California Health Care Quality and Affordability Act.

Assembly Member Bonta's legislation expands oversight of health care market transactions by broadening the scope of entities subject to California's Health Care Quality and Affordability Act. The bill adds new definitions and reporting requirements for management services organizations, hedge funds, and private equity groups involved in health care operations.

The Office of Health Care Affordability would gain authority to collect data from management services organizations that provide administrative support services like provider rate negotiation and revenue cycle management. These organizations must submit written notice before selling assets or transferring control of operations. The office would establish specific data reporting requirements to monitor their market impact.

The legislation introduces definitions for hedge funds and private equity groups operating in health care, excluding passive investors and traditional lenders. These entities must notify the office 90 days before completing transactions with health care providers. The bill maintains existing exemptions for transactions already reviewed by other state regulators, including the Department of Managed Health Care and Department of Insurance.

The office's expanded monitoring duties include analyzing cost trends, market consolidation, venture capital activity, and profit margins to assess impacts on competition, prices, and access. This builds upon its current role in setting cost targets and reviewing mergers. The office must make certain transaction notices public while maintaining its neutral analytical function of collecting and reporting market information.