On September 28, California Governor Newsom vetoed Assembly Bill 3129 (Bill), which would have created significant oversight of private investment in and management of certain healthcare transactions and arrangements in California.
Had the Bill been signed into law, certain transactions between a private equity group or hedge fund and healthcare facilities, provider groups, and providers would have required notice to and/or consent from the California Attorney General. The Bill also would have prohibited certain arrangements between private equity groups or hedge funds and physicians, psychiatrists, or dentists, including, among other things, certain non-competition and non-disparagement clauses in contracts involving the management of a physician, psychiatric, or dental practice doing business in California.
While the Bill was not signed into law, there are other current laws in California that impact transactions involving certain healthcare entities and retail drug firms. The Bill, and other current legislation in California, reflect the increasing trend of states enshrining policies that target private equity investment in the healthcare industry; such laws can be tracked by reference to the Bass, Berry & Sims interactive map available here, which outlines these healthcare and filing regulations by state.
