Health facilities.

Senator Cabaldon's proposal to regulate private equity and hedge fund involvement in California healthcare practices aims to preserve medical decision-making authority for licensed professionals. The legislation would prohibit these investment entities from influencing clinical judgments about diagnostic testing, referrals, treatment options, and patient care schedules.

The bill establishes specific boundaries around investor control, barring private equity groups and hedge funds from managing medical records, making personnel decisions based on clinical competency, setting insurance contracting parameters, or determining billing procedures. It also invalidates contract provisions that prevent healthcare providers from competing after leaving a practice or discussing quality of care concerns related to investor involvement.

The Attorney General would gain authority to pursue injunctive relief and recover legal costs when enforcing these restrictions. While the measure maintains existing corporate practice of medicine regulations, it creates new oversight specifically focused on investment entity participation in healthcare delivery. The provisions apply regardless of how medical or dental practices are legally structured, affecting sole proprietorships, partnerships, foundations, and corporations operating in California.