New OHCA Regulations Take Effect November 2: What’s Changing for ASC Transactions, and What Isn’t

CASA MEMBER UPDATE | REGULATORY

CASA MEMBER UPDATE | REGULATORY

AB 1415 Is Law: What's Changing for ASC Transactions, and What Isn't

Assembly Bill 1415, signed into law in October 2025, expanded California's review of health care transactions to private equity groups, hedge funds, management services organizations (MSOs) and other investors. On October 2, 2026, the state approved the regulations that put AB 1415 into practice. They take effect November 2, 2026.

These changes build on a review program the Office of Health Care Affordability (OHCA) has run since April 1, 2024. Many requirements members will hear about are not new. What is new is who must file and which deals now count. Below, CASA lays out what was already in place, what has changed, and what it means for ASCs.

Three layers, three dates

The program now rests on three layers. Each built on the one before it.

Layer	What it did	In effect
SB 184 (2022) and original OHCA regulations, 22 CCR §97431 et seq.	Created OHCA and the material change notice and Cost and Market Impact Review (CMIR) process for "health care entities" (payers, providers, fully integrated delivery systems)	Transactions closing on or after April 1, 2024
AB 1415 (2025), amending Health & Safety Code §127507	Added "noticing entities" (private equity groups, hedge funds, MSOs, newly created acquisition entities, entities that own or control a provider) as filers in their own right	January 1, 2026
AB 1415 implementing regulations (amended 22 CCR §§97431–97442)	Set the specific thresholds, triggers and added disclosures for noticing entities	Approved by OAL October 2, 2026; effective November 2, 2026

OHCA's own regulations page lists November 2, 2026 as the effective date, and that is the date we are relying on. Noticing entities have had a statutory duty to give OHCA written notice since January 1, 2026, regardless.

Already in place before AB 1415 (not new)

These requirements have applied since April 1, 2024, and AB 1415 left them in place.

ASCs are already covered. ASCs are providers and can be "health care entities" under OHCA. OHCA has already reviewed ASC deals, including AmSurg's sale to Ascension (25 California ASCs) and AmSurg's 51% acquisition of Euclid Endoscopy Center. OHCA waived a CMIR in both.
90-day advance notice. A filer must notify OHCA at least 90 days before the transaction closes. AB 1415 did not change this.
Revenue and asset thresholds for health care entities. A health care entity files if it has at least $25 million in annual California revenue or assets; or at least $10 million and is dealing with a $25 million entity; or provides services in a primary care shortage area. These are unchanged.
Eight original transaction triggers. Examples: a deal worth $25 million or more; a deal that raises a party's California revenue by $10 million or 20%; a transfer of 25% or more of assets; a change of control (including 25% of board voting power or veto-type rights); and serial acquisitions over 10 years.
Review timeline. Once a notice is complete, OHCA has 45 days to waive a CMIR or 60 days to start one, both subject to tolling. A full CMIR then runs 90 days, with possible extension and tolling. The clock starts only when the notice is complete.
Core disclosures. Transaction agreements, valuation documentation, three years of financial statements, organizational charts, patients served by county, expected staffing changes, and documents and presentations supporting the filer's claimed benefits were already required (see the disclosure table below).
Ordinary-course exclusion. Transactions in the usual and regular course of business, and internal restructurings among commonly controlled entities, were already excluded.

What is actually new

From AB 1415 (statute, effective January 1, 2026):

Private equity groups, hedge funds, MSOs, newly created acquisition entities, and entities that own or control a provider became "noticing entities" with their own duty to file. Before, only the health care entity side filed.
The statute defined MSO narrowly: an entity providing management and administrative support that includes provider rate negotiation, revenue cycle management, or both.
It directed OHCA to set MSO data reporting rules. OHCA has not issued those yet.

From the regulations (effective November 2, 2026):

Private equity and hedge fund trigger. A filing is required if the deal leaves the investor holding 10% or more of a qualifying entity's assets, equity, debt or liabilities. A smaller stake also triggers a filing if it comes with any of eight control rights, such as appointing leadership, veto power, approving debt, charging fees, or managing the entity.
MSO triggers. A filing is required when a qualifying MSO begins serving a $25 million health care entity, serves two or more providers that together earn $10 million in California, or is part of a change of control. Only MSOs meeting one of four tests must file (for example, hospital-owned with physician clients, or affiliated with at least two of a payer, physician organizations, or a hospital).
Real estate (sale-leaseback) trigger. A filing is required when property where care is delivered goes to an entity other than the buyer or its direct parent, and the provider must then lease it back.
No size floor for noticing entities themselves. Their duty turns on the size of the health care entity or MSO on the other side of the deal.
A $10 million health care entity dealing with a qualifying noticing entity now files too.
Process additions. Director remand of a CMIR decision (30 days), a new review factor for real estate investment trusts, an "urgent situation" ground for expedited review, response logs, and a consolidated confidentiality section.

Disclosures: what was required and what was added

Most of the information OHCA asks for in a notice was already required. The table below maps each item against the approved regulation text (22 CCR §97438).

Disclosure item	Status
Transaction agreements, letters of intent, term sheets	Already required
Valuation documentation	Already required
Three years of certified financial statements	Already required
Investor presentations and board materials supporting the filing	Already required
Patients or enrollees by county	Already required
Post-transaction staffing, wages and benefits changes	Already required
Support for claimed quality, access or cost benefits	Already required
Organizational charts	Expanded: now up to the ultimate parent, with all 5% owners
Names of all affiliates, parents, subsidiaries and governing body members	New
Lease-back and property agreements; real estate changes	New
Quality and equity ratings (such as CMS Star Ratings)	New
Anticipated cost savings and service expansions	New
Material transactions planned in the next 12 months	New
Private equity portfolio holdings	New (PE and hedge funds only)
Debt-to-enterprise-value or debt-to-equity ratios	New (PE and hedge funds only)
List of all health care entities an MSO serves	New (MSOs only)
Executive options and deal-contingent compensation	New

The process today, step by step

Screen the deal early. Check whether any party is a health care entity meeting the revenue or asset thresholds, and whether a PE group, hedge fund, MSO, new acquisition entity or real estate transfer is involved.
Identify every filer. Each qualifying health care entity and each qualifying noticing entity files its own notice. Filers may cross-reference each other's submissions. Questions can go to OHCA at CMIR@hcai.ca.gov before filing.
File at least 90 days before closing through OHCA's online portal, under penalty of perjury.
Wait for a complete notice. The notice is complete only when every required party has filed everything. One party's delay holds up everyone.
OHCA decides. Within 45 days, it may waive a CMIR; within 60 days, it may order one. Both clocks pause while OHCA waits for information or another agency or court reviews the deal.
If a CMIR is ordered, parties may ask the Director to review within 10 business days. The CMIR itself runs 90 days, extendable by 30, plus tolling, followed by a preliminary report, a 10-business-day comment period, and a final report.
Report changes. Notify OHCA within five business days if the deal is amended or canceled.

OHCA cannot block a transaction. A CMIR, however, can delay closing well past the 90-day notice period.

What this means for ASCs

For most day-to-day ASC business, nothing changes. Routine operations, ordinary-course contracts, and internal restructurings remain excluded, and the revenue thresholds still screen out many smaller centers.

The new rules matter most for these ASC arrangements:

Private equity investment in an ASC or its management company, especially minority stakes that carry board seats, veto rights, debt approval, or management fees.
Management company agreements where the manager negotiates payer rates or handles revenue cycle, and meets one of the MSO filing tests.
Sale-leasebacks of ASC real estate to a property company that is not the buyer or its direct parent.
Physician syndications and recapitalizations structured through a newly formed entity.

We recommend members with a transaction expected to close in the next 6 to 12 months review it with transaction counsel now, building 90 days plus review time into the closing date. CASA will continue to monitor OHCA's permanent rulemaking and the pending MSO data reporting rules.

This update is general information, not legal advice.

Sources

More from OHCA: Spending Report Shows Hospital Outpatient Growth

OHCA’s interim spending report, released October 7, shows health care spending in California kept climbing from 2023 to 2024. Total spending grew 7.1% in commercial coverage, 9.4% in Medicare, and 19.0% in Medi-Cal managed care. The report does not break out ASC spending, but hospital outpatient claims rose 11.6% in commercial coverage and 21.5% in Medicare Advantage, the fastest growth of any category in that market. Those numbers support the cost-saving value of moving appropriate procedures to ASCs.

This report measures spending from before the target took effect. California’s statewide spending target started with 2025, at 3.5% growth, and steps down to 3.0% by 2029. Health plans held to that target are likely to push harder in rate negotiations with all providers, including ASCs. OHCA also notes that some Medi-Cal spending categories are left out, so these totals should not be compared directly with its earlier baseline report.

The full report is available here.

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