Maryland’s FAMLI Program, Part I: An Overview of The Law
In 2022, the Maryland General Assembly overrode Governor Larry Hogan’s veto to enact the law that created the Family and Medical Leave Insurance (FAMLI) program. Applicable to all employers with Maryland employees and starting July 1, 2026, the program will provide most employees in Maryland with twelve weeks of paid family and medical leave, with the possibility of an additional twelve weeks of paid parental leave. Contributions from employers and employees to fund the program will begin July 1, 2025.
Quick Hits
Maryland’s Family and Medical Leave Insurance (FAMLI) program provides most Maryland employees with up to twelve weeks of paid leave, with some eligible for an additional twelve weeks, starting July 1, 2026, funded by contributions from both employers and employees beginning July 1, 2025.
The Maryland Department of Labor has released two sets of proposed regulations for the FAMLI program.
Under the FAMLI program, employees in Maryland will be eligible for paid leave for various family and medical reasons, and if they take leave for their own medical reasons, they will be eligible for an additional twelve weeks for parental bonding purposes.
There is much that employers may need to do to prepare. That preparation will depend on regulations issued by the Maryland Department of Labor (MDOL) to implement the law. Thus far, the MDOL has released two sets of proposed regulations, with more to come. The first set, released in October 2024, covers general provisions, contributions, equivalent-private insurance plans, and claims, while the second set, released on January 13, 2025, and currently open for public comment, covers dispute resolution. Part one of this multipart series explains the law, with parts two and three summarizing the proposed regulations, as well as employer concerns.
The law sets forth a general framework for the program, consisting of the following elements:
Leave Amount and Reasons for Leave
Effective July 1, 2026, all employees who have worked at least 680 hours in Maryland over the prior twelve months will be eligible to receive up to twelve weeks of paid leave for their own serious health condition, to care for a family member’s serious health condition, for parental bonding (including kinship care), to care for an injured or ill military servicemember who is next of kin, or for certain qualifying exigency reasons related to a servicemember’s active duty. If an employee has taken FAMLI leave for their own serious health condition, they may receive an additional twelve weeks for parental bonding purposes (and vice versa). The law requires employees to take leave in a minimum of four-hour increments.
Family members include the child of the employee or their spouse, the parent of the employee or their spouse, the employee’s spouse or domestic partner, and the employee’s grandparent, grandchild, or sibling. These include biological, adopted, foster, step, legal guardian, and in loco parentis relationships.
Contributions
The benefits will be administered through a state program, which will be funded through contributions from employers and employees, starting July 1, 2025. The rate of contribution will be determined annually by the Maryland secretary of labor, but is capped at 1.2 percent of an employee’s wages, up to the Social Security wage base (which will be $176,100 in 2025). The law splits contributions 50-50, unless the employer elects to make the employee share of the contribution as well. The law does not require small employers (those with fewer than fifteen employees) to submit the employer portion of the contribution (although employee contributions are still required), and the Maryland Department of Health will reimburse certain licensed/certified community health providers for up to the full amount of their share of the premium.
Employer Notice to Employees
The law requires covered employers to provide written notice to employees of their rights and duties under the law upon hire, annually, and within five days when leave is requested or when the employer knows leave may qualify.
Employee Notice to Employers
If the need for leave is foreseeable, the law requires employees to provide employers with at least thirty days’ written notice of their intention to take leave. If it is not foreseeable, they must provide notice as soon as practicable and generally comply with the employer’s absence-reporting requirements. If intermittent leave is required, the employee must make a reasonable effort to schedule the leave to not unduly disrupt business operations.
Employee Application for Benefits
Employees may apply for benefits up to sixty days before and sixty days after the anticipated start date of the leave, although the MDOL may waive the filing deadlines for good cause. Employers have five days to respond to an application.
Interaction With Other Benefits
FAMLI leave will run concurrently with federal Family and Medical Leave Act (FMLA) leave. Employers may not require employees to use vacation, sick leave, or other paid time off before or while receiving FAMLI benefits, although employers may permit employees to use such leave to bridge the difference between FAMLI benefits and full pay. However, if an employer provides paid leave specifically for purposes of parental bonding, family care, military leave, or disability, the employer may require employees to use such leave concurrently or coordinated with FAMLI leave. Employees receiving unemployment insurance benefits or workers’ compensation benefits (other than for a permanent partial disability) are not eligible for FAMLI benefits.
Job Protection and Health Benefits
During FAMLI leave, the law states that employers may discharge employees only for cause. They must otherwise be reinstated to their job, unless the employer determines that reinstatement will cause “substantial and grievous economic injury” to their operations and has notified the employee of that fact. In addition, the law requires employers to maintain the employee’s health benefits during FAMLI leave.
Private Employer Plans
Employers may establish their own plan or utilize a certified third-party insurance plan that meets or exceeds the rights, protections, and benefits provided to employees under the law. For such private employer plans to be valid, the MDOL, which is directed to establish “reasonable criteria” for such plans, must approve the plan.
Grassley Defends Constitutionality of False Claims Act’s Qui Tam Provisions in Amicus Brief
In an amicus brief filed on January 15, Senator Chuck Grassley (R-IA) urges the Eleventh Circuit to reverse a district court ruling which held that the False Claims Act’s qui tam provisions are unconstitutional.
Grassley, who authored the 1986 amendments which modernized the FCA, states that “the False Claims Act is our nation’s single greatest tool to fight waste, fraud and abuse” and calls the Middle District of Florida’s decision in Zafirov v. Florida Medical Associations a “flawed decision.”
In September, the Middle District of Florida dismissed whistleblower Claire Zafirov’s qui tam lawsuit on the grounds that the FCA’s qui tam provisions are unconstitutional as they violate the Appointments Clause of Article II of the Constitution.
In his brief, Grassley lays out the long-history of qui tam laws and details a number of qui tam provisions enacted by the First Congress. He criticizes the district court for discarding this history despite the Supreme Court’s heavy reliance on it in its decision in Vermont Agency of Nat. Res. v. United States ex rel. Stevens, which held that the FCA’s qui tam provisions do not violate Article III of the Constitution.
“The First Congress that enacted numerous statutes that featured qui tam provisions made clear that, at the time of the founding, the legislature believed that the limited rights granted relators fell within the Constitutional separation of powers many of them had personally fashioned,” Grassley’s brief states.
In the brief, Grassley also notes that “every court to have addressed the issue has concluded that the qui tam provision is in accordance with the Constitutional separation of powers.”
He further emphasizes the immense success of the FCA’s qui tam provisions in incentivizing whistleblowers to come forward and expose otherwise hard-to-detect frauds, deter would-be fraudsters, and protect the public from harm.
As Grassley notes in his brief, “the FCA is a resounding success, as Congress and the Executive Branch have both acknowledged.” According to newly released statistics from the Department of Justice (DOJ), since the FCA was modernized in 1986, qui tam lawsuits have resulted in over $55 billion in recoveries of taxpayer dollars.
Grassley’s brief joins a brief filed by the U.S. government in urging the Eleventh Circuit to reverse the district court ruling. In its brief, the government claims that the Stevens decision “makes clear that relators do not exercise Executive power when they sue under the Act… Rather, they are pursuing a private interest in the money they will obtain if their suit prevails.”
It further states that “the historical record.. suggests that all three branches of the early American government accepted qui tam statutes as an established feature of the legal system.”
During her Senate confirmation hearing on January 15, Senator Grassley asked Pam Bondi, nominee to be the Attorney General, if she would commit to defending the constitutionality of the FCA.
“I would defend the constitutionality of course of the False Claims Act,” Bondi stated. “The False Claims Act is so important, especially by what you said with whistleblowers.”
Michigan’s Earned Sick Time Act – Legislative Update
There are only 36 days before the Earned Sick Time Act (ESTA) takes effect on February 21, 2025. Presently, both the state House and Senate have introduced bills to amend the ESTA. The House acted quickly convening a committee to hear testimony on House Bill 4002 and proposed amendments to the minimum wage law (HB 4001). Varnum’s Labor and Employment team has been closing monitoring the progress of these amendments.
Varnum attorney Ashleigh Draft testified before the House Select Committee on Protecting Michigan Employees and Small Businesses in support of House Bill 4002. To date, the Senate has not yet convened a committee to discuss the Senate Bill. A summary of both the House and Senate bills follow:
House Bill (HB 4002)
The House Bill includes crucial amendments to make the Act more workable for both employees and employers, including:
Clarifies the definition of employees eligible for the benefits of the ESTA. Independent contractors, out of state employees, seasonal workers (working 25 weeks or less in a year), part-time employees (working 25 hours or less per week) and variable hour workers are not eligible for benefits under the Act.
Exempts small businesses (employers with less than 50 employees) from ESTA.
Employers may limit increment of use to 1 hour.
Retains the accrual method of 1 hour for every 30 hours worked, with usage capped at 72 hours per year, and limiting carryover to 72 hours.
Recognizes that employers that frontload 72 hours per year are in compliance with the Act and do not need to carryover time from one benefit year to the next.
Permits employers to provide a single PTO bank that can be used for all purposes including ESTA.
Allows employers to require employees to take ESTA time concurrently with FMLA, ADA or any other applicable law.
Senate Bill (SB 15)
The bill pending in the Senate proposes the following amendments:
Defines small business as an employer with fewer than 25 employees.
Allows small businesses to frontload 40 hours of paid and 30 hours of unpaid earned sick time at the beginning of the year.
Employers may limit increment of use to 1 hour.
Retains the accrual method of 1 hour for every 30 hours but permits frontloading of 72 hours as an alternative to the accrual method, while retaining the carryover from year to year.
The amount of accrued sick time that an employee may carry over from year to year may be limited to 144 hours if the employer pays the employee the value of the employee’s unused sick time before the end of the year. If the employer does not pay out the value of the employee’s unused sick time, carryover may be capped at 288 hours.
Charlotte E. Jolly contributed to this article
DOJ’s False Claims Act Recoveries Top $2.9 Billion in FY 2024, but Health Care Numbers Dip—What Could FY 2025 Hold for Health Care Enforcement?
On January 15, 2025, the U.S. Department of Justice (DOJ) issued a press release announcing its fiscal year (FY) 2024 False Claims Act (FCA) recoveries and reported that settlements and judgments exceeded $2.9 billion in 2024—up from $2.68 billion in FY 2023.
Recoveries from entities in the health care and life sciences industries continue to represent the lion’s share of the dollars. However, health care recoveries have dropped year over year, and 2024 saw a decrease in the number of cases pursued by the DOJ on its own. What does the future hold as we look forward to a new administration? History might provide some interesting guidance.
Overview of the Statistics
While the 423 FCA cases filed by the DOJ in FY 2024 represented a marked decrease from the 505 FCA cases filed the previous year, FY 2024 saw the highest number of qui tam actions filed in history. FY 2024, coincidentally, ended on the same day (September 30, 2024) that a Florida judge ruled in U.S. ex rel. Zafirov v. Florida Medical Associates that the qui tam provisions of the FCA were unconstitutional.
Qui tam relators, or whistleblowers, filed 979 suits in FY 2024, up from 713 in FY 2023 and eclipsing the prior record of 757 filings set in FY 2013.
Whistleblower and DOJ cases combined resulted in 558 settlements and judgments, on par with 566 last year.
Counting the $2.9 billion recovered in FY 2024, total recoveries under the FCA since the 1986 amendments now exceed $78 billion and have exceeded $2 billion annually for 16 consecutive years.
Health Care Statistics
While several of the health care statistics dipped slightly, recoveries from the health care sector remained steady at $1.68 billion (compared to $1.86 billion in FY 2023) and drove the overall FCA recovery figures.
While the FCA statistics show overall increases in total fraud recoveries and the number of cases filed by whistleblowers in FY 2024, the health care statistics portray a slightly different picture. While more health care cases were filed by relators in FY 2024 than in FY 2023, the number of cases brought by the DOJ, on its own, dropped by more than 10 percent compared to FY 2023. Other health care statistics that dropped in FY 2024 compared to FY 2023 included:
total health care fraud recoveries,
recoveries in cases pursued by the government,
recoveries in cases in which the government intervened, and
recoveries in cases where relators pursued matters on their own.
In DOJ’s press release announcing the FCA recoveries, the agency reaffirmed its commitment to enforcement in the health care sector, highlighting key recoveries in the following areas:
health care entities contributing to the opioid crisis;
providers billing federal health care programs for medically unnecessary services and substandard care;
cases alleging false claims in the Medicare Advantage program;
matters involving unlawful kickbacks and Stark Law violations;
pandemic-related fraud (including cases involving improper payments under the Paycheck Protection Program and alleged fraud affecting Medicare and other federal health care programs for services related to COVID-19 testing and treatment); and
cybersecurity enforcement and holding contractors accountable for compliance with applicable cybersecurity requirements (one example was a case against the Georgia Institute of Technology and Georgia Tech Research Corp., which we covered in an earlier blog post).
What to Expect in FY 2025
As a general matter, the FY 2024 statistics demonstrate that FCA enforcement continued to be a top DOJ priority, particularly within the health care sector.
As we look ahead to the incoming Trump administration, it is noteworthy that the first Trump administration saw almost 370 more health care FCA cases brought by relators than those filed during the Biden administration. The first Trump administration also saw the highest number of health care-related FCA cases brought in a single year by the DOJ. History would suggest a continued focus on health-care related FCA enforcement during President Trump’s second term.
Epstein Becker Green Attorney Ann W. Parks contributed to the preparation of this post.
FDA Revokes Authorization for the Use of Red Dye No. 3 in Food and Ingestible Drugs
On 15 January 2025, the US Food and Drug Administration (FDA) announced that it will revoke the color additive authorization for use of FD&C Red No. 3 in food (including dietary supplements) and ingestible drugs. This ban responds to a 2022 color additive petition submitted by several interested parties and filed by FDA in 2023.
In support of the revocation, FDA is relying on the Delaney Clause of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 379e(b)(5)(B)), which requires FDA to ban color additives that are found to cause or induce cancer in humans or animals. Specifically, FDA is invoking the Delaney clause as a result of data that shows FD&C Red No. 3 causes cancer in male rats via a sex- and species-specific hormonal mechanism. In fact, according to the preamble of the final rule, “the carcinogenicity of FD&C Red No. 3 was not observed when tested in other animals including female rats and either sex of mice, gerbils, or dogs.” In other words, there is no demonstrable link between consumption of the food additive and cancer in any animal other than male rats, and most importantly, between consumption of the food additive and cancer in humans. The Delaney clause nevertheless requires the revocation of the clearance for FD&C Red No. 3 based on the male rat carcinogenicity data.
Food manufacturers will have until 15 January 2027 to reformulate products containing FD&C Red No. 3, whereas drug producers will have until 18 January 2028. California’s ban on FD&C Red No. 3 in food (along with three other additives) under AB 418 goes into effect a few weeks before FDA’s ban, on 1 January 2027.
McDermott+ Check-Up: January 17, 2025
THIS WEEK’S DOSE
House Committees Organize, Senate Committees Begin Nomination Hearings. House healthcare committees held organizing meetings and announced subcommittee assignments, while Senate committees held nomination hearings for President-elect Trump’s appointees, although none (yet) in the healthcare space.
Senate Committee on Homeland Security & Governmental Affairs Holds OMB Director Nomination Hearing. The Office of Management and Budget (OMB) director confirmation hearing focused on Russell Vought’s previous positions, and mentions of healthcare issues were mostly related to veterans.
Senate Special Committee on Aging Holds Hearing on Improving Wellness Among Seniors. The hearing highlighted programs and policies that can improve seniors’ quality of life.
CMS Announces Next 15 Drugs to be Negotiated in Medicare Part D. The prices for the 15 drugs, which include the anti-obesity medications Ozempic, Rybelsus, and Wegovy, must be negotiated and announced by September 1.
HHS, DEA Issue Two Regulations on Telemedicine Prescribing of Controlled Substances. The regulations, one final and one proposed, from the US Department of Health and Human Services (HHS) and the US Drug Enforcement Administration (DEA) address requirements and pathways for certain providers to prescribe controlled substances via telehealth.
CMS Finalizes NBPP for 2026. The Centers for Medicare & Medicaid Services (CMS) finalized much of what was proposed, including enhanced enforcement against agents and brokers.
CMS Releases Advance Notice for 2026 MA and Part D Payment Policies. The annual Medicare Advantage (MA) and Part D payment update would increase MA revenue by 4.33% in 2026 compared to 2025.
CONGRESS
House Committees Organize, Senate Committees Begin Nomination Hearings. Various committees, including House Ways and Means and House Energy and Commerce, held organizational meetings this week and solidified subcommittee assignments. Reps. Buchanan (R-FL) and Doggett (D-TX) will continue as chair and ranking member, respectively, of the Ways and Means Health Subcommittee. Reps. Carter (R-GA) and DeGette (D-CO) are the new chair and ranking member, respectively, of the Energy and Commerce Health Subcommittee. The Senate Finance and Health, Education, Labor, and Pensions (HELP) Committees have not yet released subcommittee assignments.
The Senate held nomination hearings for Trump appointees this week, including hearings for secretary of defense nominee Pete Hegseth and attorney general nominee Pam Bondi. Nomination hearings for healthcare appointees, including HHS secretary nominee RFK Jr. and CMS administrator nominee Mehmet Oz, are not yet scheduled. RFK Jr. will testify before both the Senate Finance and HELP Committees, although only the Finance Committee will vote to advance his nomination. Committees typically provide a week’s notice before a nomination hearing, so health-related hearings will likely begin no earlier than the week of January 27.
Senate Committee on Homeland Security & Governmental Affairs Holds OMB Director Nomination Hearing. During the hearing, Republicans predominately praised nominee Russell Vought’s previous work as OMB director under Trump’s first Administration and emphasized that they looked forward to working with him again. Democrats pressed Vought on some of his previous positions. With respect to health-policy-focused questions, Democrats asked if he would commit to distributing funds appropriated for SUPPORT Act programs, because they stated that he previously supported withholding funds for funded programs that required reauthorization. Democrats also raised concerns about potential cuts to Veterans Affairs disability benefits.
Senate Special Committee on Aging Holds Hearing on Improving Wellness Among Seniors. The hearing included witnesses from a local police department, research centers, and nonprofits who highlighted that physical and dietary interventions at an earlier age can improve health and longevity and lower costs. Democratic members focused on how lowering prescription drug costs and implementing food programs would benefit seniors, while Republican members focused on addressing financial scams and the costs of implementing programs for older Americans.
ADMINISTRATION
CMS Announces Next 15 Drugs to be Negotiated in Medicare Part D. On the Biden Administration’s last full business day, CMS announced the second round of 15 drugs that will be negotiated in Medicare Part D starting in 2027. Notably, Medicare will negotiate prices for Ozempic, Rybelsus, and Wegovy. Per the Inflation Reduction Act, drugs were selected based on total gross covered prescription drug costs under Medicare Part D. Drug companies with a selected drug will have until February 28 to decide if they will participate in negotiations. However, if a company opts to not participate in the negotiation process, they will face a significant penalty in the form of an excise tax on the sales of that drug, potentially reaching up to 95% of the drug’s U.S. sales.
It is unclear how the incoming Trump Administration will handle both these negotiations and the MA/Part D Technical Rule, released in late November, that proposes to expand coverage of anti-obesity medications in Medicare and Medicaid. Under the Inflation Reduction Act, the final prices for these 15 drugs must be negotiated and announced by September 1, 2025. A fact sheet can be found here, and information about the first round of negotiated drug prices can be found here.
HHS, DEA Issue Two Regulations on Telemedicine Prescribing of Controlled Substances. The agencies released a final rule, Expansion of Buprenorphine Treatment via Telemedicine Encounter, which establishes requirements for the prescription of certain controlled substances via telemedicine and audio-only telemedicine for treatment of opioid use disorder. The final rule requires a DEA-registered practitioner to review the patient’s prescription drug monitoring program data for the state in which the patient is located during an audio-only telemedicine encounter. Additional prescriptions can be issued via other forms of telemedicine as authorized under the Controlled Substances Act, or after an in-person medical evaluation is conducted.
The DEA also released a proposed rule, Special Registrations for Telemedicine and Limited State Telemedicine Registrations, which would establish three special registrations that create a pathway for certain healthcare professionals to prescribe certain controlled substances via telemedicine. The special registration would only apply where the prescribing practitioner has never conducted an in-person medical evaluation of the patient prior to the issuance of the prescription. Comments are due 60 days from publication. For more information on the special registration proposed rule, check out our +Insight.
CMS Finalizes NBPP for 2026. The Notice of Benefit and Payment Parameters (NBPP) finalizes changes to health plans participating on the Affordable Care Act (ACA) Marketplace, as well as new requirements for Marketplaces themselves, agents, brokers, web-brokers, direct enrollment entities, and assisters that help Marketplace consumers. Most proposed policies were finalized and include the following:
Agents and Brokers: CMS enhanced enforcement, including to suspend an agent’s or broker’s ability to transact information with the Exchange. CMS also updated the model consent form that agents, brokers, and web-brokers can use to obtain and document consumer consent.
Grace Periods: CMS will allow health plans to adopt a fixed-dollar payment threshold of $10 or less, adjusted for inflation, under which plans would not be required to trigger a grace period or terminate enrollment for enrollees who fail to pay the full amount of their portion of premium owed.
Failure to File and Reconcile: CMS will require Exchanges to provide notice to consumers and tax filers who have failed to file and reconcile their advanced premium tax credit for two consecutive years.
Plan Options: CMS finalized updates to standardized plan options and non-standardized plan option limits, including requiring issuers to offer multiple standardized plan options within the same product network type, metal level, and service area to better differentiate these plans from one another to reduce the risk of duplicative offerings.
It is unclear how the incoming Trump Administration will handle these policies and whether any will be altered prior to the start of 2026. The final notice was effective January 15, 2025. A fact sheet is available here.
CMS Releases Advance Notice for 2026 MA and Part D Payment Policies. The Advance Notice is released on an annual basis and includes proposed updates to the capitation and risk adjustment methodologies used to calculate payments to MA plans, as well as other payment policies that impact Part D. Key proposals include:
Overall Payment Update: CMS proposed payment updates that would result in an estimated 4.33% increase in MA revenue in 2026 compared to 2025. CMS noted that this percentage translates to an increase of more than $21 billion in MA plan payments from 2025 to 2026.
Risk Adjustment: CMS proposed to complete the three-year phase-in of the Part C Risk Adjustment Model by calculating 100% of the risk scores using only the 2024 CMS-HCC model.
Part C and D Star Ratings: CMS provided a list of eligible disasters for adjustment and lists measures that will be included in the Part C and D improvement measures and Categorical Adjustment Index for the 2026 Star Ratings. CMS is considering additional ways to simplify and refocus the measure set on clinical care, outcomes, and patient experience of care measures, and is considering adding geography to the Health Equity Index reward.
Comments are due by February 10, 2025, which is after President-elect Trump’s inauguration. It is unclear how the incoming Trump Administration will handle the rate notice and whether these policies and payment rates will ultimately be implemented for 2026. The fact sheet can be found here, and a press release can be found here.
QUICK HITS
ASPE Issues Report on Medicare Part D Out-of-Pocket Cap. The HHS Assistant Secretary for Planning and Evaluation (ASPE) found that about 11 million Part D enrollees are expected to reach the $2,000 annual out-of-pocket cap enacted by the Inflation Reduction Act. Read the full report here.
FTC Releases Second Interim Report on PBMs. The Federal Trade Commission (FTC) report on pharmacy benefit managers (PBMs) focuses on specialty generic drug costs and follows the July 2024 first interim report on PBMs. Read the press release here.
HHS Summarizes Public Comments on Consolidation in Healthcare Markets RFI. The report highlights themes from public comments in response to a March 2024 request for information (RFI). The report calls for more ownership transparency and greater disclosures of private equity acquisition activity in healthcare markets; more enforcement action to inhibit mergers and acquisitions; and increased data sharing across federal, state, and local agencies.
CMS Releases Snapshot of Accountable Care Initiatives. The snapshot highlights that 53.4% of traditional Medicare enrollees are in an accountable care relationship in 2025, an increase of 4.3% from 2024. Read the fact sheet here.
CMS Issues Draft 2026 Part D Redesign Program Instructions. The instructions provide information about changes to the structure of the Part D standard benefit that were mandated by the Inflation Reduction Act. Comments are due by February 10, 2025. A fact sheet is available here.
CMS Releases Updated Guidance on Medicaid/CHIP Children’s Continuous Eligibility. The guidance replaces previously issued guidance on the topic, clarifying policies related to implementation in the Children’s Health Insurance Program (CHIP) and for incarcerated youth. The requirement to provide 12 months of continuous eligibility to children under the age of 19 was effective January 2024.
OIG Raises Concerns About FDA Accelerated Approval Pathway. An HHS Office of Inspector General (OIG) report recommended that the US Food and Drug Administration (FDA) modify the accelerated approval pathway to define specific factors that would require the accelerated approval council to advise on certain drug applications, and ensure appropriate documentation of meetings with sponsors in drug approval administrative files.
CMS Releases Guidance on Improving HIV Testing, Prevention, and Care Delivery in Medicaid/CHIP. The guidance provides strategies and opportunities for state Medicaid programs based on the latest scientific evidence and aims to help address access issues raised by two recent OIG reports.
HHS Declares Public Health Emergency, Provides Resources in California. In response to wildfires in southern California, HHS and CMS will provide resources and flexibilities, including extending the Marketplace Open Enrollment period and compiling a Medicaid disaster toolkit for states. Read the press release here.
MedPAC Holds January 2025 Meeting. The Medicare Payment Advisory Commission (MedPAC) meeting included votes on draft recommendations for updating payments for physicians, hospital inpatient and outpatient services, skilled nursing facility services, home health agency services, inpatient rehabilitation facility services, outpatient dialysis services, and hospice services. Sessions also discussed coverage limits on stays in freestanding inpatient psychiatric facilities; cost-sharing for outpatient services at critical access hospitals; and status reports on Part D, MA, and ambulatory surgical center services.
NEXT WEEK’S DIAGNOSIS
President-elect Trump will be inaugurated on January 20. With the new Administration, we expect immediate executive orders and other actions that may impact healthcare. The House and Senate will be in session next week. The Senate HELP Committee will hold an organizational meeting on January 21. Nomination hearings for Trump’s healthcare appointees could begin the week of January 27.
DEA Releases Long-Awaited Telehealth Special Registration Proposal, but Adoption Is Uncertain
On January 15, 2025, the US Drug Enforcement Administration (DEA) released a proposed rule entitled Special Registrations for Telemedicine and Limited State Telemedicine Registrations. This proposed rule would establish three special registrations, creating pathways for telehealth practitioners to prescribe, and online platforms to dispense, certain controlled substances via telemedicine after flexibilities expire on December 31, 2025. However, it is unclear whether the incoming Trump administration will move forward with the proposed approach for special registration.
IN DEPTH
WHY IT MATTERS
Current federal telehealth-focused controlled substance prescribing flexibilities, initially invoked in response to the COVID-19 public health emergency (PHE), will expire December 31, 2025.
Absent the flexibilities, current law would require telemedicine providers to perform an in-person medical evaluation of a patient prior to prescribing a controlled substance, with certain limited exceptions. One such exception is for providers who hold a “special registration,” the details of which were left within the DEA’s purview. This is the first time the DEA has proposed a special registration since the passage of the Ryan Haight Online Pharmacy Consumer Protection Act of 2008, when it was originally required.
The proposed rule would establish three types of special registrations for telemedicine:
Telemedicine Prescribing Registration, authorizing qualified clinician practitioners to prescribe Schedule III – V controlled substances via telemedicine
Advanced Telemedicine Prescribing Registration, authorizing qualified specialized clinician practitioners (e.g., psychiatrists and hospice care physicians) to prescribe Schedule II – V controlled substances via telemedicine
Telemedicine Platform Registration, authorizing covered online telemedicine platforms, in their capacity as platform practitioners, to dispense Schedule II – V controlled substances.
Special registrants would be required to maintain a State Telemedicine Registration (issued by the DEA) for every state in which the special registrant treats patients, unless otherwise exempted.
The proposed rule would also impose detailed requirements for practice standards, prescription information, and documentation, including requirements related to prescription drug monitoring program (PDMP) checks, use of audio-video technology, restrictions on Schedule II controlled substances, data reporting to the DEA, identity verification, clinician credentialing, and record retention.
The proposed rule was released just days before the incoming Trump administration takes office. Whether the new administration will allow the proposed rule to remain open for public comment or take a different approach remains unclear.
BACKGROUND
Under the Ryan Haight Act, a telemedicine provider is required to perform an in-person medical evaluation of a patient prior to prescribing a controlled substance, with certain limited exceptions. One such exception is for providers who hold a “special registration.” The Ryan Haight Act requires the DEA to establish the circumstances and procedures under which a special registration may be issued. In the more than 16 years since the act’s passage, the DEA has failed to implement such a process, even though Congress imposed a deadline of October 2019 in the 2018 SUPPORT for Patients and Communities Act for the promulgation of final regulations.
In March 2020, in response to the PHE, the DEA invoked flexibilities that allow for prescribing controlled substances via telemedicine without an initial in-person visit. The current extension of the flexibilities, pursuant to a November 2024 rule, authorizes all DEA-registered practitioners to prescribe Schedule II – V controlled medications via telemedicine without an initial in-person examination through December 31, 2025.
Stakeholders had hoped that the DEA would permanently adopt flexibilities for telemedicine prescribing of controlled substances after the PHE, including finally adopting a special registration process. In February 2023, the DEA and the Substance Abuse and Mental Health Services Administration proposed two rules: the general telemedicine rule and the buprenorphine rule. The two proposals would have established additional potential pathways for prescribing certain controlled substances in limited quantities via telemedicine without an initial in-person medical examination while also imposing detailed recordkeeping requirements. Notably, the proposed rules did not include a special registration process for telemedicine providers.
The DEA received a record 38,000 comments in response to the February 2023 proposed rules, including comments from federal lawmakers. Many stakeholders pointed out that the requirement for an in-person evaluation would make it more challenging for certain patients – those facing significant barriers to accessing care without telemedicine – to continue receiving the controlled medications they need. Subsequently, the DEA issued temporary rules in May 2023 and October 2023 extending the telemedicine flexibilities through December 31, 2024, and stated that it anticipated releasing a final rule addressing telemedicine prescription of controlled substances in fall 2024. In November 2024, the DEA further extended the flexibilities through December 31, 2025, stating that the extension would give it time to promulgate proposed and final rules on telemedicine prescribing and “ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled substance prescriptions.”
THE PROPOSED RULE
The DEA stated that it has determined that the best course of action to ensure patient access to care while maintaining sufficient safeguards to detect and protect against the diversion of controlled substances is to establish and maintain a separate special registration process for telemedicine.
The special registration would only apply where the prescribing practitioner intends to prescribe controlled substances and has not conducted an in-person medical evaluation of the patient prior to the issuance of the prescription. The proposed special registration would not be applicable to practitioner-patient relationships in which there has been a prior in-person medical evaluation of the patient by the practitioner. The special registration also would not apply to the other forms of the practice of telemedicine authorized under the Ryan Haight Act, including those authorized under the 2025 Expansion of Buprenorphine Treatment via Telemedicine Encounter final rule.
THREE REGISTRATION TYPES
The DEA proposes three types of special registrations for telemedicine. To be eligible for a special registration, the applicant would need to demonstrate a legitimate need for a special registration. An applicant for a special registration also would be required to already have one or more DEA registrations to prescribe (if a clinician practitioner) or dispense (if a platform practitioner), unless otherwise exempt.
The Telemedicine Prescribing Registration would authorize qualified clinician practitioners to prescribe Schedule III – V controlled substances via telemedicine.
The DEA determined that clinician practitioners have a legitimate need to prescribe Schedule III – V controlled substances when they anticipate treating patients for whom requiring an in-person medical evaluation prior to prescribing could impose significant burdens on bona fide practitioner-patient relationships (e.g., severe weather conditions, living in remote or distant areas, or having communicable diseases).
The Advanced Telemedicine Prescribing Registration would authorize qualified specialized physicians and board-certified mid-level practitioners to prescribe Schedule II – V controlled substances via telemedicine.
To be eligible for an advanced telemedicine prescribing registration, physicians and board-certified mid-level practitioners would need to demonstrate a legitimate need for a telemedicine prescribing registration, as described above, as well as a legitimate need for the prescribing of Schedule II controlled substances. Balancing concerns for vulnerable populations and the high potential for abuse of Schedule II controlled substances, the DEA determined that only the following seven categories of specialized physicians and board-certified mid-level practitioners have a legitimate need for the advanced telemedicine prescribing registration:
Psychiatrists
Hospice care physicians
Palliative care physicians
Physicians rendering treatment at long-term care facilities
Pediatricians
Neurologists
Mid-level practitioners and physicians from other specialties who are board-certified in the treatment of psychiatric or psychological disorders, hospice care, palliative care, pediatric care, or neurological disorders unrelated to the treatment and management of pain.
Clinician practitioners would be required to furnish information on the special registration application that demonstrates their specialized training – for example, board certification, specialized training, or the percentage of their overall practice that falls within one of the specialized practices). Mid-level practitioners would be required to be board-certified. The DEA seeks input on whether other types of practitioners should be included if they can demonstrate specific training and expertise in managing conditions that are traditionally treated with Schedule II controlled substances, and on alternative methods to ensure that practitioners seeking to prescribe Schedule II controlled substances have the appropriate training and expertise to do so safely.
The Telemedicine Platform Registration would authorize covered online telemedicine platforms to dispense Schedule II – V controlled substances through a clinician practitioner possessing either a telemedicine prescribing registration or an advanced telemedicine prescribing registration.
The DEA notes that the term “dispense” in the Controlled Substances Act means “to deliver a controlled substance to an ultimate user, which includes the prescribing and administering of a controlled substance” and encompasses “not only the physical act of handing out medications, but the broader process of providing medications to patients under the direction of a licensed healthcare provider.” The DEA also notes that by serving as intermediaries for the prescribing of controlled substances, covered online telemedicine platforms qualify as “practitioners” engaged in dispensing.
The DEA proposes to define “covered online telemedicine platform” as an entity that facilitates connections between patients and clinician practitioners via an audio-video telecommunications system for the diagnosis and treatment of patients that may result in the prescription of controlled substances, but is not a hospital, clinic, local in-person medical practice, or insurance provider, and meets one or more of the following criteria:
The entity explicitly promotes or advertises the prescribing of controlled substances through the platform.
The entity has financial interests, whether direct incentives or otherwise, tied to the volume or types of controlled substance prescriptions issued through the platform, including but not limited to ownership interest in pharmacies used to fill patients’ prescriptions or rebates from those pharmacies.
The entity exerts control or influence on clinical decision-making processes or prescribing related to controlled substances, including but not limited to prescribing guidelines or protocols for clinician practitioners employed or contracted by the platform; consideration of clinician practitioner prescribing rates in the entity’s hiring, retention, or compensation decisions; imposing explicit or de facto prescribing quotas; or directing patients to preferred pharmacies.
The entity has control or custody of the prescriptions or medical records of patients who are prescribed controlled substances through the platform.
The DEA states that this definition is intended to limit the special registration requirements to only those direct-to-consumer online telemedicine platforms that play a substantial and integral role as intermediaries in the remote dispensing of controlled substances. The DEA notes that ownership and operation of the online or digital system or platform on which the virtual visit takes place are not mandatory criteria within the proposed definition of a covered online telemedicine platform. Similarly, an entity solely operating a platform or system that merely provides the technological service or conduit for a telemedicine encounter to occur, without the presence of one of the additional four factors, would not constitute a covered online telemedicine platform. The definition of covered online telemedicine platform also explicitly excludes certain types of entities whose primary business operations do not rely on, or center around, telemedicine services, including hospitals, clinics, insurance providers, and local in-person medical practices (defined as medical practices where less than 50% of the prescriptions for controlled substances collectively issued by the practice’s physicians and mid-level practitioners are issued via telemedicine in any given calendar month).
The DEA has determined that covered online telemedicine platforms, in their capacity as platform practitioners, have a legitimate need to dispense Schedule II – V controlled substances when they:
Anticipate providing necessary services to introduce or facilitate connections between patients and clinician practitioners via telemedicine for the diagnosis, treatment, and prescription of controlled substances
Are compliant with federal and state regulations
Provide oversight over clinician practitioners’ prescribing practices
Take measures to prioritize patient safety and prevent diversion, abuse, or misuse of controlled substances.
STATE TELEMEDICINE REGISTRATIONS
The DEA would also require the special registrant to maintain a state telemedicine registration for every state in which the special registrant treats patients, unless otherwise exempted. This registration would be issued by the DEA and not by individual states and would operate as an ancillary credential, contingent on the special registration held by the special registrant.
Both clinician practitioners and online telemedicine platforms would be subject to this requirement.
APPLICATION PROCESS
Creation of Form 224S, Form 224S-M, and Fees
The DEA proposes issuing a new registration application, Form 224S, Application for Special Registration for Telemedicine Under the Controlled Substances Act, tailored for special registrations. The registration would last for three years. The registration fee would be $888 for any one of the three types of special registration. The fee for the platform practitioner state telemedicine registration would be $888 for each state in which a state telemedicine registration is sought; however, the clinician practitioner state telemedicine registration would be discounted to $50 for each state in which the clinician practitioner seeks a state telemedicine registration. The DEA notes in its discussion that fees for the state telemedicine registration for clinician practitioners would be discounted to account for the expected lower volume of telemedicine that would be conducted by clinician practitioners compared to covered online telemedicine platforms.
Registrants would be required to notify the DEA within 14 business days of any modification or changes to the information provided in their original application (Form 224S) via a new form, Form 224S-M. For example, if a clinician holding a special registration began employment with a new direct-to-consumer online telemedicine platform not previously disclosed on the clinician’s original Form 224S, the clinician would be required to submit a Form 224S-M.
Physical Location Requirement
All applicants would be required to designate one of their existing 21 U.S.C. 823(g) registered locations as the registered location/physical address (special registered location) of their special registration. The special registered location would serve as the physical point of contact for DEA inquiries and compliance actions. As discussed below, records arising from telemedicine encounters under the special registration would be required to be maintained at the special registered location.
Additional Disclosures
The applicant would be required to provide certain disclosures and attestations on Form 224S, which the DEA states will “enhance transparency, patient safety, and anti-diversion efforts”:
Platform practitioners applying for the telemedicine platform registration would be required to attest to all employment, contractual relationships, or professional affiliations with any clinician special registrant and online pharmacy, and their respective registration numbers. Likewise, clinician practitioners applying for the telemedicine prescribing registration or the advanced telemedicine prescribing registration would be required to attest to all employment, contractual relationships, and professional affiliations, including but not limited to those with covered online telemedicine platforms (and the respective online telemedicine platform’s telemedicine platform special registration number, if applicable).
Clinician practitioners and platform practitioners would be required to attest that they have devised and are committed to maintaining anti-diversion policies and procedures.
Clinician practitioners applying for the advanced telemedicine prescribing registration would be required to disclose their practice specialties.
For each type of special registration, applicants would be required to attest to their legitimate need on their special registration application.
PRACTICE STANDARDS
Under the proposed rule, registrants would be required to adhere to certain practice standards, such as:
Prescription Origination Within the United States. A clinician special registrant must be physically present in the United States when conducting a telemedicine encounter and issuing a special registration prescription. The clinician also would be required to hold the proper licensure and authorization within the state and territory where the practitioner is located when the telemedicine encounter takes place.
Electronic Prescribing for Controlled Substances (ECPS). All special registration prescriptions must be issued through ECPS.
PDMP Adherence. For the first three years after enactment of the special registration process, clinician special registrants would be required to check the PDMPs for the state or territory where the patient is located, the state or territory where the clinician practitioner is located, and any state or territory with PDMP reciprocity agreements with either the state or territory where the patient is located or the state or territory where the clinician practitioner is located. After three years, all clinician special registrants would be required to verify the identity of the patient and run a nationwide PDMP check of all 50 states and any US district or territory that maintains its own PDMP (referred to as the nationwide PDMP check).
If there is no mechanism to perform the nationwide PDMP check after three years, individual special registrants would continue to be required to perform PDMP checks of the states in the three categories described above. Individual special registrants would only be able to issue special registration prescriptions for Schedule II controlled substances to patients located within the same state as the individual special registrant.
The DEA acknowledges that it is currently unlikely that any one healthcare provider has access to all PDMPs nationwide but recognizes that current efforts to standardize, centralize, and interconnect PDMP data are making headway.
Audio-Video Telecommunications. A clinician special registrant would be required to utilize both audio and video components of an audio-video telecommunications system to prescribe under the special registration framework for every telemedicine encounter, whether for an initial visit or subsequent visit or follow-up.
Schedule III – V Special Registration Prescriptions for Opioid Use Disorder. Clinician special registrants would be allowed to issue special registration prescriptions for, and platform special registrants would be allowed to dispense, Schedule III – V controlled substances approved by the US Food and Drug Administration (FDA) for the treatment of opioid use disorder (OUD) through the use of an audio-only telecommunications system, provided that the treatment was initiated through the use of an audio-video telecommunications system. Currently, the only Schedule III – V narcotic drug approved by the FDA for the treatment of OUD is buprenorphine.
The DEA acknowledges that the Expansion of Buprenorphine Treatment via Telemedicine Encounter final rule allows a DEA-registered practitioner without a special registration to issue a prescription for a Schedule III – V controlled substance approved by the FDA for the treatment of OUD via audio-only or audio-video telemedicine for an initial consecutive six-month supply. Following the initial six-month supply, practitioners may prescribe the controlled substance by other forms of the practice of telemedicine authorized under the Controlled Substances Act (such as pursuant to a special registration) or after conducting an in-person medical evaluation.
Schedule II Controlled Substance Prescriptions. The DEA proposes two requirements for special registration prescriptions for Schedule II controlled substances, indicating that it anticipates imposing one or both requirements based on stakeholder comments.
The first proposed requirement would require that the clinician special registrant be physically located in the same state as the patient when issuing a special registration prescription for a Schedule II controlled substance.
The second proposed requirement would require that the average number of special registration prescriptions for Schedule II controlled substances constitute less than 50% of the total number of Schedule II prescriptions issued by the clinician special registrant in their telemedicine and non-telemedicine practice in a calendar month.
Schedule II Controlled Substance Prescriptions for Minors. In addition to the proposed requirements for Schedule II controlled substances described above, clinician special registrants who are pediatricians or board-certified in pediatric care prescribing Schedule II controlled substances to a minor would be required to prescribe in the presence of the minor’s parent or guardian.
State Law Considerations. When issuing a special registration prescription, a special registrant must comply with the laws and regulations of the state in which the special registrant is located and the state in which the patient is located during the telemedicine encounter.
PRESCRIPTION REQUIREMENTS AND “RED FLAG” CONSIDERATIONS
All prescriptions for controlled substances, whether issued via telemedicine or on the basis of an in-person encounter, are required to include the elements specified in 21 CFR 1306.05(a): signature of the prescriber; issue date; patient’s full name and address; drug details (name, strength, dosage form, and quantity); directions for use; and the practitioner’s name, address, and DEA registration number. The special registration proposed rule would require two additional elements for special registration prescriptions:
The special registration numbers of the clinician practitioner and, if a platform practitioner facilitated the prescription, the platform practitioner
The state telemedicine registration numbers of the clinician practitioner and, if a platform practitioner facilitated the prescription, the platform practitioner (unless exempt from the state telemedicine registration requirements).
The DEA indicates that the inclusion of the special registration number would allow pharmacists to determine if the clinician practitioner has the authority to prescribe a Schedule II controlled substance under the special registration while the inclusion of the state telemedicine registration numbers would allow pharmacists to verify that patients are only being prescribed special registration prescriptions by special registrants authorized to practice in the specific state where the patient is located. The DEA notes that pharmacists occasionally encounter what they may perceive as “red flags” for certain telemedicine prescriptions, which can stem from the nature of telemedicine itself, where patients may receive prescriptions from prescribers located at distances far away (both inside and outside the state where the patient is located). The geographical distance can raise doubts about the legitimacy of the prescription and could lead pharmacists to question its validity and refuse to fill the prescription. The DEA suggests that by verifying state telemedicine registration numbers, pharmacists would receive a level of assurance that a special registration prescription is legitimate when it originates from a prescriber located a significant distance from the patient.
DOCUMENTATION REQUIREMENTS
The special registration proposed rule includes the following documentation requirements:
Patient Verification and Photographic Record. Clinician special registrants would be required to establish and maintain photographic records for patient verification. The DEA would require that these records be maintained for two years from the date of the telemedicine encounter.
If the patient does not consent to their photo being captured, the clinician special registrant (or a delegated employee or contractor under the special registrant’s direct supervision) would be allowed to accept a copy of the patient’s federal or state government-issued photo identification card or other forms of documentation provided by the patient.
Special Registration Telemedicine Encounter Record. Clinician special registrants would be required to maintain a record of the date and time of the telemedicine encounter, the address of the patient during the telemedicine encounter, and the home address of the patient. The DEA would require that these records be maintained for two years from the date of the telemedicine encounter.
Credentialing and Clinician Records. Platform special registrants would be required to maintain and update records related to clinician special registrants with whom they enter and maintain a covered platform relationship, including:
Verification of the clinician special registrant credentials, including but not limited to records on education, training, board or specialty certifications, and special registration number and state telemedicine registration number(s)
The employment contract and any other contract between the platform special registrant and the clinician special registrant
Any disciplinary actions or sanctions, or documentation of complaints, disputes, or incidents involving the practice of telemedicine.
Platform special registrants would be required to maintain and update these records every two years and make them readily available to the DEA.
Data Reporting. Pharmacies dispensing special registration prescriptions would be required to report monthly aggregated special registration prescription data on Schedule II controlled substances and certain Schedule III – V controlled substances. Special registrants would be required to report annually aggregated information about their telemedicine practice, including the number of new patients they treat through telemedicine and the total number of special registration prescriptions for Schedule II controlled substances and certain Schedule III – V controlled substances dispensed for the preceding year.
Recordkeeping at the Special Registration Location. The proposed rule would require that records arising from telemedicine encounters under the special registration framework be kept at the special registered location. The DEA acknowledges that, given telemedicine’s nationwide reach – where a special registrant could serve patients in any state – it would pose an unreasonable administrative burden to require the special registrant to maintain records in every state where telemedicine patients are located.
NEXT STEPS AND INCOMING TRUMP ADMINISTRATION
Stakeholders will have 60 days to comment after publication of the special registration proposed rule in the Federal Register. The DEA encourages input on appropriate implementation timelines, or on-ramps for phased or gradual adoption, to help ensure a smoother transition when the final rule takes effect. Practitioners, pharmacies, and industry stakeholders are encouraged to provide their input on the time necessary to operationalize the proposed requirements.
However, the upcoming administration change may affect when – or if – the special registration proposed rule is adopted. Once in office, President-elect Donald Trump is expected to sign an executive order pausing many of the rules proposed by the Biden administration. It is unclear if this rule will be included. Because this proposed rule is a long-awaited attempt by the DEA to create a special registration, the incoming administration may choose to keep the proposed rule open in order to review public comments on the proposed approach. These comments could help inform future rulemaking. If the proposed rule remains open for public comment, stakeholders should consider providing feedback to help educate and inform the new administration on this approach.
Navigating Employer Obligations During California’s Wildfire Disasters
As Los Angeles (the “City”) grapples with the impacts of the devastating wildfires, employers are facing critical decisions about protecting their workforce while maintaining operations. While Cal/OSHA recently urged employers to protect workers from unhealthy air in Los Angeles County, this article will provide further insight on a variety of the complex legal obligations California employers must navigate during wildfire and other natural disaster emergencies.
Wildfire Exception in Los Angeles Fair Work Week Ordinance
The Los Angeles Fair Work Week Ordinance typically imposes strict scheduling requirements on covered employers. However, the City has clarified that wildfire-related closures fall under the ordinance’s force majeure exceptions. Specifically:
The standard 14-day advance notice requirement for work schedules may be suspended when operations are compromised by wildfires.
Employees’ right to decline schedule changes made after the notice deadline may be limited during wildfire emergencies.
The force majeure exception explicitly covers natural disasters, including fires, floods, earthquakes, and other civil disturbances.
Employers must still document and justify any schedule changes made under this exception.
Workplace Safety Requirements Under Cal/OSHA
Under California Labor Code section 6400, employers must provide and maintain a safe and healthful workplace for employees. Cal/OSHA’s Protection from Wildfire Smoke standard mandates specific employer obligations when wildfire smoke affects air quality. These requirements include:
Monitoring the Air Quality Index (AQI) for PM2.5[1] before and throughout each work shift;
Providing N-95 respirators for voluntary use when AQI for PM2.5 exceeds 150;
Requiring mandatory respirator use when AQI for PM2.5 exceeds 500;
Implementing specific worker training programs about wildfire smoke hazards; and
Tracking air quality through EPA’s AirNow website or local air quality management district resources.[2]
Worker Rights in Evacuation Zones
California law explicitly prohibits employer retaliation against workers who refuse to work in unsafe conditions, including within evacuation zones. California Labor Code section 6311 protects workers who refuse to perform work in violation of occupational safety or health standards where such violation creates a real and apparent hazard. Additionally, section 1102.5 prohibits employer retaliation against workers exercising such rights. Employers should ensure that they abide by evacuation orders when issued by appropriate authorities. For more information, the Department of Industrial Relations (“DIR”) has an infographic regarding Worker Safety Wildfire Smoke and Evacuation Zones.
Wage and Hour Obligations During Emergency Closures
Employers must also navigate complex wage and hour requirements during natural disasters. California Labor Code Section 204 and the Fair Labor Standards Act (FLSA) require employers to maintain regular payment schedules even during emergencies. If a workplace is forced to close due to wildfire danger or evacuation orders, exempt employees must generally receive their full salary for any workweek in which they perform any work. Non-exempt employees, however, generally only need to be paid for hours actually worked, though reporting time pay requirements under Industrial Welfare Commission Wage Orders may apply if employees report to work but are sent home due to wildfire-related closures.
Employee Accommodations and Leave Rights
The California Fair Employment and Housing Act (FEHA) provides protections to employees who need accommodations due to wildfire-related conditions in specific circumstances. For instance, employees with respiratory conditions may require additional accommodations when working in smoke-affected areas.
The California Family Rights Act (CFRA) and/or Family and Medical Leave Act (FMLA) entitles leave to employees with a serious health condition caused or exacerbated by a natural disaster, including smoke from wildfires. California Labor Code Section 233 (also known as the “Kin Care” law) and various local ordinances may also provide employees with the right to use accrued paid sick leave to care for family members affected by wildfire evacuations or related health issues.
WARN Act Considerations and Business Planning
Natural disasters like wildfires may trigger obligations under Labor Code Sections 1400-1408. This law, known as the WARN Act, typically requiring a 60 days’ notice before a mass layoff or closure. While Courts and the California Labor Commissioner have generally interpreted the Act’s “physical calamity” exception to include natural disasters like wildfires, employers should note that this exception is narrowly interpreted and excludes foreseeable business circumstances and economic downturns even if caused by disaster. At the start of the COVID-19 pandemic, the DIR issued Guidance providing insight on the “physical calamity” exception.
Given these issues, employers should review their employment and insurance policies, as well as their disaster preparedness plans, to ensure compliance with all applicable regulations and to minimize potential liability during these challenging circumstances.
[1] PM2.5, or particulate matter 2.5, is a term for tiny particles in the air that are 2.5 micrometers or less in diameter.
[2] Air quality can be tracked through websites like the U.S. EPA’s AirNow or local air quality management district websites. Employers can also use their own instruments to measure PM2.5 at worksites per Cal/OSHA’s requirements.
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DOJ Reports Nearly $3 Billion in FCA Settlements, Judgments for FY 2024
Headlines that Matter for Companies and Executives in Regulated Industries
DOJ Reports Nearly $3 Billion in FCA Settlements, Judgments for FY 2024
On January 15, the US Department of Justice (DOJ) reported that settlements and judgments under the False Claims Act (FCA) totaled more than $2.9 billion in fiscal year 2024. The government and whistleblowers were involved in 558 FCA settlements and judgments, marking the second-highest total after fiscal year 2023’s record of 566 recoveries. Whistleblowers also filed the highest number ever of qui tam lawsuits, totaling 979 this past fiscal year.
Health care fraud accounted for the majority of FCA settlements and judgments. Over $1.67 billion of the FCA settlements and judgments reported in fiscal year 2024 related to health care matters, including managed care providers, hospitals, pharmacies and pharmaceutical companies, and physicians. The cases related to the health care industry involved, among other things, the opioid epidemic, unnecessary services and substandard care, Medicare Advantage matters, and unlawful kickbacks.
The DOJ statistics sheet can be found here and the press release can be found here.
Pharmacy to Pay $625,000 to Resolve FCA Allegations
On January 13, a settlement was finalized between a pharmacy located in New Jersey, Medsinbox Pharmacy LTC LLC, and the federal and New Jersey state governments. Pursuant to the settlement agreement, Medsinbox agreed to pay $625,000 to settle allegations that it violated the FCA by billing Medicare and Medicaid for prescriptions that it never actually distributed.
The government alleged that between 2019 and 2022, Medsinbox knowingly submitted claims for reimbursement to the federal Medicare and Medicaid programs for medications that it never actually gave to beneficiaries. According to the government, Medsinbox inventory records indicate that the pharmacy never purchased the amount of prescriptions that it claims to have filled and billed to Medicare and Medicaid programs.
The settlement is available here and the DOJ press release can be found here.
Firm Founder Pleads Guilty for Role in $9 Million Cryptocurrency Investment Fraud
On January 9, Travis Ford, the founder of a cryptocurrency investment firm, pleaded guilty for his role in a $9 million fraud conspiracy. Ford pleaded guilty to one count of conspiracy to commit wire fraud, for which he faces up to five years in prison.
According to the government, Ford was the co-founder of cryptocurrency investment firm Wolf Capital Crypto Trading LLC. As alleged, Ford made false promises to solicit investments through social media and other internet platforms, including by purporting to be a sophisticated trader able to deliver returns of 1-2% daily despite admitting that those returns were not realistic. The government alleged that Wolf Capital raised $9.4 million through Ford’s conduct and Ford then misappropriated the investor funds for his own use.
The DOJ press release can be found here.
2024 False Claims Act Statistics Show More Cases Filed Than Ever Before
The Justice Department released its annual False Claims Act statistics on Wednesday, January 15, detailing the number of cases filed, recoveries made, and relators’ shares awarded in fiscal year 2024. The government recovered $2.9 billion dollars in 2024, with 57% of that total coming from healthcare cases, 3% from defense spending cases, and the remainder from other actions. Seventy-five percent of recoveries came from qui tam actions in which the government intervened and 17% came from cases initiated by the Justice Department, while qui tam actions where the government declined to intervene resulted in only 7% of the year’s recoveries.
2024 also saw more new FCA cases initiated than ever before. There were 1,402 new matters: 423 initiated by the government and a record-shattering 979 initiated by relators.
While the overall total recoveries increased by $133 million from the year prior, the types of cases driving the number have shifted slightly. Healthcare recoveries are down $184 million from last year and are the lowest they have been since 2009. Defense spending recoveries are down $464 million and are the lowest they have been in the last several years, though DOJ noted in its press release that a $428 million defense settlement—the second largest in history—came in just after the close of the fiscal year. While those traditional stalwarts of FCA recoveries lagged in 2024, DOJ more than made up for them in recoveries in non-healthcare or defense cases. Recoveries in other cases increased $781 million over the prior year and were the highest they have been in almost a decade.
It is not immediately clear what drove the uptick in non-healthcare and defense cases, though pandemic-related fraud claims accounted for at least $250 million of the recoveries. A menagerie of claims related to other government agencies, programs, and grants also appear to have contributed, including claims related to General Services Administration contracts, Housing and Urban Development grant funds, underpayment of royalties owed for oil and natural gas on federal lands, and Federal Emergency Management Agency (FEMA) projects.
Though the government increased its recoveries, it shared less of that money with whistleblowers. Relators received $50 million less than they did in fiscal year 2023. For qui tam actions in which DOJ intervened, it provided an average of 15.7% of the recoveries to the relator, which is the second-lowest relator share percentage since 2012.
In its press release touting the year-end statistics, the Justice Department highlighted healthcare recoveries in areas it has focused on in recent years, including opioid-related cases, matters alleging unnecessary services and substandard care, Medicare Advantage cases, kickbacks, and Stark Law violations. Though it did not appear to drive significant numbers in 2024, the government also highlighted its emerging cybersecurity initiative to promote cybersecurity requirements for government contractors.
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US Department of Justice Announces US$2.9 Billion in Fiscal Year 2024 False Claims Act Recoveries
On 15 January 2025, the US Department of Justice (DOJ) published its report (Report) announcing civil recoveries under the False Claims Act (FCA) for Fiscal Year (FY) 2024. The recoveries for FY 2024 exceeded US$2.9 billion, approximately US$1.7 billion of which involved the health care industry. The US government has now collected over US$78 billion in recoveries under the FCA since the statute was amended in 1986 to allow for treble damages and increased incentives for whistleblowers. Notably, the 979 qui tam lawsuits filed in FY 2024 marked the highest number in a single year; and the 558 settlements and judgments trailed only just behind the record number set in FY 2023.
As with FY 2023, qui tam cases comprised the largest portion of recoveries, with over 83% (US$2.4 billion) stemming from whistleblower actions. The government paid over US$400 million to whistleblowers in relation to these FY 2024 recoveries. Of the record-setting 979 qui tam suits that were filed in FY 2024, 370 were health care focused.
DOJ also highlighted its “key enforcement priorities” for FY 2024 and provided representative examples. The enforcement priorities included health care fraud, military procurement fraud, pandemic fraud, and cybersecurity fraud. As with prior years, health care fraud was the principal source of FCA recoveries, which included recoveries relating to Medicare Advantage fraud, billing for unnecessary services and substandard care, opioid epidemic-related fraud, kickback schemes, and Stark Law violations.
Health Care Fraud
With Medicare Advantage, also known as Medicare Part C, having become the largest component of the Medicare program, the government continued its focus on Medicare Advantage fraud. In FY 2024, the government secured a substantial recovery from a provider that allegedly paid kickbacks to third-party insurance agents in exchange for recruiting senior citizens to the provider’s primary care clinics. DOJ also highlighted that it is continuing to litigate a number of cases against Medicare Advantage Organizations.
DOJ obtained substantial recoveries from providers who allegedly improperly billed for medically unnecessary services and substandard care. Additionally, the government has continued to focus on opioid crisis-related fraud, with several substantial recoveries against pharmaceutical companies and individual physicians.
In a carry-over from FY 2023, some of the largest health care recoveries in FY 2024 resulted from alleged unlawful kickback schemes and Stark Law violations. The kickback schemes ranged from payments to purportedly induce referrals of dialysis patients, to medical directorships that were intended to induce patient referrals. As to the Stark Law, DOJ highlighted a US$345 million settlement to resolve allegations that a health care network paid compensation to certain physician groups far above fair market value and awarded bonuses tied to referral volume.
Other Enforcement Priorities
In addition to health care-specific recoveries, the government recovered significant funds stemming from military procurement fraud, pandemic fraud, and cyber fraud. The military procurement fraud recoveries included a US$70 million settlement against a contractor to resolve allegations that they overcharged the US Navy for spare parts and materials needed to repair and maintain aircraft used to train naval aviators. Of note, military procurement fraud recoveries could have been much higher in FY 2024, however, a US$428 million settlement with a defense contractor occurred on 16 October 2024, putting that recovery in FY 2025.
The government also resolved an estimated 250 cases, totaling over US$250 million, in connection with pandemic-related fraud. As with FY 2023, the pandemic fraud largely stemmed from the submission of inaccurate information in PPP loan applications, though the DOJ also highlighted a US$12 million recovery that resolved allegations of false claims for COVID-19 testing that were billed to the Health Resources and Services Administration’s Uninsured Program.
In October 2021, DOJ announced its Civil Cyber-Fraud Initiative with the goal of pursuing companies who receive federal funds while failing to follow required cybersecurity standards. In FY 2024, the government entered into several recoveries under the Civil Cyber-Fraud Initiative. DOJ also highlighted a complaint-in-intervention that was filed against a research institution alleging that the defendants had failed to meet cybersecurity requirements in connection with Department of Defense contracts.
Whistleblower Suits
Given the record-setting number of qui tam cases filed in FY 2024, it will be important to continue to monitor developments regarding the constitutionality of the qui tam provisions. On 30 September 2024, a judge in the US District Court for the Middle District of Florida held that the qui tam provisions of the FCA violate the Appointments Clause of Article II of the US Constitution. This first-of-its-kind decision has sparked a wave of filings by the defense bar. With the Middle District of Florida’s decision on appeal, there are sure to be many developments on this issue in the coming months.
The FY 2024 settlements and judgments provide an insight into the government’s enforcement priorities and potential future enforcement areas. The firm’s forthcoming article The False Claims Act and Health Care: 2024 Recoveries and 2025 Outlook will provide an in-depth analysis of the 2024 recoveries, as well as some key enforcement areas to look out for in 2025.
EnforceMintz — Scienter, Causation, and Constitutional Questions: 2024’s Three Key FCA Litigation Issues
In 2024, federal courts issued a number of important decisions in False Claims Act (FCA) cases that are particularly noteworthy for the health care and life sciences industries. We focus here on decisions that further develop the FCA scienter standard addressed in 2023 by the Supreme Court in its important SuperValu decision. We also look at decisions that have accepted the invitation of three Supreme Court justices to reexamine the constitutionality of the FCA’s qui tam provisions. Finally, a circuit split on the interpretation of “causation” for FCA suits based on alleged violations of the Anti-Kickback Statute (AKS) remains unresolved, pending a decision from the First Circuit.
Post-SuperValu Developments Concerning the FCA’s Scienter Standard
An essential element of any FCA claim is “knowledge” that the submission of claims was “false or fraudulent.” By statute, the FCA defines “knowledge” to mean that a person acted with (i) actual knowledge, (ii) deliberate ignorance, or (iii) reckless disregard with respect to the truth or falsity of the information at issue. This is the FCA’s intent or scienter standard. Last year, in SuperValu, the Supreme Court held that the FCA’s “knowledge” element is based on subjective intent and not, as a number of circuits had previously held, on a defendant’s “objectively reasonable” interpretation of an ambiguous legal or regulatory issue.1 We previously discussed the SuperValu case (here and here) and analyzed the decision’s implications in last year’s issue of EnforceMintz.
The Supreme Court explained that the FCA’s scienter requirement could be met by showing (i) “deliberate ignorance,” meaning that a defendant had knowledge of a “substantial risk” that its statements were false but “intentionally avoid[ed]” a relevant legal or regulatory requirement; or (ii) “reckless disregard,” meaning that a defendant understood that there was a “substantial and unjustifiable risk” that its claims were false but submitted the claims anyway. While the Supreme Court did not define how lower courts might determine which risks are “substantial” or “unjustifiable,” these two new glosses on “deliberate ignorance” and “reckless disregard” offer some guidance to providers and companies seeking to avoid exposure to FCA liability through well-designed compliance programs.
SuperValu may have been initially understood as a clear-cut victory for the United States and private whistleblowers who bring actions under the qui tam provisions of the FCA. Generally speaking, in litigation, a defendant’s subjective knowledge is often a question of fact, which makes it difficult for defendants to win a motion to dismiss on the basis of whether a complaint adequately alleges knowledge. But as decisions from the past year demonstrate, that is not the full story, for two reasons.
First, even after SuperValu, courts have been willing to grant motions to dismiss on scienter grounds. For example, in August 2024, a federal district court granted a pharmaceutical manufacturer’s motion to dismiss an FCA complaint for failure to adequately allege scienter.2 In US ex rel. Sheldon v. Forest Laboratories, LLC, the relator alleged that Forest Laboratories overcharged the government in violation of the FCA because it did not include certain price concessions in calculating “best price,” as that term was defined by statute. The court found the “best price” definition “no more informative than the hypothetical instruction in [SuperValu] to drive at a ‘reasonable’ speed.”3 As such, the court found that the defendant’s alleged familiarity with such vague instructions did not provide a basis to attribute a culpable mental state to the drug manufacturer.
Second, in June 2024, the Supreme Court decided Loper Bright Enterprises v. Raimondo, ending the era of “Chevron deference” in which courts deferred to an agency’s interpretation of an ambiguous statute.4 This decision may lend support to FCA defendants in cases where the conduct at issue allegedly violated an ambiguous statutory or regulatory requirement. Often in FCA cases, the United States or a private relator attempts to establish scienter by showing an FCA defendant’s knowledge of statutory or regulatory requirements or agency guidance. After Loper Bright, a provider or company facing ambiguous or complex statutory or regulatory requirements can now demonstrate that it subjectively believed it was not taking “substantial and unjustifiable risk” that its claims were false based on the controlling statutory text, without undue deference to an agency’s interpretation. For example, analyzing Stark Law compliance often requires a review of layers of exceptions to complex statutory or regulatory prohibitions. Loper Bright may help provide a defense as to both scienter and falsity where theories of liability are premised on noncompliance with a web of statutory requirements, regulations, and complex agency guidance.
As we previously discussed (here), these case law developments highlight three implications for health care and life sciences companies seeking to minimize FCA exposure or to defend against an FCA investigation or litigation:
Providers and companies should seek to minimize potential FCA exposure by documenting interpretations of ambiguous legal requirements or regulations based on all available advice, communications with agencies or payors, and any other information when making business decisions that involve claims to federal programs or federal funds.
In the event of an FCA investigation, strong compliance functions and a clear record showing the entity’s lack of a subjective belief that it was submitting false or fraudulent claims, or taking an unjustified risk of doing so, may help persuade the government to decline to intervene in an FCA lawsuit.
As Sheldon demonstrates, once in litigation, a scienter-based motion to dismiss argument as well as summary judgment opportunities may still be available, despite SuperValu’s subjective intent holding.
While scienter issues often raise disputed factual questions, that is not always the case, as demonstrated by developments in FCA case law since SuperValu.
Successful Constitutional Challenges in FCA Cases Under Article II and the Eighth Amendment
For the first time in two decades, the issue of the constitutionality of the FCA’s qui tam provisions is squarely before the federal courts. In 2024, defendants raised successful constitutional challenges in cases involving large FCA penalties. Given these results, constitutional questions will likely remain a hot-button issue in 2025, particularly in cases where the government declines to intervene.
Zafirov and the Constitutionality of the FCA’s Qui Tam Provisions
In September 2024, a federal district court held in US ex rel. Zafirov v. Fla. Med. Assocs., LLC that the FCA’s qui tam provisions violate the Appointments Clause of Article II of the Constitution.5
Public officials who exercise “significant authority” under federal law and “occupy a continuing position established by law” are “Officers” who must be appointed consistent with the requirements of Article II, Section 2. In considering whether FCA relators are “Officers”, the court observed that “[a]n FCA relator’s authority markedly deviates from the constitutional norm.” The court explained that the qui tam provisions permit anyone “wherever situated, however motivated, and however financed” to perform a “traditional, exclusive [state] function by appointing themselves as the federal government’s avatar in litigation.”6 The court thus concluded that arrangement violates the Appointments Clause because it permits unaccountable, unsworn private actors to exercise core executive power with substantial consequences for the public. Finding the relator in Zafirov was unconstitutionally appointed, the court granted the defendants’ motion for judgment on the pleadings and dismissed the case with prejudice.
In our prior discussion (here), we explained how Zafirov followed from Justice Thomas’s dissent in US ex rel. Polansky v. Executive Health Resources, which noted the “substantial arguments” that the FCA’s qui tam provisions may be “inconsistent with Article II.” Two other justices agreed with Justice Thomas’s suggestion that the Court should consider the constitutional question in an appropriate case.
The United States and the relator appealed the Zafirov decision to the Eleventh Circuit. As of the date of this publication, briefing is in progress. The government made four particularly noteworthy arguments in its opening brief. First, the government argued that qui tam relators pursue “private interests” assigned by the FCA but do not exercise executive power. Second, the government argued that the qui tam provisions are not subject to the Appointments Clause because relators are not a part of the federal government. Third, even if the Appointments Clause applies, the government argued that relators (i) do not exercise “significant authority” because they are not part of the government workforce and the government retains supervisory authority over declined FCA cases; and (ii) do not “occupy a continuing position established by law” because the role of a qui tam relator is time-limited, case-specific, and involves interests that are personal in nature. Finally, the government argued that, even if the district court’s ruling in Zafirov is affirmed, the decision should be limited only to declined cases and should not extend to matters where the government has intervened or is considering whether to intervene. The defendants’ brief will be filed in the first quarter of 2025 and a decision is expected by the end of 2025.
If Zafirov is affirmed, that would create a circuit split on the constitutionality of the qui tam provisions, which would greatly increase the odds of Supreme Court review. In cases decided between 1993 and 2002, the Second, Fifth, Sixth, Ninth, and Tenth Circuits rejected Article II constitutional challenges to the FCA’s qui tam provisions, so Zafirov’s impact may be limited in those jurisdictions. But in circuits where the issue has not been decided, and to preserve the argument in circuits that previously rejected Article II challenges, defendants are raising the constitutional arguments via motions to dismiss, motions for judgment on the pleadings, and in affirmative or general defenses.
For example, in one recent declined FCA lawsuit pending in a federal district court within the Eleventh Circuit, a defendant Medicare Advantage Organization moved to dismiss, leading its brief with the argument that such relator-driven qui tam suits violate Article II of the Constitution.7 Defendants have made similar arguments in other jurisdictions as well.8
The success of these arguments remains to be seen. FCA defendants raising the constitutional argument should be aware of the notice requirements of Federal Rule of Civil Procedure 5.1, which requires that a party filing a pleading or motion drawing into question the constitutionality of a federal statute promptly file a “notice of constitutional question” with the court and serve that notice on Attorney General of the United States.
In response to FCA defendants’ emerging reliance on Zafirov, the United States has not hesitated to step in to defend the constitutionality of the FCA’s qui tam provisions in previously declined cases. For example, in US ex rel. Gill v. CVS Health Corp., DOJ initially declined to intervene in an FCA lawsuit involving over $200 million in alleged damages from overpayments and over-billing federal programs and commercial payors.9 After Zafirov was decided, the CVS defendants filed a Rule 5.1 notice of constitutional challenge, arguing that the FCA qui tam provisions violated separation of powers principles and Article II of the US Constitution. The CVS defendants also asserted those defenses in their answer to the complaint. The CVS defendants’ Rule 5.1 notice prompted the government to reverse course and intervene “for the limited purpose of defending the constitutionality of the qui tam provisions” of the FCA.
These Article II challenges to the qui tam provisions could significantly impact FCA cases, especially qui tam litigation where the United States previously declined to intervene. We will continue to monitor this issue as it develops in 2025.
Eighth Amendment Challenges to Excessive FCA Penalties
In July, the Eighth Circuit vacated a roughly $6.5 million FCA award, holding that the amount violated the Eighth Amendment’s Excessive Fines Clause.10 In Grant ex rel. US v. Zorn, a medical practitioner filed a qui tam action against the co-owner of a sleep disorders center, alleging that the defendant overbilled federal and state programs for patient visits and engaged in a kickback scheme. After trial, the district court determined that the 1,050 false claims the defendant had submitted to the government resulted in roughly $86,000 in actual damages, which was then trebled to about $259,000. Then, the court imposed a per-claim civil penalty, which added almost $7.7 million to the total award.
Citing the Eighth Amendment’s Excessive Fines Clause and the Supreme Court’s prior invalidation of punitive damages awards that far outpace actual damages, the district court reduced the penalties to $6.47 million. The district court thus endorsed a ratio in which the penalty amounts were 25 times greater than actual damages.
On appeal, however, the Eighth Circuit in Grant vacated the punitive damages award, holding that the application of both treble damages and per-claim civil penalties violated the Eighth Amendment’s Excessive Fine Clause. The court reasoned that the punitive sanction was “grossly disproportional” to the conduct at issue and that the Eight Circuit had previously rejected double-digit multipliers where there was a small economic loss and no evidence of danger to health and safety.
The Grant decision bolsters defendants’ arguments for lower penalty awards in FCA cases where the penalties imposed far exceed actual damages. These arguments are more likely to succeed in cases where the only harm alleged is purely economic.
The Unresolved Circuit Split on the Causation Standard for AKS-Based FCA Claims
As we discussed in last year’s edition of EnforceMintz, a significant circuit split is developing on the causation standard applicable to FCA claims based on violations of the AKS. Specifically, section (g) of the AKS states that “a claim that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purposes of [the FCA].”11 The issue in this circuit split is whether the submission of a claim to the government “result[s] from” a kickback only if it would not have been submitted “but for” the kickback.
In July 2024, the First Circuit heard oral argument on the FCA-AKS causation issue in United States v. Regeneron Pharmaceuticals, Inc.12 As of the date of publication of this article, the First Circuit’s decision is pending.
In Regeneron, the government appealed the district court’s holding that a standard of “but for” causation applied to FCA lawsuits premised on AKS violations. The district court’s holding was consistent with recent decisions from the Sixth and Eighth Circuits (which we previously discussed here) applying the plain language of section (g) of the AKS to require a showing of “but for” causation. On appeal, the government argued that a broader proximate cause standard applies, requiring only “some sort of causal connection.” That view, which has been endorsed by the Third Circuit, is based on the legislative history of the 2010 amendment that added the “resulting from” language in section (g) of the AKS.
At oral argument in Regeneron, Judge Kayatta challenged the government’s expansive view of the causation standard based on legislative intent. Judge Kayatta asked whether causation would be met in a situation where a hospital sent a vendor 10,000 claims in one year, then received a kickback, and then sent fewer claims in the following year. In response, the government argued that each and every claim in year two would be tainted by a kickback, even though the volume of claims decreased post-kickback. Perhaps tellingly, Judge Kayatta found that to be an “odd” outcome.
However the First Circuit rules, the circuit split will deepen, thereby increasing the likelihood that the causation standard question will rise to the Supreme Court. In the meantime, health care and life science entities facing FCA scrutiny based on AKS theories should closely monitor this emerging area. The applicable causation standard can have major implications on FCA exposure and potential damages.
ENDNOTES
[1] US ex rel. Schutte v. SuperValu Inc., 143 S. Ct. 1391, 1399 (2023).
[2] US ex rel. Sheldon v. Forest Laboratories, LLC, No. 1:14-cv-02535, 2024 US Dist. LEXIS 129331, at *79-80 (D. Md. July 23, 2024), appeal filed, No. 24-1793 (4th Cir. Aug. 21, 2024).
[3] Id. at 63.
[4] Loper Bright Enters. v. Raimondo, 603 US ___, 144 S. Ct. 2244 (2024).
[5] US ex rel. Zafirov v. Fla. Med. Assocs., LLC, C.A., No. 8:19-cv-01236-KKM, 2024 US Dist. LEXIS 176626 (M.D. Fla. Sept. 30, 2024).
[6] Id. at *58-59 (internal quotations omitted).
[7] See Gonite v. UnitedHealthCare of Ga., Inc., et al., No. 19-246 (M.D. Ga. Oct. 11, 2024), ECF 69.
[8] See, e.g., US ex rel. Kenly Emergency Med. Corp. v. SCP Health, No. 3:20-cv-3274 (N.D. Cal. Dec. 13, 2024), ECF 74; Omni HealthCare Inc., et al v. North Brevard Cty. Hosp. Dist., et al., No. 6:22-cv-00696 (M.D. Fla. Nov. 28, 2024), ECF 87; US ex rel. Sullivan, et al. v. Murphy Med. Ctr., Inc., et al., No. 1:21-cv-219-MR (W.D.N.C. Oct. 25, 2024), ECF 85; US ex rel. Eckert v. Sci Tech. Inc and Sanmina Corp., No. 20-cv-1443 (D.D.C. Oct. 7, 2024), ECF 34-1.
[9] US ex rel. Gill v. CVS Health Corp., et al., No. 1:18-cv-06494 (N.D. Ill. Feb. 25, 2022), ECF 31.
[10] Grant ex rel. US v. Zorn, 107 F.4th 782 (8th Cir. 2024).
[11] 42 USC § 1320a-7b(g) (emphasis added).
[12] United States v. Regeneron Pharms., Inc., No. 23-2086 (1st Cir. filed Dec. 22, 2023).