Substitute Senate Bill No. 196, now Public Act No. 26-22, establishes new regulations regarding hospital sale-leaseback transactions and the influence of private equity entities on hospitals. Effective from passage, the bill defines key terms such as "controlling interest," "hospital," "main campus of a hospital," "private equity entity," and "sale-leaseback transaction." Notably, it prohibits hospitals from entering into sale-leaseback transactions after July 1, 2027. Additionally, hospitals are required to submit annual attestations to the Commissioner of Public Health, confirming that no private equity entity has a controlling interest or governance control over hospital operations, and that such entities do not interfere with clinical decisions made by healthcare providers.

The bill also outlines penalties for non-compliance, allowing the commissioner to impose civil penalties of up to $2,000 for each violation of the attestation requirement. Hospitals have the right to contest these penalties through a hearing process. Importantly, the legislation clarifies that it does not prevent hospitals from engaging in joint ventures or agreements with physicians, nor does it interfere with coordination with parent health care systems. This legislation aims to safeguard the integrity of hospital operations and ensure that clinical decisions remain in the hands of qualified healthcare professionals.