Committee approves AB 1415 to expand Office of Healthcare Affordability merger reporting to private equity and MSOs

Assemblymember Bonta presented AB 1415 and accepted committee amendments that narrowed the bill to focus on transparency: adding authority for the Office of Healthcare Affordability (OCA) to collect information from private equity and hedge funds involved in health‑care transactions, and requiring management service organizations (MSOs) to report to OCA in merger reviews.

The author and supporters said private equity accounted for a large share of recent health‑care deals and that MSOs—companies providing nonclinical services such as billing and IT—can materially affect costs and care. Katie Van Dynes of Health Access California said private equity acquisitions “can lead to price increases, dangerous impacts on quality, and risks for access to care,” and cited recent examples of private‑equity‑owned systems that filed for bankruptcy.

Hospitals and health systems opposed the bill in part, saying OCA has not yet shown where its existing authority is insufficient and warning that expanded review could delay transactions needed to rescue distressed providers. Hospital groups also requested clarification that health systems themselves would not be swept into the MSO definition; several senators asked the author to clarify the MSO definition and to preserve expedited review processes for distressed facilities. The author said the intent is not to include health systems as MSOs and noted OCA can expedite reviews in distressed‑hospital circumstances.

Action and next steps: The committee voted to pass AB 1415 as amended and referred it to the Committee on Appropriations. During committee discussion members praised the author’s negotiations with stakeholders but asked for continued work on MSO definitions and safeguards for timely reviews in distress situations.