The proposed legislation, General Assembly Raised Bill No. 196, aims to regulate sale-leaseback agreements for hospitals and ensure that private equity entities do not exert control over hospital operations or interfere with clinical decision-making. Under the new law, effective from passage, hospitals will be prohibited from entering into sale-leaseback transactions after October 1, 2026, unless they are experiencing financial distress. In such cases, hospitals can proceed with these transactions if authorized by their governing body and if they notify the Commissioner of Public Health and the Attorney General at least ten days prior to finalization. Additionally, these transactions will be exempt from certain approval requirements under existing statutes.

Furthermore, the bill mandates that by October 1, 2026, and annually thereafter, hospitals must submit attestations to the Commissioner confirming that no private equity entity has a controlling interest in the hospital and that such entities do not influence clinical decisions or policies. The Commissioner is tasked with developing a uniform template for these attestations. The legislation emphasizes the importance of maintaining governance control within hospitals and protecting the professional judgment of healthcare providers from external influences.