On May 15, 2026, California’s Office of Health Care Affordability (OHCA) released proposed regulations implementing Assembly Bill 1415, legislation that became effective on January 1, 2026. The proposed rules would significantly expand California’s healthcare transaction review framework by broadening notice requirements, increasing oversight of private equity and management services organizations (MSOs), and imposing new disclosure obligations on transaction participants.
The regulations were presented to OHCA’s Health Care Affordability Board on May 27, 2026, and are expected to proceed through emergency rulemaking, with an anticipated effective date in August 2026.
Expanded Reporting Obligations
One of the most significant changes is the creation of a broader category of entities required to submit material change notices (MCNs).
Previously, reporting obligations primarily focused on healthcare entities themselves. Under the proposed regulations, filing requirements would also extend to a new category of “noticing entities,” including:
- Private equity groups
- Hedge funds
- Management services organizations (MSOs)
- Special purpose entities and acquisition vehicles created for healthcare transactions
This expansion is intended to prevent parties from avoiding regulatory review through intermediary entities or transaction structures. The proposed rules also apply existing revenue and asset thresholds to these newly covered entities.
New Transaction Categories Requiring Notice
The proposed regulations identify several additional categories of transactions that would trigger MCN filings.
Private Equity and Hedge Fund Transactions
A filing may be required when a private equity group or hedge fund:
- Acquires 5% or more of the assets, equity, debt, or liabilities of a qualifying healthcare entity or MSO; or
- Obtains operational control through governance rights, contractual arrangements, or similar mechanisms.
The relatively low 5% threshold signals OHCA’s intention to scrutinize even minority investments and early-stage transactions.
MSO Transactions
The proposed rules would also bring many MSO arrangements directly within OHCA’s review process, including transactions where:
- An MSO begins providing management or administrative services to a qualifying healthcare entity;
- An MSO serves multiple providers that collectively generate at least $10 million annually from California patients; or
- There is a transfer of governance, operational control, or at least 25% ownership of an MSO.
Healthcare Real Estate Sale-Leasebacks
The regulations would additionally require notice for certain sale-leaseback transactions involving healthcare real estate used to provide patient care when the purchaser is not the healthcare entity’s acquirer or direct parent organization.
Expanded Disclosure Requirements
The proposal substantially increases the information parties must provide to OHCA.
Required disclosures may include:
- Services provided by participating MSOs
- Geographic service areas
- Ownership interests in healthcare entities and MSOs
- Parent, subsidiary, and affiliate relationships
- Governing board membership
- Post-transaction governance and operational structures
- Ownership interests of 5% or greater
- Voting rights and decision-making authority
- Real estate ownership and lease arrangements involving healthcare facilities
Additional documentation requirements include organizational charts, sale-leaseback agreements, portfolio company information, and certain debt and capitalization details for private equity and hedge fund participants.
Confidentiality Clarifications
The proposed regulations also revise the rules governing confidential treatment of submitted information.
Among other changes, they would:
- Clarify what constitutes nonpublic information
- Extend confidentiality protections to Cost and Market Impact Review (CMIR) submissions
- Require more detailed support for confidentiality requests
- Allow parties to seek confidential treatment for information supplied by other transaction participants, provided appropriate supporting declarations are submitted.
Expanded Opportunities for Expedited Review
Current regulations permit expedited review in limited circumstances, such as severe financial distress or threats to healthcare service availability.
The proposed rules add a broader third category covering urgent situations outside the submitter’s control, including:
- Public health emergencies
- Natural disasters
- Legal or regulatory mandates
OHCA would retain discretion to determine whether expedited treatment is appropriate.
Additional CMIR Review Factors
OHCA is also proposing to expand the factors considered when determining whether a transaction warrants a Cost and Market Impact Review.
A new consideration would be whether a transaction involves a real estate investment trust (REIT) and whether the associated transaction terms could negatively affect the financial stability of a healthcare provider or reduce patient access to care.
The proposal further creates a formal remand process allowing parties to challenge CMIR determinations and submit new information for review. Under this framework, OHCA may reconsider a decision, waive the review requirement, or reaffirm the original determination after additional evaluation.
Looking Ahead
The proposed regulations represent a substantial expansion of California’s healthcare transaction oversight regime. By extending reporting requirements to private equity investors, hedge funds, MSOs, and affiliated entities, OHCA is broadening its ability to review ownership structures, management arrangements, and healthcare-related transactions that may previously have fallen outside the reporting framework.
If adopted, the rules are likely to have significant implications for healthcare providers, investors, management organizations, and transaction planners operating in California. Parties involved in healthcare transactions should carefully evaluate proposed structures, governance arrangements, and contractual relationships to determine whether additional reporting obligations or regulatory review requirements may apply.