A California bill that would require private equity firms and hedge funds to obtain prior approval from the state attorney general for certain healthcare-related transactions is one step closer to becoming law following the State Assembly’s passage of the legislation late last month.
The California Association of Health Facilities, the state affiliate of the American Health Care Association/National Center for Assisted Living, is part of a coalition of hospitals, doctors, dentists, investors and employers opposing AB 3129, saying that it would “cut off much-needed private funding for healthcare providers, harming access to local healthcare in communities across the state,” a spokesperson told the McKnight’s Business Daily on Wednesday. “CAHF supports financial transparency, and that nursing homes report ownership and financing through a vast array of current requirements,” the spokesperson added.
The bill now heads to the California State Senate, “where approval must be obtained prior to the end of the legislative session in August if it is to be enacted into law this year,” according to attorneys at Sheppard Mullin.
“While the bill has not yet been enacted into law, the State Assembly’s passage of the bill does represent positive momentum for proponents of the legislation, and stakeholders should be aware of the legislation’s broad implications on the structuring and consummation of healthcare-related transactions in the state,” according to the lawyers.
AB 3219 would require private equity firms and hedge funds to file an application with the state attorney general at least 90 days in advance of a transaction involving the acquisition or change of control of healthcare facilities and provider groups. According to the legislation, the attorney general has the authority to extend the 90-day requirement under certain circumstances.
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