California Health Care Quality and Affordability Act.

Assembly Member Bonta's legislation expands California's health care market oversight by broadening the scope of entities subject to transaction reporting requirements under the Health Care Quality and Affordability Act. The bill adds management services organizations, health systems, and certain financial entities to the definition of regulated health care entities while updating requirements for monitoring ownership changes and market consolidation.

The measure requires private equity groups, hedge funds, and newly created business entities to notify the Office of Health Care Affordability 90 days before completing transactions that would transfer control or assets of health care entities. This extends existing notification mandates that currently apply only to direct health care providers and payers. The office must review these notifications to analyze potential impacts on market competition, costs, and access.

The legislation refines key definitions to capture more complex ownership structures in health care markets. It defines health systems as entities under common control that include hospital systems, physician organizations, or health plans. Management services organizations are characterized as entities providing administrative support like billing and network development without directly delivering care. The bill also establishes specific parameters for hedge funds while excluding certain passive investors and debt financing arrangements.

Certain transactions remain exempt from notification requirements, including those already reviewed by the Department of Managed Health Care, Department of Insurance, or Attorney General. The bill maintains existing exemptions for county acquisitions aimed at preserving access and for transactions involving nonprofit corporations under separate oversight. The Office of Health Care Affordability retains authority to establish thresholds and fees for material transactions requiring review.