Connecticut SB 196: 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.

Bill Text

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 

Substitute Senate Bill No. 196 
 
Public Act No. 26-22 2 of 3 
 
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,  operational,  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 time 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  diagnosis,  diagnostic 

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Public Act No. 26-22 3 of 3 
 
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 the 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. 
 
 
 
Governor's Action: 
Approved May 27, 2026