If you didn’t catch the Carbon Health settlement with California Attorney General Rob Bonta, and you are in digital health, you should read up on it. As one telehealth lawyer we spoke to last week put it bluntly: “I think this is a huge problem. My phone has been ringing nonstop, and California’s AG’s mishmash of settlements has made it very difficult to understand what is acceptable practice and what is not.”

Second Opinion has been talking to about half a dozen healthcare legal experts since the news broke, and we think the settlement is worth paying attention to. This is not intended to be an alarmist take, but digital health companies should get ahead of the issues presented here, and we’ll explain why. 

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First, a quick refresher on Carbon Health. The company raised over $600 million for an ambitious bet to scale primary and urgent care clinics before filing for Chapter 11 Bankruptcy in February. Carbon attracted attention from the California AG’s office for a variety of reasons, including its advertising and billing practices, which you can read about in the injunction.