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.

Substitute Senate GeneralBill Assembly File No.

48196 FebruaryPublic Session,Act 2026 Substitute Senate Bill No.

19626-22 Senate,AN MarchACT 17,CONCERNING 2026HOSPITAL TheSALE-LEASEBACK CommitteeTRANSACTIONS onAND PublicATTESTATIONS HealthCONCERNING reportedLACK throughOF SEN.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.

ANWAR of the 3rd Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING HOSPITAL SALE-LEASEBACK AGREEMENTS AND ATTESTATIONS CONCERNING LACK OF PRIVATE EQUITY CONTROL OF THE HOSPITAL AND CONTROL OF OR INTERFERENCE WITH THE PROFESSIONAL JUDGMENT AND CLINICAL DECISIONS OF CERTAIN HEALTH CARE PROVIDERS.

SectionSection1. 1.

(NEW)(NEW)(Effective (Effective from passage)passage)(a)As (a)used Asinthissectionand usedsection in2 of this section:act:

(1) "Hospital""Commissioner" hasmeans the sameCommissioner meaning as provided in section 19a-646 of thePublic generalHealth; statutes;

(2) "Main"Controlling campusinterest" ofmeans athe hospital"direct meansor indirect power to direct the licensedmanagement premisesand withinpolicies whichof the majoritymain campus of inpatienta bedshospital, arewhether located;through ownership of voting securities, contract or other means;

(3) "Real"Hospital" estate investment trust" has the same meaning as provided in 26section USC19a-646 856,of asthe amendedgeneral fromstatutes; time to time;

and (4) "Sale-leaseback"Main transaction"campus meansof a transactionhospital" inmeans whichthe alicensed hospitalpremises enterswithin intowhich anthe agreementmajority withof ainpatient realbeds estateare investmentlocated; trust to sSB196 / File No.

48(5) 1"Private sSB196equity Fileentity" means any entity that collects capital investments from individuals or entities and purchases, as a parent Substitute Senate Bill No.

48196 sellcompany andor leasethrough backanother hospital-ownedentity realthat propertythe thatentity constitutescompletely theor mainpartially campusowns or controls, a direct or indirect ownership share of a hospital.hospital;

(b)and On(6) and"Sale-leaseback aftertransaction" Octobermeans 1,a 2026,transaction noin hospitalwhich shalla enterhospital enters into an agreement with a sale-person leasebackor transaction.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.

(NEW) (Effective from passage) (a) AsNot usedlater than February 15, 2027, and annually thereafter, each hospital shall submit to the commissioner, in thisa section:form and manner prescribed by the commissioner, a document containing the following information:

(1) "Commissioner"An meansattestation 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 Commissionermain campus of Publica Health;hospital, including, but not limited to, any clinical, operational, managerial, financial or human resources matter;

and (2) "Hospital"An hasattestation that no private equity entity is permitted to direct a hospital's adoption of any policy or procedure that would interfere with the sameprofessional meaningjudgment asor providedclinical indecisions sectionof 19a-646duly authorized clinicians, including (A) the amount of time spent with patients or the generalnumber statutes;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 Public Act No.

and26-22 (3)2 "Private equity entity" means any entity that collects and pools capital investments from individuals or entities and purchases, as a parent company or through an entity that theprivate equity entity owns or controls, an ownership share of one3 orSubstitute moreSenate companies.Bill No.

(b)196 Not later than February 1, 2027, and annually thereafter, each hospital shall submit to the commissioner an attestation that (1) no private equity entity has a controlling interest in the hospital and that the entity holding the hospital's license maintains full governance control and authority over the hospital's assets and activities, including, but not limited to, all clinical, operational, managerial, financial and human resources matters, and (2) no private equity entity is permitted to influence 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 terminology or codes that are entered into the medical record, or (F) the appropriate diagnostic test for medical sSB196conditions. / File No.

48(b) 2The sSB196commissioner Filemay No.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.

48(c) conditions.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.

(c)If Thethe commissionerhospital shallfails developto submit such a uniformrequest templatenot tolater bethan usedten bybusiness hospitalsdays after such receipt, theordershallbedeemedafinalorderofthedepartment,effectiveupon theexpirationofsuchtenbusinessdays.Afterreceiptofatimelyrequest for purposesa ofhearing, complyingthe department shall set the matter down for a hearing as a contested case in accordance with the provisions of subsectionchapter (b)54 of thisthe section.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.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.

ThisGovernor's actAction: shall take effect as follows and shall amend the following sections:

SectionApproved 1May from27, passage2026 NewPublic sectionAct Sec.No.

226-22 from3 passageof New3 section PH Joint Favorable Subst.

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48 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

None Explanation The bill prohibits hospitals from entering sale-leaseback transactions and requires them to make annual attestations to the Department of Public Health concerning private equity control and influence, resulting in no fiscal impact to the state or municipalities.

sSB196 / File No.

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48 OLR Bill Analysis sSB 196 AN ACT CONCERNING HOSPITAL SALE-LEASEBACK AGREEMENTS AND ATTESTATIONS CONCERNING LACK OF PRIVATE EQUITY CONTROL OF THE HOSPITAL AND CONTROL OF OR INTERFERENCE WITH THE PROFESSIONAL JUDGMENT AND CLINICAL DECISIONS OF CERTAIN HEALTH CARE PROVIDERS.

SUMMARY This bill prohibits hospitals from entering into sale-leaseback transactions on or after October 1, 2026.

These are agreements with a real estate investment trust (REIT) for the hospital to sell and lease back the real property comprising its main campus.