The California State Assembly is considering a bill requiring private equity firms and hedge funds to obtain consent from the state’s Attorney General prior to any change of control or acquisition of healthcare facilities or provider groups.
Partners Jon Zucker and David R Carpenter as well as associate Gabrielle Feliciani at US law firm Sidley Austin wrote on the firm’s website that bill AB 3129 is “currently being considered by the California senate”, which means that stakeholders are still able to “influence the legislative process”.
Authored by Democrat Jim Wood, the bill requires firms to give at least a 90-day notice of their intentions, after which the Attorney General — currently Democrat Rob Bonta — can either “consent to, give conditional consent to, or not consent” on the grounds that it “may have a substantial likelihood of anticompetitive effects or may create a significant effect on the access or availability of health care services to the affected community”.
The bill also prohibits private equity firms from controlling or directing any physician or psychiatric practice conducting business in the state, as well as entering any agreements or arrangements “in which that private equity group or hedge fund manages any of the affairs of the physician or psychiatric practice in exchange for a fee”.
