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- New Rules, No Drama: What’s Happening in Healthcare?
New Rules, No Drama: What’s Happening in Healthcare?
California’s shaking things up with fresh investment rules, the No Surprises Act is cracking down, and a data showdown is brewing between Particle Health and Epic. It’s our first newsletter, so we’re kicking things off with a bang—grab your popcorn because healthcare just got interesting! 🍿
California’s New Law: Navigating Healthcare Investments
California’s proposed legislation, pending the Governor’s signature, mandates Attorney General approval for specific healthcare investments 📈 and underscores stringent requirements for Management Services Organizations (MSOs) and Professional Corporations (PCs).
Update: California's proposed healthcare investment legislation was vetoed by the Governor on September 30th. No changes will take effect.
Key Points
The proposed law mandates Attorney General approval for healthcare transactions involving entities with annual revenues over $25 million.
Management Services Organizations (MSOs) must adhere to stricter compliance standards, including detailed financial disclosures.
Professional Corporations (PCs) are required to maintain clear operational independence from MSOs to avoid conflicts of interest.
The legislation will take effect on January 1, 2024, if signed by the Governor, giving stakeholders a limited window to align with the new requirements.
Why It Matters
California's new legislation reshapes the landscape of healthcare investments, potentially slowing down deal-making and increasing compliance costs. This shift demands strategic agility, as organizations must now navigate a more complex regulatory environment, ensuring that their growth plans align with the heightened scrutiny and approval processes.
Takeaway
California’s heightened scrutiny of the MSO model raises risks for private equity healthcare expansions, making stricter compliance essential for existing MSO structures.