As state legislative sessions wind down, notable healthcare policy themes are emerging across the country. It is important to note which states introduced ambitious legislation, and even more so, which enacted it. State policy activity often builds on one another, with legislative changes in one state influencing those in another. In some instances, states can act as trendsetters by adopting new approaches not yet considered elsewhere, and whether these initiatives will influence legislative activity in other states remains to be seen. The following paragraphs highlight a few of the topics legislators focused on in 2026.
Current Healthcare Trends
Merger Review:
State lawmakers remain highly interested in mergers. While high-profile merger review and approval bills died in Colorado, Connecticut, Hawaii, and Washington, several other states have bills still in process. North Carolina's S532 and S978 require notice to state authorities before hospital entities can engage in any sale, transfer, or change of control of assets valued at more than $5 million. The bills would also establish extensive state review processes for major hospital transactions, including public hearings, evaluations of community impacts, and authority to challenge transactions that could harm competition or patient care. New York's A06056 would go even further by requiring that healthcare providers engaging in mergers be reviewed by the Public Health and Health Planning Council to determine whether the merger is equitable and favorable to public health goals. Pennsylvania legislators introduced multiple bills (SB708, HB1266, HB1460/SB322, and HB2115) that would require advance notice to the Attorney General, public hearings, ongoing monitoring, and state approval for various healthcare transactions, while Rhode Island's H7720/S2492 would authorize regulators to approve, conditionally approve, or deny healthcare transactions after evaluating their effects on competition, prices, quality, access, workforce issues, and health equity.
By contrast, merger notification legislation has experienced greater success. California enacted SB25, which requires businesses already filing Hart-Scott-Rodino notifications with federal regulators to provide copies to the California Attorney General under certain circumstances. Maine enacted LD2202, requiring notice to the Attorney General before qualifying healthcare mergers and acquisitions, while companion legislation, LD2201, would give the state notice and time to review any healthcare transactions involving private equity companies, hedge funds, or management services organizations (MSOs), with the intent of increasing transparency and oversight. The state would have the authority to approve, conditionally approve, or disapprove these transactions, after reviewing the potential impact on costs, access, quality, and equity, and can impose conditions or penalties for non-compliance. The legislation reflects growing concern among policymakers about the role of private equity in healthcare and the possibility that profit-driven ownership structures may prioritize financial returns at the expense of patients, providers, or local communities. Increased transparency and stricter regulations could help limit transactions that may increase healthcare costs. Washington enacted HB2548/SB6208, which requires hospital systems or provider organizations engaging in mergers, acquisitions, or contracting affiliations to notify the Attorney General at least sixty days prior. Additionally, the law would require the Secretary of State to revoke the nonprofit status of a healthcare entity if it converts to a for-profit or unincorporated entity through a material change transaction. These bills strengthen healthcare market standards in Washington and will likely ease the burden on healthcare affordability that citizens in Washington have been feeling. The regulation of hospitals' nonprofit status could lead to greater accountability for healthcare organizations that receive significant tax benefits in exchange for providing community benefits and serving the public interest. As policymakers increasingly scrutinize whether nonprofit hospitals are fulfilling these obligations, measures like Washington's may help ensure that tax-exempt status is reserved for organizations that continue to operate in a manner consistent with their charitable missions.
Facility Fees / Site neutral payments:
A facility fee is a charge that helps a facility cover overhead building maintenance costs, but overhead charges added onto bills for services performed in hospital-owned clinics or outpatient centers can make the same medical service cost significantly more when provided at these facilities. Site-neutral payment policies aim to ensure that insurers pay the same amount for the same healthcare service regardless of whether it is performed in a hospital outpatient department, a physician's office, or an ambulatory surgical center. Currently, several states have bills in progress that could address the additional cost of facility fees, and Virginia has enacted a bill creating site-neutral payments. Virginia's recently enacted HB184 creates site-neutral payment policies for certain outpatient or ambulatory healthcare services, requiring providers to accept payment that does not exceed 150% of Medicare rates. The enactment of HB184 likely reflects a continued state interest in controlling healthcare costs and increasing payment transparency for consumers.
Anticompetitive contract clauses:
States continue to express concern about contract provisions that could limit competition in healthcare markets. For example, antisteering clauses prevent the contracted parties from steering consumers toward competitors, and antitiering clauses restrict insurance companies from creating preferred tiers of hospitals or large medical providers and then assigning certain providers to a "nonpreferred tier." While there was a large influx of bills aimed at limiting or restricting anticompetitive contract clauses, nothing has been enacted to date. Notably, if it had passed, Mississippi's SB2752 would have prevented health insurers from discriminating against any licensed healthcare provider within the plan's service area who is willing to accept the insurer's terms and conditions. In Washington, HB1589/SB5588 would have required carriers to give providers a meaningful opportunity to engage in good-faith negotiations. The bill would have also prohibited "all-or-nothing" contract clauses. While those bills died, some states are still considering new legislation. New York's A05106/S07577 would prevent insurers from being required to include all members of a provider group in their network, place all group members in the same network tier, or include all group members in all their insurance products. Although no major legislation addressing anticompetitive contract clauses has been enacted in 2026, the volume of proposed legislation suggests that lawmakers remain concerned about contractual practices that may limit competition, restrict network design, or increase healthcare costs.
Noncompete clauses:
While many proposed bills restricting anticompetitive contract clauses have not passed, there has been an influx of enacted bills addressing noncompete clauses, which limit healthcare employees' employment options after leaving a particular employer. Firstly, Maine's LD2200 adds healthcare practitioners to the existing list of workers for whom noncompete agreements are prohibited. Similarly, Virginia's HB627/SB128 expands protections against noncompete agreements to include healthcare professionals. More broadly, Tennessee's HB1034/SB0995 generally prohibits noncompete agreements and renders restrictions on the right to practice professionally after termination of employment void and unenforceable. The bill specifically removes existing language that allowed noncompetes in healthcare. Washington's HB1155/SB5437 also generally prohibits noncompetes. Noncompete clauses are problematic in healthcare for a variety of reasons, including disrupting continuity of care, depressing provider wages, and creating barriers to competition in healthcare services. Recent federal efforts to ban noncompete clauses have failed, making it even more critical for state legislatures to have success on this issue. The enactment of some of these bills demonstrates a growing recognition by states that noncompete agreements can harm competition in healthcare.
Notable Legislation
With a high volume of healthcare legislation introduced during the session, several notable bills have been successfully enacted. The bills below are particularly noteworthy as they reflect emerging policy concerns and illustrate new ways that states are attempting to address these issues.
- Maryland HB277/SB139: This bill expands reasons why the Maryland Insurance Commissioner can deny, refuse to renew, suspend, or revoke the registration of a third-party administrator (TPA) to include violations of any part of the entire Insurance Article or another state law related to insurance, or if they knowingly fail to follow a regulation or order from the Commissioner. Maryland legislators acknowledge that there were enforcement gaps within the laws governing TPAs before the enactment of HB277/SB139. These new laws will strengthen consumer protection by broadening the Maryland Insurance Administration's power to impose penalties for wrongdoing by TPAs. The legislation also reflects a broader trend toward heightened scrutiny of TPAs nationwide. Increased transparency requirements and a growing number of lawsuits regarding the conduct of TPAs could continue prompting legislators to consider additional oversight.
- Alabama SB63: This bill creates rules for using artificial intelligence to make decisions about healthcare coverage, specifically for prior authorization requests, requiring that these decisions must consider the enrollee's medical history, unique clinical circumstances presented by the healthcare provider, and any additional clinical information in the enrollee's medical record. Additionally, any decision to deny, reduce, or delay a prior authorization request must ultimately be made by a licensed physician or qualified healthcare professional who evaluates the AI's recommendation. This bill marks the first law to regulate the use of AI in the coverage of services under a health benefit plan, and it helps ensure that AI cannot be the sole decision-maker in denying or reducing coverage.
- Tennessee SB 2040: The bill basically prevents PBMs or health insurance issuers from having ownership or control over any pharmacy in the state. The bill includes exceptions, including for hospital or health system pharmacies, and for employers that own pharmacies for their own employees. The bill doesn't take effect until 2027, and PBMs and insurance companies would have until July 1, 2028, to divest any pharmacy holdings. The bill is similar to legislation passed in Arkansas in 2025, which made Arkansas the first state to enact a structural approach to address concerns about PBM business practices. Although Arkansas was almost immediately sued after the law's enactment, it looks like this is gaining traction among states looking to rein in PBM practices.
Broader Healthcare Policy Trends
Beyond the regulatory issues discussed above, states have continued to address broader healthcare challenges. Across the country, lawmakers are seeing issues with healthcare affordability and access to care. Pharmaceutical costs remain a significant concern, with many states pursuing legislation to regulate pharmacy benefit managers (PBMs), increase pricing transparency, and limit patient out-of-pocket costs for medications such as insulin. Notably, prescription drug spending by private health plans was almost $152 billion in 2021, and health plans rely on PBMS to “process claims, develop pharmacy networks, and negotiate rebates from drug manufacturers.” The Government Accountability Office reviewed five states—Arkansas, California, Louisiana, Maine, and New York—that had enacted laws to regulate PBMs. Regulators in these states noted that regulating the PBMS was more effective when there was broad regulatory authority and strong enforcement of PBM laws.
Mandated health insurance coverage requirements also remain an active area of state legislative activity. In particular, fifteen states have expanded coverage requirements related to women's health, fertility treatment, and maternal care. However, there are exceptions to these mandates. For example, the "mandate to cover" laws sometimes apply only to certain insurers or impose monetary caps on the amount covered. Several states have enacted or considered legislation requiring health plans to cover infertility diagnosis and treatment, such as in vitro fertilization (IVF), while others have expanded access to fertility preservation services. States have also increasingly recognized the role of doulas and midwives in improving maternal health outcomes, leading to the adoption of coverage requirements through Medicaid programs and private health plans. At the same time, immunization coverage has become an increasingly polarizing issue. Since the end of the COVID-19 public health emergency, states have been making efforts to limit vaccine mandates. There will continue to be efforts by states to either limit or enforce vaccine exemptions as they decide whether they want to align with the federal government or not.
Conclusion
Overall, the 2026 state legislative session reflects a continued shift toward more active state regulation of healthcare markets, particularly in response to concerns over consolidation, cost growth, and access to care. While merger oversight and contracting reforms saw mixed success, states advanced transparency measures and targeted regulatory tools. States remain key drivers for healthcare reform amid limited federal action.
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