Cal/OSHA Provides Guidance for Managing Post-Fire Cleanup Efforts
In light of the ongoing and devastating fires in Los Angeles County, Cal/OSHA released new guidance to ensure the safety and health of workers involved in fire damage cleanup.
Of note, Cal/OSHA’s standards may apply to some household domestic service workers. Historically, domestic service workers have not been subject to Cal/OSHA’s standards while cooking, cleaning, and providing childcare for a family. Cal/OSHA reminded employers that household domestic service workers are governed by Cal/OSHA’s standard if the workers are engaged in fire cleanup work, such as removing ash and debris and cleaning fire-damaged structures. As such, it is important for those employers who have employees performing post-fire cleaning to take note of the Cal/OSHA guidance.
As a reminder and unrelated to this recent guidance, effective July 1, 2025, Cal/OSHA will gain control over workplace safety for some household domestic services.
Key Points to Note:
Employers are required to identify and evaluate potential hazards in fire-damaged areas. This includes assessing risks such as unstable structures, hazardous materials, and environmental dangers like ash and soot.
Proper training and instruction must be provided to employees before they begin cleanup work. This training should cover the specific hazards they may encounter and the safety measures they need to take.
Employers must ensure that workers have access to and use appropriate PPE. This includes NIOSH-certified respirators, gloves, eye protection, and other necessary gear to protect against inhalation of harmful substances and physical injuries.
Cal/OSHA emphasizes the importance of adhering to existing health and safety standards. This includes regulations on heat illness prevention, confined space entry, and handling of hazardous materials.
Employers must establish and communicate clear emergency procedures. This includes protocols for evacuations, first aid, and reporting unsafe conditions.
Funding Freeze for Health Care Providers – What You Need to Know
Last night, the Office of Management and Budget (“OMB”) released a memo directing federal agencies to take several actions impacting federal grant programs (outlined in greater detail below) that are resulting in real money consequences for health care providers today. Providers need to be aware of these issues and the challenges ahead. We are already working with several providers to mitigate damages and develop strategies to respond to these updates in real time. Each provider is unique, and every provider will respond to and be impacted by these changes differently.
What Happened?
Late on January 27, 2025, the Trump Administration’s Office of Management and Budget (“OMB”) released a memorandum placing a moratorium on payments for almost all federal grants (the “OMB Memo”).1 OMB explained the justification for this pause as follows:
“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending “wokeness” and the weaponization of government, promoting efficiency in government and Making America Healthy Again. The use of Federal resources to advance Marxist equity, transgenderism and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
The OMB Memo directs federal agencies to undertake the following tasks:
Complete a comprehensive analysis of all existing Federal financial assistance programs to determine their alignment with Presidential orders;
During the course of this review, pause (a) the issuance of new awards and (b) the disbursement of federal funds under existing awards. Agencies must also take all other relevant agency actions to comply with this direction and Trump’s executive orders until directed by OMB to do otherwise; and
Every federal financial assistance program must be assigned to a senior political appointee who will evaluate, modify or cancel existing awards that conflict with Administration policies, and ensure adequate oversight over award distribution.
Timeline
January 27, 2025 – OMB Memo issued
January 28, 2025 (5:00 PM) – Funding freeze implemented (on hold)
February 3, 2025 (5:00 PM) – Order halting funding freeze expires
February 7, 2025 – OMB guidance deadline for agency submission of information regarding identified programs with funding or activities planned through March 15, 2025
February 10, 2025 – OMB Memo deadline for agencies to provide detailed information on review of programs
Why Does This Matter for Health Care Providers?
Providers of every type depend on federal grant funds as a key component of their operating and service budgets. Both the Medicaid and CHIP Programs are structured as “grant” programs to the states and are specifically identified by OMB on the list of grant programs to be reviewed.2 Guidance issued today by OMB suggests that Medicaid is a mandatory program that will not be paused, but we have also seen reports from several states, including Illinois, that they are unable to access federal Medicaid funding.3 Regardless of the ultimate outcome, providers can expect temporary uncertainty related to Medicaid funding status.
In addition to major sources of health care coverage, there are innumerable smaller grants that providers rely on to help make ends meet and extend services to their communities, including grants for substance use disorder treatment, provider education and training, telehealth expansion and rural health care services. Without the availability of these programs, even on a temporary basis, health care providers face a difficult operational reality resulting in loss of cash flow, failure to meet payment obligations (even payroll) and service disruption for particularly vulnerable patient populations. We are already aware of providers who have been frozen out of grant portals, and who are unable to draw down funds.
Providers who rely on federal funds should inventory each of their grant programs and determine whether they can still lawfully access funds.4 Keep watching this space – there will be rapid developments over the next several days as providers, state governments and other stakeholders respond. There is a wide array of options available to providers to respond to these changes – if you’re unsure of the best path for your organization, we’re here to help.
As of 3:30pm (MST) A D.C. Federal Judge temporarily blocked Trumps administration from freezing federal grants. More details will be available in the webinar tomorrow.
Temporary Reprieve. Late afternoon, D.C. District Court Judge Loren AliKhan temporarily halted the freeze ordered by the OMB Memo to allow additional time for consideration. Judge AliKhan’s order expires February 3 at 5:00 pm, and there will likely be many further developments over the next week.
[1] Executive Office of the President, Office of Management and Budget, M-25-13 Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs (Jan. 27, 2025).
[2] The OMB Memo specifically exempts Social Security and Medicare, these are the only two express exemptions.
[3] Executive Office of the President, Office of Management and Budget, Untitled FAQ (Jan. 28, 2025).
[4] Executive Office of the President, Office of Management and Budget, Instructions for Federal Financial Assistance Analysis in Support of M-25-13 (Jan. 27, 2025).
Complying with the ACA Disclosure Requirements Just Got a Whole Lot Easier!
New legislation liberalizing certain disclosure requirements under the Affordable Care Act (“ACA”) was passed at the end of 2024.
Effective for 2024 reporting, mailing a paper copy of Forms 1095-C/1095-B is no longer required if the employer timely provides employees with proper notice by January 31, 2025.
Under the ACA, Applicable Large Employers (ALEs) are required to provide minimum essential health care coverage to at least 95% of their full-time employees that meets “minimum value” and “affordability” standards, or potentially pay a penalty to the Internal Revenue Service (“IRS”) under the ACA’s employer shared responsibility provisions. In connection with this requirement, health insurers and ALEs are required to provide full-time employees and employees with health care coverage with an annual IRS Form 1095-C/1095-B that discloses the coverage.
ALEs are no longer required to do a mass mailing of these forms to their employees if the employer meets certain notice requirements. If an employer posts a clear, conspicuous and accessible notice informing employees that any individual to whom Form 1095-C/1095-B would otherwise be required to be provided may request a copy of the applicable forms, a broad mailing to all employees is not required. There has not been subsequent guidance on what will qualify as “clear, conspicuous and accessible,” so for purposes of complying with the notice condition this year, employers are left to make a good-faith and reasonable interpretation of the standards.
Deadline – January 31: The notice must be posted no later than January 31 following the year of the reporting. For the 2024-year reporting, the notice must be posted by Friday, January 31, 2025.
Responding to Requests: Upon request, employers must provide the requested IRS Form 1095-C/1095-B to the employee by the later of January 31 or 30 days after receiving the employee’s request.
Employers still need to complete and file Forms 1095-C and 1094-C with the IRS. If filed electronically, the forms are due no later than March 31, 2025; if filed in paper form, the forms are due no later than February 28, 2025.
Next Steps for Employers:
If an employer wishes to take advantage of this reprieve, the employer should prepare and conspicuously post an accessible notice to employees informing them of their right to request a Form 1095-C/1095-B. The notice must be posted by January 31, 2025.
Employers should adopt a process for managing employee requests for forms.
Employers should continue to prepare and submit required ACA forms with the IRS.
The Trump Administration’s Immigration Enforcement Policy: What Hospitals and Health Care Providers Must Know for Their Patients and Visitors [Video]
It is by now common knowledge that on Inauguration Day, January 20, 2025, President Trump signed numerous executive orders geared toward the implementation of his immigration policy objectives, setting the stage for what he has called “the largest domestic deportation operation in American history.”
Less well known is the directive issued the following day by Acting Department of Homeland Security (DHS) Secretary Benjamine Huffman lifting Biden administration restrictions on Immigration and Customs Enforcement (ICE) agents that prevented the arrest of immigrants without legal status in certain specified sensitive areas, such as hospitals, churches, and schools. Thus, immigration enforcement personnel are now permitted to find individuals without legal status in or near sensitive areas, including hospitals and medical clinics.
Then, on January 26, The Washington Post reported that quotas of between 1,200 and 1,500 arrests per day had been placed on immigration enforcement agencies. As a result, there is a growing concern among health care providers who treat populations likely to contain disproportionate numbers of undocumented individuals that ICE agents will request information from them about their patients, including protected health information (PHI), and may even seek to question or detain patients when they have been admitted to the hospital or come to a clinic to obtain treatment, or about visitors to the facility.
This Insight provides background about immigration enforcement, describes what happens during an ICE raid, and offers information regarding policies that health care providers should have in place to be prepared for a patient- or visitor-focused enforcement action at their facility.[1]
What Could Happen During an ICE Raid?
In light of these recent changes to ICE policies, hospital systems and other medical providers should be prepared for the possibility of increased immigration-related law enforcement activity. Raids conducted by law enforcement agents are not announced in advance, and it has been reported that in recent years, ICE has used increasingly aggressive tactics in connection with federal immigration enforcement. Reports of ICE enforcement since the inauguration show federal agents wearing technical gear, which can be an alarming sight in a patient-centered care environment. One substantial concern is that ICE and other law enforcement agents will arrive at hospitals and health care clinics and insist that they be permitted to enter treatment areas to question patients about their immigration status and detain those not able to demonstrate they are in the United States legally.
Law enforcement agents are free to enter any public areas of a business, such as the lobby or a parking lot. However, to enter non-public business premises, which includes patient evaluation and treatment areas and administrative offices, the agent must have a signed judicial search warrant, i.e., issued by a judge and not merely an administrative warrant from an agency. While the agent can also enter with the consent of the health care provider, the provider must take care to uphold privacy protections, notably, the Health Insurance Portability and Accountability Act (HIPAA) and state privacy laws, even if the provider opts to respond to immigration enforcement requests.
What Can Health Care Providers Do Now to Prepare?
It is imperative that health care providers take the following steps in advance to prepare for a potential onsite ICE enforcement activity:
Assess and review the entity’s policy on responding to law enforcement. Many hospitals and other providers currently maintain policies on federal/local investigations and interactions with law enforcement. These policies should be updated to address the potential for immigration enforcement and to ensure consistent application across differing situations. Many hospitals and other providers have frequent contact with local law enforcement and are used to responding to police inquiries.
Designate a person in advance within the Legal Department (preferred) or senior on-site administrator with access to legal counsel to be the primary point of contact. A backup liaison should also be available during off-hours.
Establish basic protocols for the designated entity representative to follow, including obtaining identification of the law enforcement officers (i.e., name and business card). This should include reviewing with legal counsel the type and scope of documentation presented by the agents to justify their inquiry to determine whether it aligns with the request being made.
Provide a checklist of the basic protocols for the designated entity representative to follow, and keep copies in an easily accessible location, including on the designated representative’s work-related cellular phone.
Provide training to security and “front desk” personnel (and whoever else is likely to be the first person encountered) regarding how to respond to a variety of potential law enforcement scenarios, including raids, targeted enforcement involving those with criminal histories, document requests, and requests for information. This should include obtaining identification of the law enforcement officers, reviewing the materials to determine whether the agents have judicially authorized search warrants (as required to enter non-public business premises) and/or only administrative subpoenas/deportation orders, referring them to the designated entity representative, and requesting they remain in a specified office while the designated representative evaluates the appropriate response.
Notify and train personnel who may encounter ICE agents that they are not authorized to provide information or documentation or permit entry to non-public areas of the provider’s premises without direction from the designated representative and that they should be courteous and fully document all occurrences and actions of the agents.
Notify appropriate staff they must not provide legal advice to patients or employees who may be affected by immigration enforcement measures. Instead, if they wish, they may make available pamphlets or other literature regarding immigrant rights from recognized immigration support organizations and refer them to such organizations for further information.
Connect with legal counsel specializing in health care, privacy, and immigration law to obtain guidance regarding internal policies, procedures, and training and support to the designated entity representative.
Assess whether, and to what extent, information regarding immigration status should be obtained from patients.
What Else Should Health Care Providers Know?
Health care providers are generally not obligated to share the immigration status (if known) of their patients, nor are they obligated to provide immigration officials with access to treatment spaces in their facilities, which are non-public, absent a judicially issued search warrant or a warrant to arrest a specific individual. While HIPAA generally permits the disclosure of PHI to law enforcement in limited circumstances, as described in the regulations, it does not require disclosure of PHI. The definition of PHI is, of course, quite comprehensive and includes information such as name, address, date of birth, immigration status, admission status, and anticipated discharge date. Visitors to a facility will not have the same HIPAA protections as patients.
The staff of health care providers are also generally under no obligation to speak with ICE agents or other immigration enforcement personnel and should be advised they are not authorized to speak or release any documentation or information on behalf of the provider entity. Legal counsel should be consulted to determine what disclosure is permitted under HIPAA based on the documentation presented and what response, if any, is required by such documents.
With all this in mind, health care providers should be careful not to engage in a physical or verbal altercation with any law enforcement officer or otherwise be seen as obstructing or interfering with the government’s actions. Note also it is illegal to intentionally protect from detention a person who is in the United States unlawfully. Balancing this with the ongoing obligation to observe HIPAA and other privacy laws, as well as holding law enforcement to their legal standards for entry and access to patients and visitors, requires some analysis and judgment. This is the basis for recommending the designation (in advance) of a Legal Department or other senior on-site administrator with access to legal counsel to be the primary point of contact for law enforcement personnel, including for after-hours inquiries.
ENDNOTE
[1] As employers, you may also be interested in a companion Insight, “The New Trump Administration’s Immigration Enforcement Policy: What Employers Must Know,” as well as the blog post “Responding to Law Enforcement Demands for HIPAA Protected Information” and the video below.
Additional Authors: Stephen R. Kleinman and Jennifer M. Nelson Carney
New York State Legislature Passes Health Data Law to Protect Abortion Rights
On January 21, 2025, the New York legislature passed Senate Bill S929, an act to amend the general business law, in relation to providing for the protection of health information (the “Act”). The Act would provide for the protection of health information and require written consent or a designated necessary purpose for the processing of an individual’s health information. The bill is pending Governor Kathy Hochul’s signature.
The Act prohibits the sale of regulated health information and limits the circumstances in which an entity can lawfully “process” regulated health information, including but not limited to the collection, use, access and monetization of such information. It defines regulated health information to mean “any information that is reasonably linkable to an individual, or a device, and is collected or processed in connection with the physical or mental health of an individual,” including location or payment information. Notably, regulated health information does not include deidentified information, or information that “cannot reasonably be used to infer information about, or otherwise be linked to a particular individual, household, or device,” given reasonable technical safeguards.
Entities will still be able to “process” regulated health information in certain circumstances, including when they have received “valid authorization” from an individual to do so. In order for the authorization to be valid, it must satisfy 11 different conditions set forth by the Act. These include authorization made by written or electronic signature; the individual has the ability to provide or withhold authorization for different categories of processing activities; the individual has the ability to revoke authorization; and failure “to provide authorization will not affect the individual’s experience of using the regulated entity’s products or services.” Authorizations must expire within one year of being provided.
The Act provides for other circumstances that allow entities to “process” regulated health information absent “valid authorization” from the individual, including when such information is “strictly necessary” for “providing… a specific product or service requested by [the] individual,” “conducting… internal business operations,” “protecting against… illegal activity,” and “detecting, responding to, or preventing security incidents or threats.”
The Act would take effect one year after it is signed into law. Rules or regulations necessary to implement the Act are authorized to be made immediately following its passage and may be completed before the effective date.
The Act is now awaiting the signature of Governor Kathy Hochul. Governor Hochul’s Office has not yet commented on the bill, but she has been a longtime supporter of abortion access, a position on which she campaigned.
HHS-OIG Issues Favorable Opinion on Drug Manufacturer’s Free Genetic Testing, Counseling for Patients
Highlights
HHS-OIG recently released Advisory Opinion No. 24-12, a favorable opinion involving a drug manufacturer’s patient support program for individuals who suffer from genetic condition causing chronic kidney stones
The proposed arrangement is consistent with previous HHS-OIG guidance on patient assistance that promotes access to care involving rare health conditions
The HHS-OIG noted several factors that limited the possibility of fraud and abuse, even though the arrangement implicates the Anti-Kickback Statute and the civil monetary penalty provision prohibiting inducements to beneficiaries
The U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) recently released Advisory Opinion No. 24-12, a favorable opinion regarding a drug manufacturer’s program to sponsor genetic testing, related genetic counseling, and disease-state awareness education for certain hereditary conditions that may cause kidney stones. The manufacturer of a drug used to treat chronic kidney stones caused by a rare genetic condition requested the advisory opinion.
The manufacturer proposes the program be offered to certain patients that meet specified criteria. Eligible patients are those who: 1) have a family history of recurrent kidney stones, 2) received inconclusive results after testing for the genes responsible for the genetic condition, 3) have lab results indicating a potential monogenic disorder resulting in chronic kidney stones, 4) suffer from chronic kidney disease of unknown etiology, 5) suffer from nephrocalcinosis, 6) have a history of recurring kidney stones, or 7) are younger than two years old and failing to thrive with impaired renal function.
Under the program, no patient or payor would be billed for any of the tests or counseling services. The services would not be conditional on the use of the company’s drug or any other items or services sold by the company or its affiliates. The company acknowledged that the arrangement could result in healthcare providers scheduling, conducting, and billing eligible patients and their payors for additional visits to review patient test results generated by the program. However, these visits are not required under the program and would be solely done at the provider’s discretion in consultation with the patient.
The HHS-OIG concluded that the proposed arrangement implicated both the Anti-Kickback Statute and the civil monetary penalty provision prohibiting inducements to beneficiaries and would not fall directly within any exception or safe harbor. Nevertheless, the agency concluded the risk of fraud and abuse is sufficiently low and it would not impose sanctions on the proposed arrangement.
The HHS-OIG cited the following factors as limiting the possibility for fraud and abuse:
The narrow eligibility requirements regarding how a patient obtains genetic tests and counseling reduce the risk of over-utilization and improper utilization
The arrangement is unlikely to skew clinical decision-making or raise concerns regarding patient safety or quality of care because the manufacturer does not provide any sort of incentive to providers who order genetic testing or counseling
The manufacturer does not receive any information that identifies the prescribers or the patients who receive free genetic testing and counseling under the arrangement, and therefore, the company cannot target any drug marketing materials specifically to those individuals
Genetic counselors discuss genetic testing and hereditary diseases, but do not discuss treatment options therefore limiting any marketing of the drug
Notably, the HHS-OIG warned that it would likely reach a different conclusion if patient or provider data was shared with the drug manufacturer that would allow it to perform target marketing of the drug based on the arrangement. The HHS-OIG also noted its conclusion would likely be different if there was a more direct nexus between the free genetic testing, counseling, and education and ordering or purchasing the manufacturer’s drug.
Takeaways
This advisory opinion continues to demonstrate HHS-OIG’s leniency toward targeted patient support programs for rare diseases and genetic conditions. It also shows HHS-OIG’s tolerance for arrangements that increase the standard of care while limiting costs to federal healthcare programs, especially when patient data under the arrangement cannot be used for marketing purposes or other financial gain.
Massachusetts Expands FCA Liability To Owners and Private Equity Investors
Under a new 2025 law, Massachusetts is one of the first in the nation to broaden its state False Claims Act (FCA) to require disclosures by investors and owners of health care entities. On January 8, 2025, Governor Maura Healey signed into law H.5159, An Act enhancing the market review process (the Act), significantly changing Massachusetts’s regulatory and enforcement landscape. As discussed in further detail here, the law imposes FCA liability against investors and focuses on private equity and corporate ownership in health care. While this Act appears to be the first direct codification of FCA liability, it is consistent with the Department of Justice (DOJ) and Office of the Inspector General, U.S. Department of Health and Human Services’ (HHS-OIG) recent focus on private equity and the impact on health care.[1] While the DOJ has focused on private equity firms that allegedly knew of misconduct at portfolio companies and failed to stop it through their involvement in the operations of those companies, the MA FCA goes further by imposing liability on health care investors for merely being aware of misconduct and failing to report it to the state. H. 5159 expands the scope of the MA FCA enforced by the Commonwealth’s Attorney General[2] to apply to any person who has an “ownership or investment interest” and any person who violates the false claim statute that “knowingly” or “knows” about the violation[3] and fails to disclose the violation to the government within 60 days of identifying the violation. This is a significant expansion of the traditional protections afforded by the corporate veil and appears to be designed to hold private equity and other owners liable if they become aware of any MA FCA violations and fail to take action.
As part of the expansion, the Act defines “ownership or investment interest” as any: (1) direct or indirect possession of equity in the capital, stock, or profits totaling more than ten percent of an entity; (2) interest held by an investor or group of investors who engages in the raising or returning of capital and who invests, develops, or disposes of specified assets; or (3) interest held by a pool of funds by investors, including a pool of funds managed or controlled by private limited partnerships, if those investors or the management of that pool or private limited partnership employ investment strategies of any kind to earn a return on that pool of funds. This amendment clearly expands MA FCA liability to private equity investors and appears to codify the Massachusetts Attorney General’s approach in an October 2021 settlement with a private equity firm and former executives of South Bay Mental Health Center, Inc. for allegedly causing the submission of false claims submitted to MA’s Medicaid program.[1]
Additional enforcement mechanisms codified in the Act include expanding the Attorney General’s authority to obtain information as part of a civil investigative demand from significant equity investors, health care real estate investment trusts, or management services organizations.[2]
We will continue to monitor this activity and any resulting litigation and its possible impact on organizations transacting business in Massachusetts.
[1] https://www.mass.gov/news/private-equity-firm-and-former-mental-health-center-executives-pay-25-million-over-alleged-false-claims-submitted-for-unlicensed-and-unsupervised-patient-care.
[2] To be codified at MGL 12, s. 11N.
[1] For example, see Justice Department, Federal Trade Commission and Department of Health and Human Services Issue Request for Public Input as Part of Inquiry into Impacts of Corporate Ownership Trend in Health Care, available at https://www.justice.gov/opa/pr/justice-department-federal-trade-commission-and-department-health-and-human-services-issue; see also, https://www.hhs.gov/about/news/2025/01/15/hhs-releases-report-consolidation-private-equity-health-care-markets.html
[2] To be codified at MGL 12, §§ 5A and 5B.
[3] The Act clarifies that “knowing,” “knowingly,” or “knows” all mean “possessing actual knowledge of relevant information, acting with deliberate ignorance of the truth or falsity of the information or acting in reckless disregard of the truth or falsity of the information; provided, however, that no proof of specific intent to defraud shall be required.”
Analyzing President Trump’s Latest Executive Order Titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”
On January 21, 2025, President Trump signed an Executive Order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This Executive Order is a major pivot in federal policy regarding affirmative action and diversity initiatives, which have been in place for decades, particularly within federal contracting. The implications of this Executive Order are far-reaching, affecting both federal contractors and private employers across the United States.
Key Aspects of the Executive Order
A significant component of the Executive Order is the revocation of Executive Order 11246. Enacted in 1965 by President Lyndon B. Johnson, Executive Order 11246 mandated that federal contractors and subcontractors implement affirmative action programs to ensure equal employment opportunities for women and minorities. According to the Department of Labor, this requirement has become deeply embedded in the operational frameworks of approximately 25,000 firms and 120,000 establishments, impacting nearly 20% of the U.S. workforce. By revoking this order, President Trump’s Executive Order effectively dismantles the federal mandate for race and gender-based affirmative action.
The Executive Order further instructs all federal agencies to eliminate any programs, policies, or mandates that are deemed discriminatory or illegal under what the Executive Order characterizes as the guise of DEI (Diversity, Equity & Inclusion). This encompasses the cessation of activities such as promoting diversity initiatives and holding contractors accountable for affirmative action measures. Contractors “may” continue complying with the existing affirmative action requirements under Executive Order 11246 until April 20, 2025. Additionally, the Office of Federal Contract Compliance Programs (OFCCP) is specifically directed to stop engaging in workforce balancing based on race, color, sex, sexual preference, religion, or national origin. The overarching goal, as stated in the Executive Order, is to promote individual initiative, excellence, and hard work, aligning employment practices more closely with merit-based principles.
Despite these sweeping changes, it is crucial for federal contractors and subcontractors to remain compliant with existing anti-discrimination laws, such as Title VII of the Civil Rights Act, the Equal Pay Act, the Age Discrimination in Employment Act and the Americans with Disabilities Act. Moreover, the obligations under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act remain intact. These statutes continue to require affirmative action and non-discriminatory practices specific to employees who are veterans or are disabled, underscoring the nuanced landscape of compliance that employers must navigate.
Additionally, the Executive Order calls for the development of a new contract term, likely replacing the current Equal Employment Opportunity clause, for inclusion in federal contracts. This term will require contractors to agree that compliance with all applicable federal anti-discrimination laws is essential to the government’s payment decisions. Contractors must certify that they do not operate any programs promoting DEI that violate federal anti-discrimination laws. The White House Fact Sheet on the Executive Order describes this certification as a clear statement that contractors will not engage in illegal discrimination, including any DEI practices the order characterizes as illegal. This certification is expected to be published in the upcoming weeks.
Employers should carefully review their current employment practices to ensure compliance with nondiscrimination statutes, such as Title VII of the Civil Rights Act of 1964. Any policies or practices that might be inconsistent with existing law should be revised to ensure compliance. Additionally, employers should review their Equal Employment Opportunity policies and communications to assess potential risks of enforcement agency investigations.
Employers should also stay informed about potential challenges to the Executive Order and look for additional information about sectors, industries, and organizations that federal agencies may identify for investigation. Guidance from the Attorney General, Secretary of Education, and other federal agencies will be essential as these changes unfold.
The Executive Order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” represents a pivotal shift in federal policy, reshaping the landscape of affirmative action and DEI initiatives. As the ramifications of this order unfold, it is imperative for employers to remain vigilant and proactive in adjusting their compliance strategies. Staying informed about these developments and seeking guidance from legal advisors will be crucial in navigating this new era of employment practices.
State of Play: Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs
On Monday evening, the Office of Management and Budget (OMB) ordered all federal agencies to temporarily suspend grant and loan payments, with the exception of Social Security, Medicare, and “assistance provided directly to individuals.” In the internal memo, OMB’s Acting Director, Matthew Vaeth, calls for each agency to undertake a comprehensive analysis to ensure all grant and loan programs comply with the Administration’s Executive Orders. The pause applies to an estimated 2,600 accounts across the federal government, and details are still being worked out on federal funding that is statutorily obligated.
While intended to be temporary, the duration of the pause may vary by Department and program. Each federal department and agency are likely to interpret its scope and requirements differently and prioritize review of certain programs before others. This pause may have a profound effect on clients who were expecting to receive federal funds within the next two to six weeks. While the pause has the potential to affect any business or entity receiving federal grants or loans, clients receiving such funds as part of programs related to DEI initiatives, foreign aid, or federal clean energy investments, specifically electric vehicles, may be most impacted.
Some of the questions agencies must answer in the report for OMB include whether or not the program supports illegal immigrants, if the program supports abortion, gender ideology or DEI initiatives, or if the program supports activities that impose an undue burden on the identification, development, or use of domestic energy resources. It’s important to note, only a handful of President Trump’s cabinet secretaries and agency heads have been confirmed, making this process all the more complicated.
Key Facts
All federal assistance – with the exceptions listed above – will be paused starting today, January 28, at 5:00 pm ET.
This affects ALL federal agencies.
The government-wide freeze is temporary and is intended to allow each agency to conduct a comprehensive analysis of all federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s Executive Orders.
Agencies have until February 10, 2025, to submit to OMB detailed information on each program subject to this pause.
The freeze will include:
Issuance of new awards;
Disbursement of Federal funds under all open awards; and
Other relevant agency actions that may be implicated by Trump’s Executive Orders until OMB has reviewed and provided guidance based on what is received.
Could this Affect You?
Yes, if your business receives federal grants or loans, the pause will almost certainly affect you until at least February 10th and potentially beyond. If your company is concerned about the funding pause, or you are impacted by any of the recent Executive Orders, it is critical to determine the risk posed by the pause or Executive Order and to develop a response that evaluates both their legal and political options.
CMS Publishes Final Rule, Effective January 1, 2025, Addressing the Requirements for Reporting and Returning Overpayments
The standard for an “identified overpayment” under Medicare Parts A–D now aligns with section 1128J(d)(4)(A) of the Social Security Act, which incorporates by reference the Federal False Claim Act’s (the “FCA”) “knowledge” standard. The previous “reasonable diligence” standard, which, as it related to Part C, had been struck down by a Federal court, no longer applies. Under the new standard, a provider, supplier, or Medicare Advantage Organization (“MAO”) has knowledge of an overpayment when it has been identified.
Additionally, the deadline for reporting and returning identified overpayments has also been finalized. An overpayment must be reported and returned by the later of:
The date which is 60 days after the date on which the overpayment was identified, or
The date any corresponding cost report is due, if applicable.
Any identified overpayment retained after the deadline to report and return may create FCA liability.
The foregoing was finalized, as proposed in 2022, pursuant to the Calendar Year 2025 Physician Fee Schedule (the “2025 PFS”). With respect to the timeframe to report and return overpayments, the 2025 PFS suspends a person’s 60-day obligation to report and return overpayments for up to 180 days if the person, after having identified an overpayment, conducts a timely, good-faith investigation to determine whether related overpayments exist. While the 2025 PFS did not expressly define the term “good-faith investigation”, persons “can rely upon [its] plain meaning.” See 2025 PFS at 98338.
Takeaways
This legal change creates new risks for providers who fail to investigate credible information about a potential overpayment. However, this should come as no surprise, as it aligns with what the U.S. Department of Justice may already pursue against a person under the FCA—a reverse false claim. As noted in the commentary of the 2025 PFS, the FCA, from which the “knowledge” qualifier originates, contains an existing body of case law and examples to guide stakeholders and their counsel regarding if a person has the requisite knowledge to have identified an overpayment based on the facts and circumstances presented. See 2025 PFS at 98335–8.
Additionally, once a person has identified an overpayment, the 60-day obligation to report and return such overpayment begins to run. And, that deadline exists regardless of whether the overpayment has been quantified. But, because quantification takes time, the 60-day deadline may be suspended if the person needs to dive deeper into its investigation to determine if related overpayments exist. The timeline to do so, however, is only 180 days. Thus, providers should make every effort to act with “all deliberate speed”, which, in turn, may require providers with fewer resources and expertise to expend a disproportionately high amount of effort. These rules apply across all of Medicare and, thus, are applicable to all providers, suppliers, and MAOs.
Updates for Employers Using Private Plans to Comply with Minnesota’s Paid Leave Law
Minnesota is one of a dozen states that have enacted a statewide program providing compensation to employees during family and medical leaves. Minnesota’s law provides job protection and payment of benefits through a state-run insurance program to qualifying employees to take up to 12 weeks of leave for family and/or medical reasons (or a combined total of up to 20 weeks of leave if the employee qualifies for both types of leave in one benefit year) (“the Paid Leave Law”). The insurance program will be funded through employer and employee contributions beginning on January 1, 2026. Employees can also begin applying for compensation beginning on January 1, 2026.
Recently, the Division outlined how employers can use self-insured plans or plans from an insurance carrier to comply with the Paid Leave Law. The Division refers to insurance plans providing coverage for Minnesota’s Paid Leave law as “Equivalent Plans.”
Equivalent Plans must allow for the same, or more comprehensive, coverage than is expressly required by the Paid Leave Law. The Division details the conditions that an Equivalent Plan must meet to comply with the Paid Leave Law. As explained by the Division, employers can choose to use an Equivalent Plan to cover one leave category (family or medical) and can participate in Minnesota’s Paid Leave program to cover the other leave category (family or medical). The Minnesota Department of Commerce will begin accepting applications from employers to use Equivalent Plans “in the spring of 2025” according to the Division. The Minnesota Department of Commerce recently published a checklist for employers to submit along with their Equivalent Plan application.
The Division is set to provide more information about Equivalent Plans soon. According to the Division, the information is likely to include a cost estimation calculator for employers and employees, and more details about the application process employers must follow to secure an approved Equivalent Plan.
Minnesota’s Paid Leave Division published final proposed rules in December, that, if adopted, will regulate the state’s Paid leave Law. We are monitoring these developments and will continue to provide updates as we approach the January 2026 rollout.
Hadley M. Simonett contributed to this article.
EPA Proposes Risk Management Rule to Protect Workers from Inhalation Exposure to PV29
On January 14, 2025, the U.S. Environmental Protection Agency (EPA) issued a proposed rule to address the unreasonable risk of injury to human health presented by Color Index (C.I.) Pigment Violet 29 (PV29) under its conditions of use (COU) as documented in EPA’s January 2021 risk evaluation and September 2022 revised risk determination. 90 Fed. Reg. 3107. The proposed rule states that the Toxic Substances Control Act (TSCA) requires that EPA address by rule any unreasonable risk of injury to health or the environment identified in a TSCA risk evaluation and apply requirements to the extent necessary so the chemical no longer presents unreasonable risk. To address the identified unreasonable risk, EPA proposes requirements to protect workers during manufacturing and processing, certain industrial and commercial uses of PV29, and disposal, while also allowing for a reasonable transition period prior to enforcement of said requirements. Comments are due February 28, 2025. EPA notes that under the Paperwork Reduction Act (PRA), comments on the information collection provisions are best assured of consideration if the Office of Management and Budget (OMB) receives comments on or before February 13, 2025.
As reported in our January 25, 2021, memorandum, pursuant to TSCA Section 6(b), EPA determined that PV29 presents an unreasonable risk of injury to health, without consideration of costs or other nonrisk factors, including an unreasonable risk to potentially exposed or susceptible subpopulations (PESS) identified as relevant to the 2021 risk evaluation for PV29 under the COUs. EPA notes that the term “conditions of use” is defined in TSCA Section 3(4) to mean the circumstances under which a chemical substance is intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used, or disposed of. To address the unreasonable risk, EPA proposes, under TSCA Section 6(a), to:
Require use of assigned protection factor (APF) 50 respirators and equipment and area cleaning to address the risk from inhalation exposure to dry powder PV29 (also referred to as regulated PV29), where dry powder PV29 is expected to be present, for the following COUs:
Domestic manufacture;
Import;
Incorporation into formulation, mixture, or reaction products in paints and coatings;
Incorporation into formulation, mixture, or reaction products in plastic and rubber products;
Intermediate in the creation or adjustment of color of other perylene pigments;
Recycling;
Industrial and commercial use in automobile (original equipment manufacturer (OEM) and refinishing) paints and coatings;
Industrial and commercial use in coatings and basecoats paints and coatings;
Industrial and commercial use in merchant ink for commercial printing; and
Disposal.
Require manufacturers (including importers), processors, and distributors in commerce of regulated PV29 to provide downstream notification of the requirements.
Require recordkeeping.
EPA notes that not all TSCA COUs of PV29 are subject to the proposed rule. As described in the 2021 risk evaluation and the September 2022 revised unreasonable risk determination, four COUs do not contribute to the unreasonable risk: distribution in commerce; industrial/commercial use in plastic and rubber products — automobile plastics; industrial/commercial use in plastic and rubber products — industrial carpeting; and consumer use in professional quality watercolor and acrylic artist paint. Consumer use in professional quality watercolor and acrylic artist paint was the only consumer COU evaluated as part of the 2021 risk evaluation. More information on EPA’s September 2022 revised unreasonable risk determination is available in our September 9, 2022, memorandum.
EPA requests public comment on all aspects of the proposed rule. According to EPA’s December 20, 2024, press release, EPA “is especially interested in hearing perspectives from the public on the feasibility and effectiveness of the proposed requirements for worker protections, including from workers and entities that would be required to implement the workplace protections.”
Commentary
EPA’s evaluation of PV29 was expected to be “easy” when it was identified as one of the first ten chemicals selected for risk evaluation. PV29 is a poorly soluble, low toxicity (PSLT) particle. EPA’s approach to PSLTs has been evolving over the years and has been the subject of controversy, including whether carcinogenicity in rats from “kinetic lung overload…[where the] dust overwhelms the lung clearance mechanisms over time” is relevant to humans.
Since EPA first issued its 1994 document titled “Methods for Derivation of Inhalation Reference Concentrations (RfCs) and Application of Inhalation Dosimetry,” scientific advances in mechanistic modeling of inhalation dosimetry have matured. The scientific understanding of the most appropriate dose metric for PSLTs (i.e., retained dose, not deposited dose) has also evolved. In 1994, EPA developed the regional deposited dose ratio (RDDR) model, an empirical model that provides predictions of deposited dose. In 2021, EPA developed an update to the multiple-path particle dosimetry (MPPD) model (i.e., MPPD EPA 2021 v.1.01). This model is an improvement over the RDDR model because it incorporates the best available science, including “some dose metric predictions…based on mechanistic descriptions instead of empirical fitting…[and] providing prediction of retained mass….” Prior to this update, MPPD was already recognized as a superior model versus RDDR for inhalation dosimetry. For example, EPA’s Integrated Risk Information System used MPPD when developing an inhalation reference concentration for benzo[a]pyrene in January 2017; the National Institute for Occupational Safety and Health also used MPPD for developing its recommended exposure limit for carbon nanotubes in April 2013.
EPA used the MPPD model in the revised draft risk evaluation for PV29. EPA subsequently used the RDDR model in the Final PV29 risk evaluation. EPA stated that “The change in model [i.e., RDDR rather than MPPD] resulted in unreasonable risk determinations for all [occupational nonusers] ONUs and industrial and commercial use in automobile paint [original equipment manufacturer] OEM and refinishing condition of use” (emphasis added). EPA justified this change by stating “The MPPD model was not thought to be appropriate because the particle size data was not robust enough and the MPPD model cannot calculate [human equivalent concentrations] HECs for the hamster data…, while the RDDR model can accept hamster data input.” We find this justification hollow. EPA did not state why the particle size data were robust enough for the RDDR model but not the MPPD model. Further, EPA did not use the hamster data as the basis for its point of departure (POD) in the Final PV29 risk evaluation. We suspect this change was based on a preferred outcome (i.e., unreasonable risks), rather than an objective scientific evaluation to determine if there is unreasonable risk.
Interestingly, EPA calculated an existing chemical exposure limit (ECEL) of 0.014 mg/m3 for PV29, but it did not provide the underlying documentation for this value. Instead, EPA only stated that it chose not to propose an ECEL for PV29 because EPA was unable to identify a “method with a limit of detection lower than the calculated ECEL….” Without the underlying documentation, it is impossible to determine if EPA’s proposed regulatory action is based on the best available science or if the protective measures meet the requirement to protect workers “to the extent necessary” to mitigate the risk identified.
EPA derived PODs based on the HEC of 0.28 mg/m3 derived from rats and the HEC of 0.16 mg/m3 that it derived from hamsters, but these PODs are based on a dose metric (i.e., deposited dose) that does not represent the best available science (i.e., retained dose). EPA should have used the results of the rat inhalation study (the most sensitive species) and calculated the HEC based on the retained dose. That would provide a POD that would be both health protective and based on the best available science. Without that POD and an appropriate benchmark margin of exposure (MOE), EPA cannot justify its proposed regulatory action.
The proposed PV29 risk management rule has the potential to be more impactful than other EPA risk management rules because of the thousands of PSLTs listed on the TSCA Inventory. If either of EPA’s proposed risk management options is issued in final, it will set a bad precedent by serving as the basis for all of EPA’s risk evaluations for PSLTs when respirable particles are formed. Stakeholders need to be aware and be engaged. It is critically important that the rule be based on the best available science. This is a good opportunity for EPA to work with the U.S. Occupational Safety and Health Administration (OSHA) to revise the permissible exposure limit (PEL) for particulates not otherwise regulated (PNOR) (PSLTs fall into this category), given the immense number of opportunities for exposure to PSLT dust in the workplace, many of which are not under TSCA authority.