In a significant move reshaping the healthcare transaction landscape, Massachusetts enacted a new healthcare reform law in 2025 (House Bill No. 5159). The law is aimed at strengthening regulatory oversight of mergers and acquisitions, affiliations, joint ventures, management services, and other transactions. This new legislation, entitled An Act Enhancing the Market Review Process (the “Act”), comes in response to growing concerns about rising healthcare costs and the potential for adverse effects on care quality and patient access resulting from consolidation and for-profit equity investment. Because healthcare industry participants in Massachusetts are frequent targets for investment and the State is viewed as a leader in setting health policy, healthcare providers, investors, and attorneys throughout the United States should take notice of how similar laws are developing in other parts of the country.
Top Ten Column: The Changing Legal Landscape in the Hub of Healthcare and Its National Implications
The Act establishes a number of policy changes that impact healthcare market participants, such as new facility licensure categories for urgent care and office-based surgery providers, revised liability standards under the Massachusetts False Claims Act for certain parties, certain restrictions on REIT involvement with hospitals, and new criteria for Determination of Need review. However, at the core of the Act is an expanded role for the Commonwealth’s independent healthcare transactions review agency known as the Massachusetts Health Policy Commission (“HPC”). For over a decade, parties to certain healthcare transactions in Massachusetts have been required to file pre-transaction public notices to the HPC if those transactions qualify as reportable “Material Changes,” thereby allowing the agency to review them for market impacts, such as costs and access to care. With the new Act, the HPC now has greater authority to review and, in some cases, delay the advancement of transactions in order to conduct market impact evaluations based on a wider range of factors. The Act also broadens the scope of transactions constituting a reportable Material Change, capturing a greater variety of deals and financial relationships. It also requires certain parties to such Material Change transactions, including private equity investors, to provide more detailed financial and operational disclosures.
Massachusetts is not alone in requiring state agencies to closely review healthcare transactions, the players involved, and anticipated market impacts. Rather, the Act reflects a growing national trend toward heightened oversight in healthcare more broadly. At least twelve states require a form of pre-closing healthcare transaction agency review reminiscent of the federal Hart–Scott–Rodino Antitrust Improvements Act of 1976, with additional states considering similar legislation in light of growing private equity involvement and other for-profit investment in healthcare over the past decade. Attorneys advising clients in Massachusetts, and in other jurisdictions with similar transaction review agencies, must take proactive steps to assess deal structures and timelines in light of these new laws and regulatory trends. Legal due diligence will need to account for expanded compliance requirements, increased public disclosure of transaction details, and the possibility of intervention by state regulators. Early engagement with counsel and regulatory bodies – and having documentation of cost-saving or quality-enhancing goals, as well as community impact assessments -- will be essential tools for navigating new oversight waters.
Massachusetts leads the way in healthcare delivery and innovation in the United States, thanks to its world-renowned medical institutions, expansive provider networks, and thriving life sciences and technology sectors. Its well-developed market infrastructure will continue to make the Commonwealth an appealing destination for business growth and investment, including through acquisitions, joint-venture transactions, and other strategic affiliations. As Massachusetts likewise solidifies its position as a national leader in health policy, healthcare investors and other stakeholders should monitor implementation of the Act and similar state laws closely and adapt their transaction strategies to meet with the evolving priorities of state and federal regulators—chief among them, cost containment, access to care, and market transparency. Success in this emerging legal landscape will hinge on a deep understanding of its implications and a commitment to strategic decision-making that prioritizes regulatory alignment.
Submitted by Verrill