State oversight of healthcare transactions is continuing to undergo a significant transformation. As tracked in our updated Healthcare Merger Matrix, the number of states implementing or considering expanding antitrust laws targeting proposed deals continues to rise.[1] For instance, Washington and Colorado’s premerger notification laws went into effect on July 27 and August 6, 2025, respectively, and Indiana recently modified its existing transaction notice law to exempt certain practitioner-owned practices.[2] Additionally, New Mexico enacted a permanent version of its temporary transaction notification law with enhanced oversight and enforcement.[3]
Importantly, new and pending laws are not limited to transactions involving traditional healthcare entities. As described below, states are actively trying to expand their reach to include private equity, hedge funds, management services organizations (“MSOs”), and for-profit entities.
Pennsylvania Aims to Limit the Impact of Private Equity on Healthcare
Pennsylvania is considering legislation to limit the impact of private equity on healthcare. The proposed legislation would authorize the Pennsylvania Attorney General to review mergers and acquisitions of healthcare entities involving private equity companies and other for-profit entities and block the transactions if they are “against the public interest.” If passed, prior to entering into a covered transaction, a healthcare entity would be required to file a notification with the Attorney General and obtain a written determination from the Attorney General that the transaction is not against the public interest or observe a 60-day waiting period, which may be extended. Transactions are considered to be against the public interest if they result in (1) a significant reduction in competition, quality of care, or access to care; (2) a significant increase in healthcare costs; (3) an unfair method of competition or deceptive act or practice in or affecting healthcare commerce; or (4) healthcare leaseback agreements. Transactions against the public interest would be prohibited unless the Attorney General determines “there is no feasible alternative to prevent a health care entity’s closure or a greater loss of health care services in the absence of the covered transaction.” See H.B. 1460.[4]
California Considering Expanding its OHCA Notice and Review Regime
California is considering amendments to existing law to expand the transaction review process administered by the California Office of Health Care Affordability (“OHCA”) to include additional entities subject to the law. While the current law applies to certain provider and payor entities, the proposed legislation would now require private equity companies, hedge funds, MSOs, new business entities created for the purpose of contracting with healthcare entities, and entities that own, operate, or control a provider to submit notice of material change transactions and await OHCA’s clearance for applicable transactions. The legislation was passed by the State Assembly in May, and is close to a final vote by the State Senate. See A.B. 1415.[5]
Illinois Mini-HSR Amendment Targets PE/Hedge Funds
Proposed legislation would amend Illinois’s existing healthcare transaction notification law to require private equity and hedge funds to obtain Attorney General consent for financing of covered healthcare transactions. As proposed, the legislation does not specify the timeframe within which the Attorney General’s consent must be given or criteria to which consent would be issued or denied. See S.B. 1998.[6]
Massachusetts Seeks to Strengthen Transaction Oversight
Massachusetts is considering a number of proposed bills to further expand its current healthcare transaction review process. These efforts follow the adoption earlier this year of H.B. 5159 which expanded the filing and reporting requirements for private equity groups, real estate investment trusts, and MSOs investing in Massachusetts healthcare providers.
Proposed legislation S.D. 1910 primarily focuses on private equity groups, MSOs and for-profit entities. If passed, the bill would expand the definition of “provider organization” under Massachusetts’ current healthcare transaction review process to include MSOs and providers that are owned or controlled by for-profit entities, including significant equity investors and any other organizations that contract with carriers, third-party administrators or public payors for payment for healthcare services. The bill would also require private equity groups acquiring ownership or control of a provider or provider organization to deposit a bond with the Department of Public Health upon submission of a notice of material change. Additionally, the bill would authorize the Health Policy Commission to recommend modifications to proposed transactions to mitigate any significant negative impacts on healthcare costs, quality, or breadth of services and refer its final Cost and Market Impact Review report to the state Attorney General, with a presumption of unfair trade practices under state consumer protection laws. See S.D. 1910.[7]
Proposed legislation H.D. 3147 would expand Massachusetts’ current healthcare transaction review process to include applications for a new freestanding ambulatory surgery center license or a clinic license, or a new satellite facility under an existing license. The bill would also add additional factors the Health Policy Commission (“HPC”) could consider as part of its Cost and Market Impact Review (“CMIR”) and authorize the HPC to deny certain proposed material change transactions subject to a CMIR. If the HPC approves a proposed material change upon completion of a CMIR, the HPC would refer the report to the Attorney General to make an independent determination as to whether the transaction satisfies state and federal antitrust law. Finally, the bill would permit the HPC to review material change transactions after they are completed. If the HPC finds that an approved material change has failed to produce the stated benefits in its notice, the HPC may subject the entity to a new CMIR, require the entity to complete a corrective action plan, or prohibit the entity from making any additional material changes to its operating or governance structure for one year following the reevaluation and approval by the commission. See H.D. 3147.[8]
FOOTNOTES
[1] State Healthcare Transaction Laws, Sheppard Mullin, https://discover.sheppardmullin.com/state-healthcare-transaction-laws/p/1.
[2] Wash. Rev. Code § 19.420 (2025); 2025 Colo. Sess. Laws 2366; Ind. Code § 25-1-8.5 (2025).
[3] N.M. Stat. Ann. § 24A-9 (2025).
[4] H.B. 1460, 2025 Gen. Assemb., Reg. Sess. (Pa. 2025).
[5] A.B. 1415, 2025-2026 Gen. Assemb., Reg. Sess. (Cal. 2025).
[6] S.B. 1998, 104th Gen. Assemb., Reg. Sess. (Ill. 2025).
[7] S.D. 1910, 194th Gen. Assemb., Reg. Sess. (Mass. 2025).
[8] H.D. 3147, 194th Gen. Assemb., Reg. Sess. (Mass. 2025).