Maine Health Care Transactions: New State Approvals Involving Some Private Equity, Hedge Funds, and MSOs

On April 13, 2026, Governor Janet Mills signed H.P. 1480 / L.D. 2201 (the Act), giving the Maine Department of Health and Human Services (the Department) approval authority over certain health care transactions involving private equity companies, hedge funds, and certain management services organizations (MSOs) connected to private equity or hedge fund ownership.

The Act was enacted in response to the Maine Commission to Evaluate Regulatory Review and Oversight of Health Care Transactions’ (the Commission) final report, issued in December 2025, which included 14 recommendations related to, among other things, Certificate of Need law and regulating substantial health care transactions and the role of private equity in hospitals.

The Act has three primary components:

1. Establishing a regulatory review process for health care transactions,
2. Establishing annual reporting obligations for health care entities, and
3. Requiring health care entities to publicly post transparency data on their website.

Health Care Transactions Review

Starting January 1, 2027, “health care entities” must file notice with the Department at least 180 days in advance of completing a proposed “material change transaction.” The law does not apply to all health care deals. Instead, a “material change transaction” is defined as “the acquisition of a majority interest or operational control of a health care entity within [Maine] occurring during a single transaction or in a series of related transactions by a private equity company, hedge fund or management services organization.”

Importantly, the Act defines “management services organization” narrowly to include only entities owned or controlled by a private equity company or hedge fund that contract with a health care provider or provider organization to perform management or administrative services when the provider or provider organization is also owned or controlled by the same private equity company or hedge fund. As a result, some private equity-backed friendly professional entity arrangements may fall within the law, particularly where a transaction gives the acquirer “operational control” over a Maine health care entity. However, the Act does not reach every MSO arrangement and does not apply to MSO structures that do not involve private equity or hedge funds.

The Act defines the following key terms. Notably, while “hedge fund” is not defined, the definition of “private equity company” is expansive.

• “Health care entity” means a health care provider, a health care facility, or a provider organization. The term excludes nursing facilities and health care providers or provider organizations that provide only dental services.
• “Health care provider” means a person, corporation, partnership, governmental unit, state institution, medical, or other entity qualified or licensed under state law to perform or provide health care services to persons in Maine. The Act defines “medical practice” to mean a corporate entity or partnership organized for the purpose of practicing medicine and permitted to practice medicine in the State, including partnerships, professional corporations, limited liability companies, and limited liability partnerships.
• “Management services organization” means any organization or entity owned or controlled by a private equity company or hedge fund that contracts with a health care provider or provider organization to perform management or administrative services relating to, supporting or facilitating the provision of health care services when the healthcare provider or provider organization is also owned or controlled by the same private equity company or hedge fund.
• “Private equity company” means an entity that collects capital investments from individuals or entities and purchases, as a parent entity or through another entity it completely or partially owns or controls, a direct or indirect ownership share of a health care provider, provider organization, or management services organization, except that “private equity company” does not include venture capital entities exclusively funding start-ups or other early-stage businesses.
• “Provider organization” means any corporation, partnership, business trust, association, or organized group of persons that is in the business of health care delivery or management, whether incorporated or not, that represents one or more health care providers in contracting with carriers for the payment of health care services. “Provider organization” includes, but is not limited to, physician organizations, physician-hospital organizations, independent practice associations, health care provider networks, accountable care organizations and management services organizations, and any other organization that contracts with carriers for payment for health care services.

Within 60 days after receiving a complete notice, the Department and the Office of Affordable Health Care (the Office) must notify the health care entity whether:

• The proposed transaction is approved;
• The proposed transaction is approved subject to specific, enumerated conditions; or
• The proposed transaction is subject to a comprehensive review.  

A comprehensive review is required if the transaction will result in a transfer of assets over $100 million, will lessen competition, or if the Department determines the transaction “is likely to have a material impact on the cost, quality or equity of or access to health care services in any region in” Maine. After review, the Department may approve, conditionally approve, or disapprove the transaction, and a transaction approved after undergoing a comprehensive review will have additional reporting requirements one, two and five years post-closing, and at future intervals determined by the Department.

After a material change transaction closes, the Attorney General can subpoena records to investigate and enforce the Act, and the Department can audit any entity subject to a conditional approval to monitor compliance. Violations may result in civil penalties of up to $10,000 per day. The Department may also charge the transacting parties the actual, reasonable, and direct costs of review and ongoing monitoring.

Health Care Entity Registration

By July 1, 2027, “health care entities” in Maine must file an initial report with the Maine Health Data Organization (MHDO), including their name, business address, location of operations, contact information, business identification numbers (TIN, NPI, CMS certification number), and a current organizational chart showing the business structure of the health care entity, including affiliates and subsidiaries. In addition, hospitals must report their affiliated health care providers and whether each provider is employed or contracted by the hospital, as well as their affiliated health care facilities. After the initial registration, health care entities must update the filing upon the completion of a material change transaction.

There are two exceptions to the registration requirement: (1) independent provider organizations without any ownership or control entities, consisting of six or fewer individual providers; and (2) “health care providers” or “provider organizations” that are owned or controlled by another “health care entity” that reported the subsidiary on its organizational chart in connection with its own registration.

Transparency Data

By January 1, 2029, MHDO will post on its public website information about health care entities that registered in the prior year. Social Security and business identification numbers are confidential and will not be included in the posting. MHDO will also include aggregated information about the entities that registered in the prior year.

Conclusion

The Act is a significant expansion of Maine’s oversight of health care transactions, aligning the state with the growing national trend of heightened state-level scrutiny  over private equity and similar investment activity in the health care sector. Health care entities and investors should begin assessing the impact of these requirements on current and planned transactions in Maine, in particular, ensuring that the long pre-closing lead time aligns with the transaction’s goals and objectives.

Foley is here to help you address the short and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group and Health Care & Life Sciences Sector with any questions.