Hartford, CT — Connecticut lawmakers are weighing new rules that would tighten oversight of nursing homes owned by private equity firms, as concerns grow over transparency and resident care.
The proposal, now before the legislature’s Aging Committee, would require nursing homes to provide detailed financial disclosures to the Department of Social Services starting Feb. 15, 2027. Facilities would need to identify all entities with beneficial ownership stakes, list directors and partners, and submit audited financial statements, debt records, and purchasing agreements.
Homes that fail to comply could face civil penalties of $1,000 per day.
Performance Bond Requirement
The bill would also require nursing homes with beneficial ownership entities to secure a performance bond — or similar financial guarantee — equal to 90 days of operating costs. The bond would remain in place throughout the facility’s license term.
In addition, owners would be barred from selling or transferring the property within five years of acquiring it without written approval from the state’s public health commissioner. Approval would hinge on proof that the sale benefits resident care or strengthens operational stability.
Supporters say the changes are needed to protect residents and ensure Medicaid dollars are used appropriately.
Senate President Pro Tem Martin Looney and Senate Majority Leader Bob Duff argued in written testimony that private equity ownership has been linked to reduced staffing and complex financial arrangements that can strain facility resources.
Social Services Commissioner Andrea Barton Reeves said the added disclosures would help the state monitor increasingly complicated ownership structures and safeguard public funds.
Industry Voices Concerns
Industry representatives, however, urged caution.
Mag Morelli, president of LeadingAge Connecticut and Rhode Island, said nonprofit providers share transparency goals but questioned the feasibility and cost of securing a bond equal to three months of operating expenses. She also suggested requiring notice of property sales rather than prohibiting them without approval.
Matthew Barrett, president of the Connecticut Association of Health Care Facilities, pointed to a more comprehensive oversight proposal introduced last year and encouraged lawmakers to use it as a starting point.
The debate comes as private equity investment in health care remains under scrutiny nationwide.
