Comment Period Closes on California OHCA’s Proposed Emergency Regulations Expanding Private Equity, Hedge Fund, and MSO Reporting in Health Care Transactions

On September 11, 2026, California’s Office of Health Care Affordability (OHCA) Department of Health Care Access and Information (HCAI) released advance notification of proposed emergency regulatory action (the “Proposed Emergency Regulations”) regarding material change health care transactions.

The Proposed Emergency Regulations—subsequently submitted to the state’s Office of Administrative Law (OAL)—further implement California’s AB 1415[1] respecting state oversight of private equity (PE) groups, hedge funds, and management services organizations (MSOs) operating in the health care space. As EBG wrote at the time of signing in 2025, AB 1415, which took effect January 1, 2026, represented a significant change for PE groups, hedge funds, and MSOs in the state by expanding OHCA’s notice requirements.

What You Need to Know

• California’s OHCA has released Proposed Emergency Regulations to implement AB 1415.
• The Proposed Emergency Regulations clarify AB 1415 health care transaction notice requirements with respect to PE groups, hedge funds, and MSOs. Under AB 1415, these entities are now subject to OHCA notice requirements and review under certain conditions.
• OHCA filed the Proposed Emergency Regulations with the state OAL; they were posted on September 22. Stakeholders had five calendar days to review the Proposed Regulations and submit comments. That period has closed.

AB 1415 and Finding of Emergency

As HCAI noted in its detailed Finding of Emergency, also published on September 11, 2026, AB 1415 amended California’s Health Care Quality and Affordability Act[2] to add the following to the list of entities required to file material change notices of agreements or transactions with OHCA: PE groups; hedge funds; MSOs; newly created business entities; and entities that own, operate, or control a provider. Previously, only “health care entities” (i.e., payers, providers, or integrated delivery systems) were required to provide OHCA with written notice of agreements or transactions, including the sale or transfer of a material amount of their assets.

The new AB 1415 requires a “noticing entity” to provide written notice of agreements or transactions between it and a health care entity or MSO or an entity that owns or controls the health care entity or MSO. It also requires an MSO to provide OHCA with written notice of any agreement or transaction between the MSO and any other entity. It is worth noting that OHCA, established in 2022 within HCAI, is tasked with (1) slowing health care spending; (2) promoting high value system performance; (3) assessing market consolidation by collecting, analyzing, and reporting data on total health care expenditures; and (4) enforcing spending targets set by its Health Care Affordability Board. HCAI/OHCA in the Finding of Emergency deems “these emergency regulations necessary for the immediate preservation of public health and safety and general welfare of the citizens of California.”

Circumstances Requiring Filing

When effective, these emergency regulations would amend Section 94735 of the California Code of Regulations to add transactions that:

• Involve a PE group or hedge fund that
  • Results in the PE group or hedge fund holding 10 percent or more of the assets, equity, debt, or liabilities of a health care entity or MSO. This includes groups of investors, PE groups, or hedge funds investing collectively to hold 10% of the assets or equity of the health care entity; or
  • Results in the acquisition of assets, equity, debts, or liabilities of a health care entity or MSO with an agreement where the PE group or hedge fund has the authority to undertake several actions.
• Involve MSOs providing management and administrative support services for a health care entity; or for two or more providers that collectively generate $10 million in annual California-derived revenue; or involve a transfer of control, responsibility, or governance.
• Result in the sale or transfer of real estate where a provider or fully integrated delivery system provides health care services, under certain conditions.

Lifecycle of Emergency Regulations

PE groups, hedge funds, and MSOs operating in California will be particularly affected by these emergency regulations. If unimpeded, the Proposed Regulations will become effective for five years as emergency regulations, during which time, HCAI will proceed with a regular rulemaking action including a comment period. For further questions related to this article, please reach out to the authors.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.

Endnotes

[1] Cal. Stats. 2025, ch. 641

[2] CA HLTH &S § 127500 et seq.

* * * *

If you have questions, please reach out to the author(s).

The Health Law Advisor blog is currently edited by Emily Chi Fogler.