HOUSE BILL 552

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Joanne J. Ferrary and Elizabeth "Liz" Thomson and Sarah Silva and Marianna Anaya and Eleanor Chávez

 

 

 

 

AN ACT

RELATING TO HEALTH CARE; ENACTING THE MEDICAL CORPORATION ACCOUNTABILITY ACT; REQUIRING HOSPITALS TO DISCLOSE INFORMATION ON THEIR OWNERSHIP STRUCTURES; REQUIRING THE HEALTH CARE AUTHORITY TO REPORT TO THE LEGISLATURE ON INFORMATION GATHERED FROM HOSPITALS; PROHIBITING PRIVATE EQUITY FUNDS AND HEDGE FUNDS FROM INTERFERING WITH THE PROFESSIONAL JUDGMENT OF HEALTH CARE PROVIDERS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Medical Corporation Accountability Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Medical Corporation Accountability Act:

          A. "affiliation" means a business arrangement in which one person is directly or indirectly controlled by, is under common control with or controls another person;

          B. "authority" means the health care authority;

          C. "chief executive officer" means the highest-ranking person in a company or other institution that is ultimately responsible for making managerial decisions;

          D. "control" means the power to direct or cause the direction of the management and policies of a hospital, whether directly or indirectly, including through the ownership of voting securities, through licensing or franchise agreements or by contract other than a commercial contract for goods or nonmanagement services, unless the power is the result of an official position with or corporate office held by an individual;

          E. "health care provider" means a person qualified or licensed under state law to perform or provide health care services;

          F. "hedge fund" means a pool of funds by investors, including a pool of funds managed or controlled by private limited partnerships, if those investors or the management of that pool or private limited partnership employ investment strategies of any kind to earn a return on that pool of funds;

          G. "hospital" means a hospital licensed by the department of health or its successor health facility licensing agency, but "hospital" does not include a state university teaching hospital or a state-owned special hospital;

          H. "own" or "ownership" means:

                (1) direct or indirect possession of equity in the capital, stock or profits totaling more than five percent of an entity;

                (2) a controlling interest held by a private equity fund; or

                (3) a controlling interest held by a hedge fund;

          I. "person" means an individual, an association, an organization, a partnership, a firm, a syndicate, a trust, a corporation or another legal entity; and

          J. "private equity fund" means a publicly traded or nonpublicly traded company that collects capital investments from individuals or entities and purchases a direct or indirect ownership share or controlling interest of a health care entity.

     SECTION 3. [NEW MATERIAL] HOSPITAL REPORTING REQUIREMENTS.--

          A. Beginning January 1, 2026 and annually thereafter, each hospital in the state that receives local or state funding shall submit a report to the authority that provides information on:

                (1) the ownership structure of the hospital that includes specific information on:

                     (a) the person that owns the hospital;

                     (b) if applicable, any parent entities that own the entity that owns the hospital;

                     (c) the person that operates the hospital;

                     (d) any affiliation that the hospital has;

                     (e) the person that owns the land on which and facilities in which the hospital operates;

                     (f) any entities that the hospital owns; and

                     (g) whether any of the persons listed in this paragraph are a private equity fund or a hedge fund;

                (2) the salary ranges for every type of health care provider that is employed at the hospital; and

                (3) the total compensation of the chief executive officer of:

                     (a) the hospital;

                     (b) the owner of the hospital; and

                     (c) if applicable, the parent entity that owns the entity that owns the hospital.

          B. The authority shall promulgate rules to ensure that every hospital that receives local or state funding is held to the same reporting requirements and quality metrics.

          C. Beginning July 1, 2026 and annually thereafter, the authority shall provide a report to the legislature that summarizes the information collected from hospitals pursuant to the Medical Corporation Accountability Act.

     SECTION 4. [NEW MATERIAL] CORPORATE PRACTICE OF MEDICINE PROHIBITED.--

          A. A private equity fund or hedge fund involved in any manner with a hospital or health care provider in this state shall not:

                (1) interfere with the professional judgment of a health care provider in making health care decisions, including:

                     (a) determining what diagnostic tests are appropriate for a particular condition;

                     (b) determining the need for referrals to, or consultation with, another health care provider;

                     (c) determining treatment options available to the patient; or

                     (d) determining how many patients a health care provider shall see in a given period of time or how many hours a health care provider is required to work; or

                (2) exercise control over, or be delegated the power to:

                     (a) own or otherwise determine the content of patient medical records;

                     (b) select, hire or fire health care providers based, in whole or in part, on clinical competency or proficiency;

                     (c) set the parameters under which a health care provider is required to enter into contractual relationships with third-party payers;

                     (d) set the parameters under which a health care provider is required to enter into a contractual relationship with other health care providers for the delivery of care;

                     (e) make decisions regarding coding and billing procedures for patient care services; or

                     (f) approve the selection of medical equipment and medical supplies used by health care providers to provide services to patients.

          B. A private equity fund or hedge fund shall not enter into an agreement or arrangement with a health care provider doing business in this state if the agreement or arrangement would enable the private equity fund or hedge fund to exercise control over the health care provider in a manner that violates this section.

          C. Nothing in this section shall be construed to limit the liability of a hedge fund or private equity fund for the hedge fund's or private equity fund's independent acts of negligence.

- 6 -