Health facilities.

Senator Cabaldon's legislation aims to prevent private equity groups and hedge funds from influencing clinical decisions in California physician and dental practices. The bill prohibits these financial entities from interfering with healthcare providers' professional judgment regarding diagnostic testing, referrals, patient care volumes, and treatment options. It also bars them from controlling medical records, clinical staffing decisions, insurance contracting, and billing procedures.

The measure invalidates contract provisions that restrict providers from competing with practices after leaving or from commenting on quality of care issues, ethical challenges, or revenue strategies implemented by private equity or hedge fund owners. While allowing these entities to provide consulting services, the bill requires that physicians and dentists retain ultimate authority over clinical and operational decisions. The Attorney General can seek injunctive relief and recover legal costs for enforcement.

The legislation exempts certain entities from its restrictions, including hospitals, hospital systems and their affiliates, public agencies, and individuals who invest capital without participating in management. It operates alongside existing regulations governing medical and dental practice while establishing new parameters specifically addressing financial investor involvement in healthcare delivery.