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California bans private equity from controlling medical decisions, effective Jan. 1, 2026.
California Governor Gavin Newsom signed SB 351 into law on October 6, 2025, reinforcing the state’s longstanding ban on the corporate practice of medicine and dentistry.
The law prohibits hedge funds, private equity firms, and management services organizations from interfering in clinical decisions, controlling medical records, or dictating employment and billing practices.
It bans noncompete and non-disparagement clauses in contracts with healthcare providers, while allowing sale-of-business agreements.
The California Attorney General can enforce the law through injunctive relief and recover legal fees.
The legislation formalizes existing legal standards without significantly expanding current rules, taking effect January 1, 2026.
California prohíbe al capital privado controlar las decisiones médicas, a partir del 1 de enero de 2026.