The Weekly Articles

CSHA continues to honor our valued platinum sponsors.  This week, we are proud to acknowledge Latham & Watkins LLP.

Latham is one of the largest law firms in the world with more than 3,000+ lawyers located in major financial, business, and regulatory centers around the globe. We have one of the most integrated and comprehensive healthcare and life sciences practices in the world, with more than 30 years of experience representing healthcare and life sciences companies. We understand the economic, market, regulatory, enforcement, and political climates in which healthcare companies operate, and work seamlessly across offices and borders to provide integrated solutions for your legal and business needs. Visit lw.com for more information.

CSHA extends its gratitude to Latham & Watkins for its generous partnership and support of the Annual Meeting and Spring Seminar.

In February 2025, California’s Legislature continued its targeting of corporate influence in healthcare. California Senate Bill 351 (“SB 351”) and Assembly Bill 1415 (“AB 1415”) were introduced aiming for further reinforcement of state oversight of healthcare investments, with a focus particularly on private equity, hedge fund and management service organizations (MSOs).   

California prohibits the corporate practice of medicine and corporate practice of dentistry, and SB 351 seeks to codify legal boundaries protecting clinical autonomy from corporate control. Proposed restrictions would prohibit investors from determining diagnostic tests, treatment options, patient volume, or referral requirements. It would also ban non-compete and non-disparagement agreements in management contracts and asset sale agreements involving medical and dental practices, and it would restrict non-licensed entities from owning or managing patient medical records or influencing billing and coding procedures. It proposes giving the California Attorney General enforcement authority.

AB 1415 seeks to expand the authority of the Office of Health Care Affordability (“OHCA”) over healthcare transactions by adding to the definitions in the California Health Care Quality and Affordability Act entities previously outside the scope of OHCA, including private equity groups, hedge funds, MSOs, and health systems. Although it does not seek to allow OHCA to block transactions, as the vetoed AB 3129 did, delays and compliance burdens for these entities engaging in applicable transactions would increase.

Tam Ma has been appointed to the Protect Access to Health Care Act (Proposition 35) Stakeholder Advisory Committee. Tam is the Associate Vice President for Health Policy and Regulatory Affairs at the University of California Office of the President. Congratulations, Tam!

As we approach the Annual Meeting and Spring Seminar, we want to spotlight our valued platinum sponsors.  This week, we are proud to acknowledge Greenberg Traurig, LLP. 

Greenberg Traurig, LLP has more than 2750 attorneys in 49 locations in the United States, Europe and the Middle East, Latin America, and Asia. The firm is a 2024 BTI “Leading Edge Law Firm” for delivering on client expectations for the future and is consistently among the top firms on the Am Law Global 100 and NLJ 500. Greenberg Traurig is Mansfield Rule Certified Plus by The Diversity Lab. The firm is recognized for powering its U.S. offices with 100% renewable energy as certified by the Center for Resource Solutions Green-e® Energy program and is a member of the U.S. EPA’s Green Power Partnership Program. The firm is known for its philanthropic giving, innovation, diversity, and pro bono.  

CSHA extends its gratitude to Greenberg & Traurig for its generous partnership and support of the Annual Meeting and Spring Seminar.

On February 13, 2025, Senator Scott Wiener introduced legislation requiring health plans to provide annual reports on their claim denials to regulators and to pay stiff penalties if too many denials get reversed or modified after a request for independent medical review. Plans would submit the reports to the agency that regulates them, either the Department of Managed Health Care or the Department of Insurance, depending on the type of plan. The legislation would not apply to Medi-Cal managed care plans.

As proposed, the legislation, SB 363, requires each plan to report annually its number of treatment denials or modifications, separated by type of care (surgical, medical, or behavioral) and disaggregated by age. Plans must also provide “the reasons provided for” those denials and modifications, though the bill does not elaborate on how detailed the report must be as to denial reasons. The reporting obligation would commence on June 1, 2026.

The legislation also requires DMHC and DOI to compare each plan’s total denials with the number of successful independent medical review overturns of the plan’s denials and modifications and the number of denials or modifications the plan reversed after an independent medical review had already been requested. If more than half the independent medical reviews filed with a plan result in overturns or reversals, the plan must pay penalties of $50,000, $400,000, and $1 million for the first, second, and third and subsequent violations, respectively. Penalties would inflation-adjust every five years starting in 2031. Notably, plans can be liable for multiple violations per annual report, and “each independent medical review resulting in an additional overturned or reversed denial or modification in excess of the threshold . . . constitutes a separate violation . . . ”

The bill was referred to the Senate Health Committee on February 26, 2025.

California Attorney General Rob Bonta joined a coalition of 18 other state attorneys general to submit an amicus brief on February 21 supporting a motion for preliminary injunction in a federal lawsuit in the District Court of Maryland, brought by trans young adults and the families of trans children challenging two federal executive orders that prohibit federal funding, including research and education grants, for institutions that provide gender-affirming care to patients under age 19, and proclaim that the U.S. government recognizes only two biological genders—male and female.

The district court recently issued a 14-day temporary restraining order prohibiting federal agencies from withholding federal funds from healthcare entities or professionals who provide gender-affirming care to patients under 19. PFLAG, Inc. v. Trump, No. 8:25-cv-00337 (D. Md. Feb. 13, 2025). Plaintiffs filed a motion for preliminary injunction on February 18, followed by a motion to extend the TRO on February 21. The TRO is currently set to expire February 27; plaintiffs have asked the court to extend it by another 14 days.

A ruling on the motion to extend the TRO is expected imminently. Briefing on the motion for preliminary injunction will continue through Wednesday, Feb. 26.

The executive orders have led some hospitals and clinics, including at least one California hospital, to cancel appointments for gender-affirming care for patients under age 19. On Friday, Feb. 21, the California hospital, a major care provider for transgender youth, announced it was reversing its pause on gender-affirming care and resuming services.

State Senator Scott Wiener introduced a new bill to expand state shield laws and protections for gender-affirming care. Senate Bill 497 would prohibit health care providers, health plans, and other individuals from disclosing information relating to gender-affirming care in response to a subpoena or any other request based on another state’s laws restricting access to gender-affirming care. Existing law (enacted by SB 107 (2022), also by Sen. Wiener) already prohibits the issuance of a state subpoena or the disclosure of information relating to gender-affirming care for a child in response to a civil action based on out-of-state laws that interfere with the right to gender-affirming care for minors. SB 497 would extend those prohibitions to actions, including criminal actions, based on out-of-state laws restricting gender-affirming care for individuals of any age.

The bill would also require law enforcement to obtain a warrant before accessing the state’s CURES database for medical information relating to “sensitive services,” including gender-affirming care, and prohibits accessing CURES data or otherwise complying with any interstate investigation or proceeding seeking to impose civil, criminal, or disciplinary liability on a legally protected health care activity, as defined. The bill makes a knowing violation a misdemeanor.

This legislation follows a spate of executive orders and other actions by the Trump administration targeting the transgender community, including efforts to restrict access to gender-affirming care and peel back rights and protections for transgender individuals.

On January 28, 2025, the Trump Administration released an Executive Order that, among other things, directs federal agencies to bar medical institutes that receive research or education funds, including medical schools and hospitals, if those entities provide gender-affirming care to youth under the age of 19. The order also directs the U.S. Secretary for Health and Human Services (HHS) to take appropriate actions in Medicare or Medicaid conditions of participation or conditions for coverage in accordance with the Executive Order. Robert F. Kennedy, Jr. was sworn in as the U.S. Secretary of HHS on February 13, 2025. Temporary restraining orders in two separate cases filed in federal district courts in Maryland and Washington were issued on February 13 and 14 respectively, temporarily blocking federal agencies including those that fund medical institutions from conditioning or withholding federal funding based on the Executive Order.

This order follows the memorandum from the Office of Management and Budget (OMB) directing federal agencies to pause all grant-related activity in order to review federal grant programs for consistency with the new Administration’s priorities including an earlier Executive Order outlining the Trump Administration’s priorities on “gender ideology” signed on January 20. These actions caused confusion and gaps in funding throughout the country, including at California health care entities that reported receiving letters from federal agencies related to their existing federal funding and left them unable to access their funding. The California Attorney General, along with 22 other state attorneys general filed a lawsuit to block the federal Administration’s efforts to freeze disbursement of state funding. A temporary restraining order was granted by a federal district court and affirmed by the court again on February 10. Furthermore, the California Attorney General issued a statement reminding California’s federally-funded health care providers of ongoing obligations under California’s anti-discrimination laws amid the confusion resulting from the OMB memo and the January 28 Executive Order. California health care entities will need to closely monitor and navigate relevant federal actions and related litigation to ensure continuity of care and compliance with a rapidly evolving legal landscape.

Julia Weisner recently transitioned to OHCA Director, Enterprise Regulatory Services, Kaiser Foundation Health Plan, Inc. & Hospitals.  In her new role, Julia will provide leadership, coordination and oversight of Kaiser Foundation Health Plan, Inc. & Hospital's regulatory engagement with the California Office of Health Care Affordability.  Julia previously was with The Permanente Medical Group, Inc.'s Office of the General Counsel.  Congratulations to Julia on her new role.  

Sheirin Ghoddoucy has been promoted to Senior Legal Counsel, Director of Legal Advocacy at the California Medical Association, where she has worked as senior legal counsel since 2022 on legislative and regulatory advocacy as well as issues ranging from managed care and reimbursement to health equity and access, health care reform, and mental health parity.