Members of the California Assembly voted 42-16 Thursday to approve a bill that could create new reporting and review rules for private equity firms involved in health care deals.
The bill would add private equity firms, hedge funds and management services organizations to the list of entities that must file health care deal disclosure reports with the California Office of Health Care Affordability, according to an Assembly staff analysis.
The office already can review health care deals involving private equity firms, but the bill would give the office the ability to collect data directly from the private equity firms and hedge funds.
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What it means: If bill supporters are right, it could help employer health plan sponsors by preserving competition in the California health care market, by keeping private equity firms from buying up many or all of the provider practices in a market, shutting many of the practices down and driving up prices.
If opponents are right, the bill could ultimately hurt the supply of health care services, by forcing struggling, cash-strapped providers to keep going without adequate capital and, eventually, shut down.
The bill's prospects are uncertain. The California Legislature passed a private equity health care deal review bill in 2024, and Gov. Gavin Newsom vetoed it.
Related: California governor vetoes PBM bill and private equity deal review bill
The earlier bill would have given the state attorney general the ability to review private equity health care deals.
Newsom said at the time that he was vetoing the bill because the Office of Health Care Affordability already had the ability to review the deals.
The Assembly also voted, by a voice vote, to approve a bill that would require a prior authorization for care provided by a state-regulated health plan to stay in effect for at least one year.
If adopted, the provision would apply to employers' fully insured health plans but not to their self-insured health plans.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
