Health facilities.

Fixed a typo in Section 1191(c)(1) changing 'an a contract' to 'a contract'

Deleted a redundant sentence fragment 'Any arrangement or agreement, or any provision therein,' from Section 1191(c)(1) that was left over from earlier drafting

Legislative counsel's digest wording was cleaned up: 'as amended' removed from the bill reference, and the description of void/unenforceable provisions was reworded for clarity

Added 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' header and chapter number 409, replacing the enrolled bill's Senate and Assembly passage signatures.

Replaced blank Governor approval date line with the confirmed date of October 6, 2025, and filing date with the Secretary of State on the same day.

Page numbering changed from 'SB 351' format to 'Ch. 409' format throughout, with page numbers shifted by one (95 to 94).

Removed the phrase 'explicitly or implicitly' from the prohibition on non-compete and non-disparagement clauses in contracts between PE groups/hedge funds and physician or dental practices. The ban now applies to any clause that bars a provider from competing or disparaging, regardless of how it is worded.

Throughout the bill, the phrase 'agreement or arrangement' was expanded to 'contract or other agreement or arrangement,' explicitly including contracts as a covered instrument type and making the language more precise about what kinds of legal instruments are prohibited.

Changed the hospital exclusion in both the 'hedge fund' and 'private equity group' definitions from 'licensed general acute care hospitals' to 'licensed hospitals.' This broadens the exclusion to cover all types of licensed hospitals (e.g., psychiatric, rehabilitation), not just general acute care facilities.

Subdivision (c) was restructured from a single paragraph into two numbered paragraphs: (c)(1) for the prohibition on entering into agreements, and (c)(2) for the void/unenforceable provision. This is a structural clarification with no substantive policy change.

A new exemption was added for public agencies (as defined in Government Code Section 6500) to both the 'hedge fund' and 'private equity group' definitions. This covers clinics, outpatient settings, health facilities, and ambulatory surgical centers that are directly or indirectly owned, operated, managed, controlled by, or otherwise affiliated with a public agency.

The hospital exclusion in both the 'hedge fund' and 'private equity group' definitions was broadened from 'subdivision (a) of Section 1250' to 'subdivision (a) or (b) of Section 1250,' expanding which hospitals and hospital systems are excluded from the bill's reach.

The void and unenforceable provision was significantly expanded. Previously, only specific contract clauses (noncompete and non-disparagement) were rendered void. Now, any agreement or arrangement, or any provision therein, that violates subdivision (a) (the prohibited interference and control actions) is also void, unenforceable, and against public policy.

A new exception was added to the noncompete prohibition: provisions in a contract that prohibit disclosure of material nonpublic information about the private equity group or hedge fund that is not generally available to the public are preserved, except where the provision seeks to block disclosures required by law or disclosures about quality of care, utilization of care, ethical challenges, or revenue-increasing strategies.

Assembly Member Patel was added as a coauthor of the bill.

Hospitals and hospital systems that own one or more licensed general acute care hospitals (and their affiliates and managed entities) are now explicitly excluded from both the 'hedge fund' and 'private equity group' definitions, meaning the bill's restrictions do not apply to them.

A new subdivision (h) allows unlicensed persons or entities to assist or consult with a physician or dental practice on the decisions and activities listed in paragraph (2)(a), provided the physician or dentist retains ultimate responsibility for or approval of those decisions and activities. This is a major carve-out that permits some level of non-physician involvement.

The prohibition on setting parameters for contractual relationships between physicians/dentists for delivery of care was narrowed from 'setting the parameters' broadly to only 'setting the clinical competency or proficiency parameters,' leaving other types of parameters (e.g., financial, administrative) outside the prohibition.

Minor wording change in the coding and billing prohibition: changed from 'making decisions regarding coding and billing procedures for patient care services' to 'making decisions regarding the coding and billing of procedures for patient care services.'

A new severability clause (Section 1192) was added, stating that if any provision of the division is held invalid, the remaining provisions continue in effect.

Senator Blakespear was added as a coauthor.