By Julia Burleson, Abby Knapp, and Kennah Watts
Patients and families are being squeezed by higher premiums and cost-sharing as health care spending and prices in the U.S. continue to climb. In 2025, nearly half of working-age adults had difficulties affording care and more than two-thirds of Americans want a “complete overhaul” of the health care system. Many state policymakers are paying attention. In the 2026 legislative session, several states took legislative and regulatory action to contain health care costs (as of publication, 33 state sessions have adjourned). In this blog we review four legislative and regulatory trends to promote competition and contain costs: ownership transparency, transaction oversight, private equity oversight, and price regulation.1
Ownership Transparency
One factor contributing to the health care affordability crisis is the corporatization of the health care system, as hospitals, doctors’ practices and other health care service providers are increasingly owned by entities that prioritize short-term profits over patient outcomes. At the same time, the opacity of these corporate acquisitions makes it increasingly difficult to determine which entities own or control health care providers, limiting states’ ability to oversee and prohibit harmful behavior. Growing evidence suggests that certain ownership and contractual agreements, particularly involving private equity firms and real estate investment trusts, can jeopardize the long-term financial stability of facilities, drive up prices, and harm both health care workers and patient care. To strengthen oversight over these relationships and provide greater information to patients, researchers, and other interested stakeholders, several states now require health care facilities to report more detailed ownership information to state officials.
Maine will require health care entities to report ownership and control details to the Maine Health Data Organization by July 2027, as well as upon the completion of a material change transaction. This requirement includes submitting a current organizational chart that details the entity’s business structure, encompassing all affiliates and subsidiaries. In Vermont, health care facilities and management services organizations will be required to report to the Green Mountain Care Board if a private equity group or hedge fund takes on an ownership or investment interest. Facilities with private equity ownership or investment interest will be required to report detailed ownership information, as well as the organization’s most recent fiscal year’s profit and loss statement and balance sheet.
Transaction Oversight
This session, several states strengthened their ability to review mergers that could result in higher health care prices by giving state attorneys general (AGs) better access to information and the resources needed to enforce antitrust laws.
At the federal level, the Hart-Scott-Rodino (HSR) Act requires organizations involved in large transactions to notify federal antitrust agencies before a deal can close. These filings help agencies determine whether a merger is likely to reduce competition and, if necessary, challenge it before it is finalized. Although state AGs have parallel authority to challenge anticompetitive transactions, they cannot access HSR filings without going through a costly and lengthy subpoena process. To close this gap, California and Maine now require organizations to concurrently file HSR documents with the federal government and the state AG. Earlier access to these filings will help state AGs review mergers more efficiently and identify transactions that could harm consumers.
Washington also expanded its oversight of health care transactions to include arrangements that can shift operational control without a change in ownership. These arrangements include management agreements, contracting affiliations, and certain asset transfers such as sale-leaseback transactions (as described below) that have become common among private equity-backed providers. Access to this information gives the state a more complete picture of changes in control and can help identify transactions that could reduce access to care or increase health care costs.
Finally, Washington and Oregon (through regulation) adopted tiered filing fees based on the value of the transaction. This provides state AGs with additional resources to review complex transactions and protect consumers.
Oversight of Private Equity
Many corporate and private equity owners are more incentivized to engage in value extractive, profit-seeking behaviors that are often associated with higher prices and reduced access to and quality of care. Some states are therefore enacting more explicit oversight for transactions that involve private investors. States are also prohibiting corporate or private equity control of providers and banning certain extractive strategies often employed by private equity owners. These policies aim to protect clinical decision making and maintain facilities’ assets to ensure patient access and care quality are not compromised.
As previously mentioned, Washington expanded its transaction oversight authority to include transactions common to private investors. Similarly, Rhode Island and Massachusetts finalized regulations to expand the definition of covered transactions to include those involving private equity groups and management services organizations. Maine also established a new review and approval process for majority ownership or operational control acquisitions by private equity investors, hedge funds, or management services organizations. As noted above, this law also requires these entities to report detailed ownership, control, and operational information.
Other states took action to limit corporate and private equity control of provider practices. These laws, known as corporate practice of medicine (CPOM) laws, require licensed physicians and clinicians––rather than corporate owners––to retain ultimate authority over clinical decisions. Last year, Oregon enacted the strongest CPOM to date, and this session, other states have followed Oregon’s example. Vermont enacted a law that prohibits private equity and hedge fund involvement in clinical decisions at health care facilities, and only allows these owners to advise on business decisions. As described above, this law also requires facilities owned by private equity or hedge funds to report ownership. Similarly, in Connecticut, hospitals must now submit an annual attestation affirming that private equity investors do not have a controlling interest in the hospital or influence clinical decision-making. Delaware went beyond these CPOM laws and established a moratorium on for-profit and private equity hospital acquisitions until July 2028 to completely restrict investor involvement.
In addition to explicit transaction oversight for private investors or regulation of corporate control, some states are prohibiting certain tactics commonly used by private equity owners. One of these tactics is a sale-leaseback agreement, in which the owner of a facility––such as a hospital or nursing home—sells the facility’s real estate property and then leases the land back from the new owner. This arrangement leaves the hospital or facility without a substantial asset and with a new, steep monthly lease payment. This session, following the bankruptcy of private-equity backed Prospect Medical Holdings, Connecticut banned hospitals from entering into a sale-leaseback transaction. Last year, Massachusetts enacted a similar law after the collapse of Steward Health Care. Rather than target the investors themselves, these laws target the harmful practices often employed by, but not exclusive to, profit-driven investors.
Reference-Based Pricing
This session, states continued to explore reference-based pricing as a way to rein in high hospital prices. Reference-based pricing caps the amount a health plan will pay for a hospital service, often as a percentage of the Medicare rate. By limiting excessive prices, reference-based pricing can help slow premium growth and reduce out-of-pocket costs.
This session, Delaware enacted a law capping payments from fully insured plans and the state employee health plan to the state’s two largest hospitals. The state will phase in the cap from 2029 through 2033. When fully implemented, covered plans will pay no more than 250 percent of the Medicare rate for inpatient, outpatient, and emergency department services. In New Mexico, lawmakers expanded its reference-based pricing policy. Last year, the state established payment caps for its state employee health plan at 200 percent of the Medicare rate for in-network hospitals and 175 percent for out-of-network hospitals in counties with more than 125,000 residents. This session, legislators extended the policy to public school employee health plans, although the state has not established the reference-based prices.
A few other states also introduced bills to regulate commercial prices this year. A bill in Maine was introduced but did not pass before the legislature adjourned, while bills in New Jersey and Michigan are still under consideration.
Looking Ahead
In a period of federal gridlock, states continue to advance policy solutions to promote health care affordability. While no one policy can fully protect consumers from the effects of health care consolidation in today’s market, states are taking incremental steps to better understand and limit the complex financial relationships within and between health care entities. Greater information and authority to oversee transactions, reining in profit-seeking behavior, and directly regulating the prices paid for care can prevent further consolidation and ever-higher commercial health care prices, and provide much needed financial relief to Americans.
