In early August, Illinois enacted the Wellness and Oversight for Psychological Resources Act (HB 1806, or the “Act”), making it the first state to pass a law regulating the use of AI[1] in the delivery of therapy and psychotherapy services. The Act, which took immediate effect, imposes guardrails on the use of AI to provide decision-making therapeutic support services, but permits the use of AI for administrative and supplementary tasks, subject to certain consent requirements. This blog post summarizes the Act and addresses its potential implications for the use of agentic AI by Illinois therapy providers.
Continue Reading Illinois Becomes the First State to Regulate the Use of AI Mental Health Therapy Services

The Centers for Medicare & Medicaid Services (“CMS”) recently finalized a rule establishing the new Ambulatory Specialty Model (“ASM”)— a mandatory value-based payment model that could apply to nearly one-quarter of all physicians in select specialties starting January 1, 2027. The ASM applies to physicians providing services to address two high-expenditure chronic conditions among Medicare patients: heart failure (cardiology) and low-back pain (pain management, interventional pain, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation). Participation will be mandatory for eligible clinicians practicing in geographic areas selected by CMS that will likely encompass approximately one-quarter of U.S. Core-Based Statistical Areas (“CBSAs”) or…
Continue Reading CMS Finalizes Mandatory Ambulatory Specialty Model for Cardiology and Low-Back Pain

On October 30, HRSA announced that it had selected eight drug manufacturers to participate in its 340B Rebate Model Pilot Program, spanning 10 drugs representing a range of widely used therapies. These include:…
Continue Reading Preparing for HRSA’s 340B Rebate Model Pilot Program and the Beacon Platform

Persistent workforce shortages continue to define the post-pandemic healthcare landscape. Hospitals, health systems, and long-term care providers report enduring deficits in nursing, primary care, and behavioral health staffing, with projections indicating that these shortfalls are likely to persist through the next decade.[1]…
Continue Reading Navigating Healthcare Workforce Shortages: Evolving Scope-of-Practice and Staffing Regulations

California continues to lead the nation in artificial intelligence (“AI”) regulation with the recent enactment of Senate Bill (“SB”) 53—the Transparency in Frontier Artificial Intelligence Act (“TFAIA” or the “Act”)[1]. Signed by Governor Gavin Newsom earlier this fall, the TFAIA takes effect January 1, 2026, and establishes significant oversight, accountability, and reporting requirements for advanced developers at the cutting edge of artificial intelligence. This law sets a framework for transparency and public safety, and is expected to set a nationwide precedent for future AI legislation to come.
Continue Reading California Enacts SB 53: A Defining Step in Responsible AI Governance for Frontier AI Developers

For years, the conversation around health insurer consolidation and vertical integration has simmered through antitrust inquiries, oversight hearings, and policy papers. The Patients Over Profit Act (the “POP Act”)[i], introduced in both chambers of Congress this fall, marks a decisive shift. Rather than regulating insurer-provider integration, the POP Act proposes to ban it outright.
Continue Reading Patients Over Profit Act: A Federal Inflection Point on Insurer-Provider Integration and What Comes Next

Leaders from across Sheppard Mullin’s national healthcare team gathered in Dana Point, California, for a day-long strategy session led by Co-Leaders, Eric Klein and Amanda Zablocki, to discuss the most impactful trends shaping the future of healthcare and how to best support our clients.
Continue Reading A Look Ahead: Major Industry Trends Our Healthcare Team is Tracking

Federal enforcement of the False Claims Act (FCA) against healthcare and pharmaceutical companies—especially based on alleged Anti-Kickback Statute (AKS) violations—continues to change, with the Regeneron Pharmaceuticals case at the forefront of recent developments. Recall that in Regeneron, the government alleges that the pharmaceutical company is illegally subsidizing copayments for Medicare beneficiaries by making large donations to third party foundations offering copay assistance to strategically steer patients to its high-cost specialty drug, Eylea, instead of lower-cost alternatives, resulting in alleged FCA liability based on an AKS violation. After the First Circuit held that a FCA plaintiff in an AKS-based FCA case must…
Continue Reading Regeneron, the False Claims Act, and a New Era in Government Enforcement

On October 8, 2025, Governor Newsom signed the California Opt Me Out Act (the “Act”) into law, which expands on the California Consumer Privacy Act (“CCPA”). Most notably, the Act mandates that businesses developing or maintaining internet browsers must include functionalities enabling consumers to automatically communicate their preference to opt out of the sharing or selling of personal information. The functionalities must be readily accessible to consumers and must be “easy for a reasonable person to locate and configure,” which will spare consumers from the hardships of navigating oftentimes confusing mechanics to identify and enable opt outs.
Continue Reading Opting Out of Web Tracking Has Never Been Easier in California

Healthcare organizations of every shape and size are rapidly expanding their use of artificial intelligence solutions from high-risk applications like clinical decision-support interventions, ambient listening, and charting to lower-risk administrative activities like automated patient communications and scheduling. While adoption is widespread and increasing in depth and breadth across the industry, not every healthcare organization has established governance around AI or a monitoring process for exploration and adoption of new tools – including those contemplating a sale of assets or equity. For buyers in healthcare mergers and acquisitions today, AI diligence needs to be a focus, given the potential risk of…
Continue Reading AI Due Diligence in Healthcare Transactions

California’s physician assistant (“PA”) practice landscape is set to undergo significant transformation following the enactment of California Assembly Bill 1501 (AB 1501), which was signed into law by Governor Newsom on October 1, 2025, and will take effect on January 1, 2026. Among its key provisions, AB 1501 extends the authority of the California Department of Consumer Affairs’ Physician Assistant Board (the “Board”) through January 1, 2030, increases the physician-to-PA supervision ratio from 1:4 to 1:8 in all settings, and directs the Board to study scope-of-practice structures—with input from stakeholders—to evaluate potential models from other states that could benefit…
Continue Reading AB 1501 Becomes Law: How It Will Reshape California PA Practice

On October 11, 2025, Governor Gavin Newsom signed into law Assembly Bill 1415 (“AB 1415”), which amends the California Health Care Quality and Affordability Act (the “Act”) to require pre-transaction clearance and data reporting from private equity groups, hedge funds, and management services organizations (“MSOs”), and certain other entities involved in healthcare transactions. Effective January 1, 2026, the law represents a significant expansion of the authority of the California Office of Health Care Affordability (“OHCA”), which already has broad review power over transactions involving many different provider and payor entities.
Continue Reading Governor Newsom Signs AB 1415 Expanding OHCA Oversight to Private Equity and MSOs

On October 1st, certain key telehealth flexibilities created during the COVID-19 public health emergency (“PHE”) expired as the government shutdown began. The Centers for Medicare & Medicaid Services (“CMS”) issued a number of telehealth waivers during the PHE, some of which were extended through September 30, 2025 by the Full-Year Continuing Appropriations Act, 2025 (“CAA”). The flexibilities expired as legislative efforts to once again extend the flexibilities, including through the House Committee’s stop-gap government funding Continuing Resolution, failed to pass.
Continue Reading The Telehealth Cliff Has Arrived: What’s Changing and What to Watch