Sunsetting of COVID-19 Paid Emergency Leave Law
Beginning July 31, 2025, New York employers will no longer be required to provide separate leave for COVID-19 quarantines and isolations. This marks a significant shift in pandemic-related employment policies for businesses in the Empire State.
New York’s COVID-19 Paid Emergency Leave (“PEL”) was originally enacted in March 2020, during the height of the COVID-19 outbreak. PEL requires employers provide up to fourteen (14) days of protected, paid leave to employees who are subject to a mandatory or precautionary order of isolation or quarantine due to COVID-19, and who cannot work remotely. PEL is limited exclusively to COVID-19, and its paid leave benefits are separate from and additional to other paid sick and safe leave benefits—including New York State’s Paid Sick and Safe Leave law, New York City’s Earned Sick and Safe Time law, and New York’s Paid Family Leave law.
When enacted, PEL did not contain an expiration date; nor was one provided in subsequent guidance. But on April 24, 2024, Governor Hochul signed the 2024-2025 New York State Budget. This Budget includes a provision sunsetting PEL—a measure many employers and legislators believed was long overdue. Indeed, while numerous other jurisdictions passed similar COVID-19 leave laws, New York’s PEL is the last such statute remaining in effect.
With the impending repeal of PEL, employers are reminded to remain compliant with other paid sick and safe leave benefits. Serious COVID-19 cases or other illnesses may still trigger obligations under various protected leave and medical accommodation laws, such as the federal Family and Medical Leave Act, the Americans with Disabilities Act, the New York Human Rights Law, and the New York City Human Rights Law.
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CFPB to Revoke Medical Debt Collection Advisory Opinion
On April 11, the CFPB filed a joint motion in the U.S. District Court for the District of Columbia indicating its intent to revoke an advisory opinion on medical debt collection. The Bureau requested a stay of litigation while it moves to formally withdraw the opinion and committed to providing a status update by July 14 and every 30 days thereafter.
The October 2024 advisory opinion interpreted the Fair Debt Collection Practices Act (FDCPA) and Regulation F to restrict certain medical debt collection practices, including those involving allegedly deceptive or unfair statements about the validity or scope of consumer obligations. The opinion’s issuance triggered multiple lawsuits challenging the CFPB’s statutory authority and legal basis, arguing that the Bureau exceeded its rulemaking powers by issuing substantive policy through an advisory opinion without following the Administrative Procedure Act’s notice-and-comment requirements.
The parties explained that revoking the advisory opinion would resolve the plaintiff’s legal claims, eliminating the need for further litigation. The CFPB stated that it was actively evaluating next steps and that maintaining the litigation would be inefficient and unnecessary.
Putting It Into Practice: The CFPB’s decision to revoke its medical debt advisory opinion continues a broader rollback of policies issued under prior leadership (previously discussed here and here). As the Bureau reconsiders its approach, states may increasingly step in to fill the regulatory gap—particularly those active in applying and enforcing UDAAP laws.
Unprecedented Nullification of the Biannual Public Tender Formedicine Procurement
Following up on our March newsletter No. 5, on April 8, 2025, the Ministry for AntiCorruption and Good Government declared the nullity of the entire public tender forthe 2025–2026 consolidated procurement of medicines, coordinated by BIRMEX,and ordered the procedure to be restarted based on a new market investigation.
The resolution declaring nullity was based on irregularities detected by the Ministry,mainly due to breaches of the tender terms and formal errors during the process,including:
Inconsistencies in the minimum bid percentages established in the call andits annexes.
Improper fiscal and technical requirements imposed on participants.
Irregularities related to requirements involving exclusive rights or patents.
Additionally, the same resolution highlights that:
All previously issued supply orders will be honored, as well as requests forpurchase orders.
The rights of awarded companies will be respected, and institutions mustpay for all products that have been delivered and accepted.
In cases where no overpricing was identified, a new direct award will begiven to the previously selected supplier.
In cases involving pricing irregularities, a new bidding process will be carriedout to determine a new awardee.
Current contracts will be terminated early to allow for the new procedure.However, until such termination occurs, contracts must be fulfilled to avoidpenalties.
Awards made by direct assignment were not affected by this resolution.
The decision does not identify or sanction any specific company, nor does it affecttheir right to participate in future tenders. However, sanctions against governmentofficials or companies cannot be ruled out in the future.
Companies that consider themselves affected may challenge the resolution.However, as this is a general measure that impacts all awarded companies equally,legal challenges are considered unlikely to succeed.
Washington State Enacts Broad Antitrust Premerger Notification Law
On 4 April 2025, Washington became the first state to enact a broad, industry-agnostic merger control regime. Under the new law, parties submitting premerger notification filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) must simultaneously submit their HSR filings to the Washington attorney general (AG) if they meet certain local nexus requirements or are a healthcare provider or provider organization. The law will take effect on 27 July 2025.
While many states (including Washington) have recently established notification requirements for healthcare transactions, the new Washington law is unique in its broad application to deals in any sector. Together with the new HSR rules, which took effect in February 2025, the law could increase regulatory costs and antitrust scrutiny for reportable transactions, particularly for companies with a significant presence in the state. More broadly, the legislation continues a trend of heightened state-level merger review, and underscores that states remain an important factor in the US antitrust enforcement landscape.
Washington Premerger Notification Law
On 4 April 2025, Washington Governor Bob Ferguson signed into law the Uniform Antitrust Premerger Notification Act (the Act). The Act will take effect on 27 July 2025 and apply to any HSR filings made on or after that date.
Thresholds
The Act requires any “person”1 submitting an HSR filing to contemporaneously file an electronic copy of the HSR form with the Washington AG if any of the following applies:
The person’s principal place of business is in Washington.
The person, or any entity it directly or indirectly controls, had annual net sales in Washington of goods or services involved in the transaction of at least 20% of the HSR filing threshold (under the current threshold of US$126.4 million, this would mean local annual net sales of at least US$25.28 million).
The person is a healthcare provider or provider organization (as defined in RCW 19.390.020) conducting business in Washington.
Documents
If the “principal place of business” threshold is met, or if the AG otherwise requests, then the filing party must also submit documentary attachments to the HSR form, including the transaction agreement and any other agreements between the parties, audited financials for the most recent year, and documents analyzing the transaction with respect to various competition issues.
Confidentiality
Under the Act, filings and related materials are confidential and exempt from public disclosure, other than in connection with certain administrative or judicial proceedings, subject to protective order. The AG may also disclose information to the Federal Trade Commission, US Department of Justice, or the AGs of other states that have adopted similar reciprocal legislation.
Penalties
Failure to submit filings required by the Act can trigger civil penalties of up to US$10,000 for each day of noncompliance.
Interplay With Washington Healthcare Notification Law
Like many states, Washington already has a premerger notification requirement on the books applicable to certain healthcare transactions. Under this law, both parties to “material change transactions” (mergers, acquisitions, or contracting affiliations) between two or more in-state hospitals, hospital systems, providers, or provider organizations must submit a written notice (Notice of Material Change) to the AG at least 60 days prior to closing.2 This requirement applies to transactions involving an in-state and out-of-state entity where the latter generates US$10 million or more in healthcare services revenues from patients residing in Washington. The law also states that any provider or provider organization that conducts business in Washington and files an HSR form must provide a copy of the filing to the AG’s office in lieu of a Notice of Material Change.
The Act has a much broader scope, capturing HSR-reportable transactions in any industry, not just healthcare. HSR filings submitted under the Act by providers and provider organizations will be sufficient to satisfy the requirements under the healthcare transactions notification law, which will remain on the books. Note, however, that the definitions for “provider” and “provider organizations” do not specifically include hospitals or hospital systems. Therefore, absent additional guidance from the AG, hospitals and hospital systems that meet the thresholds under the Act may need to submit a copy of the HSR form and a Notice of Material Change.
What Happens Next? Premerger Notification in Other States
The Act is based on model legislation from the Uniform Law Commission, which adopted the Uniform Antitrust Pre-Merger Notification Act in July 2024. Similar bills have been introduced in Colorado, Hawaii, Nevada, Utah, West Virginia, and the District of Columbia. One of the goals of the model legislation is to “facilitate early information sharing and coordination among state AGs and the federal antitrust agencies” and encourage reciprocal adoption by states. As state AGs assume an increasingly significant role in US antitrust enforcement—including in the M&A context—the new Washington law could signal the beginning of a trend of heightened, industry-agnostic, state-level merger control.
What Should I Do Now?
In light of the new requirements under the Act, dealmakers should consider the following:
Evaluating state-level merger control filings alongside HSR, global merger control, and foreign direct investment filing requirements as part of standard transaction diligence, as well as building these filing considerations into deal negotiations and documents, as appropriate.
If an HSR filing is required, assessing potential filings under the Act, particularly where companies have a significant nexus to the state of Washington (in terms of principal location or local revenues).
Closely monitoring developments in other states, including new regimes coming online or proposed amendments broadening the scope of existing requirements, and preparing for reciprocal sharing of filings between states with similar legislation.
Assessing the impact of filings that may be required under the Act with respect to budget, timing, and the potential for increased visibility into business operations by regulators.
Assessing potential competitive impacts on local markets when evaluating transactions and how these effects are discussed in ordinary-course documents.
Footnotes
1 Under the Act, “person” means an individual; estate; business or nonprofit entity; government or governmental subdivision, agency, or instrumentality; or other legal entity. “Person” has a different definition under the rules implementing the HSR Act.
2 “In-state” entities are those that are licensed or operating in the state of Washington.
Pushback of Deadline for SNFs to Submit Significantly More Detailed Ownership and Control Information in New “SNF Attachment” to CMS Form 855A
With newly confirmed Dr. Mehemet Oz at its helm, the Centers for Medicare & Medicaid Services (CMS) maintained but delayed the deadline for its requirement that Skilled Nursing Facilities (SNFs) to report significantly expanded information to CMS about the ownership, management and relationships with private equity (PE) and real estate investment trusts (REIT), and newly defined “additional reportable parties” (ADPs).
Scheduled to take effect on May 1, 2025, CMS recently announced a three-month reprieve, pushing the deadline back to August 1, 2025. This comes at the same time that CMS is seeking suggestions on lowering the Medicare regulatory burden and simplifying Medicare reporting requirements.
The delay announcement came as a surprise since, as recently as Friday, April 11, CMS reminded SNFs about the May 1 deadline that was fast-approaching for the Off-cycle SNF Revalidation of all Medicare-enrolled SNFs. Originally issued on October 1, 2024, every SNF was required to complete the new Form 855A that was designed to improve transparency and accuracy in SNF enrollment data under new reporting rules that were finalized by CMS in the Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities; Medicare Providers’ and Suppliers’ Disclosure of Private Equity Companies and Real Estate Investment Trusts, on November 17, 2023.
Effective October 1, 2024, CMS added the new “SNF Attachment” to Form 855A, the Medicare Enrollment Application for Institutional Providers. All SNFs must now revalidate CMS enrollment by submitting the updated form by August 1, 2025. Medicare-enrolled SNFs should have received a revalidation notice by the end of the calendar year 2024. Even if the letter got lost in the mail, CMS expects every Medicare enrolled SNF to contact their Medicare Administrative Contractor (MAC) to ensure they revalidate their enrollment before August 1, 2025, or risk what will be serious consequences.
CMS set the bar for disclosures high, and the consequences will be swift and painful for SNFs that fail to report enrollment information fully and accurately. Penalties may include notice of dis-enrollment or revocation of Medicare enrollment, which could result in a lapse in enrollment, leaving a non-compliant SNF unable to submit claims or receive reimbursements.
The updated 855A requires SNFs to disclose all ownership interest and managing control information on the new SNF Attachment, rather than in Sections 5 and 6 as previously required. SNFs will no longer fill out Sections 5 and 6 and instead must check a box in each section which states “Check here if you are a Skilled Nursing Facility and skip this section.”
The new SNF Attachment requires far more information and detail than previously required by Sections 5 and 6. While some of the disclosures previously required in these sections have carried over to the new SNF Attachment, there are several additional requirements. SNFs must now disclose:
All members of their governing body irrespective of business type;
If the SNF is an LLC, all owners must be reported regardless of ownership percentage;
If the SNF is a trust, all trustees;
All Additional Disclosable Parties (ADPs); and
Certain additional information about each ADP.
An Additional Disclosable Party (ADP) is defined broadly to include any person or entity that:
Exercises operational, financial, or managerial control over any part of the SNF,
Provides policies or procedures for any of the SNF’s operations,
Provides financial or cash management services to the SNF,
Leases or subleases real property to the SNF or owns a whole or part interest equal to at least 5% of the total value of property leased by the SNF,
Provides management or administrative services to the SNF,
Provides clinical consulting services to the SNF, and/or
Provides accounting or financial services to the SNF.
There is no minimum threshold for how long the ADP must have furnished the services, the extent of involvement with the SNF’s operations, or the volume of furnished services. If a person or entity performed any of the above-listed services, for any period of time, they must be disclosed as an ADP.
Furthermore, CMS has made it abundantly clear that SNFs should err on the side of disclosure if they are uncertain as to whether a party qualifies as an ADP. Additional information can be found in CMS Guidance for SNF Attachment on Form CMS-855A.
At approximately the same time SNFs were expected to be gathering the information to complete the new disclosures, CMS posted an appeal for regulatory relief titled “Unleashing Prosperity Through Deregulation of the Medicare Program Request for Information” (Medicare Deregulation RFI). Through this RFI, CMS asks for input “on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries, Medicare Advantage and Part D plans, and other stakeholders participating in the Medicare program . . . [in an] effort[ ] to reduce unnecessary administrative burdens and costs, and create a more efficient healthcare system. . .” Commenters are asked to identify “specific Medicare administrative processes, quality, or data reporting requirements, that could be automated or simplified to reduce the administrative burden on facilities and providers,” “changes [that could] be made to simplify Medicare reporting and documentation requirements without affecting program integrity,” and “documentation or reporting requirements within the Medicare program that are overly complex or redundant.” Some SNF industry stakeholders are looking at the RFI as an opportunity to get the Trump Administration to at least decrease the complexity of the increased SNF reporting requirements, if not eliminate as a redundant, duplicative and unnecessary administrative burden that will create financial strain on SNFs.
McDermott+ Check-Up: April 25, 2025
THIS WEEK’S DOSE
HELP Committee Releases 340B Report. Health, Education, Labor, and Pensions (HELP) Chair Cassidy (R-LA) released findings from his investigation and laid out potential reforms to the 340B Drug Pricing Program.
CMS Releases FY 2026 Medicare IPPS Proposed Rule. The Centers for Medicare and Medicaid Services’ (CMS’s) fiscal year (FY) 2026 hospital Inpatient Prospective Payment System (IPPS) proposed rule includes payment updates, proposals related to the Transforming Episode Accountability Model, and deregulation.
CMS Releases Additional FY 2026 Medicare Proposed Rules. The rules would update the hospice wage index and the skilled nursing facility, inpatient psychiatric facility, and inpatient rehabilitation facility prospective payment systems.
President Trump Signs EO on Lowering Drug Prices. The executive order (EO) includes directives to lower Medicare drug prices and reduce anticompetitive behavior.
Administration Acts on Gender-Affirming Care. A CMS letter reminded states of existing Medicaid requirements, a separate US Department of Justice memo outlined potential future action, and the US Department of Health and Human Services (HHS) created an online portal for whistleblowers.
President Trump Sends Memo on Immigrants’ Use of Medicare and Medicaid Benefits. Various departments, including HHS, were directed to ensure ineligible immigrants do not receive benefits.
NIH Releases New Grant Guidelines. The National Institutes of Health (NIH) expanded the actions that are prohibited by antidiscrimination laws.
Administration Continues Federal Workforce Restructuring. The latest proposal seeks to create a new class of at-will civil service employees.
President Trump Issues EO on Higher Education Accreditation. The directive includes medical school accreditation reforms.
CONGRESS
HELP Committee Releases 340B Report. The report includes findings from Chair Cassidy’s long-running investigation into the 340B program that looked at two hospitals, two federally qualified community health centers, two contract pharmacies, and two drug manufacturers. The report highlights five potential reforms for Congress to consider:
Requiring covered entities to provide detailed annual reporting on how 340B revenue is used to ensure direct savings for patients, creating more transparency into the link between program savings and patient benefit.
Addressing potential logistical challenges caused by increased administrative complexity; these burdens may impede patient benefit from the program.
Investigating the types of financial benefits that contract pharmacies and third-party administrators (TPAs) receive for administering the 340B program to ensure that increasing fees do not disadvantage covered entities and patients.
Requiring transparency and data reporting for entities supporting participants in the 340B program (i.e., contract pharmacies and TPAs).
Providing clear guidelines to ensure that manufacturer discounts actually benefit 340B-eligible patients and examining legislative changes to the definition of eligible patient and contract pharmacies’ use of the inventory replenishment model.
ADMINISTRATION
CMS Releases FY 2026 Medicare IPPS Proposed Rule. The rule, released April 11, 2025, proposes a 2.4% payment rate. A fact sheet is available here.
New proposals include:
Updates to the Transforming Episode Accountability Model (TEAM), which would remain a five-year mandatory model but would include a limited deferment for certain hospitals, neutral scoring on quality for hospitals with insufficient quality data, changes to the payment methodology and risk adjustment, and expansion of the skilled nursing facility (SNF) three-day-rule waiver. The model is slated to begin on January 1, 2026.
A request for comments on future quality measures supporting the Make America Healthy Again priorities of well-being and nutrition and on proposals to remove quality measures on health equity and social determinants of health.
A deregulation request for information (RFI) on ways to streamline regulations, reduce administrative burdens, and identify duplicative requirements across the Medicare program. Responses should be submitted through a web-based form, separate from other comments on the rule.
CMS Releases Additional FY 2026 Medicare Proposed Rules. Additional proposed regulations were released on April 11, 2025. These rules include the same deregulation and quality measure RFIs that were included in the IPPS proposed rule.
Key takeaways include:
Hospice Wage Index. CMS proposes to increase rates by 2.4% and clarify technical certification regulations.
SNF Prospective Payment System (PPS). CMS proposes to increase rates by 2.8% and implement operational and administrative updates to the SNF value-based purchasing program.
Inpatient Psychiatric Facility (IPF) PPS. CMS proposes to increase rates by 2.4% and issued an RFI on the IPF quality reporting program.
Inpatient Rehabilitation Facility (IRF) PPS. CMS proposes to increase rates by 2.6% and remove social determinants of health patient assessment data elements from the IRF quality reporting program.
Comments on the hospice wage index and SNF PPS are due by June 29, 2025, and comments on IPF PPS and IRF PPS are due by June 10, 2025.
President Trump Signs EO on Lowering Drug Prices. The EO directs HHS to:
Seek comment within 60 days on revisions to the Medicare Drug Price Negotiation Program for initial price applicability in 2028.
Coordinate with Congress to address the timing disparity between small-molecule and biologic drugs.
Conduct a survey to determine hospital acquisition costs for outpatient drugs and propose adjustments.
Condition health center grant funding on providing insulin and injectable epinephrine at or below the 340B acquisition cost, plus a minimal administrative fee.
Address payment incentives that encourage shifting of drug administration volume from physician offices to hospital outpatient departments.
The EO directs the CMS Innovation Center to develop a model for high-cost Medicare-covered drugs and biologicals. It also calls on agencies to develop recommendations to reduce anticompetitive behavior from drug manufacturers. Read the fact sheet here.
Administration Acts on Gender-Affirming Care. Pursuant to President Trump’s January EO on gender-affirming care for children, “Protecting Children from Chemical and Surgical Mutilation,” CMS sent a state Medicaid director letter. It states that the use of medical interventions for gender dysphoria in children has increased in recent years and that such interventions can cause long-term harm. The letter reminds states of existing federal requirements, including to ensure care is provided in the best interests of recipients. It reiterates that states must develop a drug utilization review (DUR) program that ensures drugs are appropriate, medically necessary, and not likely to result in adverse outcomes. CMS encourages states to review their DUR programs and indicates there will be additional DUR guidance in the future. Read more in a statement from CMS Administrator Oz.
HHS launched an online portal where whistleblowers can submit a tip or complaint regarding gender affirming care for minors. Read the press release here.
The US Department of Justice issued a memo outlining potential future actions in this arena, including:
Enforcement of laws outlawing female genital mutilation.
Investigation of violations of the Food, Drug, and Cosmetic Act and False Claims Act.
Withdrawal of any regulatory action based on World Professional Association for Transgender Health guidelines.
Establishment of the Attorney General’s Coalition Against Child Mutilation.
Legislation that bans gender-affirming care for minors.
President Trump Sends Memo on Immigrants’ Use of Medicare and Medicaid Benefits. With regard to healthcare programs, the memo:
Directs the heads of HHS, the US Department of Labor, and the Social Security Administration to take all reasonable measures to ensure ineligible immigrants do not receive funds from Social Security Act programs, which include Medicare and Medicaid.
Directs the attorney general and HHS secretary to ramp up fraud prosecution for all CMS programs.
Directs the social security commissioner, with the HHS secretary’s cooperation, to ensure death information is up to date.
On April 16, 2025, it was reported that officials from Immigration and Customs Enforcement and the Department of Government Efficiency sought access to a CMS database that includes health and personal information of beneficiaries, including immigrants.
NIH Releases New Grant Guidelines. In its Notice of Civil Rights Term and Condition of Award update (NOT-OD-25-090), NIH alerted domestic recipients that when accepting NIH grant funding, recipients must now certify that they are not in violation of federal antidiscrimination laws. Specifically, the notice highlights that such violations include operation of diversity and equity programs, engaging in “discriminatory equity ideology,” and participation in any prohibited boycott of businesses. Based on the memo, the NIH can terminate financial assistance and recover funds from recipients that engage in prohibited conduct.
Administration Continues Federal Workforce Restructuring. An Office of Personnel Management proposed rule seeks to create a new category of federal employees (“Schedule Policy/Career”) for employees with policy-influencing duties. These are not political appointees, and they currently have federal civil service protections. The new proposed category would remove these protections for an estimated 50,000 employees and instead make them “at-will,” which means agencies could remove them more quickly. Read the fact sheet here.
President Trump also issued a memo extending the hiring freeze on federal civilian employees through July 15, 2025.
President Trump Issues EO on Higher Education Accreditation. With regard to healthcare, the EO directs the attorney general and education secretary to terminate diversity, equity, and inclusion requirements advanced by the Liaison Committee on Medical Education, the Accreditation Council for Graduate Medical Education, or other accreditors of graduate medical education. The EO also directs the education secretary to assess whether to suspend or terminate the council’s status as an accreditation agency. Read the fact sheet here.
QUICK HITS
Vulnerable House Republicans Express Concerns About Medicaid Cuts. A group of 12 House Republicans sent a letter to House Republican leadership and Energy and Commerce Committee Chair Guthrie (R-KY) stating that they will not vote for any reconciliation bill that reduces Medicaid coverage for children, seniors, individuals with disabilities, or pregnant women, although they emphasized their support for targeted reforms.
FTC Issues RFI on Anticompetitive Regulations. In response to President Trump’s EO on “Reducing Anticompetitive Regulatory Barriers,” the Federal Trade Commission (FTC) launched a public inquiry into the impact of federal regulations on competition. The RFI invites members of the public to comment on how federal regulations can harm competition, and seeks to understand which federal regulations have an anticompetitive effect. Comments are due on May 27, 2025.
Commerce Department Launches Investigation Into Imports of Pharmaceuticals, Pharmaceutical Ingredients. The RFI announced that Commerce Secretary Lutnick initiated an investigation to determine the national security effects of imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, key starting materials, and derivative products of those items. Comments are due on May 7, 2025.
House Republicans Launch American-Made Medicines Caucus. House Energy and Commerce Health Subcommittee Chair Carter (R-GA) and Reps. Tenney (R-NY) and Bilirakis (R-FL) announced the launch of a new caucus that will focus on ways to bring the pharmaceutical supply chain to the United States and become less dependent on China for pharmaceutical products.
FDA Limits Industry Employees From Advisory Committees. The policy directive limits individuals employed at companies regulated by the US Food and Drug Administration (FDA) from serving as official members on FDA advisory committees.
House Ways and Means Committee Members Send Letter to IRS. The letter from Committee Chair Smith (R-MO), Health Subcommittee Chair Buchanan (R-FL), and Rep. Panetta (D-CA) encourages Acting Internal Revenue Service (IRS) Commissioner Shapley to update and expand the IRS list of services and treatments for chronic diseases covered under an employer-sponsored high deductible health plan.
HHS Secretary Kennedy Focuses on Autism Spectrum Disorder. In a press conference, Kennedy highlighted recently released data from the Centers for Disease Control and Prevention that found an increased prevalence of Autism Spectrum Disorder. He stated that a large research effort would be underway, with findings published by September 2025, although NIH stated that its goal is just to award research grants by then. Read the press release here.
House Ways and Means Committee Republicans Issue RFI on OPOs. In an open letter, Chair Smith and Oversight Subcommittee Chair Schweikert (R-AZ) requested information on organ procurement organizations (OPOs) related to their operations, their allocation of resources, and the rules and regulations governing them. This RFI is part of the committee’s broader effort to examine OPOs’ potential violations of Medicare reimbursement rules and US tax law.
GAO Examines College Student Health Coverage. The US Government Accountability Office (GAO) report found that the percentage of college students with health insurance has increased by 11 percentage points in the last decade, but found that 1.6 million students still lack coverage. GAO identified barriers such as lack of Medicaid expansion and geographic limitations on coverage for students attending school out of state.
GAO Releases Reports on Defense Healthcare. The first report found that sepsis-related quality measures at medical facilities run by the US Department of Defense (DOD) have been improving. The second report recommended that DOD monitor mental health screenings for prenatal and postpartum TRICARE beneficiaries to ensure the recommended screenings are being provided.
NEXT WEEK’S DIAGNOSIS
Both chambers of Congress will be back in session next week, and the House plans to forge ahead on the reconciliation process during this upcoming work period. It’s being reported that the House Energy and Commerce Committee will mark up its reconciliation package on May 7, 2025, and House Republicans have indicated they plan to have a full bill on the floor the week of May 19, 2025. At the committee level, next week’s healthcare activities include:
House Education and Workforce Committee hearing on the Employee Retirement Income Security Act.
Senate Appropriations Committee hearing on US biomedical innovation.
House Oversight and Government Reform Cybersecurity, Information Technology, and Government Innovation Subcommittee hearing on government IT modernization.
House Veterans’ Affairs Oversight and Investigations Subcommittee hearing on the VA’s mental health policies.
We await the release of the Trump administration’s FY 2026 budget request, which is expected in the form of an abbreviated, or “skinny,” budget (as is common in a new administration) this month, followed by a full budget request at a later date. HHS confirmed that HHS Secretary Kennedy will testify in front of the Senate HELP Committee, likely after the skinny budget is released next month.
Deregulatory Push by Trump Administration Picks Up Speed
It’s no secret that President Trump, his Cabinet, and other executive branch leaders are prioritizing deregulatory activities over more historical federal governance approaches. Indeed, one of President Trump’s earliest executive orders – issued on January 31, 2025 – is entitled “Unleashing Prosperity Through Deregulation” and states that for each new regulation issued, at least ten prior regulations must be identified for repeal (and it defines the term “regulation” broadly to include memoranda, guidance documents, and policy statements, among others). In addition to this new 10-for-1 directive, on February 19, 2025, President Trump issued executive order 14219, “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative” (EO 14219). The president’s order directs all executive agency heads, in coordination with the Director of the Office of Management and Budget (OMB) and its Department of Government Efficiency (DOGE) Team Lead, to review all existing regulations for “consistency with law and Administration policy” and, within 60 days, to identify regulations that fall under the following categories:
regulations that are unconstitutional and those that raise serious constitutional difficulties, such as exceeding the scope of power vested in the federal government by the Constitution;
regulations based on unlawful delegations of legislative power;
regulations based on anything other than the best reading of the underlying statutory authority or prohibition;
regulations that implicate matters of social, political, or economic significance that are not authorized by clear statutory authority;
regulations that impose significant costs upon private parties that are not outweighed by public benefits;
regulations that harm the national interest by significantly and unjustifiably impeding technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objectives; and
regulations that impose undue burdens on small businesses and impede private enterprise and entrepreneurship.
The 60-day period granted to agency heads under EO 14219 ended on April 19, 2025. Just prior to the deadline for responsive agency submissions to the White House, on April 11, 2025, OMB also published a notice styled as “Request for Information: Deregulation,” which seeks comments from the broader public on “regulations that are unnecessary, unlawful, unduly burdensome, or unsound.” This brief public Request for Information (RFI) from OMB asks commentators specifically to identify “regulations that stifle American businesses and American ingenuity.” The open-ended RFI could reasonably garner comments on regulations across a multitude of industries, including the health care, clinical research, and life sciences sectors. Comments are due to OMB no later than May 12, 2025, and should be submitted via Regulations.gov (Docket ID OMB-2025-0003) with information on the rule’s background and the submitter’s rationale for proposing its rescission.
Also on April 11, the Centers for Medicare & Medicaid Services (CMS) published its own request for information pursuant to its deregulatory activities under EO 14219. CMS is asking “healthcare providers, researchers, stakeholders, health and drug plans, and other members of the public” to submit feedback on a diverse array of topics. Topics of interest include how to streamline regulatory requirements; whether there are opportunities to reduce the administrative burden of reporting and documentation; and whether duplicative requirements can be identified and reduced. CMS also requests that responsive public comments include, where practical “data, examples, narrative anecdotes, and recommended actions.”
In parallel to the ongoing and wide-ranging processes of identifying federal rules and regulations that may be ripe for revocation, the Trump Administration has signaled in multiple forums that it intends to bypass procedural requirements created by Congress with the Administrative Procedure Act (APA). Most conspicuously, on April 9, 2025, President Trump issued a Memorandum to the Heads of Executive Departments and Agencies on the subject of “Directing the Repeal of Unlawful Regulations.” The memo directs executive branch leaders to identify categories of unlawful and potentially unlawful regulations following their completion of the 60-day review period ordered in February via EO 14219 and to immediately repeal any regulation that “clearly exceeds the agency’s statutory authority or is otherwise unlawful.”
In directing his administration regarding what regulations may be unlawful, President Trump cites a slew of recent Supreme Court decisions that he characterizes as having “recognized appropriate constitutional boundaries on the power of unelected bureaucrats and that restore checks on unlawful agency actions,” such as last year’s Loper Bright v. Raimondo. The memo continues to state that: “In effectuating repeals of facially unlawful regulations, agency heads shall finalize rules without notice and comment, where doing so is consistent with the ‘good cause’ exception in the [APA]…that allows agencies to dispense with notice-and-comment rulemaking” in certain situations.
Whether such regulatory changes can be implemented without following the typical rulemaking process is very likely to be subject to litigation initiated by stakeholders who prefer the regulations in question stay in place, as the APA’s “good cause” exception has not been used to support widespread deregulatory activities such as this one, and existing case law does not appear to support the President’s expansive view of the exception’s applicability. It’s also worth noting that the Department of Health and Human Services (HHS) separately published a notice on March 3, 2025 rescinding a long-standing departmental policy that directed HHS to use the APA’s good cause exception “sparingly.” This HHS policy shift makes it more likely that the department may seek to make significant regulatory changes – whether promulgating new rules or revoking existing rules – without engaging in public notice-and-comment processes. Stakeholders should continue to closely monitor HHS and agencies within its purview (e.g., CMS) for actions that would affect their rights and that may not comply with the statutory mandates of the APA.
Leaked Budget Proposal Suggests Major Restructuring of Federal Health and Safety Agencies, Including the Consumer Product Safety Commission
A recently leaked and apparently genuine Office of Management and Budget (OMB) Budget “Passback” memorandum—the OMB’s official feedback mechanism for budget submissions from federal agencies—signals major changes to the Department of Health and Human Services’ (HHS) proposed discretionary budget for Fiscal Year 2026. Namely, the draft Passback shows the Trump administration is considering sweeping changes to the structure and funding of federal health and safety programs, including not only HHS but also the Consumer Product Safety Commission (CPSC).
Dated April 10, 2025, the draft Passback is marked “pre-decisional” and explicitly not intended for dissemination. According to its language, the proposed funding levels “reflect the reforms necessary to enable agencies to fulfill their statutory responsibilities in the most cost-effective manner possible,” while acknowledging that “many difficult decisions were necessary to reach the funding level provided in the Passback.” The Washington Post has verified the authenticity of the draft Passback, though no formal confirmation has been issued by the White House or the relevant agencies.
In the draft Passback, the Trump administration proposes cutting nearly one-third of the federal health department’s budget. This would be achieved primarily through the elimination of select programs and the consolidation of various health and safety-related agencies under a new umbrella entity: the Administration for a Healthy America (AHA), overseen by Health Secretary Robert F. Kennedy, Jr.
Among the potentially affected agencies is the CPSC, an independent, bipartisan regulatory body established by Congress during the Nixon administration in 1972 through the Consumer Product Safety Act (CPSA). The CPSC is tasked with protecting the public from unreasonable risks of injury or death associated with consumer products. Under the proposed restructuring, the CPSC’s functions and staff would be absorbed into a newly created “Assistant Secretary for Consumer Product Safety” within the Immediate Office of the Secretary. The draft Passback also outlines a reduction in funding for administrative and support functions, stating that those responsibilities could be handled by existing staff within the Immediate Office of the Secretary. The CPSC reported total budgetary resources of $174.3 million in FY 2024. Its operating plan for FY 2025—last revised on February 25, 2025—requests $151 million at the Continuing Resolution level and $183.05 million under the President’s proposed budget. By contrast the FY 2025 budget for the Immediate of Office of the Secretary was $15.2 million. How the proposed restructuring would affect these appropriations remains unclear.
What Is Next for the CPSC?
The future of the CPSC remains uncertain. The CPSC is an independent agency created and empowered through congressional legislation. As only Congress has historically had the power to create and eliminate independent agencies, this draft Passback raises questions regarding whether the executive branch has the necessary authority to actually do what it proposes.
The CPSA mandated the CPSC’s creation in 1972, which was expanded in 2008 through the Consumer Product Safety Improvement Act (CPSIA). Traditionally, these enacting legislations would have insulated the CPSC from unilateral intervention by the executive branch. However, this draft Passback, in combination with several recent executive orders, signals plans to reduce the independence of regulatory agencies and asserts a level of executive oversight that would depart from historical norms. These efforts raise constitutional questions, particularly ones regarding the separation of powers between the executive and legislative branches.
These actions are likely to spark significant legal challenges. But with a Supreme Court that has reviewed and overturned related precedent, there is a possibility that these challenges may not succeed. Notably, the Court recently stayed a lower court ruling that reinstated Gwynne Wilcox to the National Labor Relations Board, and the matter is pending final disposition. Wilcox’s removal raises questions under Humphrey’s Executor v. United States, 295 U.S. 602 (1935), a landmark case that limited a president’s power to remove officers of independent agencies. That precedent may now be at risk. In its reply brief, the Trump administration leaves little doubt about its intentions: “Article II of the Constitution vests the ‘executive Power’—‘all of it’—in the President alone.”
In short, the possibility that the CPSC may be subject to restructuring cannot be ruled out. If implemented, the changes outlined in the draft Passback would mark a significant step toward increased executive oversight of independent agencies like the CPSC.
Insight Into DOGE’s Access to HHS’ Systems
Becker’s Hospital Review reports that the Department of Government Efficiency (DOGE) “has access to sensitive information in 19 HHS databases and systems,” according to a court filing obtained by Wired. HHS provided the information during the discovery process in the lawsuit filed by the American Federation of Labor and Congress of Industrial Organizations against the federal government, requesting restriction of DOGE’s access to federal systems.
According to Becker’s, DOGE had not previously disclosed nine of the 19 systems, which “contain various protected health information, ranging from email and mailing addresses to Social Security numbers and medical notes.”
Some of the systems included federal employees’ data and access to Medicare recipients’ personal information. For instance, one system listed is the Integrated Data Repository Cloud system, which “stores and integrates Medicare claims data with beneficiary and provider data sources.” Other listed systems include the NIH Workforce Analytics Workbench, which “tracks current and historical data on the NIH workforce, including headcounts and retirement information,” the Office of Human Resources Enterprise Human Capital Management Investment system, which “manages personnel actions and employee benefits at HHS,” and the Business Intelligence Information System, which “stores cloud-based HHS human resources and payroll data for analysis and reporting.”
Connecticut Office of the Attorney General Issues Annual Report on CTDPA Enforcement
On April 17, 2025, the Connecticut Office of the Attorney General (“OAG”) issued a report highlighting key enforcement initiatives, complaint trends and legislative recommendations aimed at strengthening the Connecticut Data Privacy Act (“CTDPA”). Highlights from the report are summarized below.
Breach Notice Review
In 2024, the OAG received 1,900 breach notifications. Each report was reviewed for compliance with state law. The OAG issued numerous warning letters to covered businesses that failed to provide timely notice, emphasizing that the 60-day statutory clock starts at the detection of suspicious activity—not when the full scope is confirmed. In serious cases, the OAG pursued Assurances of Voluntary Compliance requiring businesses to improve incident response practices and pay penalties.
Consumer Complaints
The OAG continues to receive significant complaint volumes regarding CTDPA compliance. Issues include unfulfilled data rights requests, misleading privacy notices, vague breach notifications, and misuse of public records for online profiles.
Enforcement Actions
The report highlighted enforcement actions on several violations, including the following:
Privacy Notices: The OAG conducted “sweeps” of insufficient or inadequate privacy notices and issued over two dozen cure notices. Common issues included missing CTDPA language, unclear opt-out mechanisms, and misleading limitations on consumer rights. Most businesses took corrective steps following notice.
Facial Recognition Technology: The OAG sent a cure notice to a regional supermarket due to their use of facial recognition technology (for purposes of preventing and/or detecting shoplifting). The OAG noted that businesses using facial recognition must comply with CTDPA’s protections for biometric data. The OAG clarified that crime prevention purposes do not exempt compliance.
Marketing and Advertising Practices: The OAG investigated a complaint involving a national cremation services company that mailed a targeted advertisement to a Connecticut resident shortly after receiving medical treatment. While the data used—name, age and zip code—was not classified as sensitive, the OAG expressed concern over the context and issued a cure notice. As a result, the company updated its privacy notice to disclose its use of third-party data and specify the categories of data collected. The case underscores that for the OAG, even non-sensitive data, when used in sensitive contexts, can lead to privacy harms and warrants heightened oversight.
Dark Patterns and Opt-Out Mechanisms: The OAG has significantly expanded its enforcement efforts to address manipulative design choices—commonly known as “dark patterns”—that interfere with consumer privacy rights. In a 2024 enforcement sweep, the OAG issued cure notices to businesses employing cookie banners that made it easier to consent to data tracking than to opt out.
Minors’ Online Services: The report notes that as of October 1, 2024, the CTDPA imposes new obligations on businesses that offer an “online service, product or feature” to minors under 18 years of age. Generally, these provisions require that businesses use reasonable care to avoid causing a heightened risk of harm to minors. Further, these provisions prohibit: (1) the processing of a minor’s personal data without consent for purposes of targeted advertising, profiling, or sale; (2) using a system design feature to significantly increase, sustain, or extend a minor’s time online; and (3) collecting a minor’s precise geolocation data without consent.
Consumer Health Data: The report notes that controllers must obtain opt-in consent for processing consumer health data and ensure proper contractual safeguards when sharing such data with processors. Two telehealth companies received letters related to potential unauthorized sharing with technology platforms.
Universal Opt-Out Preference Signals: The report also notes that as of January 1, 2025, businesses must recognize browser-based opt-out signals such as GPC. The OAG has emphasized that this requirement is key to easing consumer privacy management. The OAG also notes that going forward, it will be focused on examining whether businesses are complying with the universal opt-out preference signal provisions and that the OAG expects to engage in efforts to ensure this consumer right is upheld.
CTDPA Legislative Recommendations
The OAG reiterated eight proposed legislative changes to improve the CTDPA:
Scale Back Exemptions: Limit current entity-level exemptions for GLBA and HIPAA, narrow the FCRA data-level exemption and remove the entity-level exemption for non-profit organizations.
Lower Thresholds: Remove thresholds for businesses processing sensitive or minors’ data and scale back all other thresholds for businesses processing other types of data.
Strengthen Data Minimization: Require data processed to be strictly necessary for stated purposes.
Expand Definition of “Sensitive Data”: Add a comprehensive list of “sensitive data” elements found in other state privacy laws, such as government ID numbers, union membership and neural data.
Clarify Protections for Minors: Prohibit targeted advertising and sale of minors’ data for consumers that business “knew or should have known” are minors.
Narrow Definition of “Publicly Available” Data: Refine and limit the scope of “publicly available” data.
Right to Know Specific Third Parties: Require businesses to name the specific entities receiving consumer data.
Enhance Opt-Out Preference Signal and Deletion Rights: Require all web browsers and mobile operating systems to include a setting that allows users to affirmatively send opt out preference signals and create a centralized deletion mechanism.
10th CIRCUIT EXPANDS TCPA EMERGENCY PURPOSES EXCEPTION: Calls Made to Inform Residents of Virtual Town Halls During Covid-19 Are Covered
For many of us, Covid-19 feels like a distant memory. But with the TCPA’s four-year statute of limitations, what’s in the past is rarely forgotten. The 10th Circuit Court of Appeals, in particular, has not forgotten the challenges of maintaining normalcy amidst social distancing measures and the raging pandemic.
In a recent decision, the 10th Circuit affirmed the New Mexico District Court’s dismissal of a TCPA case, holding that calls made by the City of Albuquerque to inform residents about virtual town-halls during the Covid-19 pandemic are covered by the TCPA’s emergency purposes exception. This decision notably expands scope of the emergency purposes exception – previously limited to calls conveying urgent health and safety information – to cover broader mitigation measures tied to public health emergencies.
Plaintiff Gerald Silver brought a putative class action against the City of Albuquerque, alleging that the city violated the TCPA by making pre-recorded phone calls inviting its residents to attend virtual town hall meetings during the COVID-19 pandemic. The calls were made to residents designated by the (505) area code. Silver’s complaint alleges that he received “at least seven prerecorded voice calls from the city on his cell phone” about the town halls.
Both parties agreed there was no commercial purpose to the calls, and that, during the period in which the calls were made, the federal government, the State of New Mexico, and the City of Albuquerque had all declared a state of public health emergency relating to Covid-19.
The city moved to dismiss Silver’s claim on two grounds: First, the city argued it was not subject to the TCPA because it was not a qualifying “person” under the statute; and second, the city contended that, even if it was subject to the TCPA, the calls fell under the TCPA’s exception for calls made for emergency purposes.
While the Court skirted around the issue of whether the TCPA applies to local governments, it held that Silver’s complaint did not show a violation of the TCPA. Although the TCPA generally prohibits the use of robocalls, it excepts from coverage “calls made necessary in any situation affecting the health and safety of consumers.” 47 C.F.R. § 64.1200(f)(4). The Court of Appeals undertook a two-step inquiry to determine whether the City’s calls were covered by the emergency purposes exception, looking at their (1) context and (2) content. Because the caller was a local government official, the “context” prong of the inquiry was satisfied. The “content” prong was also satisfied, because each call was informational. And because the City made the calls to inform citizens that town hall meetings would be held virtually—a mitigation measure “made necessary” by the social-distancing requirements of the pandemic—the Court of Appeals held that calls fall squarely within the exception.
“Because a virtual town hall meeting is itself a mitigation measure, any communications regarding those town hall meetings satisfy the content prong of the emergency purposes exception.”
The Court of Appeals also rejected Silver’s argument that because he had not expressed a desire to attend the town hall meetings, the phone calls were not relevant to him. The Court held that emergency purposes exception does not require that calls be tailored to an individual’s preferences, but rather, to an emergency that is relevant to the called party. Here, the emergency was the pandemic which, along with any associated mitigation measures, was relevant to all City residents.
Silver next argued that there were less intrusive means for the city to inform residents about the town halls, or, in the alternative, that the City’s calls could not have related to the pandemic because they did not explicitly mention Covid-19. Both these arguments failed to persuade the Court, because (1) the TCPA does not require calls to use specific words to invoke the emergency purposes exception, and (2) a caller is not required to use the least intrusive means available.
You can read the Court of Appeals’ Order here: Gerald Silver v. City of Albuquerque
Are Your Lactation Spaces Compliant?
Lactation spaces go by different names — wellness room, vacant office, storage room. No matter what you call it, there are strict regulations about what the room contains and where the room must be located. Some of the requirements may surprise you.
PUMP Act Requirements
In short, the PUMP Act states that employees “are entitled to a place to pump at work, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public.”
However, last year a U.S. Department of Labor (DOL) memo provided more specifics. DOL guidance states that employees must be provided a place to sit, and a flat surface (other than the floor) on which to place the pump. The guidance does not say a refrigerator is required, but rather the employee must be able to safely store milk while at work, such as in an insulated food container, personal cooler, or refrigerator. Access to electricity is “ideal.” And the guidance states that access to a sink near the lactation “improves the functionality of the space.”
The DOL guidance says that some employers may choose to use a room with a door that closes and covered windows. But an employer can also create a space using partitions, as long as the space is shielded from view and free from intrusion.
But There’s More
Many employers forget that their lactation space must not only comply with the PUMP Act, but also the Pregnant Worker’s Fairness Act (PWFA) regulations. The PWFA regulations turn many of the amenities that were not mandatory into amenities that an employer may be required to provide if an employee makes a request and adding the amenity does not create an undue hardship for the employer.
The PWFA regulations state: “Accommodations related to pumping, such as, but not limited to, ensuring that the area for lactation is in reasonable proximity to the employee’s usual work area; that it is a place other than a bathroom; that it is shielded from view and free from intrusion; that it is regularly cleaned; that it has electricity, appropriate seating, and a surface sufficient to place a breast pump; and that it is in reasonable proximity to a sink, running water, and a refrigerator for storing milk.” Therefore, if an employee asks for something for the PUMP room, consider whether it qualifies as a reasonable accommodation request under the PWFA that you are required to provide.
Lactation spaces are no longer a “bonus room” or a “benefit,” they are a legal requirement. And not providing a room that is compliant with federal law may make you vulnerable to a collective action lawsuit. So do your research and ensure lactation spaces cover your legal basis.
Lactation spaces are no longer a “bonus room” or a “benefit,” they are a legal requirement.