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 also introduces definitions for key terms such as "health system," "hospital," "ownership interest," and "operational control," while establishing 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 advanced practice registered nurses and physicians, rendering any agreements that violate this provision void and unenforceable.

Moreover, the bill mandates the Office of Health Strategy to assess the potential for the Attorney General to petition for the appointment of a receiver to manage hospitals facing financial distress, with a report due by October 1, 2026. It includes new legal language that voids any policy or contract entered into, amended, or renewed after July 1, 2025, if it contravenes the bill's provisions, and requires courts to award reasonable attorney's fees and costs to plaintiffs in such cases. The implementation of these provisions is expected to incur costs to the General Fund, primarily due to the need for additional personnel in the Department of Public Health to manage increased case volumes related to interference claims. The bill aligns with broader legislative efforts to regulate ownership interests in nursing homes, reflecting a strong commitment to safeguarding public health.