Hospital ownership oversight bill signed into law, but lawmakers worry about compromises
By Daniel Montaño
April 21, 2025 at 12:32 PM MDT
Hospital mergers and acquisitions will get more scrutiny by state regulators thanks to a bill signed recently by Gov. Michelle Lujan Grisham.
The governor’s signature on House Bill 586 was the culmination of a story complete with plot twists and turns that began almost two years ago with the proposed, and now defunct, merger between Presbyterian Healthcare Services and Iowa-based UnityPoint Health.
State lawmakers’ first attempt in the 2025 legislative session to pass a bill providing oversight of hospital mergers, acquisitions and private equity takeovers failed in the face of overwhelming industry opposition. The sponsors then successfully scrambled to get a second — less controversial — bill passed before the session closed.
The bill was designed to solidify changes created in another bill passed during the 2024 session. Sponsored by State Sen. Katy Duhigg (D-Albuquerque) that bill provided temporary oversight of hospital ownership transactions. It was set to expire on July 1 and Duhigg called it a “Band-Aid.”.
“It has no enforcement, it has no transparency. It was the absolute bare minimum to have in place while we went through this stakeholder engagement process,” she said.
The earlier bill gave Duhigg and the other cosponsors time to get input from industry leaders, patient advocates and the general public. They spent a year developing legislation aimed at safeguarding New Mexicans’ health care permanently.
Prior to the 2024 law, Duhigg said New Mexico was one of only 11 states that had no oversight on these sorts of transactions.
Private equity has been expanding its presence in health care in general in recent years, and New Mexico was named most at risk of private equity takeovers by the Private Equity Stakeholder Project.
Moreover, the non-partisan Legislative Finance Committee said 38% of New Mexico’s health care facilities are already owned by private equity firms.
Studies from Harvard Medical School and the Stanford Law Review among others, have shown that when profit is the main focus in health care, patient outcomes can suffer, prices can rise and services or staff can be cut.
That’s why Duhgg said she worked so hard on this year’s Senate BIll 14, but opponents of the bill, most of whom were industry representatives, said it went too far in its regulation and oversight measures.
The bill was struck down on a narrow 5-4 vote in the Senate Judiciary Committee, with Senators Joseph Cervantes (D-Doña Ana) and Antonio Maestas (D-Bernalillo) breaking party lines to vote with their Republican colleagues against the legislation. Part of what swayed them was testimony from opponents who turned out in force, like President of the New Mexico Hospital Association, Troy Clark.
“Unfortunately it was so broad and so expansive and invasive that it was going to be detrimental to health care,” Clark said. “It would hurt our ability to recruit and retain additional physicians. It would limit the ability of capital to come in to fund maintain operations
Duhigg said she did speak with industry leaders about the bill at great length prior to its introduction.
“I think, frankly, the hospitals want to be able to do what they want to do, and be able to decide for themselves whether profit is the priority, or patient care and provider protection,” she said.
House Majority Leader Reena Szczepanski (D-Santa Fe) sprang into action with the defeat of SB14.
Because the previous year’s legislation was always meant to be temporary, she said there was a huge push to find a way to get any legislation passed.
“To face the prospect of another year with nothing in place caused a lot of concern from House and Senate leadership, a lot of concern from the governor's office, certainly from the community advocates,” Szczepanski said. “Then it was, ‘let's figure out what we can get through and make it as robust as possible.’”
SB14 was defeated with only two weeks left in the legislative session, and Szczepanski once again met with stakeholders, industry leaders and House and Senate leadership.
“All of those conversations had to happen again, but very rapid-fire,” she said.
She crafted a new bill, House BIll 586, based on 2024’s temporary bill, but beefed up with more oversight, full enforcement and some whistleblower protections.
HB586 is an example of what legislators call Emergency Bills — legislation that is filed before the session’s introduction cut off date, titled with vague and generalized language and left mostly blank. Szczepanski said Emergency Bills give legislation a second life if it ends up stuck in committee or otherwise struck down.
“It was a really useful way for us to continue the conversation on oversight of mergers and acquisitions for hospitals,” she said. “I did not want that conversation to be over. And we keep working on legislation up until the gavel comes down on the last day.”
HB586 managed to get passed by all necessary committees and both chambers in a mere four working days, leaving two days to spare before the session’s end.
But Szczepanski and Duhigg had to make concessions to garner support, and HB586 does not contain nearly as much detail on oversight and regulation as SB14. For example, Duhigg said she wishes the definitions around the language used in the SB14 would have made it through to the final bill.
“We were really trying to make sure that we weren't leaving loopholes that could be exploited for people to essentially avoid oversight,” Duhigg said.
Moreover, SB14 contained permanent conditions on transactions that stopped new owners from raising prices too high, and cutting too many staff positions or services. In the final bill those restrictions expire after three years.
Duhigg said she also wished there were more whistleblower protections, which in the final bill are limited to concerns around ownership transactions, as compared to overall protections.
“If a health care provider sees something that they believe is putting their patient in danger,” she said, “they should be able to tell people they need to tell, to get that properly addressed without fear of losing their job because of it.”
Duhigg said she’s also concerned about the amount of data companies will be allowed to keep behind closed doors.
“There's very little transparency now, the things that are submitted are almost entirely confidential,” she said.
But Troy Clark of the hospital association said those sorts of compromises are what changed the association's stance from opposing SB14 to being neutral on the final bill.
He said SB14 unnecessarily divulged information not related to the change of ownership, but rather the daily operation of a hospital.
“There's some level of information that the communities would like to know as a result of a transaction. It's not usually people's personnel files, and contracted rates. What they want to know is what services are going to be maintained or might change,” Clark said. “So when we discussed with Rep. Szczepanski what it would take (to get a bill passed), we came to a very clear list of these are the things that would be opened, to be shared with the public, to be aware everything else has to stay confidential, either for competitive reasons, for privacy reasons, or personnel reasons.”
He said his organization isn’t completely against regulation, as long as it’s not too disruptive to individual hospitals’ choices in daily operations.
“Any industry from a business side, likes the ability to move without regulation and oversight, but we also understand that there are things that have happened in the health care industry in other parts of the country that we don't want to have happen here,” he said. “So, we had expressed our willingness, as long as it was not detrimental to the access to care.”
Both Duhigg and Szczepanski said there is room to add on to the bill in future sessions if it’s deemed necessary after it’s been in use.
“If we start seeing that there are a bunch of transactions that we all would have expected to be reviewed under this oversight mechanism, and they're not, because they are able to exploit loopholes to avoid that oversight,” Duhigg said, “then I think hopefully there will be the political will to come in and address things like that.”
But even with the concessions, Duhigg said she’s relieved HB586 got passed.
“I am glad that we will have something in place. Do we have what I think we need to have in place to really thoroughly protect New Mexicans and New Mexico providers? No,” she said. “But it's better than nothing, and hopefully it gives us something to build on in the future
The final bill will go into effect when last year’s temporary bill expires on July 1.
Support for this coverage comes from the W.K. Kellogg Foundation.
The governor’s signature on House Bill 586 was the culmination of a story complete with plot twists and turns that began almost two years ago with the proposed, and now defunct, merger between Presbyterian Healthcare Services and Iowa-based UnityPoint Health.
State lawmakers’ first attempt in the 2025 legislative session to pass a bill providing oversight of hospital mergers, acquisitions and private equity takeovers failed in the face of overwhelming industry opposition. The sponsors then successfully scrambled to get a second — less controversial — bill passed before the session closed.
The bill was designed to solidify changes created in another bill passed during the 2024 session. Sponsored by State Sen. Katy Duhigg (D-Albuquerque) that bill provided temporary oversight of hospital ownership transactions. It was set to expire on July 1 and Duhigg called it a “Band-Aid.”.
“It has no enforcement, it has no transparency. It was the absolute bare minimum to have in place while we went through this stakeholder engagement process,” she said.
The earlier bill gave Duhigg and the other cosponsors time to get input from industry leaders, patient advocates and the general public. They spent a year developing legislation aimed at safeguarding New Mexicans’ health care permanently.
Prior to the 2024 law, Duhigg said New Mexico was one of only 11 states that had no oversight on these sorts of transactions.
Private equity has been expanding its presence in health care in general in recent years, and New Mexico was named most at risk of private equity takeovers by the Private Equity Stakeholder Project.
Moreover, the non-partisan Legislative Finance Committee said 38% of New Mexico’s health care facilities are already owned by private equity firms.
Studies from Harvard Medical School and the Stanford Law Review among others, have shown that when profit is the main focus in health care, patient outcomes can suffer, prices can rise and services or staff can be cut.
That’s why Duhgg said she worked so hard on this year’s Senate BIll 14, but opponents of the bill, most of whom were industry representatives, said it went too far in its regulation and oversight measures.
The bill was struck down on a narrow 5-4 vote in the Senate Judiciary Committee, with Senators Joseph Cervantes (D-Doña Ana) and Antonio Maestas (D-Bernalillo) breaking party lines to vote with their Republican colleagues against the legislation. Part of what swayed them was testimony from opponents who turned out in force, like President of the New Mexico Hospital Association, Troy Clark.
“Unfortunately it was so broad and so expansive and invasive that it was going to be detrimental to health care,” Clark said. “It would hurt our ability to recruit and retain additional physicians. It would limit the ability of capital to come in to fund maintain operations
Duhigg said she did speak with industry leaders about the bill at great length prior to its introduction.
“I think, frankly, the hospitals want to be able to do what they want to do, and be able to decide for themselves whether profit is the priority, or patient care and provider protection,” she said.
House Majority Leader Reena Szczepanski (D-Santa Fe) sprang into action with the defeat of SB14.
Because the previous year’s legislation was always meant to be temporary, she said there was a huge push to find a way to get any legislation passed.
“To face the prospect of another year with nothing in place caused a lot of concern from House and Senate leadership, a lot of concern from the governor's office, certainly from the community advocates,” Szczepanski said. “Then it was, ‘let's figure out what we can get through and make it as robust as possible.’”
SB14 was defeated with only two weeks left in the legislative session, and Szczepanski once again met with stakeholders, industry leaders and House and Senate leadership.
“All of those conversations had to happen again, but very rapid-fire,” she said.
She crafted a new bill, House BIll 586, based on 2024’s temporary bill, but beefed up with more oversight, full enforcement and some whistleblower protections.
HB586 is an example of what legislators call Emergency Bills — legislation that is filed before the session’s introduction cut off date, titled with vague and generalized language and left mostly blank. Szczepanski said Emergency Bills give legislation a second life if it ends up stuck in committee or otherwise struck down.
“It was a really useful way for us to continue the conversation on oversight of mergers and acquisitions for hospitals,” she said. “I did not want that conversation to be over. And we keep working on legislation up until the gavel comes down on the last day.”
HB586 managed to get passed by all necessary committees and both chambers in a mere four working days, leaving two days to spare before the session’s end.
But Szczepanski and Duhigg had to make concessions to garner support, and HB586 does not contain nearly as much detail on oversight and regulation as SB14. For example, Duhigg said she wishes the definitions around the language used in the SB14 would have made it through to the final bill.
“We were really trying to make sure that we weren't leaving loopholes that could be exploited for people to essentially avoid oversight,” Duhigg said.
Moreover, SB14 contained permanent conditions on transactions that stopped new owners from raising prices too high, and cutting too many staff positions or services. In the final bill those restrictions expire after three years.
Duhigg said she also wished there were more whistleblower protections, which in the final bill are limited to concerns around ownership transactions, as compared to overall protections.
“If a health care provider sees something that they believe is putting their patient in danger,” she said, “they should be able to tell people they need to tell, to get that properly addressed without fear of losing their job because of it.”
Duhigg said she’s also concerned about the amount of data companies will be allowed to keep behind closed doors.
“There's very little transparency now, the things that are submitted are almost entirely confidential,” she said.
But Troy Clark of the hospital association said those sorts of compromises are what changed the association's stance from opposing SB14 to being neutral on the final bill.
He said SB14 unnecessarily divulged information not related to the change of ownership, but rather the daily operation of a hospital.
“There's some level of information that the communities would like to know as a result of a transaction. It's not usually people's personnel files, and contracted rates. What they want to know is what services are going to be maintained or might change,” Clark said. “So when we discussed with Rep. Szczepanski what it would take (to get a bill passed), we came to a very clear list of these are the things that would be opened, to be shared with the public, to be aware everything else has to stay confidential, either for competitive reasons, for privacy reasons, or personnel reasons.”
He said his organization isn’t completely against regulation, as long as it’s not too disruptive to individual hospitals’ choices in daily operations.
“Any industry from a business side, likes the ability to move without regulation and oversight, but we also understand that there are things that have happened in the health care industry in other parts of the country that we don't want to have happen here,” he said. “So, we had expressed our willingness, as long as it was not detrimental to the access to care.”
Both Duhigg and Szczepanski said there is room to add on to the bill in future sessions if it’s deemed necessary after it’s been in use.
“If we start seeing that there are a bunch of transactions that we all would have expected to be reviewed under this oversight mechanism, and they're not, because they are able to exploit loopholes to avoid that oversight,” Duhigg said, “then I think hopefully there will be the political will to come in and address things like that.”
But even with the concessions, Duhigg said she’s relieved HB586 got passed.
“I am glad that we will have something in place. Do we have what I think we need to have in place to really thoroughly protect New Mexicans and New Mexico providers? No,” she said. “But it's better than nothing, and hopefully it gives us something to build on in the future
The final bill will go into effect when last year’s temporary bill expires on July 1.
Support for this coverage comes from the W.K. Kellogg Foundation.