California Proposes Emergency Rules for PE, MSO Healthcare Deals
California’s Office of Health Care Affordability has proposed emergency regulations that would significantly expand transaction notification and disclosure requirements for private equity groups and management services organizations.
California’s Office of Health Care Affordability (OHCA) has advanced emergency regulations that significantly broaden reporting obligations for healthcare transactions involving private equity groups and management services organizations (MSOs). The proposed rules, implementing Assembly Bill 1415, expand the state's existing 90-day pre-closing notice requirement. For sophisticated counsel and clients, these changes introduce substantial new deal friction. OHCA can order a "cost and market impact review" that may significantly delay closings. The proposal also mandates extensive new disclosures, including organizational charts up to the ultimate parent and details of management's deal-contingent financial incentives. The regulations apply broadly, capturing MSO changes of control where a PE fund acquires as little as a 10% interest, as well as certain sales of healthcare-related real estate. The Office of Administrative Law is expected to decide on the emergency action by late September 2026, after a very brief public comment period. If approved, the regulations will be effective for five years, impacting deal timelines and strategy in California's healthcare market.