Vermont’s H. 583 Restricts Private Equity and Hedge Funds with Ownership and Controlling Interests from Interfering with Clinical Judgment of Health Care Providers

On June 15, 2026, Vermont Governor Phil Scott signed H. 583—imposing significant restrictions on private equity groups, hedge funds, and entities they control, including management services organizations (MSOs).

The legislation prohibits interference with the clinical judgment of health care providers and establishes reporting requirements to an independent state agency regarding ownership and control.

The stated purpose of H. 583, which takes effect on July 1, 2026, is “to ensure that clinical decision making and treatment decisions are exclusively in the hands of health care providers and to safeguard against nonlicensed individuals or entities, such as private equity groups and hedge funds, exerting influence or control over health care delivery.”

The legislation is pared down from the version introduced by Democratic state Representatives Alyssa Black and Tiff Bluemle on January 6, 2026. Black reportedly has plans for additional legislation, including a potential ban on the friendly physician model.

We discuss the relevant provisions of H. 583 below.

Clinical Decision Making

Vermont’s existing law, 18 V.S.A. 9405(c), “Notice of acquisition,” simply requires hospitals to provide notice to the state attorney general at least 90 days or as soon as practicable prior to the effective date of a transaction through which the hospital will acquire a medical practice.

H. 583 adds a new Section 9772 to Title 18 (“Health”), limiting control over clinical decision making by prohibiting private equity groups or hedge funds involved in any manner with a health care facility doing business in the state—including as an investor in a health care facility or as an investor or owner of the assets of a health care facility—from doing any of the following:

1. Interfering with the judgment of health care providers in making health care decisions, including:

• Determining which diagnostic tests are appropriate for a particular condition;
• Determining the need for referrals to or consultation with another health care provider;
• Determining the patient's care plan, including the treatment options available to the patient; or
• Determining how many patients a health care provider shall see in any given period of time or how many hours a health care provider shall work.

2. Exercising control over, or delegating the power to perform, any of the following:

• Setting clinical standards or policies, including clinical staffing levels;
• Controlling or otherwise determining the content of patient medical records;
• Hiring or firing health care providers, clinical staff, or medical assistants based in whole or in part on clinical competency or proficiency;
• Setting the parameters under which a health care provider or facility shall enter into contractual relationships with third-party payers;
• Setting the prices, rates, or amounts the health care facility charges for a health care provider’s services;
• Setting the clinical competency or proficiency parameters under which a health care provider shall enter into contractual relationships with other health care providers for the delivery of health care services;
• Making decisions regarding the coding and billing of diagnoses and procedures for patient care services; or
• Selecting or approving the selection of medical equipment and medical supplies for the health care facility.

The legislation specifically states that private equity groups or hedge funds, or entities controlled directly in whole or in part by private equity groups or hedge funds, “shall not enter into an agreement or arrangement with a health care facility doing business in the state if the agreement or arrangement would enable” interference with the ability of health care providers to make health care decisions, as described in 1 above, or exercise control over or be delegated the powers as described in 2.

Who’s Covered

“Health care facility” in H. 583 means all persons or institutions, including mobile facilities, whether public or private, proprietary or not for profit, that offer diagnosis, treatment, inpatient, or ambulatory care to two or more unrelated persons, and the buildings in which those services are offered. The term does not apply to any institution operated by religious groups relying solely on spiritual means through prayer for healing, but includes:

(A) hospitals, including general hospitals, mental hospitals, chronic disease facilities, birthing centers, maternity hospitals, and psychiatric facilities including any hospital conducted, maintained, or operated by the State of Vermont, or its subdivisions, or a duly authorized agency thereof; and

(B) nursing homes, health maintenance organizations, home health agencies, outpatient diagnostic or therapy programs, kidney disease treatment centers, mental health agencies or centers, diagnostic imaging facilities, independent diagnostic laboratories, cardiac catheterization laboratories, radiation therapy facilities, or any inpatient or ambulatory surgical, diagnostic, or treatment center.

The organizational form of a health care facility does not affect the applicability of the law.

Ownership Disclosure Obligations

H. 583 imposes mandatory ownership disclosure obligations on both health care facilities and MSOs, which warrant careful attention.

Initial Reporting Deadline

An initial ownership disclosure report must be submitted to the Green Mountain Care Board (GMBC) on or before March 1, 2027. This deadline applies to any MSO in which a private equity group or hedge fund held an ownership or investment interest as of June 1, 2026. If no such interest existed as of that date, the MSO need only submit a written attestation confirming the absence of private equity or hedge fund ownership.

What Must Be Disclosed

The following information must be provided to the Green Mountain Care Board:

• The name, business address, and business identification numbers of each person or entity that holds an ownership or investment interest, a controlling interest, or a significant equity interest, or that qualifies as a significant equity investor;
• A current organizational chart reflecting the full business structure, including all affiliates, entities under common control, and subsidiaries; and the most recent fiscal year profit and loss statement and balance sheet.

Updates

Modifications to the private equity group’s or hedge fund’s ownership or investment interest in a health care facility or MSO must be reported.

Exemptions

Nursing homes, health care staffing companies, federally qualified health centers, and certain telehealth entities are exempt from the reporting requirements.

Public Disclosure

Stakeholders should be aware that most of the information reported under the law will become public record. The law expressly provides that ownership and control information submitted to the GMBC will not be considered confidential, proprietary, or a trade secret. The only carve-outs from public disclosure are individual health care providers’ Social Security numbers used as taxpayer identification numbers, personal contact information of individual providers, and the profit and loss statements and balance sheets submitted; the profit and loss statements and balance sheets are kept confidential, though they may be shared with the Office of the Health Care Advocate. Entities should factor this transparency requirement into their compliance planning, as their ownership structure and investor relationships will be publicly accessible once reported.

Civil penalties

A health care facility or MSO that fails to report the information as required may be liable to the state for civil penalties of not more than $50 per day, not to exceed a total of $10,000 per year. A material misrepresentation in a report may result in a civil penalty of up to $25,000 for each material misrepresentation.

Takeaways

Any MSO operating in Vermont must carefully review any management services agreement or administrative services agreement that it has in place with a healthcare facility to ensure the agreement does not grant unlawful authority over any of the clinical or operational matters listed above.

It is important to note that the law does not prohibit an MSO from providing nonclinical management, administrative, or business services to a health care facility. Under Section 9772(d)(2), such services are permissible provided that a licensed health care provider retains ultimate responsibility for and approval of all clinical and operational decisions. In other words, an MSO may assist and consult, but it may not exercise de facto control over the administrative, business, or clinical operations of the facility in any manner that affects a health care provider’s clinical decision making or the nature or quality of care delivered.

Perhaps most significantly, Section 9772(e) creates a private right of action—a development that should not be underestimated. This means that any individual health care provider who is aggrieved by a violation of this section may bring suit directly in Superior Court against the offending private equity group, hedge fund, or entity they control, seeking equitable relief, actual damages, reasonable costs, and attorney’s fees. This is a powerful enforcement mechanism that places litigation risk squarely in the hands of individual providers, meaning that exposure under this statute is not limited to regulatory enforcement by the state but could come from any physician or other licensed provider who believes their clinical autonomy has been compromised.

If you have questions, please reach out to the authors.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.