The Evolving Oversight of For-Profit Health Care: The Massachusetts Initiative

Takeaway Points

Massachusetts law HB 5159 marks a paradigm shift in state-level health care oversight, moving from reactive crisis management to proactive, data-driven transparency. Following the Steward Health Care bankruptcy, this legislation provides managed care decision makers with a blueprint for stabilizing markets by regulating the influence of private equity, real estate investment trusts, and management services organizations. The law involves the following components:

• Enhanced oversight: Expands the material change notice to include private equity investments and sale-leaseback transactions, preventing hidden financial extraction.
• Operational transparency: Requires audited out-of-state financial statements and organizational charts, piercing the corporate veil often used by for-profit entities.
• Market stability: Grants state agencies the authority to delay or block repossessions of medical equipment and hospital closures, prioritizing patient continuity over creditor demands.
• National model: Offers a replicable legal framework for other states seeking to mitigate the risks of laissez-faire for-profit health care models.

On January 8, 2025, Massachusetts Gov Maura T. Healey signed into law An Act Enhancing the Market Review Process (House Bill [HB] 5159).¹ Triggered in large measure by Steward Health Care's recent filing for Chapter 11 bankruptcy, the largest private for-profit hospital operator in the US, HB 5159 went into effect on April 8, 2025.² A sweeping product of the Massachusetts state legislature, HB 5159 constitutes a critical upgrade of the state-mandated oversight of for-profit health care enterprises.³ The latter include but are not limited to pharmaceutical manufacturing companies, private equity companies, real estate investment trusts, management services organizations, and pharmacy benefit managers.³ As written, the law stands to increase the rigor of the oversight of any private state-based health care transactions by means of enhanced reporting requirements as well as through novel licensing rules.³ This commentary aims to review the leading elements of HB 5159 as well as assess the potential national implications thereof.

Among its leading decrees, HB 5159 expands the oversight of the state’s material change notice (MCN) and the cost and market impact review (CMIR) processes.³ As specified in the newly enacted law, both the MCN and the CMIR are to carefully weigh any “significant expansion in a provider or provider organization’s capacity.”³ Also to be scrutinized are equity investor–backed transactions that give rise to a “change of ownership or control of a provider or provider organization.”³ Note is also made of the inclusion of “significant acquisitions, sales or transfers of assets, including, but not limited to, real estate sale lease-back arrangements.”³ Moreover, the Massachusetts Health Policy Commission (MHPC) is to be granted the right to “require that any provider, provider organization, significant equity investor, or other party involved in a given transaction submit documents and information in connection with a notice of material change or a cost and market impact review under this section.”³

In an effort to further enhance the state oversight of for-profit health care enterprises, HB 5159 requires that provider organizations intent on embarking on their initial registration or on the annual renewal thereof, provide the MHPC with “organizational charts showing the ownership, governance and operational structure of the provider organization, including any clinical affiliations and community advisory board.”³ Additionally, provider organizations are to report the “number of affiliated health care professional full-time equivalents” as well as the “name and address of licensed facilities.”³ Note must also be made of the “name, address, and capacity of all other locations where the provider organization, or any of its affiliates, delivers health care services.”³ Most importantly, provider organizations are to afford the MHPC with a “comprehensive financial statement” replete with information on “parent entities, including their out-of-state operations, and corporate affiliates, including significant equity investors, health care real estate investment trusts, and management services organizations as applicable.”³ Just as critically, the MHPC is to be provided with information on “clinical quality, care coordination, and patient referral practices.”³

Apart from the aforementioned requirements, HB 5159 expands the information providers must report to the Center for Health Information and Analysis (CHIA).³ To this end, the law permits CHIA to request “audited financial statements of the parent organization’s out-of-state operations” replete with relevant information from “significant equity investors, health care real estate investment trusts and management services organizations.”³ Additionally, HB 5159 requires registered provider organizations to annually report on relevant “practice locations,” whether directly or through affiliates, with the state of the financial health thereof.³ Moreover, any of the information shared with CHIA can and will be made available to the Office of the Attorney General of Massachusetts for its review and action as required.³

Note is also made of the stand taken by HB 5159 with respect to the oversight pursued by the Department of Public Health (DPH). Leading this segment of HB 5159 is an outright preclusion of the DPH from granting or renewing a license, intent on establishing or maintaining “an acute-care hospital” when and if “the main campus of the acute-care hospital is leased from a health care real estate investment trust.”³ In addition, the DPH is to “establish rules, regulations, and practice standards for the licensing of office-based surgical centers…and urgent care centers.”³ It is the position of HB 5159 that “no contract between a facility and a lessor of medical equipment shall authorize the repossession of medical equipment or supplies unless the lessor provides a notice of financial delinquency to the department not less than 60 days prior to repossession of any medical equipment or supplies necessary for the provision of patient care.”³

Viewed broadly, HB 5159, a bill inspired by the Steward Health Care debacle, constitutes an effort to forestall the costly dissolution of a for-profit health care enterprise.¹ All but nonexistent in the US, for-profit health care was first enabled by the enactment of the Health Maintenance Organization Act of 1973 (Public Law 93-222).⁴ Then, and to a large extent now, the national and/or state-specific legal means intent on overseeing the financial well-being of for-profit health care enterprises were all but nonexistent. Viewed in this light, HB 5159 affords a legal framework that other states would do well to emulate. The absence of a state law along the lines of HB 5159 is nothing short of a recipe for a Steward Health Care–like financial disaster. Laissez-faire is no longer an option.

Author Affiliations: Brown University (EYA), Providence, RI; Harvard Law School and Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics, Harvard University (IGC), Cambridge, MA.

Source of Funding: None.

Author Disclosures: Professor Cohen is a member of the Bayer Bioethics Council, a bioethics adviser for Bexorg, and an adviser for World Class Health and Manhattan Neuroscience LLP. He recently concluded service as the chair of the ethics advisory board for Illumina. He has been retained as an expert in health privacy, gender-affirming care, and reproductive technology lawsuits.

Authorship Information: Concept and design (EYA, IGC); acquisition of data (EYA); analysis and interpretation of data (EYA); drafting of the manuscript (EYA, IGC); critical revision of the manuscript for important intellectual content (IGC); and supervision (EYA).

Address Correspondence to: Eli Y. Adashi, MD, MS, Brown University, 222 Richmond St, Providence, RI 02903. Email: Eli_Adashi@brown.edu.

REFERENCES

1. Governor Healey signs laws lowering health care costs and strengthening oversight. News release.
Commonwealth of Massachusetts. January 8, 2025. Accessed December 8, 2025. https://www.mass.gov/news/governor-healey-signs-laws-lowering-health-care-costs-and-strengthening-oversight

2. Unpacking Massachusetts’ Steward health system crisis. Harvard T.H. Chan School of Public Health. March 6, 2024. Accessed December 8, 2025. https://hsph.harvard.edu/news/unpacking-massachusetts-
steward-health-system-crisis/

3. An Act Enhancing the Market Review Process, HB 5159, 193rd Leg (Mass 2024). December 27, 2024. Accessed December 8, 2025. https://malegislature.gov/Bills/193/H5159

4. Health Maintenance Organization Act of 1973, Pub L No. 93-222, 87 Stat 914. December 29, 1973. Accessed December 8, 2025. https://www.govinfo.gov/content/pkg/STATUTE-87/pdf/STATUTE-87-Pg914.pdf