Substitute Senate Bill No. 1507 seeks to prohibit private equity ownership and control of hospitals and health systems, effective July 1, 2025. The bill explicitly states that no private equity company or real estate investment trust (REIT) may acquire or increase any direct or indirect ownership interest or operational control over these healthcare entities. It introduces definitions for key terms such as "health system," "hospital," "ownership interest," and "operational control," while also clarifying the concept of "indirect ownership interest." Additionally, the bill restricts healthcare facilities and management services organizations from interfering with the clinical decisions of healthcare providers, including aspects like patient interaction time and care decisions. Any agreements that violate these provisions will be rendered void and unenforceable.

Moreover, the bill mandates an evaluation by the Commissioner of Health Strategy to assess the need for appointing a receiver to manage financially distressed hospitals, with a report due by October 1, 2026. It also includes provisions that make any policy or contract entered into after July 1, 2025, void if it contravenes the bill's stipulations, and courts are required to award reasonable attorney's fees to plaintiffs if such contracts are deemed unenforceable. The implementation of these regulations is expected to incur costs to the General Fund, estimated at $164,000 in FY 26 and $211,900 in FY 27, primarily due to increased personnel needs in the Department of Public Health. The bill is part of a broader legislative effort to regulate private equity involvement in healthcare, alongside related bills addressing similar issues in the nursing home sector.