Connecticut tells private equity nursing home owners: Hands off resident care

Connecticut has enacted a law setting new limits on how private equity can operate inside nursing homes, making clear that financial backers cannot oversee choices involving residents' health, care, or safety.

Gov. Ned Lamont signed the measure last week.

What happened?

Beginning in February 2028, nursing homes in Connecticut must send the state an annual certification confirming that investment owners are not involved in decisions affecting residents' health, care, or safety, Connecticut Public Radio reported.

The measure also requires that, a year earlier — in February 2027 — each facility identify any person or entity that owns at least a 5% financial interest. The disclosure must include names, addresses, ownership percentages, and the home's purchase agreement.

Missing those disclosures could result in a $1,000 fine for each day the information is not provided.

The law also adds a financial backstop. As of July 2028, any nursing facility with an investment entity owning 5% or more must carry a bond or insurance policy worth at least 90 days of operating costs, according to Connecticut Public.

An additional mandate in the law requires the state Department of Social Services to examine differences in care quality between skilled nursing facilities with private equity backing and those without, and to report its findings to lawmakers by February 2028.

Why does it matter?

At its core, the legislation addresses concerns that owners focused on returns may cut expenses in ways that harm residents.

State Sen. Jan Hochadel, identified by Connecticut Public as a co-chair of the Aging Committee, said private equity control has harmed the industry: "What ends up happening is you see staff being cut, skimping on training, delays in repairs, supplies, things like that."

Fewer workers, delayed repairs, and tighter supply budgets can affect residents' health, increase stress on workers, and erode the quality of day-to-day care.

Greater ownership transparency could help regulators and families better understand who is profiting from a nursing home and who may be responsible if problems emerge.

If a private equity-backed facility collapses, the state could otherwise be left scrambling to protect residents and cover the costs.

The law is also intended to reduce the risk that taxpayers end up paying for corporate failures.

What are people saying?

Support for the tougher standards came from labor groups and advocates for older adults.

In testimony supporting the bill, SEIU District 1199 New England wrote: "Healthcare facilities, especially nursing homes, are not speculative assets. They are homes for vulnerable residents and workplaces for thousands of caregivers. Ownership structures must align with that reality."

Hochadel also pointed to the bankruptcy safeguard, saying: "When these types of nursing homes that are owned by private equity close … Connecticut isn't left holding the bag financially."

She added that the goal for older adults in care is simple: "I think this is one way that we can actually make sure that they are getting the best care that they possibly can."

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