Saint Paul, Minnesota — A bill moving through the Minnesota Legislature would effectively shut private equity firms out of the state’s nursing home market if they’ve faced even a single lawsuit over the past ten years — a move that supporters say protects residents but that critics warn could choke off investment in an already struggling industry.
Under the proposed legislation, private equity companies, real estate investment trusts, and other entities that collect capital investments would be barred from buying or operating nursing homes in Minnesota if they were named in any legal case at any of their facilities within the last decade. The bill’s scope is broad — one lawsuit at one facility over ten years would be enough to lock out the entire entity statewide.
Rep. Liz Reyer, a DFL lawmaker from Eagan who co-sponsors the House version, is careful to frame it as a transparency and accountability measure rather than an outright ban. “I don’t say ‘let’s ban private equity,’” Reyer said in recent remarks. But her bill and a Senate companion version from Sen. Alice Mann would require facility operators to notify the state 120 days before any sale to a private equity buyer — and would mandate detailed disclosure of corporate ownership structures that currently don’t have to be reported at all.
The Ownership Blind Spot
Minnesota currently has no way to identify which of its 339 licensed skilled nursing facilities are private equity-owned. The state licenses facilities by ownership type — business, nonprofit, or public — but complex corporate structures used by private equity firms aren’t captured in that framework. The new legislation would close that gap.
Nationally, private equity firms own an estimated 13% of nursing homes, according to the Private Equity Stakeholder Project. Academic research has linked PE ownership to higher staff turnover, reduced staffing levels, and worse resident outcomes. A widely cited Wharton study found that private equity-owned nursing homes tend to accept lower-acuity patients as a cost strategy while still posting higher mortality rates for those they do admit.
That research has gained new urgency this year. A recent NYU study found that PE-owned nursing homes face ten times the bankruptcy risk and carry 11% higher resident mortality rates compared to non-PE facilities — figures that state lawmakers cited directly during committee hearings.
Industry Pushback
Not everyone is sold. Nursing home industry representatives argue that additional regulatory burdens will raise costs at facilities already operating on thin margins. Republicans on the House Human Services Finance and Policy Committee expressed concern that broad disqualification rules could push away investors at the worst possible time — when facilities need capital just to stay open.
Rep. Jeff Backer, the Republican co-chair of the committee, said he supports the bill’s transparency goals but questioned whether the lawsuit threshold is too sweeping. Under the current bill language, a single unresolved claim — regardless of its outcome or merit — at any facility in an operator’s portfolio could disqualify the entire company from doing business in Minnesota.
“Private equity’s sole purpose is to squeeze every single cent out of the function of whatever business they’ve glommed onto,” said Sen. Erin Maye Quade, DFL-Apple Valley, during a Senate Human Services Committee hearing this week. Industry representatives counter that blanket exclusions punish operators who have strong track records elsewhere.
Trend Across States
Minnesota isn’t acting alone. Similar legislation has passed in California, Massachusetts, and Oregon in recent years, driven by growing public and legislative concern over for-profit ownership of elder care. Whether the Minnesota bill advances out of committee this session remains unclear — neither the House nor Senate human services panels voted on the measure after debating it this week. But supporters say it has time to resurface before the session ends.
For nursing home operators across the country, the trajectory is hard to ignore. State-level scrutiny of private equity in long-term care is growing, and Minnesota’s proposal — if it passes — would set one of the most aggressive ownership bars in the nation.
