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On October 11, 2025, Governor Newsom signed Assembly Bill 1415 ("AB 1415") into law. Effective January 1, 2026, AB 1415 expands the existing review process by the Office of Health Care Affordability ("OHCA") to require specific and direct filings from private equity ("PE") groups, hedge funds, and management services organizations ("MSOs") involved in certain health care transactions. See Ropes & Gray Alert.
Over the past month, there has been significant speculation as to whether the Governor would support or veto AB 1415 following his veto of AB 3129 in September 2024, which similarly aimed to increase oversight of PE health care investments (see Ropes & Gray Alert). AB 3129, however, was distinct from AB 1415 in that it would have newly granted the state Attorney General with specific approval rights over PE and hedge fund health care investments, rather than expanding OHCA's existing review authority over health care transactions. While Governor Newsom has yet to issue a formal statement regarding his approval of AB 1415, his signature of the bill further reaffirms his position that OHCA is the appropriate body to oversee proposed health care transactions in the state, and demonstrates his willingness to further expand OHCA's authority to increase scrutiny of PE and hedge fund investments specifically.
Governor Newsom's signature of AB 1415 comes amidst a broader legislative trend targeted at increasing scrutiny of PE investments in health care. Notably, earlier this month, Governor Newsom signed into law SB 351, which codifies the state's existing corporate practice of medicine ("CPOM") and corporate practice of dentistry ("CPOD") doctrines, and grants the state Attorney General formal enforcement authority over such doctrines.
With respect to implementation of AB 1415, many open questions remain, including whether PE groups, hedge funds, and MSOs will be subject to similar reporting requirements and timelines as health care entities, or whether OHCA will establish a separate reporting process for such entities. We expect that OHCA will issue clarifying regulations and/or guidance in the coming months, and update its online submission portal to reflect specific information requests for these types of entities. Health care investors—whether looking to enter the market, increase their holdings, or exit their investments in the state—should closely monitor these updates to ensure they are prepared to comply with these enhanced filing requirements in 2026. Until then, we expect all transactions currently subject to OHCA's filing requirements to proceed under OHCA's current review process.
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