Private equity firms and hedge funds will face tighter rules when investing in California health-care businesses under legislation signed by Gov. Gavin Newsom on Monday.
The bill (SB 351) bars such companies from interfering in the professional judgment of physicians or making particular decisions about how to run medical practices. Private equity firms wouldn’t be allowed to exercise control over billing procedures, or decide what kinds of equipment and tests are appropriate in a doctor’s office.
Lawmakers passed the bill with bipartisan support amid heightened scrutiny of consolidation in the health-care industry, which state lawmakers have argued is ...