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California’s Attorney General has announced another CPOM enforcement settlement, this time requiring Carbon Health to unwind and restructure core elements of its friendly‑PC model. This latest action tracks the same pattern we highlighted in the ADMI matter: the AG is continuing a deliberate campaign against MSO/PC structures that, in its view, cross the line into operational control.
The complaint pointed to a set of unusually direct control rights, including MSO authority over physician hiring and firing, assignable ownership and option rights, exclusive above‑market financing that left the PC dependent on the MSO, and contractual terms that dictated staffing, scheduling, and other day‑to‑day operational decisions.
MSO‑supported platforms should expect continued scrutiny of governance, financing, and operational control. But the Carbon Health settlement also reinforces an important nuance, the AG’s most aggressive remedies still appear reserved for arrangements where the documents and actual operations show meaningful MSO control over the practice, rather than the typical friendly‑PC model.
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