Pennsylvania House Bill Takes Aim at Private Equity in Health Care
Both the CentePending legislation in the Pennsylvania General Assembly seeks to limit the impact of private equity on health care in Pennsylvania. House Bill 1460, titled the “Health System Protection Act,” passed with bipartisan support through the House of Representatives on June 10, 2025, by a vote of 121-82.
Representative Lisa Borowski, the prime sponsor of the bill, circulated a co-sponsorship memo to colleagues dated Jan. 13, 2025, where she stated, “data shows that mergers and acquisitions often precede consolidation and discontinuation of services, closure of units, or even entire hospitals – especially when private equity is involved.” Borowski argued that while the Pennsylvania Office of Attorney General can currently review hospital mergers on a limited basis, the office is missing necessary tools to protect the interests of Pennsylvania patients.
HB 1460 would allow the Pennsylvania Attorney General to review mergers and acquisitions of health care entities involving private equity companies and other for-profit entities, and block the transactions if they are “against the public interest.” Specifically, the bill allows the Attorney General to review:
- The sale, transfer, lease or other encumbrance of a material amount of a health care entity’s assets, including real property, employment groups, emergency departments or other units
- A change in control of a health care entity
- A capital distribution or similar reduction of a health care entity’s equity capital by a material amount or the incursion of an obligation that commits the health care entity to making a capital distribution or similar reduction of equity by a material amount
Covered transactions are considered to be against the public interest when they result in any of the following:
- A health care leaseback agreement
- An unfair method of competition in or unfairly affecting health care commerce or an unfair or deceptive act or practice in or affecting health care commerce
- A significant increase in costs for health care payers, purchasers or consumers
- A significant reduction in:
- Competition
- The quality of care available within the health care entity’s market territory
- Access to or availability of health care services for payers, purchasers or consumers
- Access to care in a rural, low-income or disadvantaged community
HB 1460 prohibits covered transactions against the public interest unless the Attorney General determines “there is no feasible alternative to prevent a health care entity’s closure or greater loss of health care services in the absence of the covered transaction.” Before entering into a covered transaction, health care entities would have to file proper notice and either get written determination from the Attorney General that the transaction is not against the public interest or observe a 60-day waiting period. During the waiting period, which may be extended, the Attorney General may conduct a public hearing to hear comments from interested parties.
The Attorney General, in consultation with the Pennsylvania Department of Health, must determine that a transaction is against the public interest by clear and convincing evidence. If the Attorney General makes such a determination, then they may file an action to enjoin the transaction or enter into a voluntary agreement with the parties that mitigates the aspects of the transaction that are against the public interest.
A previous similar version of the bill, HB 2344, passed through the House during the 2023-24 legislative session with bipartisan support, 114-88, but failed to reach a full Senate vote. That bill expired at the end of the session.
HB 1460 is currently in the Senate Institutional Sustainability & Innovation Committee awaiting further action. We will continue to monitor this pending legislation in the coming months and provide updates as appropriate.
