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flag California bans private equity from controlling medical decisions, effective Jan. 1, 2026.

flag 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. flag 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. flag It bans noncompete and non-disparagement clauses in contracts with healthcare providers, while allowing sale-of-business agreements. flag The California Attorney General can enforce the law through injunctive relief and recover legal fees. flag The legislation formalizes existing legal standards without significantly expanding current rules, taking effect January 1, 2026.

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