California’s OHCA Finalizes Sweeping Revisions to Health Care Transaction Review Regulations: What Dealmakers Need to Know

On October 2, 2026, the California Office of Administrative Law approved proposed emergency regulations originally issued in May 2026 by California’s Office of Health Care Affordability (OHCA). See our prior discussion here. Effective November 2, 2026, the final emergency regulations (the Emergency Regulations) implement Assembly Bill (AB) 1415 representing the most significant overhaul of California’s health care transaction review framework since adoption of the material change transaction notice (MCN) requirement in April 2024.

The revisions expand OHCA’s regulatory review in several ways: new categories of entities must file; new transaction structures trigger review; and disclosure obligations are substantially enhanced. For health care executives, in-house counsel, private equity (PE) sponsors, management services organizations (MSOs), and transactional advisors, the Emergency Regulations should be carefully reviewed, especially for transactions expected to close in late 2026 or early 2027. Below, we summarize the key changes and offer practical guidance for those engaged in California health care transactions.

New Definitions

Effective January 1, 2026, AB 1415 created new OHCA reporting obligations for “noticing entities” including PE groups, hedge funds, MSOs, and a newly defined category of entities created for the purpose of entering into agreements or transactions with a health care entity. The Emergency Regulations incorporate these definitions and noticing entity requirements while also introducing several new defined terms including:

• “Subject of a transaction” means a transaction resulting in the transfer of a health care entity’s assets, control, responsibility, governance, or operations, in whole or in part, to one or more entities; and
• “Submitter” means both health care and noticing entities required to submit MCNs.

Expanded Transaction Triggers

As an initial matter, under the Emergency Regulations, a health care entity with at least $10 million in California-derived annual revenue or California assets must now file when the health care entity transacts with a noticing entity. Additionally:

Private Equity Group and Hedge Fund Transactions. Transactions involving a PE group or hedge fund resulting in a 10% or greater interest in the assets, equity, debt, or liabilities of a health care entity or MSO now trigger filing. This includes groups of investors, PE groups, or hedge funds investing collectively to reach the 10% threshold. OHCA raised the threshold from a 5% threshold proposed in its May 2026 proposed regulations, stating that 10% better aligns with the federal Hart-Scott-Rodino passive-investment exclusion.

This provision also captures transactions affording PE groups or hedge funds with the authority to appoint or replace leadership, veto decisions, alter operations, purchase or leaseback real property, cause the entity to incur indebtedness, manage or operate the entity, charge management or administrative fees, or direct the spending of capital or net income. Importantly, such “control-rights” triggers have no minimum ownership percentage.

MSO Transactions. A filing is required in the event an MSO provides management and administrative support services for a qualifying health care entity meeting the $25 million revenue or asset threshold, provides management or administrative services for two or more providers that collectively generate $10 million or more in California revenue, or when a transaction results in a transfer of control, responsibility, or governance of a health care entity.

OHCA also extended its ten-year lookback for serial transactions to MSOs. Related transactions involving the same MSOs, and an acquirer’s prior acquisitions of MSOs providing the same or related services, are now combined with the proposed transaction when OHCA applies its revenue, asset, and control thresholds. As a result, a series of add-on deals, for example, each falling below the thresholds on their own can still trigger a filing.

Sale-and-Leaseback Transactions. A submission is required when a transaction results in the sale or transfer of real estate where a provider delivers health care services, if the property goes to an entity other than the entity acquiring the health care entity (or its direct parent) and the surviving health care entity will be required to lease or pay rent for the real estate. The trigger applies whether or not the provider is currently operating or has a pending or suspended license.

This provision brings real estate investor-driven transactions squarely within OHCA’s review framework. OHCA also broadened a cost and market impact review (CMIR) screening factor from transactions involving a real estate investment trust to those involving a real estate investment trust or other investing party.

Enhanced Disclosure Requirements

The Emergency Regulations substantially expand what must be included in a notice:

• PE Groups and Hedge Funds: PE groups and hedge funds must identify all health care entities and MSOs directly or indirectly owned, controlled, or financed by the participating asset managers and the funds they manage. The regulations do not define “directly or indirectly” or set any de minimis threshold.
• Leverage: PE groups and hedge funds must document debt-to-enterprise-value or debt-to-equity ratios, the source of any debt, and the post-recapitalization debt ratio for any acquired entity.
• MSOs: MSOs must list all health care entities to which they provide management and administrative support services.
• Executive Compensation: Filers must document options, compensation, or other financial incentives for officers, directors, and others with management authority, including compensation contingent on closing.
• Ownership and Real Estate: Filers must provide organizational charts up to the ultimate parent that show all 5%-or-greater owners. They must also disclose any leaseback or property agreements and post-transaction changes to real estate where services are provided.
• Board Materials: Filers must include documents or presentations shared with investors or the governing body.

Confidentiality Provisions

The Emergency Regulations move OHCA’s confidentiality rules into a new standalone section. Information submitted with a notice or CMIR is a public record unless the submitter designates it as nonpublic or confidential and OHCA accepts that designation. To qualify for confidentiality, submitters must justify the request, including the grounds for confidentiality, how long it is needed, and how the information has been kept confidential. Marked-confidential stock purchase agreements, compensation documents, contract rates, transaction valuation documentation, and unredacted résumés are deemed confidential. A submitter may also seek confidentiality for another party’s information by including a declaration from that party.

Takeaways

The Emergency Regulations re-confirm a significant expansion of California’s MCN framework by broadening filing obligations, increasing scrutiny of private investment, MSO arrangements, and certain real property transactions, and enhancing transparency through more detailed disclosures. To adhere to the Emergency Regulations, parties to a transaction should confer, identify the appropriate submitters, and coordinate submissions with input from OHCA as appropriate. Ultimately, advanced planning is essential to preserve confidentiality of supporting materials when available and to effectively predict and manage OHCA’s MCN review timelines.

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