California Assembly Tries Again to Combat Private Equity Medical Takeovers

Healthcare Transactions attorney John Saran was cited in a Wall Street Journal article on California lawmakers' latest attempt to regulate private equity involvement in the healthcare industry. Senate Bill (SB) 351 would strengthen the state's existing corporate practice of medicine rules by prohibiting a private equity firm or hedge fund from exercising any control over a medical or dental practice it backs. SB 351 comes after Gov. Gavin Newsom vetoed Assembly Bill (AB) 3129 last year, which would have required Attorney General approval for certain healthcare transactions, among other provisions. Although the newest bill is less expansive, it would still entail that private equity-backed healthcare businesses assess and potentially adjust their legal structures to comply, according to Mr. Saran. He added that California already has some of the country's strictest laws on healthcare investment and said private equity groups are closely watching the bill's progress.

READ: California Assembly Tries Again to Combat Private Equity Medical Takeovers (Subscription required)