices.
The law allows a three-year transition period for compliance and mandates that physicians maintain at least a 51% ownership stake in most practices. It also bars corporations and management service organizations from exerting decision-making control over medical groups.
Institutions such as hospitals, tribal health facilities, behavioral health facilities and crisis lines are exempt from the new rules. Supporters said that the legislation is a necessary corrective to increased “corporatization” of healthcare facilities within the state.
5. Pennsylvania
The Pennsylvania House of Representatives passed legislation June 12 that would expand the attorney general’s authority to review and potentially block healthcare mergers and acquisitions.
The bill also prohibits sale-leaseback arrangements involving private equity firms and requires healthcare organizations to disclose financial and operational details before finalizing major deals. The legislation was introduced May 13, following Los Angeles-based private equity firm Prospect Medical Holdings’ decision to close Upland, Pa.-based Crozer Health.
It also gives the public an opportunity to weigh in on any healthcare facility sale, merger, acquisition or major financial transaction that may impact patient access and public health.
