In a significant move to strengthen healthcare regulations, Connecticut officials have introduced a legislative proposal aimed at expanding oversight of healthcare transactions. This initiative seeks to protect patient care quality and affordability while addressing financial risks posed by increasing private equity involvement. Last week, Governor Ned Lamont, Attorney General William Tong, and Commissioner Deidre Gifford of the Office of Health Strategy (OHS) unveiled the proposal at a press conference. The legislation would establish a collaborative process between OHS and the Attorney General’s Office, enabling comprehensive reviews of various healthcare transactions.

Recent concerns over financial mismanagement in the healthcare sector have highlighted the need for stricter oversight. Instances such as Prospect Medical Holdings, where substantial dividends were redirected to private equity owners, have left hospitals struggling with debt and operational challenges. Gifford emphasized the urgency of this action, noting the frequent reports of practices that compromise healthcare quality, affordability, and accessibility. The proposed bill aims to modernize Connecticut's regulatory framework by broadening the scope of transactions subject to scrutiny. It includes changes in ownership, asset transfers, and mergers that previously evaded regulatory examination. Under the new legislation, the state attorney general and OHS would jointly assess transactions for potential issues related to antitrust concerns, patient care standards, and cost-effectiveness.

The legislation introduces a 60-day notification requirement before any transaction occurs, doubling the current review period. This extended timeframe allows for thorough evaluations of financial and operational impacts on the healthcare system. Additionally, the bill includes provisions for penalties to ensure compliance. Legislators, including state Sen. Saud Anwar and state Rep. Cristin McCarthy Vahey, have voiced their support for the bill, with public hearings scheduled for later in the session. While recognizing the complexities involved in regulating an evolving healthcare industry, officials remain optimistic about the potential benefits of this enhanced oversight. By implementing these measures, Connecticut aims to uphold the highest standards of patient care and ensure the sustainability of its healthcare system.