Draft CMIR regulations draw extensive comment on private equity, MSOs and confidentiality

Assistant Chief Counsel Heather Hoganson summarized public comment on the draft CMIR regulations prepared to implement AB 1415. The draft rules prompted detailed submissions and oral remarks, with recurring themes including (1) how to avoid duplicative filings and permit cross‑referencing of information submitted to other regulators, (2) where to draw thresholds and look‑back windows for serial transactions (staff proposed a 10‑year look‑back), (3) how to define and when to require filings from management service organizations (MSOs), private equity investors and REITs, and (4) confidentiality rules for commercial and contract documents.

Hoganson said OCA is considering adjustments — codifying existing cross‑referencing practices, defining filing thresholds tied to market influence, and retaining a substantive look‑back (staff noted 10 years to capture serial arrangements). "Sometimes things don't emerge until you've had a few extra years," she said in explaining the staff preference for the longer look‑back. On private equity, staff noted the legislative record citing evidence that private equity ownership can affect prices and quality, and said a 10% voting threshold would align with Hart‑Scott‑Rodino standards while a 25% majority threshold could miss arrangements capable of exerting control.

Provider groups asked for clearer exemptions for routine intra‑system transactions and urged protection for attorney‑client privileged materials and commercially sensitive information. Consumer and advocacy groups urged broad capture of private‑equity and portfolio disclosures and narrow confidentiality carve‑outs to preserve public transparency. Staff plans to integrate the comments into revised regulatory text and move into the emergency rulemaking process with a 5‑day public comment window at the Office of Administrative Law.