California Bill Aims to Increase Oversight Over Health Care Acquisitions

Troutman Pepper

[co-author: Stephanie Kozol]*

California Attorney General (AG) Rob Bonta and Assembly Speaker Pro Tempore Jim Wood have introduced new legislation addressing private equity health care deals. The bill, A.B. 3129, would grant the AG oversight over private equity and hedge fund acquisitions of health care facilities.

Specifically, the bill would require private equity companies and hedge funds to provide written notice to the AG 90 days before an acquisition. The AG would then have the authority to extend this period to grant, deny, or impose conditions on the acquisition if it is deemed to have anticompetitive effects or creates issues with public access to health care.

The bill comes on the heels of a recent study out of the Petris Center at the School of Public Health at the University of California, Berkeley, which found an increase in private equity acquisitions of physician practices and associated price increases. However, critics of the bill argue that it could limit partnership opportunities and increase pressure on independent practices.

Why This Matters

The legislation comes amid growing bipartisan concerns about the ownership on health care costs, quality, and accessibility. The legislation also aligns with national calls for investigations into the effects of private equity on health care, with several senators demanding probes into private equity-owned hospitals.

Additional relevant articles on State Attorneys General offices in the health care space:

*Senior Government Relations Manager

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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