Living dossier · 8 linked objects · graph state read
Corporate practice of medicine
California prohibits lay control of clinical judgement. No regulation enumerates the levers through which control is actually exercised, so the prohibition is unenforceable in the structural cases and simultaneously over-readable against ordinary administrative services.
What the law provides
The corporate-practice doctrine and the professional-corporation provisions prohibit lay interference with professional judgement. The Attorney General reviews certain health-facility transactions. Management-services agreements are now the standard structure and are not themselves unlawful.
Since 1 January 2026: Health & Safety Code § 1191 (SB 351) bars a private-equity group or hedge fund involved with a physician practice from controlling diagnostic decisions, referrals, overall treatment, patient volume and physician hours, medical records, clinical hiring and firing, payer-contract parameters, competency-based contracting, coding and billing, or equipment and supplies; § 1191(g) preserves the older doctrine for everyone else, and § 1191(h) permits consultation where the physician keeps ultimate responsibility or approval. AB 1415 extends the Office of Health Care Affordability’s transaction-notice framework to management services organizations. The Medical Board’s own guidance lists the same business decisions.
The gap
Eight levers determine independence in practice — productivity targets, panel size, referral steering, template design, coding pressure, staffing ratios, schedule control, termination without cause — — and until 2026 none was named in any instrument. Section 1191 now names coding, staffing decisions, workload and hours among its controlled functions, but only where a private-equity group or hedge fund is involved. Productivity targets, panel size, referral steering, template design and termination without cause remain unnamed outside that scope.
The KPSGILL position
Implement the statute by regulation: enumerate the eight levers, expressly permit ordinary administrative services, require disclosure of the management agreement to each licensee practising under it, and make the target-setter traceable. Preferred sequencing omits a private right in the first instrument — enumerate, disclose, trace, then measure enforcement before adding a cause of action.
The open question
If capital exits underserved markets when the acquisition model becomes more expensive, does enumeration protect physician independence at the cost of access? The proposal names this as a monitoring obligation rather than answering it.
Litigation
No KPSGILL litigation object yet. Public enforcement is no longer rare: between 2022 and 2025 the Medical Board disciplined at least nineteen named physicians in matters charging corporate-practice or related violations, most stipulated without admissions; the Attorney General and the Board jointly pursued the Orange Twist med-spa structure; and in 2026 the Attorney General filed an amicus brief in Art Center (appeal pending) and a complaint against Carbon Health (settlement announced, subject to court approval). Most of that record reaches individual licensees or single structures; none yet produces an appellate holding on the friendly-PC mechanisms themselves, which is the gap the proposal still addresses. Full record →
Everything KPSGILL has published on this
Derived from this topic’s own entry. A page tagged to this topic appears here without this dossier being edited.
- The Corporate Practice of Medicine Doctrine in California
- Who Controls Clinical Judgment
- Hospital Employment and Staff Independence: Two Relationships, One Employer, and the Question Nobody Asks
- Capitation and Clinical Independence
- Private Equity and the Medical Practice
- Fee Splitting and Referral Payment Restrictions
- Restrictive Covenants in California Physician Employment
- Compensation Models and Incentives: Where Payment Design Becomes Lay Control
How progress would be measured
- Complaints alleging enumerated levers, and disposition
- Management agreements disclosed to practising licensees
- Documented clinical overrides and any adverse action following one
Entity topic.corporate-practice-of-medicine · all dossiers · event timeline · methodology
Public-record investigation: CFMG and Wellpath in California — county contracts, entity identity and decision authority in correctional health care, from public records only.