California Adopts Regulations Expanding Healthcare Transaction Review

On October 2, 2026, the California Office of Administrative Law approved emergency regulations from the Office of Health Care Affordability (OHCA) implementing AB 1415. California passed AB 1415 in 2025 to extend OHCA healthcare transaction notice requirements to private equity groups, hedge funds, management services organizations (MSOs), and other “noticing entities” (see our prior Update here). The regulations are effective immediately and bring additional parties and smaller transactions within OHCA’s review — while increasing filing and production requirements. This follows increasing state and federal activity focusing on healthcare transactions (see our prior Update on a federal proposal here and Illinois’ expansion here).

Among key changes:

Who Must File. The regulations add new classes of entities that are required to notify OHCA of transactions, including the following:

1. a private equity group or hedge fund “that is a party to any aspect of” certain transactions with an MSO (defined below) or “health care entity”
2. an MSO that is party to certain transactions and meets one of the following requirements:
   a. owned by a hospital and has a “physician organization” as a client;
   b. employs or engages with a physician-owner of a “physician organization”;
   c. “shares directors, officers, investors, or other natural persons with the ability to exercise control with respect to a health care entity”; or
   d. is affiliated with two of the following: (i) payer, (ii) two or more “physician organizations,” and (iii) a hospital
3. a “newly created business entity created for the purpose of” entering into specific transactions with “health care entities” or MSOs.
4. “[a]n entity that owns, operates, or controls a provider, regardless of whether the provider is currently operating, providing health care services, or has a pending or suspended license” that is the party to certain transactions with “health care entities” or MSOs

Transactions Requiring Filing. The regulations create more classes of transactions requiring reporting:

1. Transactions involving private equity groups and hedge funds. Reporting is now required for transactions that result in these groups’ controlling 10% of the equity or debt interests of certain “health care entities” or gaining certain corporate governance rights (e.g., appointing leadership, veto rights, purchasing real property, charging management fees).
2. Transactions involving MSOs. Reporting is now required for MSOs entering into management arrangements with certain “health care entities” or other types of providers as well as obtaining control of a “health care entity.”
3. Sale-leaseback transactions. Certain sale-leasebacks require reporting.

Expansion of Notice Requirements and Confidentiality. Notices require additional information, including regarding names of all affiliates, parents, and subsidiaries of the submitter, the names of the members of the submitter’s governing body, the scope of MSO services and clients, other MSOs or “health care entities” owned by the private equity group or hedge fund, real estate holdings and their owners, quality of care ratings (e.g., Medicare star ratings), and anticipated cost savings and service expansions. Parties are also required to submit potentially sensitive internal documentation presented to their governing body regarding the transaction as well as any options, compensation, or financial incentive of managerial or executive staff of a “health care entity.” Private equity groups and hedge funds are required to submit postclosing debt-to-equity ratios or similar measures of MSOs or “health care entities.”

These expanded disclosures come with a new confidentiality section that permits parties to request confidentiality for certain documents and provisions that deem certain documents confidential.

Review Process. OHCA has added additional process to Cost and Market Impact Reviews (CMIRs), such as response logs. In addition, certain real estate transactions are specifically targeted as potential requiring CMIRs.

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The regulation takes effect immediately. Sponsors and healthcare platforms should closely review their current or proposed transactions for compliance with these new requirements.