September 10, 2020

In welcome news for California health care facilities and providers, California SB-977, which would have required Attorney General approval for a broad range of transactions and other arrangements, did not pass in California’s 2020 legislative session.  With strong support from the Attorney General, organized labor, and a broad legislative coalition, SB-977 seemed poised for passage with only some amendments to its original form. Opponents of SB-977, including large California health care associations, business associations and several individual California health systems and providers mounted strong opposition on the grounds that SB-977 would impose a burdensome approval process on an overly broad range of transactions, add new substantive antitrust prohibitions, reduce the ability of providers to adjust to evolving challenges such as COVID-19 and reduce consumer access to necessary care.

With the numerous open issues surrounding SB-977, including those noted in our June 5, 2020 alert, we believe its failure to pass will be a welcome reprieve to health care facilities, providers and other stakeholders in California’s health care system. This said, and in particular with the strong support SB-977 received, we recommend California health care providers and stakeholders remain alert for the possibility it, or measures like it, could be re-introduced in the future.

Please click here for our previous alert on this subject.

For additional information, please contact one of the authors of this update or your regular Polsinelli lawyer.