On September 28, 2024, California Governor Gavin Newsom vetoed California Assembly Bill 3129 (AB-3129) originally introduced by California Attorney General Rob Bonta (AG) and Assembly Speaker pro Tempore Jim Wood and passed by the California legislature earlier in the month.  While the California legislature can override the Governor’s veto, legislators likely will not take this extraordinary step, which has not been taken in several decades.

Effective immediately, on August 22, 2024, the Office of Health Care Affordability (OHCA) adopted revisions to the cost and market impact review (CMIR) regulations (Revised Regulations), which govern California’s pre-closing health care transaction review process. As discussed in our prior post, certain health care entities must provide OHCA with notice of a transaction at least 90 days prior to closing. The Revised Regulations, among other things: (1) expand who must file a notice; (2) narrow the applicability of the health care professional shortage area threshold; (3) clarify calculation of California-derived revenue; (4) clarify confidentiality of expedited review request documents; and (5) add a required attestation.

The indictment, arrest, and arraignment of Ruthia He, the founder, CEO, and clinical president of Done Global (Done), and David Brody, clinical president of Done and the sole shareholder of Done Health, P.C. (PC) in connection with their alleged criminal conspiracy to distribute controlled substances, commit health care fraud, and obstruct justice may bring heightened scrutiny to behavioral health telemedicine companies and other virtual health platforms. The seven-count indictment represents the Department of Justice’s (DOJ’s) first criminal drug distribution prosecutions related to telemedicine prescribing. The prosecution of the defendants is proceeding in federal court in the Northern District of California and several additional Done personnel including an executive, physician, and nurse practitioners are similarly being prosecuted.

California Attorney General Rob Bonta (AG) and Assembly Speaker pro Tempore Jim Wood recently introduced legislation (AB-3129) that would authorize the AG to review private equity group and hedge fund health care transactions. The proposed legislation’s stated intention is to address price increases and lower quality of and decreased accessibility to services associated with private equity acquisitions of certain health care entities, including physician practices. This article provides an overview of the proposed bill, an analysis of the key issues raised by the proposed legislation, and suggestions for next steps for those potentially affected by the proposal. 

California’s health omnibus trailer bill SB-184 and the final cost and market impact review (CMIR) regulations (CMIR Regulations), which went into effect on December 18, 2023, have ushered in a significant change in California’s health care regulatory landscape with the creation of the Office of Health Care Affordability (OHCA). On January 2, 2024, OHCA began accepting notices of covered transactions through its notice of material change transaction submission portal.

New Mexico recently became the latest state to receive Centers for Medicare & Medicaid Services (CMS) approval to expand the state’s behavioral health service offerings through mobile crisis intervention teams. Under its new state plan amendment, among other items, New Mexico will make available mobile (i.e., outside of a hospital or other facility setting) crisis and mobile response and stabilization services for individuals at the location in which they are experiencing a crisis, 24 hours a day, 7 days a week, 365 days per year. Mobile crisis services include stabilization of the person in crisis, prevention of further deterioration, and provision of immediate treatment and intervention but may also include telephonic follow-up interventions, such as additional intervention and de-escalation services and coordination with other supports and community partners, for up to 72 hours after the initial mobile response. New Mexico also will offer children’s mobile response and stabilization services (MRSS), which are mobile crisis services but specific to child, youth, and families and include up to 56 days of stabilization services.

With the goal of enhancing health care quality and outcomes for individuals with moderate to severe behavioral health conditions and substance use disorders (SUD), the Centers for Medicare & Medicaid Services (CMS) recently announced it will launch the state-based, voluntary Innovation in Behavioral Health (IBH) Model in fall of 2024.

CMS will circulate a Notice of Funding Opportunity (NOFO) in spring of 2024 and select up to eight states to participate in the IBH Model, which is expected to last for eight years. Selected states will align with their respective state Medicaid agencies (SMAs) on clinical policies for integrated care and work with Medicaid Managed Care Organizations (MCOs) or other partners for model development and implementation. 

As the Mintz Health Law team welcomes the beginning of 2024, many of its members take a moment to reflect on the exciting growth of the Health Law Practice, opportunities to partner with clients on complex legal issues, and the celebration of numerous milestones.

On January 11, 2024, the Office of Civil Rights (OCR) issued its highly anticipated Final Rule regarding conscience protections. The Final Rule clarifies the religious beliefs and moral convictions protections practitioners and entities may assert in their health care practices. The Final Rule, entitled Safeguarding the Rights of Conscience as Protected by Federal Statutes, becomes effective March 11, 2024. 

California’s new Office of Health Care Affordability (OHCA) is set to start pre-closing regulatory review of certain health care transactions on January 1, 2024. As further explained in our previous post, subject to certain exceptions, a broad range of health care entities (collectively, Health Care Entities) soon will be subject to potential pre-closing transaction review.