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 |Add To My Favorites |Track Bill | Version: 10/06/25 - Chaptered
 09/18/25 - Enrolled
 09/08/25 - Amended Assembly
 08/25/25 - Amended Assembly
 06/16/25 - Amended Assembly
 02/12/25 - Introduced

 SB-351 Health facilities.(2025-2026)

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 Date Published: 10/07/2025 02:00 PM

SB351:v94#DOCUMENTBill Start

 Senate Bill

 No. 351

 CHAPTER 409

An act to add Division 1.7 (commencing with Section 1190) to the Health and Safety Code, relating to health practices. 

 [
 Approved by

 Governor
 October 06, 2025.

 Filed with

 Secretary of State
 October 06, 2025.
 ]

LEGISLATIVE COUNSEL'S DIGEST

SB 351, Cabaldon.
 Health facilities.

Existing law generally regulates the licensing and operation of health facilities and other facilities providing health care in this state. Existing law, the Medical Practice Act, creates the Medical Board of California to license and regulate physicians and surgeons. Under existing law, the Dental Practice Act, the Dental Board of California licenses and regulates dentists.

Existing law, the Nonprofit Public Benefit Corporation Law, generally requires a nonprofit public benefit corporation to give written notice to the Attorney General before it sells, leases, conveys, exchanges, transfers, or disposes of its assets, except as specified. Existing law provides specific procedures for health facilities and additionally requires these facilities to obtain the consent of the Attorney General prior to entering into a specified agreement or
 transaction.

This bill would prohibit a private equity group or hedge fund, as defined, involved in any manner with a physician or dental practice doing business in this state from interfering with the professional judgment of physicians or dentists in making health care decisions and exercising power over specified actions, including, among other things, making decisions regarding coding and billing procedures for patient care services. The bill would prohibit a private equity group or hedge fund from entering into a contract or other agreement or arrangement with a physician or dental practice if the contract or other agreement or arrangement would enable the person or entity to engage in the prohibited actions described above and would make provisions of those contracts or other agreements that violate that prohibition void and unenforceable. The bill would prohibit and render void and unenforceable specified types of contracts between a physician or dental
 practice and a private equity group or hedge fund that include any clause barring any provider in that practice from competing with that practice in the event of a termination or resignation, or from disparaging, opining, or commenting on that practice in any manner as to any issues involving quality of care, utilization of care, ethical or professional challenges in the practice of medicine or dentistry, or revenue-increasing strategies employed by the private equity group or hedge fund, as specified. This bill would entitle the Attorney General to injunctive relief and attorney’s fees and costs incurred in remedying violations of these provisions, as specified. The bill would make its provisions severable.

Digest Key

 Vote:
 MAJORITY 
 Appropriation:
 NO 
 Fiscal Committee:
 YES 
 Local Program:
 NO 

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Division 1.7 (commencing with Section 1190) is added to the Health and Safety Code, to read:

DIVISION 1.7. Private Equity or Hedge Fund Ownership of Health Care Practices

1190.

 For purposes of this division, the following definitions shall apply:

(a) (1) “Hedge fund” means a pool of funds managed by investors for the purpose of earning a return on those funds, regardless of the strategies used to manage the funds. Hedge funds include, but are not limited to, a pool of funds managed or controlled by private limited partnerships.

(2) “Hedge fund” does not include:

(A) Natural persons or other entities that contribute, or promise to contribute, funds to the hedge fund, but otherwise do not participate in the management of the hedge fund or the fund’s assets, or in any change in control of the
 hedge fund or the fund’s assets.

(B) Entities that solely provide or manage debt financing secured in whole or in part by the assets of a health care facility, including, but not limited to, banks and cr