Post by Jennifer Whitton

California's CPOM enforcement wave just crested. On June 26, AG Bonta announced a landmark settlement with Carbon Health Technologies and its co-founder, Eren Bali, marking the first time an individual founder has been personally named and penalized ($100K) in a California corporate practice of medicine action, alongside $4.4M in civil penalties against the company. The settlement requires Carbon Health to structurally reorganize its "friendly PC" arrangement and resolves allegations of CPOM violations, false advertising, unlawful consumer contracts, and improper billing. This is the direct enforcement follow-through from the AG's March 30 amicus brief in Art Center Holdings, Inc. v. WCE CA Art, where Bonta argued that MSO continuity agreements giving lay entities the right to replace physician-owners constitute unlawful corporate control over medical practice - a strict reading that went further than any prior California court or legislature had endorsed. Taken together, Art Center Holdings and Carbon Health tell a clear story. The California AG is treating the amicus brief as a roadmap, not just a policy statement and is using it to define the violation and then enforce against it. The Aspen Dental settlement in May fit the same pattern. For any MSO-backed platform, digital health company, or PE-sponsored physician group operating in California, legacy structures that were "market standard" a few years ago now carry real legal and personal liability risk. The practical checklist is not complicated, but it is urgent: review ownership transfer restrictions, continuity and succession provisions, termination rights, and any contractual mechanism that could give a non-physician entity de facto control over physician employment or clinical decisions. SB 351 enforcement authority (including attorney's fees) is now clearly in play. If your MSO-PC documents haven't been updated since the Art Center brief dropped in March, that's the place to start. https://lnkd.in/eKQ4K9qs