AN ACT CONCERNING HOSPITAL SALE-LEASEBACK TRANSACTIONS AND ATTESTATIONS CONCERNING LACK OF A CONTROLLING INTEREST OF A HOSPITAL OR OF INTERFERENCE WITH THE PROFESSIONAL JUDGMENT AND CLINICAL DECISIONS OF CERTAIN HEALTH CARE PROVIDERS OF A HOSPITAL BY A PRIVATE EQUITY ENTITY.

Substitute Senate Bill No. 196

Public Act No. 26-22

AN ACT CONCERNING HOSPITAL SALE -LEASEBACK
TRANSACTIONS AND ATTESTATIONS CONCERNING LACK OF A
CONTROLLING INTEREST OF A HOSPITAL OR OF
INTERFERENCE WITH THE PROFESSIONAL JUDGMENT AND
CLINICAL DECISIONS OF CERTAIN HEALTH CARE PROVIDERS
OF A HOSPITAL BY A PRIVATE EQUITY ENTITY.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (NEW) (Effective from passage) (a) As used in this section and
section 2 of this act:
(1) "Commissioner" means the Commissioner of Public Health;
(2) "Controlling interest" means the direct or indirect power to direct
the management and policies of the main campus of a hospital, whether
through ownership of voting securities, contract or other means;
(3) "Hospital" has the same meaning as provided in section 19a -646
of the general statutes;
(4) "Main campus of a hospital" means the licensed premises within
which the majority of inpatient beds are located;
(5) "Private equity entity" means any entity that collects capital
investments from individuals or entities and purchases, as a parent
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company or through another entity that the entity completely or
partially owns or controls, a direct or indirect ownership share of a
hospital; and
(6) "Sale -leaseback transaction" means a transaction in which a
hospital enters into an agreement with a person or another entity to sell
and lease back hospital -owned real property that constitutes the main
campus of a hospital.
(b) On and after July 1, 2027, no hospital shall enter into a sale -
leaseback transaction.
Sec. 2. (NEW) ( Effective from passage ) (a) Not later than February 15,
2027, and annually thereafter, each hospital shall submit to the
commissioner, in a form and manner prescribed by the commissioner, a
document containing the following information:
(1) An attestation that no private equity entity has (A) a controlling
interest in a hospital, or (B) ultimate governance control and authority
over any asset or activity of the main campus of a hospital, including,
but not limited to, any clinical, operat ional, managerial, financial or
human resources matter; and
(2) An attestation that no private equity entity is permitted to direct
a hospital's adoption of any policy or procedure that would interfere
with the professional judgment or clinical decisions of duly authorized
clinicians, including (A) the amount of ti me spent with patients or the
number of patients seen in a given time period, (B) the time permitted
to triage patients in the emergency department or evaluate admitted
patients, (C) the time period within which a patient must be discharged,
(D) decisions involving a patient's clinical status, including, but not
limited to, whether the patient should be kept in observation status,
whether the patient should receive palliative care and where the patient
should be placed upon discharge, (E) the final diagnosi s, diagnostic
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terminology or codes that are entered into the medical record, or (F) the
appropriate diagnostic test for medical conditions.
(b) The commissioner may impose a civil penalty of up to two
thousand dollars per violation on any hospital that fails to provide an
attestation required under subsection (a) of this section.
(c) A hospital shall, not later than ten business days after receipt of an
order from the commissioner imposing a civil penalty under subsection
(b) of this section, submit a request in writing to the Department of
Public Health for a hearing to contest th e order. If the hospital fails to
submit such a request not later than ten business days after such receipt,
the order shall be deemed a final order of the department, effective upon
the expiration of such ten business days. After receipt of a timely request
for a hearing, the department shall set the matter down for a hearing as
a contested case in accordance with the provisions of chapter 54 of the
general statutes.
(d) Nothing in this section shall be construed to (1) prohibit a hospital
or any affiliate of a hospital from (A) investing, either directly or
indirectly, in a joint venture, or (B) having an agreement with one or
more physicians or physician groups to provide services at the hospital,
or (2) interfere with a hospital coordinating with its parent health care
system.