On September 28, 2024, California governor Gavin Newsom vetoed AB 3129, a bill that, among other things, would have required private equity firms and hedge funds to provide 90 days’ prior written notice to, and for some transactions, obtain consent from, the state attorney general prior to proceeding with certain health care transactions.
In a statement attached to his decision to veto AB 3129, the governor cited concerns regarding the redundancy of the bill given that under current law the state’s Office of Health Care Affordability (OHCA) is responsible for analyzing and evaluating certain health care consolidation transactions. While OHCA does not have the power to block a covered transaction, OHCA may refer to and coordinate with the state’s attorney general to review any transactions that may be anti-competitive or affect health care affordability.
In light of the recent increase in federal and state scrutiny of private equity investments in health care about which we have previously written, we will continue to monitor regulatory developments in this area.
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