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S 2492Medical Services

Health and Safety - Rhode Island Healthcare Transaction Oversight Act

This bill empowers the state to review and block healthcare mergers that may increase costs or hurt patient care.

Held for study
Population
Affected
75
Email Legislator
Introduced Feb 6, 2026Committee Senate Judiciary

Plain-English Summary

This bill creates the "Rhode Island Healthcare Transaction Oversight Act" to regulate mergers, acquisitions, and ownership changes in the healthcare industry. It requires healthcare entities with over $10 million in revenue to notify the Attorney General and Department of Health 180 days before any major business deal. The state will review these transactions to ensure they do not increase costs, reduce access to care, or harm the quality of medical services. The law aims to prevent the financial instability and service closures seen in recent hospital bankruptcies.

For younger readers

Imagine if the only two toy stores in town wanted to combine into one giant store. They might raise prices because you would have nowhere else to go. This law acts like a referee for hospitals and doctors. If big healthcare companies want to join together or be bought by someone else, they have to ask the state government first. The government checks to make sure the hospital will stay open and that it won't cost too much for people to get better when they are sick. If it looks like a bad idea, the government can say "no."

Who & Where It Applies

Impacted groups
Healthcare ProvidersPatientsPrivate Equity FundsHospital EmployeesInsurance Carriers
Impacted communities
All

Constitutional & Fiscal Check

Moderate risk

There is a low to moderate risk regarding the Due Process Clause and potentially the Takings Clause. By shifting the burden of proof to the private entity to demonstrate a transaction is beneficial by "clear and convincing evidence," and potentially forcing divestitures, the state may be challenged on whether it is unduly infringing on the right to contract and property ownership without sufficient state interest, though states generally have broad police powers regarding public health.

Estimated cost
None
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Empowers the state to block predatory private equity takeovers that prioritize profit over patient care, thereby protecting the social safety net and essential health services.
  • Mandates a review of how transactions affect health equity and underserved populations, ensuring that business deals do not further marginalize disadvantaged communities.
  • Includes workforce protections as a condition for approval, helping to secure jobs and preventing mass layoffs often associated with corporate consolidation.
  • The $10 million revenue threshold may still allow smaller, incremental acquisitions of independent practices by corporations to fly under the radar, leading to slow-motion consolidation.
  • Relies heavily on the discretion of the Attorney General, meaning enforcement could weaken significantly if a less regulation-minded official is elected to that office.
  • While it allows for review, it does not explicitly ban for-profit ownership of essential healthcare infrastructure, leaving the door open for corporate extraction models if they can pass the review.
For Conservatives
  • Promotes market competition by preventing monopolies and consolidations that distort the free market and artificially inflate prices for consumers.
  • Increases transparency in the healthcare sector, ensuring that large corporate entities cannot hide financial instability that could burden the community or taxpayers later.
  • Focuses on fiscal responsibility by attempting to prevent the kind of financial mismanagement that led to recent hospital bankruptcies in the state.
  • Imposes significant government interference in private business contracts, violating the principles of corporate freedom and property rights by dictating who can sell or buy a business.
  • Reverses the burden of proof, requiring private companies to prove by "clear and convincing evidence" that their transaction is innocent, rather than the government proving it is harmful.
  • Creates a "user fee" tax on businesses by forcing the transacting parties to pay for the government's own consultants and experts during the review process.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 134 additions

SECTION 1. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby amended by adding thereto the following chapter: 23-106-1. Short title. This chapter shall be known and may be cited as the "Rhode Island Healthcare Transaction Oversight Act." 23-106-2. Legislative findings and intent.

(a) Findings. The general assembly finds that:

(1) Hospitals and health care providers deliver essential services, and sudden financial or operational failures can jeopardize the health, safety, and financial security of Rhode Islanders.

(2) Recent bankruptcy proceedings involving Roger Williams Medical Center and Our Lady of Fatima Hospital, as well as hospitals in other states formerly owned by Steward Health Care, demonstrate that certain corporate ownership structures, financial arrangements, and consolidation strategies can reduce access, increase costs, and destabilize the delivery of care.

(3) A growing number of states, working with policy experts including the National Academy for State Health Policy (NASHP), have enacted laws to better detect and prevent material risks to patients, taxpayers, and health care providers. NASHP has developed a model act incorporating best practices, upon which this chapter is based.

(4) It is the intent of the general assembly to ensure that changes in ownership or control of health care entities do not undermine financial sustainability, clinical independence, or the continued availability of essential health care services, and to provide the state with tools to act before such risks result in harm to patients or communities. 23-106-3. Definitions. As used in this chapter, the following terms shall have the following meanings, unless the context clearly indicates otherwise:

(1) "Affiliate" means an entity that directly, indirectly, or through one or more intermediaries controls, is controlled by, or is under common control with another entity.

(2) "Control" means the direct or indirect power through ownership, contractual agreement, or otherwise to direct the actions or policies of a healthcare entity.

(3) "Cost and market impact review ("CMIR")" means the review conducted by the attorney general and the department of health as outlined in this chapter.

(4) "Healthcare entity" means a provider, facility, provider organization, pharmacy benefit manager, carrier, or any parent, subsidiary, or affiliate thereof that offers healthcare services in Rhode Island.

(5) "Management services organization (MSO)" means an entity that contracts with a healthcare entity to perform administrative, financial, operational, or management services.

(6) "Material change transaction" means any of the following involving a healthcare entity that has total assets, annual revenues, or anticipated annual revenues of at least ten million dollars ($10,000,000), whether occurring during a single transaction or a series of related transactions within a five (5) year period:

(i) A corporate merger or consolidation including one or more healthcare entities;

(ii) An acquisition of one or more healthcare entities or of control thereof;

(iii) Any affiliation, joint venture, parent-subsidiary formation, or arrangement that results in a change of control;

(iv) The formation of partnerships, joint ventures, or MSOs for contracting, management, or governance purposes;

(v) Real estate sale or lease agreements involving material assets of a healthcare entity; or

(vi) The closure of a healthcare facility or significant reduction of an essential health service.

(7) "Private equity fund" means a publicly or non-publicly traded investment vehicle that pools capital for, and purchases direct or indirect ownership or controlling interests in, healthcare entities. 23-106-4. Notice of material change transaction.

(a) Before consummating a material change transaction, a healthcare entity shall submit written notice to the Rhode Island attorney general and the Rhode Island department of health not fewer than one hundred eighty (180) days prior to the proposed transaction date.

(b) The notice shall include all material documents and information necessary for review including, but not limited to, transaction agreements, organizational charts, financial statements, service plans, and prior transaction history. The attorney general or the department of health may determine additional documents or information required to complete the notice and may require supplementation.

(c) Within ten (10) days of acceptance of a complete notice, the attorney general and the department of health shall publish a summary of the proposed transaction on publicly accessible websites, excluding confidential information permitted to be withheld by law. 23-106-5. Preliminary review.

(a) Within thirty (30) days after receipt of a complete notice, the attorney general and the department of health shall:

(1) Approve the transaction;

(2) Approve with conditions; or

(3) Designate the transaction for comprehensive review.

(b) A transaction shall be designated for comprehensive review if the attorney general and the department of health determine the transaction is likely to significantly affect competition, prices, quality, access, workforce, or health equity in the Rhode Island healthcare market. 23-106-6. Comprehensive review process.

(a) Upon designation for comprehensive review, the attorney general and the department of health shall conduct one or more public hearings and complete a cost and market impact review (“CMIR”) within ninety (90) days after designation. The attorney general and the department of health may extend the ninety (90) day period if the transacting parties delay, fail to timely submit, or submit incomplete requested information.

(b) The CMIR shall examine factors including, but not limited to:

(1) Market share and competitive effects;

(2) Price and total cost of care trends;

(3) Impact on access and availability of services;

(4) Impact on quality and patient outcomes;

(5) Effects on underserved and at-risk populations;

(6) Impact on the healthcare workforce;

(7) Financial condition and prior conduct of the parties;

(8) Prior healthcare transactions involving the parties, including serial acquisitions of “roll- ups;”

(9) The impact of any real estate sale, lease, or sale-leaseback transaction on healthcare service delivery, cost, access, or financial sustainability; and

(10) Any other factor relevant to the public interest.

(c) The parties to the transaction shall bear the burden of demonstrating, by clear and convincing evidence, that the transaction will not result in a significant reduction in competition, increase in cost, or harm to access, quality, or equity. 23-106-7. Determination and conditions.

(a) After the CMIR, the attorney general and the department of health may:

(1) Approve the transaction;

(2) Approve with conditions; or

(3) Disapprove the transaction.

(b) Conditions may include, but are not limited to: requirements related to pricing, maintenance of essential services, reporting, workforce protections, or structural remedies such as divestiture or unwinding of components of the transaction.

(c) The attorney general and the department of health shall issue a written determination no later than sixty (60) days following completion of the CMIR.

(d) In making the determination, the attorney general and the department of health may consider any factors that they deem relevant, including, but not limited to:

(1) The likely impact, as described in the CMIR report where applicable, of the material change transaction on:

(i) Health care costs, prices, and affordability;

(ii) The availability or accessibility of health care services to the affected community;

(iii) Provider cost trends and containment of total state health care spending;

(iv) Access to services in medically underserved areas;

(v) Rectifying historical and contemporary factors contributing to a lack of health equities or access to services;

(vi) The functioning and competitiveness of the markets for health care and health insurance;

(vii) The potential effects of the transaction on health outcomes, quality, access, equity, or workforce for residents of this state;

(viii) The potential loss or change in access to essential services;

(ix) Whether the material change transaction is contrary to or violates any applicable law, including, without limitation, state antitrust laws, laws restricting the corporate practice of medicine, and consumer protection laws;

(x) Whether the benefits of the transaction are likely to outweigh the anticompetitive effects from the transaction; and

(xi) Whether the transaction is in the public interest. 23-106-8. Post-transaction monitoring. The attorney general and the department of health may require ongoing reporting and monitoring of approved transactions and may reopen review or impose additional conditions upon a finding of noncompliance or changed circumstances. 23-106-9. Cost recovery. The attorney general and the department of health may require reimbursement from the transaction parties for all actual and reasonable costs of review, including consultant and expert costs. 23-106-10. Enforcement. Failure to comply with any of the requirements in this chapter may result in civil penalties of $10,000 (ten thousand dollars) per day, in addition to any other remedies available under law.

SECTION 2. This act shall take effect upon passage.