Bill to protect Maine health care from private equity signed into law

AUGUSTA – LD 2201, a bill recommended by a State commission on hospitals and health care requiring review and approval of sales of health care facilities involving private equity firms and similar entities was signed into law on Monday, April 13.

“In many places across the country, local hospitals and other health care facilities have been bought, gutted and closed down by private equity firms, who squeeze out every scrap of profit for their shareholders and leave people without access to care,” said Sen. Mike Tipping, D-Orono. “With this first-in-the-nation law, the state of Maine will have more information about these transactions and will be able to prevent those that would harm Mainers’ access to care.”

“Private equity companies can often be focused solely on profits, turning health care into a commodity,” said Rep. Michelle Boyer, D-Cape Elizabeth. “Across the country, we’ve seen firms buy hospitals, cut services and flip them for profit – leaving patients and their communities at risk. This measure provides critical oversight to help make progress and ensure that hospitals put patients first, not profits.”

This past fall, Sen. Tipping and Rep. Boyer chaired the Commission to Evaluate Regulatory Review and Oversight of Health Care Transactions That Impact the Delivery of Health Care Services in the State, from which this bill was one recommendation.

LD 2201 establishes a process for the review and approval of a transaction at least 180 days before a private equity company, hedge fund or management services organization acquires a majority ownership or assumes operational control of a health care entity. Transactions can be denied if they go against the public interest, make Maine’s health care system less competitive, increase costs or decrease access to care for Maine patients.

Other commission recommendations that have become bills moving through the Legislature include LD 2200, which bans certain non-compete agreements from being imposed on health care practitioners and LD 2189, which requires that a hospital provide at least 120 days’ notice prior to the termination of maternity or newborn care services.

The final report is available online here. All of the Commission’s work can be found online here.

Other members of the Commission included health care stakeholders such as representatives of the hospital industry, long-term care and nursing home facilities, health insurance consumers, health insurance carriers and health care purchasers.

As non-emergency legislation, LD 2201 will go into effect 90 days after the Legislature adjourns.

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