In California, pending Assembly Bill 3129 could severely limit the ability of digital health companies to grow and operate in the state by prohibiting arrangements between physician, psychiatric, and dental practices and any entity that furnishes business or management services to providers that accept investments from private equity groups and hedge funds. The legislation’s current definition of private equity is arguably broad enough to capture venture capital funds, angel investors, family offices and even the innovation or investment arms of academic and nonprofit medical centers. Digital health companies based in California who provide benefits services should closely monitor the potential impact of this proposed legislation on their businesses.
Pending California Law Undermines Growth of Digital Health Companies and Patient Access to Virtual Care
By Lisa Schmitz Mazur, Patrick Zanayed, Nathan Gray, Travis Jackson and Joel Rush on August 22, 2024
Lisa Schmitz MazurLisa Schmitz Mazur advises health care providers and technology companies on a variety of legal, regulatory and compliance matters with a particular focus on digital health topics, including telehealth, telemedicine, mobile health and consumer wellness. Lisa advises a variety of health care providers and technology companies involved in “digital health,” including assisting clients in developing and implementing telemedicine programs by advising on issues related to professional licensure, scope of practice, informed consent, prescribing and reimbursement. Lisa helps clients identify and understand the relevant legal issues, and develop and implement practical, forward-thinking solutions and strategies that meet the complex and still-evolving digital health regulatory landscape. Read Lisa Schmitz Mazur's full bio.
Patrick ZanayedPatrick Zanayed represents private equity funds, telehealth start-ups, strategic investors, ambulatory surgery centers, behavioral health facilities and physician practices in a variety of transactional and regulatory matters. Read Patrick Zanayed's full bio.
Nathan GrayNathan Gray is a member of the Healthcare Practice Group. While earning his law degree, Nathan served as a summer associate at McDermott. He was a legal fellow at Compassion and Choices in Portland, Oregon, and served as internal vice president of the Health Law Society at Duke University School of Law. Read Nathan Gray's full bio.
Travis JacksonTravis Jackson works with leading hospitals, health systems and academic medical centers (AMCs) to bring their most complex and innovative mergers, acquisitions and joint ventures to market. Through his counsel, Travis’s healthcare clients – both for-profit and nonprofit entities – enhance their operational efficiencies, improve care delivery and strengthen relationships with physicians and the communities they serve in a compliance-driven and cost-effective manner. Read Travis Jackson's full bio.
Joel RushJoel C. Rush has a national practice that focuses on transactional and healthcare regulatory matters affecting healthcare companies, including mergers and acquisitions, strategic affiliations, and joint ventures. Joel serves principally as counsel to private equity funds, public and private companies, physician practices, hospitals, and strategic investors in connection with a wide range of transactional, regulatory and corporate structure and governance matters. Joel is able to leverage his transactional background and deep health regulatory experience to provide seamless legal counsel regarding the complex strategic and operational issues facing healthcare providers and investors. Joel is a practice area leader for the PPM practice. Read Joel C. Rush's full bio.
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