Olha Yarynich, Contributing Photographer

Connecticut leaders introduced a legislative proposal to expand oversight of healthcare transactions in the state last week.

Gov. Ned Lamont, Attorney General William Tong and Commissioner Deidre Gifford of the Office of Health Strategy, or OHS, introduced the proposal at a press conference last Thursday. If passed, the legislation would create a joint process between OHS and the Attorney General’s Office, allowing the state to review a wider range of transactions and protect healthcare quality, affordability and access.

“The cardinal rule in healthcare is that an ounce of prevention is worth a pound of cure, and that’s what this bill is about,” said Lamont. “We’re not going to be taken by surprise ever again — if this bill is passed — by some of the financial shenanigans that impacted Prospect.”

Connecticut’s healthcare landscape is and has been under strain, with growing concerns over private equity involvement and financial mismanagement jeopardizing patient care. Officials point to cases like Prospect Medical Holdings, where $500 million in dividends were diverted to private equity owners, leaving hospitals burdened with debt and struggling to maintain operations.

Gifford underscored the urgency of action, noting that “it seems like you can’t pick up a newspaper lately without hearing about a practice impacting the quality, affordability or accessibility of healthcare.”

The proposed bill aims to modernize Connecticut’s oversight of healthcare transactions. It broadens the scope of transactions subject to scrutiny, including changes in ownership, asset transfers and mergers that have previously escaped regulatory review.

Under the bill, the state attorney general and OHS would jointly evaluate transactions for potential red flags related to antitrust issues, patient care quality and affordability.

Lamont emphasized the importance of proactive oversight, especially in light of Prospect’s bankruptcy filing.

A key provision of the bill is a new requirement for entities to notify regulators at least 60 days before a transaction occurs, doubling the current review period. This extension allows for a thorough examination of the financial and operational impacts on the state’s healthcare system. Additionally, the bill includes penalty provisions to hold entities accountable for noncompliance.

Gifford said that the legislation addresses loopholes and gaps in oversight that have allowed questionable practices to “go unchecked.”

“There are lots and lots of transactions that have the potential to cause harm to patients and workers and communities that the state does not have the ability to review,” she said.

Legislators, including state Sen. Saud Anwar and state Rep. Cristin McCarthy Vahey, co-chairs of the Public Health Committee, have expressed support for the bill, with public hearings expected later this legislative session. 

While officials are optimistic about the bill’s potential, they acknowledge the complexities of regulating an evolving healthcare industry.Connecticut General Assembly legislative session adjourns on June 4.