SB-351 • 2026

Health facilities.

Healthcare Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Cabaldon
Last action: 2025-10-06
Official status: Chaptered by Secretary of State. Chapter 409, Statutes of 2025.
Effective date: Not listed

Plain English Breakdown

The official source does not provide specific penalties or enforcement details beyond injunctive relief and attorney’s fees.

Health Facilities Rules for Private Equity Groups

This law stops private equity groups and hedge funds from interfering with doctors' and dentists' professional judgment in California.

What This Bill Does

It prohibits private equity groups or hedge funds from interfering with the professional judgment of physicians or dentists when making health care decisions, including coding and billing procedures for patient care services.
It makes contracts between these groups and physician or dental practices void if they allow interference in professional judgment or restrict competition and free speech regarding quality of care issues.

Who It Names or Affects

Doctors and dentists who work with private equity groups or hedge funds in California
Private equity groups and hedge funds that are involved with health care practices in California

Terms To Know

private equity group: A company that buys parts of other businesses to make money.
hedge fund: An investment firm that tries to earn high returns by taking risks with different types of investments.

Limits and Unknowns

The law does not specify penalties for breaking the rules.
It is unclear how this will affect small practices versus large ones.

Bill History

2025-10-06 California Legislative Information
Chaptered by Secretary of State. Chapter 409, Statutes of 2025.
2025-10-06 California Legislative Information
Approved by the Governor.
2025-09-23 California Legislative Information
Enrolled and presented to the Governor at 2 p.m.
2025-09-13 California Legislative Information
Assembly amendments concurred in. (Ayes 32. Noes 3. Page 3023.) Ordered to engrossing and enrolling.
2025-09-12 California Legislative Information
In Senate. Concurrence in Assembly amendments pending.
2025-09-12 California Legislative Information
Read third time. Passed. (Ayes 80. Noes 0. Page 3407.) Ordered to the Senate.
2025-09-08 California Legislative Information
Ordered to third reading.
2025-09-08 California Legislative Information
Read third time and amended.
2025-09-08 California Legislative Information
Joint Rule 61(a)(13) suspended. (Ayes 58. Noes 20. Page 2974.)
2025-09-08 California Legislative Information
Ordered to third reading.
2025-09-08 California Legislative Information
(Ayes 54. Noes 20. Page 2973.)
2025-09-08 California Legislative Information
Action rescinded whereby bill was read third time, passed, and ordered to the Senate.
2025-09-03 California Legislative Information
In Assembly. Held at Desk.
2025-09-02 California Legislative Information
Ordered to the Assembly.
2025-08-29 California Legislative Information
In Senate. Concurrence in Assembly amendments pending.
2025-08-29 California Legislative Information
Read third time. Passed. (Ayes 72. Noes 0. Page 2792.) Ordered to the Senate.
2025-08-25 California Legislative Information
Ordered to third reading.
2025-08-25 California Legislative Information
Read third time and amended.
2025-07-17 California Legislative Information
Read second time. Ordered to third reading.
2025-07-16 California Legislative Information
From committee: Do pass. (Ayes 13. Noes 0.) (July 16).
2025-07-02 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 12. Noes 0.) (July 1). Re-referred to Com. on APPR.
2025-06-24 California Legislative Information
From committee: Do pass and re-refer to Com. on JUD. (Ayes 16. Noes 0.) (June 24). Re-referred to Com. on JUD.
2025-06-16 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & P.
2025-06-05 California Legislative Information
Referred to Coms. on B. & P. and JUD.
2025-05-28 California Legislative Information
In Assembly. Read first time. Held at Desk.
2025-05-28 California Legislative Information
Read third time. Passed. (Ayes 30. Noes 6. Page 1301.) Ordered to the Assembly.
2025-05-23 California Legislative Information
Read second time. Ordered to third reading.
2025-05-23 California Legislative Information
From committee: Do pass. (Ayes 5. Noes 1. Page 1197.) (May 23).
2025-05-16 California Legislative Information
Set for hearing May 23.
2025-05-12 California Legislative Information
May 12 hearing: Placed on APPR. suspense file.
2025-05-02 California Legislative Information
Set for hearing May 12.
2025-04-30 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 2. Page 939.) (April 29). Re-referred to Com. on APPR.
2025-04-21 California Legislative Information
From committee: Do pass and re-refer to Com. on JUD. (Ayes 9. Noes 1. Page 808.) (April 21). Re-referred to Com. on JUD.
2025-04-08 California Legislative Information
Set for hearing April 29 in JUD. pending receipt.
2025-03-18 California Legislative Information
Set for hearing April 21.
2025-02-26 California Legislative Information
Referred to Coms. on B. P. & E.D. and JUD.
2025-02-13 California Legislative Information
From printer. May be acted upon on or after March 15.
2025-02-12 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

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.

Current Bill Text

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