The "Grace Period" is over (New laws as of Jan 1)

January 6, 2026

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Happy Tuesday (and welcome back to reality!).


If you are like me, you spent the last few weeks actively ignoring the "upcoming regulatory changes" emails so you could actually enjoy the holidays.


Well, it is January 6th. The holidays are over. The grace period is gone. And the new laws are officially here.


While we were toasting to the New Year, a significant shift in health data and AI regulation quietly went into effect on January 1, 2026. If you are building, buying, or implementing health tech this year, the ground just shifted beneath your feet.


For the last two years, we have talked about AI regulation in the future tense. We treated it like a "2027 problem" or something the EU would figure out first. That complacency ends this morning.


Here are the three critical "Jan 1" updates you need to know, fully expanded with what they actually mean for your product roadmap.


1. The "AI Doctor" Disclosure (California AB 489)


Status: Effective Jan 1, 2026. The Law: Assembly Bill 489 (Bonta)


As of five days ago, it is now explicitly illegal in California for an AI system to imply it is a licensed healthcare professional. This sounds simple on paper, but the text of AB 489 goes much further than just requiring a "I am a bot" badge.


The law targets "deceptive design" in patient interfaces. Specifically, it prohibits the use of semantic choices that suggest human agency in a clinical context.


The Reality for Your Product: If your chatbot says "I think you might have the flu" or "We recommend you see a specialist," you are likely non-compliant. The use of first-person pronouns ("I," "me," "we") by an algorithmic system in a healthcare setting is now legally risky.


The Fix: You need to audit your conversational UI this week. You cannot just slap a disclaimer in the footer anymore. The dialogue itself must be "mechanical" by design.

  • Bad: "I found three specialists near you."

  • Compliant: "The system has identified three specialists near you."


This removes the "magic" from the user experience, yes. But it also keeps you from being the first test case for the California Attorney General.


2. The Texas "Black Box" Opener (HB 149)


Status: Effective Jan 1, 2026. The Law: Texas Responsible AI Governance Act


While California is focused on what the AI says, Texas is focused on how the AI thinks. The Texas Responsible AI Governance Act (HB 149) went live this week, and it is arguably the most aggressive transparency law in the country.


It demands explainability for high-stakes decisions made by automated systems. In the text of the law, healthcare algorithms are categorized as "high-stakes" by default.


The Reality for Your Product: "It’s a proprietary black box algorithm" is no longer a valid legal defense in Texas if a patient claims your AI denied them care or misprioritized their triage.


If your tool helps a payer decide to deny a claim, or helps a hospital system flag a patient for discharge, you must be able to produce a "meaningful explanation" of how that decision was reached. This does not mean showing the source code. It means showing the weighting. You have to be able to tell the state: "The AI prioritized this patient because of Variable A and Variable B, not because of Variable C."


The Fix: If you are using deep learning models where even you don't know exactly why the model made a prediction, you have a liability problem in Texas as of this morning. You need to implement "explainability layers" or regression testing reports that can be pulled on demand.


3. The HTI-1 "Soft" Deadline is Vanishing


Status: Enforcement begins March 1, 2026. The Law: ONC HTI-1 Final Rule (ASTP/ONC)

We technically caught a break here. The Office of the National Coordinator (now ASTP/ONC) announced a "temporary enforcement discretion" window for the new certification updates.


But do not let that lull you into a false sense of security.


The discretion window closes on March 1, 2026. That gives you exactly 54 days from today to finalize your "Decision Support Interventions" (DSI).


The Reality for Your Product: This is not just about updating your software version. The HTI-1 rule requires you to provide "transparent details" about your algorithm's training data to your customers. Your hospital clients will start demanding this data in February so they can meet their own deadlines.


If you are a vendor, your customers need to know:


  1. What data was this model trained on?

  2. How did you test for bias?

  3. When was the last time it was re-validated?


If you don't have those documentation sheets ready to send, your product will be blocked from use in certified EHR environments by spring.


The Fix: Stop building new features. Dedicate your engineering and product teams to "Compliance Documentation" for the next 8 weeks. It is not glamorous work. But it is the only work that matters right now.


The Bottom Line


2025 was the year we theorized about AI safety. 2026 is the year we have to document it.


The "Wild West" era of deploying health algorithms without oversight ended on New Year's Eve. We are now in the era of audits, disclosures, and explainability.


Don't let this paralyze your roadmap. Just realize that "Compliance" is no longer a wrapper you add at the end of the development cycle. It is now the core feature.


Let’s get to work. #StayCrispy


-Dr. Matt

The "Grace Period" is over (New laws as of Jan 1)

ChatGPT Health: Universal Translator or Legal Liability?

January 13, 2026
OpenAI has officially partnered with b.well Connected Health to create a dedicated "health" tab inside the interface. This allows users to upload medical records, connect to wearables, and receive "hyper-personalized" guidance based on their actual clinical history. Read the official announcement here I thought about doing a rapid breakdown on this last week, but the noise was loud. After digging in, as a Clinical Realist , I see two sides to this coin. They are about to collide. The Good: Raising the Basement The current "basement" of health literacy is dangerously low. We have all seen patients leave the clinic, nod politely, and then get to the parking lot with absolutely no idea what the doctor just said. This "Post-Visit Amnesia" leads to 'non-compliance', confusion, and readmissions. If ChatGPT Health can act as a Universal Translator by taking a complex discharge summary and explaining it in plain English at 2 AM, that is a massive win. It democratizes access to basic medical understanding. It effectively "raises the basement" for the average patient. The Business Move: The "Wellness" Loophole There is a keen business strategy at play here. OpenAI is deliberately blurring the lines between "Health" and "Wellness." By framing this as "Wellness," they are attempting to bypass the heavy regulation required for a Medical Device (SaMD). Health is regulated. It requires FDA clearance and strict liability. Wellness is the Wild West. It is for "informational purposes only." But this is where the strategy hits the regulatory wall. The Collision: California's AI Safety Rules Last week, we discussed the new wave of AI Safety Legislation rolling out in California and the EU. These laws focus heavily on "Transparency" and "Duty of Care." Review the California AI Safety Guidelines Here is the conflict regarding the new California statutes. 1. The "Medical Advice" Trigger California law is increasingly strict about what constitutes "practicing medicine." If ChatGPT analyzes your labs and suggests a specific dietary change to lower your A1C, is that "Wellness advice" or "Medical treatment"? The new regulations suggest that if it looks like a doctor and talks like a doctor, it carries the liability of a doctor. 2. The Transparency Mandate The new rules require clear labeling when a user is interacting with an AI. More importantly, they require disclosure of the limitations of that AI. If ChatGPT Health hallucinates a drug interaction, the "Wellness" defense may not hold up in court. We are moving toward a world where "Algorithm Disgorgement" is a real threat. This means regulators can force companies to delete models that break the law. The Verdict for 2026 For my hospital leaders and startups, here is your takeaway. This tool is going to help millions of people understand their health better. It will act as a fantastic "after-visit summary" tool. But for the vendors trying to build on top of this, you must be careful. The line between "Health" and "Wellness" is not just a marketing distinction. It is a legal cliff. We are entering an era where Regulatory Strategy is Product Strategy . You cannot build the tool first and check the laws later. The Bottom Line Use the tool to educate. Use it to translate. But do not rely on it to diagnose. The technology is ready. The lawyers are not. Your Next Step We talked a lot today about the "Digital Divide." If you are concerned that your organization does not have the infrastructure to support these new AI tools, do not guess. Audit it. I have updated my Rural Tech Readiness Checklist . It is the same framework I use when evaluating sites for the $50B CMS Transformation Fund. It helps you identify exactly where your "connectivity gaps" are before you sign a vendor contract. [Download the Rural Tech Readiness Checklist]

Breaking: CMS drops $50B for Rural Health (and what it means for Tech)

December 30, 2025
Just as we were closing the books on 2025, the Centers for Medicare & Medicaid Services(CMS) made a historic announcement that fundamentally shifts the landscape for the coming year. Yesterday, they unveiled the $50 Billion Rural Health Transformation Program . In my article earlier this month, 2025 Was a Year of Correction, 2026 Will Be the Year of Construction , I predicted that the industry would be forced to pivot from flashy AI pilots to serious infrastructure building. I did not expect the federal government to prove me right this quickly!! :) This new program is the largest single investment in rural healthcare infrastructure since the Hill-Burton Act. For health tech leaders, founders, and clinicians, this is not just a policy update. It is a signal that the market for 2026 will be defined by those who can solve the "last mile" problem in healthcare delivery. The News: What CMS Announced Late Monday afternoon, CMS Administrator Dr. Mehmet Oz announced the finalized rule and funding allocation for the Rural Health Transformation Program (RHTP). The program earmarks $50 billion over the next five years. Crucially, the funding is distributed via block grants with a 50/50 split formula : 50% is distributed equally among states to ensure a baseline, while the remaining 50% is allocated based on specific rurality and need metrics. Here are the three mandates that directly impact the technology sector: 1. The "Digital Infrastructure" Mandate While there is no hard cap, the rule mandates that states must allocate a significant portion of their grant specifically to "Digital Infrastructure Modernization" to qualify for the full award. This effectively unlocks billions for hardware and connectivity upgrades at Critical Access Hospitals (CAHs). As I noted in my "Construction" piece, you cannot run 2026 software on 2015 hardware. This funding finally addresses that technical debt. 2. Telehealth Parity Permanency The program codifies the "hospital at home" waivers that were set to expire this week, making reimbursement for rural remote monitoring permanent at the facility rate. This removes the "regulatory overhang" that has kept many investors on the sidelines regarding rural telehealth. 3. The "Tech-First" Workforce Grant A dedicated portion of the fund is reserved for training rural clinicians on advanced diagnostic tools. The rule specifically rewards systems that implement AI-assisted triage to extend the reach of limited staff. You can verify the allocation formula and "allowable use" definitions here CMS Press Release: CMS Announces $50 Billion in Awards to Strengthen Rural Health . Why This Matters Now We have spent much of 2025 discussing the potential of Agentic AI and predictive analytics. However, the adoption of these tools has been uneven. While academic medical centers are piloting fully autonomous coding agents, hospitals in rural America are often struggling to keep their Wi-Fi running during storms. This funding bridges that gap. It acknowledges that high-tech software cannot function without high-tech infrastructure. By subsidizing the hardware and connectivity layer, CMS is effectively building the highway that our health tech vehicles need to drive on. This validates the "Construction" thesis entirely. We are done correcting the over-hype of previous years. We are now pouring the concrete for the next decade of digital health. The Opportunity for Startups and Innovators For the founders and product leaders reading this, the RHTP changes the calculus for your 2026 Go-To-Market strategy. The "Blue Ocean" is no longer in optimizing billing for urban centers. It is in bringing parity to rural zip codes. 1. Pivot to "Hybrid" Hardware Pure software plays have struggled in rural markets due to hardware incompatibility. This funding opens a massive procurement cycle for improved diagnostic devices. If your software can integrate directly with the new wave of CMS-subsidized connected devices (digital stethoscopes, handheld ultrasounds, remote vitals monitors), you have a distinct advantage. 2. Focus on Workflow, Not Just Diagnosis The "Tech-First" workforce grants are designed to combat burnout. Rural systems do not just need better diagnostics. They need tools that reduce administrative burden. The winners in this space will be platforms that automate scheduling, billing, and triage. This empowers the limited number of physicians and nurses to focus entirely on patient care rather than paperwork. 3. The Rise of Asynchronous Care With the new reimbursement rules for remote monitoring, asynchronous telemedicine (store-and-forward) becomes a viable business model for rural areas. Patients in remote locations can upload data or images which are reviewed later by a specialist. This model respects the time constraints of both the patient and the provider. Dr. Matt’s Take: Empowerment Through Access I want to be clear about what this means for our profession. For too long, we have accepted a two-tier system where cutting-edge technology was reserved for high-volume urban centers. We assumed that rural healthcare had to be "low tech" by necessity. This investment challenges that assumption. This is about empowerment. It empowers the rural family physician to consult with world-class specialists in real time without the connection dropping. It empowers the patient living three hours from a hospital to receive hospital-level monitoring in their own living room. It empowers the health tech industry to look beyond the saturated urban markets and build solutions for the communities that arguably need them the most. What You Should Do This Week  If you are leading a health tech organization, I recommend three immediate actions: Review the State-Level Allocation: Since 50% of the funds are need-based, you need to know which states are receiving the largest injections of capital. Look up the specific allocation for your target markets here HHS: Rural Health Transformation State Allocation Map . Audit Your Bandwidth Requirements: Can your platform run on the improved but still variable connections found in rural areas? If you require 5G speeds for your app to function, you may miss the initial wave of adoption. Reach Out to Rural Partners: Do not wait for the RFP. Connect with rural hospital administrators now. Ask them how they plan to utilize the RHTP funds and offer to help them draft the technical requirements for their "modernization plans." Looking Ahead to 2026 We are entering 2026 with a clear directive. The resources are there. The policy is set. The technology is ready. The question for the next twelve months is execution. Can we take this capital and translate it into meaningful outcomes? Can we build tools that actually work for the doctor in Wyoming as well as they do for the doctor in New York? I believe we can. Happy New Year. Let’s get to work. — Dr. Matt

2025 Retrospective: The Year of the Borderless Healthcare Revolution

December 23, 2025
While the headlines of 2025 were often dominated by technical hurdles and systemic friction, the underlying current of the year was one of profound transformation. We are moving away from the rigid, siloed structures of the past and toward the vision I outlined in my book, The Borderless Healthcare Revolution . This year proved that despite the growing pains, the walls between the clinic, the home, and the laboratory are finally coming down. The Rise of Ambient Empathy The most heartening success of 2025 was the liberation of the physician. Ambient AI transitioned from an experimental luxury to a fundamental clinical tool. A Sutter Health study published in JAMA Network Open demonstrated that AI-assisted documentation significantly reduced the time doctors spent on administrative tasks. By removing the digital screen from the exam room, we saw a resurgence in the human side of medicine. This is a core pillar of a borderless system where technology is invisible, acting as a bridge rather than a barrier between a doctor and their patient. We are finally using code to create space for care. Resilience Through Vulnerability It is true that 2025 tested our digital infrastructure. The ongoing recovery from the Change Healthcare cyberattack, which impacted nearly 192.7 million individuals , was a difficult lesson in the risks of consolidation. However, the response to these threats has been a positive catalyst for change. The industry is moving toward a more decentralized and resilient data architecture. This year, the American Hospital Association noted a significant shift toward enhanced defensive measures and cybersecurity standards . We are learning that a borderless revolution requires a foundation that is not just open, but unbreakable. These challenges are the forge in which a more secure future is being shaped. The Clinical Breakthroughs of the New Era While 2025 brought some high-profile clinical setbacks, such as disappointing results in Alzheimer's trials , the broader landscape was one of incredible momentum. We saw the successful scaling of Pulsed Field Ablation and the continued expansion of targeted gene therapies that are beginning to turn once-fatal conditions into manageable ones. Furthermore, the point of care has officially migrated. With the FDA now providing clearer paths for software-based diagnostics and mental health tools , the home is no longer the periphery of the healthcare system. It is becoming the center. Looking Ahead The Borderless Healthcare Revolution is not about a perfect, friction-free world. It is about a system that is intelligent enough to learn from its failures and flexible enough to meet patients wherever they are. As we exit 2025, we are closer to that reality than ever before. We have the tools, we have the data, and most importantly, we have the collective will to build a system that works for everyone. Join the Revolution If you want to go deeper into the strategies and technologies that are making this future possible, pick up a copy of my book. It provides the roadmap for navigating the shifts we saw this year and prepares you for what comes next in 2026. #StayCrispy -Dr Matt