Jeremy’s Perspective
AB 1415 represents the California Legislature’s renewed effort to regulate private equity and hedge fund activity in healthcare by expanding the Office of Health Care Affordability’s (OHCA) jurisdiction and transaction-notice requirements. Unlike last year’s vetoed AB 3129, it does not give the Attorney General veto power but seeks greater transparency and oversight within the existing OHCA framework.
Source
Following is an excerpt from the California Society for Healthcare Attorneys newsletter, The Weekly, “If at First You Don’t Succeed…: Renewed Efforts to Regulate Private Equity in Healthcare,” by Jeremy Avila:
The battle to address the role of private equity in healthcare continues in the State Legislature, this time in the form of AB 1415. Like last year’s AB 3129, which Governor Newsom vetoed, AB 1415 seeks to bring certain private equity and hedge fund activities under the review of California’s executive branch. This time, however, the Legislature proposes doing so by working within the already established framework of OHCA and expanding OHCA’s jurisdiction.
Readers may recall last year’s AB 3129 proposed broad oversight of private equity and hedge fund investments in healthcare. Specifically, AB 3129 aimed to regulate private equity and hedge fund acquisitions or change-of-control in health care facilities, provider groups, and other entities. The bill proposed achieving this in part through a review and approval process overseen by the California Attorney General, including the authority to approve, deny, or conditionally approve proposed transactions provided the parties conformed to proposed changes by the Attorney General. In other words, AB 3129 contemplated empowering the Attorney General with strong oversight authority to amend or even stop proposed healthcare transactions involving private equity and hedge funds.
Despite passage by both houses of the Legislature, the Governor vetoed AB 3129, indicating concerns over duplication of the role of the Office of Health Care Affordability (OHCA) in healthcare transaction review. Earlier this year, however, the Legislature tried again, this time in the form of AB 1415, seeking to carry on—in some way—where AB 3129 was stopped short.
AB 1415 proposes to once again regulate private equity and hedge fund activities in the healthcare space, but this time proposes to do so through the existing OHCA framework. The bill proposes to do this first by amending Health & Safety Code section 127500.2 to include broad definitions for the terms “hedge fund,” “management services organization,” and “private equity.” The inclusion of these definitions effectively expands OHCA’s jurisdiction to ensure these newly defined entities will be subject to its transaction-notice and review processes.
This is where AB 1415’s second major change would come in. In addition to expanding OHCA’s jurisdiction to cover new entities in the transaction-notice process, AB 1415 proposes amendments to that process that would cast a wider net and more stringent reporting requirements. Under the proposed language, the transaction-notice requirements would expand to mandate disclosures not just by the noticing entity but also by the healthcare entity or management services organization involved in the transaction, or any entity that owns or controls them, as well as disclosures by a management services organization in any transaction or agreement between it and any other entity.
In other words, AB 1415 can be viewed and described as a compromise bill. It marks another attempt by the Legislature to bring transparency to healthcare transactions by regulating entities still outside of OHCA’s purview and expands the reach of the disclosure process required by OHCA, but it also does not include the veto power or ability to block transactions that AB 3129 would have created. It also does not subject stakeholders to review by another executive branch entity (i.e., the Attorney General). Instead, the bill appears to respond to the Governor’s stated concerns and proposes consolidating and expanding OHCA’s authority rather than creating a separate track for these kinds of transactions.
The Legislature enrolled and presented the bill to the Governor on September 15, 2025, where it waits for either the Governor’s signature or veto. If signed into law, it will mark a significant change for private equity groups, hedge funds, and MSOs engaged in transactions in California, and will expand OHCA’s already important role in the healthcare industry.
