Cali Cracks Down on PFs in Healthcare

Healthcare Transactions attorney John Saran was quoted in Regulatory Compliance Watch on California's renewed push to curb private fund influence in healthcare. He explained that Senate Bill (SB) 351, while more moderate than Oregon's sweeping new restrictions, expands California's corporate practice of medicine rules by empowering the state attorney general to pursue private equity and hedge fund managers who become involved in clinical decision-making as well as by voiding certain noncompete and nondisclosure provisions. Mr. Saran cautioned investors against complacency, advising them to review restrictive covenants to ensure compliance and warning that a wave of state bills could significantly reshape deal timelines and structures for national platforms.

"Also, keep in mind, there's still a bill pending in North Carolina for the corporate practice in medicine," he added. "Pennsylvania still has three bills that are pending that have been kind of dormant for the last few months but could get reinvigorated after this."

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