Health facilities.

Senator Cabaldon's legislation aims to prevent private equity groups and hedge funds from influencing clinical decisions in California's medical and dental practices by establishing new restrictions on their involvement in healthcare operations. The bill prohibits these financial entities from interfering with physicians' and dentists' professional judgment regarding diagnostic tests, referrals, patient care options, and practice management.

Under the proposed rules, private equity and hedge fund entities cannot control medical records, make hiring decisions based on clinical competency, set billing procedures, or determine equipment selection for medical practices. The legislation also voids contractual clauses that would prevent healthcare providers from competing after leaving a practice or commenting on issues related to quality of care, ethical challenges, or revenue strategies implemented by these financial entities.

The bill maintains specific exemptions for passive investors, debt financing entities, and hospital systems while granting the Attorney General authority to pursue injunctive relief and recover costs for enforcing these provisions. These restrictions supplement existing regulations under California's Medical Practice Act and Dental Practice Act, though the bill explicitly states it does not diminish current corporate practice of medicine requirements.