Health Law & Managed Care – Page 10

UPDATE – Departments Issue Nonenforcement Policy Statement!

Regulators Pause Mental Health Parity Rules Enforcement

Federal regulators recently indicated they will not enforce parts of the final regulations issued in September 2024 under the Mental Health Parity and Addiction Equity Act (MHPAEA) and may soon propose new rules altogether.

Quick Hits

A federal judge recently paused litigation over the 2024 mental health parity regulations focused on nonquantified treatment limitations.
The Trump administration is considering rescinding or adjusting the rules.
The federal agencies will not enforce the 2024 rules in the short term.

On May 12, 2025, the U.S. District Court for the District of Columbia agreed to stay a lawsuit brought by the ERISA Industry Committee to block the 2024 rules related to nonquantitative treatment limitations (NQTLs).
The U.S. Departments of Health and Human Services, Labor, and Treasury requested a stay in the case, telling the court that they are considering rescinding or modifying the 2024 rules. They issued a nonenforcement policy on the portions of those regulations that took effect January 1, 2025, or would take effect January 1, 2026.
The agencies also directed health plans to continue to rely on the 2013 MHPAEA regulations and prior subregulatory guidance.
Background on the Case
Under the federal Mental Health Parity and Addiction Equity Act (MHPAEA), if a health plan offers mental health and substance use disorder benefits alongside medical and surgical benefits, it must provide the mental health and substance use disorder benefits in a manner that is no more restrictive than the medical and surgical benefits.
On September 23, 2024, the federal government issued final rules requiring health plans to provide “meaningful benefits” for mental health or substance use disorders in coverage categories where medical or surgical benefits are also provided. Meaningful benefits cover core treatments, defined as standard treatments or interventions indicated by “generally recognized independent standards of current medical practice.” These regulations require that a plan fiduciary certify that it undertook a prudent process to select a qualified service provider to perform the comparative analysis.
On January 17, 2025, the ERISA Industry Committee sued the three federal agencies to block the 2024 regulations.
Next Steps
Employers may wish to review their mental health and substance use disorder coverage in order to ensure compliance with the MHPAEA. While parts of the 2024 mental health parity rules will not be enforced for now, employers may wish to anticipate that the agencies could propose changes to the 2024 rules or propose new rules in the future.
Importantly, the requirement to perform and document a comparative analysis of a plan’s NQTLs still exists.

How Modern Workplaces Navigate Generational Shifts: One-on-One with Jeff Landes [Video]

Generational shifts in the workplace bring unique challenges and opportunities for employers striving to build productive and engaged teams.
In this one-on-one conversation, Epstein Becker Green attorney Jeff Landes joins George Whipple to explore strategies for managing and motivating the emerging workforce, with a particular focus on “Gen Z” employees. Jeff examines how organizations can adapt to generational expectations, including fostering transparency, providing meaningful feedback, and supporting mental health and wellness initiatives.
The discussion also addresses the evolving dynamics of hybrid and remote work, underscoring the importance of consistent performance management, clear communication, and innovative accommodations. From creating inclusive environments to navigating requests for flexible schedules, Jeff offers practical advice for handling the complexities of a modern workforce while maintaining operational efficiency.
Listen now to gain actionable ideas for workforce development and learn how to create a workplace culture that aligns with both employee needs and business goals.

Health Care Fraud and Abuse 2024 Year in Review

Polsinelli proudly presents the Health Care Fraud and Abuse 2024 Year in Review, offering a comprehensive analysis of False Claims Act (FCA) enforcement and broader fraud and abuse developments over the past year.
Read the Full E-Book Here
Sabrina Marquez, Nicole K. Nielly, and Evan M. Schrode contributed to this article

Departments Press Pause on Final Mental Health Parity Regulations

Yesterday, the Departments of Labor, Treasury, and Health and Human Services announced a non-enforcement policy with respect to final regulations issued under the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) in September 2024. The Departments recently indicated that this policy was imminent when they requested that litigation challenging the final regulations be paused while they considered rescission or modification of the regulations.
The 2024 final regulations, which we blogged about here, included sweeping changes that would have impacted virtually all group health plans that cover mental health and substance use disorder (MH/SUD) benefits.
What the non-enforcement policy does and does not do
The non-enforcement policy states that the Departments will not enforce the final regulations issued in 2024. However, this applies only to the portions of the 2024 final regulations that were “new” in relation to the 2013 final regulations.
What remains in effect: Thus, plan sponsors should keep in mind that MHPAEA and the final regulations issued in 2013 (including subsequent sub-regulatory guidance, such as agency FAQs) remain in place and should continue to be relied upon for guidance. Additionally, the statutory obligation for a plan to maintain non-quantitative treatment limitation (NQTL) comparative analyses for MH/SUD benefits and provide them to the Departments upon request remains in effect. (This statutory obligation was added as part of the Consolidated Appropriations Act, 2021.)
What is paused: The significant changes in the 2024 final rule that were new compared to the 2013 final rule—including the fiduciary certification requirement, the “meaningful benefits” standard, and revised standards for evaluating NQTLs—are all paused for the time being while the Departments reconsider their mental health parity compliance and rulemaking approach.
It bears noting that the Departments stated not only that they intend to reconsider the final rule, but also that they are conducting a “broader reexamination of each department’s respective enforcement approach.” This, and other language in the non-enforcement policy, suggests that the Departments will be looking at whether changes are necessary to balance the important goals of MHPAEA and the burdens that the current enforcement has imposed on plan sponsors.
How long does the non-enforcement policy last?
The Departments will not enforce the 2024 final rule or pursue enforcement actions based on a failure to comply that occurs prior to the final decision in the litigation, plus an additional 18 months. Plan sponsors should monitor subsequent updates from the Departments to confirm compliance.
* * *
Takeaways for group health plan sponsors: Given the challenges plan sponsors have faced in connection with the implementation of the current regulatory and enforcement scheme, the non-enforcement policy is likely welcome news. However, plan sponsors should remain mindful that the 2013 final rule and MHPAEA statutory obligations are still in place and not impacted by the non-enforcement policy. For now, while plan sponsors can pause compliance efforts related to the 2024 final rule, plans may want to consider pressing ahead with any current compliance projects related to the 2013 final rules and statutory obligations related to NQTL comparative analyses.

DOJ Announces Key Corporate Enforcement Changes & White-Collar Priorities

DOJ recently announced white-collar crime enforcement priorities and significant changes to its corporate enforcement policies (here and here). “[O]verbroad and unchecked corporate and white-collar enforcement burdens U.S. businesses and harms U.S. interests,” and “[n]ot all corporate misconduct warrants federal criminal prosecution,” according to the memo. New changes to these DOJ policies are intended to help companies navigate what to expect when making a disclosure and clarify the additional benefits that are available to companies that self-disclose and cooperate.
Priority Enforcement Areas
DOJ’s Criminal Division will prioritize investigating and prosecuting white-collar crimes in certain identified high-impact areas, as summarized below:

Health care and federal program and procurement fraud;
Trade and customs fraud, including tariff evasion;
Fraud perpetrated through variable interest entities, including securities fraud, and other market manipulation schemes;
Market manipulation including, Ponzi schemes, investment fraud, elder and servicemember fraud, and health and safety consumer fraud;
National security threats to the U.S. financial system by financial institutions and their insiders that commit sanctions violations;
Material support by corporations to foreign terrorist organizations, including recently designated cartels;
Complex money laundering, including Chinese Money Laundering Organizations, and other organizations involved in laundering funds used in the manufacturing of illegal drugs;
Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act violations, including counterfeit fentanyl pills and unlawful distribution of opioids by medical professionals and companies;
Bribery and associated money laundering that impact U.S. national interests, undermine U.S. national security, harm the competitiveness of U.S. businesses, and enrich foreign corrupt officials; and
Crimes involving digital assets that victimize investors and consumers; that use digital assets in furtherance of other criminal conduct; and willful violations that facilitate significant criminal activity.

DOJ has also called for an increased investigative pace and directed prosecutors to “move expeditiously to investigate cases and make charging decisions” quickly to ensure “that [investigations] do not linger and are swiftly concluded.”
Corporate Enforcement Policy Changes
New changes to the Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) include the following:

For companies that satisfy all required elements from voluntary self-disclosure, to full cooperation, to timely and appropriate remediation, as well as have no aggravating circumstances, the CEP will make clear there “is a clear path to declination.” This is a marked contrast to prior guidance that entitled companies to a “presumption” of a declination.
Companies that are willing to satisfy the core criteria, but have aggravating circumstances that raise concerns for the company to voluntarily self-disclose, may still qualify for declination under the revised CEP. In these cases, the DOJ will consider “the severity of those aggravating circumstances and the company’s cooperation and remediation,” offering a potential outcome to avoid prosecution.
The revised CEP also clarifies that companies may still qualify for meaningful benefits when self-disclosing in good faith – such as a non-prosecution agreement, a 75 percent reduction in criminal fines, and no requirement to appoint a monitor – even if the disclosure is not considered timely or comes after the DOJ, without the company’s awareness, has already discovered the misconduct.

DOJ also announced revisions to the Criminal Division’s standards and policy for the selection of monitors in matters handled by the Criminal Division.
Monitorships will be limited to those cases where deemed “necessary,” including “when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct without such heavy-handed intervention.” Specifically, the monitor selection standards will be revised to clarify “the factors that prosecutors must consider when determining whether a monitor is appropriate and how those factors should be applied,” as well as require that monitorships be “narrowly tailor[ed]…to address the risk of recurrence of the underlying criminal conduct and to reduce unnecessary costs.” Such factors prosecutors may consider include: (1) “the nature and seriousness of the conduct” and the risk of recurrence; (2) other available regulatory oversight; (3) the effectiveness of the company’s compliance program at resolution; and (4) the maturity of the company’s internal controls, including the company’s ability to test its compliance program as well as make improvements.
DOJ’s corporate whistleblower program will also undergo an evaluation to identify “additional areas of focus” that align with the Administration’s key initiatives. “[P]rocurement and federal program fraud; trade, tariff, and customs fraud; violations of federal immigration law; and violations involving sanctions, material support of foreign terrorist organizations, or those that facilitate cartels and TCOs, including money laundering, narcotics, and Controlled Substances Act violations” have all been included as areas of interest.
Takeaways

Voluntary Self-Disclosure now means “a clear path to declination” rather than a “presumption” of a declination.
Look for an uptick in False Claims Act investigations in the international trade area including, customs fraud and tariff evasion.
DOJ is requiring for prosecutors to “move expeditiously to investigate cases,” and will be actively monitoring investigation timelines and progress to ensure prompt resolution. This means that stakeholders and outside counsel will need to conduct internal investigations and make decisions quicker.
Notwithstanding the 180-day FCPA pause, bribery that enriches foreign officials and undermines U.S. business remains a priority.
Monitorships appear to now be the exception, not the rule for corporate resolutions.
Deferred Prosecution Agreements may be back given that DOJ is making clear “[n]ot all corporate misconduct warrants federal criminal prosecution.” Rather, DOJ is directing Criminal Division prosecutors to weigh “additional factors,” such as whether a company self-disclosed and fully cooperated, as well as its remediation efforts, when assessing whether to prosecute.

Companies will want to stay ahead of these developments and revised corporate enforcement policies. As we have reported, well-designed compliance programs help to mitigate not only bribery and corruption risks, but also money laundering, sanctions issues, human rights violations, and financial fraud risks. Effective and adequately resourced compliance programs also help to foster positive speak-up cultures, ensuring that employees feel comfortable to report suspected misconduct via available internal channels and reporting mechanisms. Maintaining robust internal controls make companies better equipped and prepared to flag potential misconduct early as well as navigate difficult considerations around self-disclosure. Companies should continue to evaluate their compliance programs, including the effectiveness and efficiency of their internal reporting mechanisms and internal investigations processes.

Focus, Fairness and Efficiency: DOJ Reveals Administration’s Plans for Enforcement of Corporate and White-Collar Crime

Key Takeaways

DOJ Criminal Division will prioritize enforcement in key areas, including health care fraud, trade and customs violations and national security-related financial crimes.
Companies that voluntarily self-disclose, cooperate and remediate may qualify for declinations, reduced penalties and shortened compliance obligations even where aggravating factors are present.
Corporate compliance agreements will generally be capped at three years, with early termination available based on remediation, risk reduction and program maturity.
Independent compliance monitors will be imposed only when necessary and must be narrowly tailored to limit burden and business disruption.

On May 12, 2025, the Head of the Department of Justice’s (DOJ) Criminal Division, Matthew R. Galeotti, issued a memorandum detailing the Division’s enforcement priorities and policies for prosecuting corporate and white-collar crimes under the Trump administration.
The memorandum describes the need for the Division’s policies to “strike an appropriate balance” between investigating and prosecuting criminal wrongdoing “while minimizing unnecessary burdens on American enterprise.” In accordance with this position, the memorandum describes areas that the Division will be particularly focused on investigating and prosecuting, while also emphasizing the Division’s willingness to reduce criminal and civil sanctions when corporations self-disclose and cooperate with the government.
Overall, the memorandum describes enforcement priorities and associated policies that align with the Trump administration’s focus on rooting out government waste and abuse, toughening U.S. policy on foreign trade and combatting national security concerns such as drug trafficking and foreign crime organizations, citing to several executive orders on these topics.
The Criminal Division’s “Areas of Focus” include:

Federal program fraud, waste and abuse—specifically health care fraud and procurement fraud;
Trade and customs fraud, including tariff evasion;
Fraud perpetrated through variable interest entities (VIEs), including schemes targeting elders, “ramp and dumps,” and other forms of market manipulation;
Fraud that victimizes U.S. investors, individuals and markets, such as Ponzi schemes, schemes targeting elders and servicemembers and fraud that threatens consumer health and safety;
Financial institutions that commit sanctions violations or enable transactions by Transnational Criminal Organizations (TCOs), drug cartels, hostile nation-states and/or foreign terrorist organizations;
Corporations that provide “material support” to foreign terrorist organizations, cartels and TCOs;
Complex money laundering schemes—specifically referencing “Chinese Money Laundering Organizations” and other organizations involved in laundering money used in the manufacturing of illegal drugs;
Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act, including the unlawful manufacture and distribution of products used to create counterfeit pills containing fentanyl and the unlawful distribution of opioids by medical professionals and companies;
Bribery that impacts U.S. national interests, undermines U.S. national security and harms the competitiveness of the U.S.; and
Crimes involving the use of digital assets—with cases impacting victims, involving cartels, TCOs, or terrorist groups or facilitating drug money laundering or sanctions evasion receiving the highest priority.

After outlining the Criminal Division’s investigation and prosecution priorities, the memorandum indicates that the Department will take a more relaxed approach to misconduct committed by corporations that are willing to report such conduct, cooperate with the government and take actions to remediate the misconduct. In fact, these are factors that Criminal Division prosecutors must now consider when determining whether to bring criminal charges against corporations.
The memorandum further states that the Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy will be revised to clarify additional benefits that are available to companies that self-disclose and cooperate with the government and will provide a “more easily understandable” path for declination and fine reductions. As part of this effort, the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section have been instructed to review all existing corporate compliance agreements to determine if they should be terminated early. Facts that these Sections may consider when determining whether early termination is warranted include the duration of the post-resolution period, a substantial reduction in the company’s risk profile, the extent of remediation and maturity of the compliance program and whether the company self-reported the misconduct.
Additionally, Division attorneys must consider several factors when imposing terms for corporate compliance agreements, including the severity of the misconduct, the company’s degree of cooperation and remediation and the effectiveness of the company’s compliance program at the time of resolution. The memorandum provides that the terms of such agreements should not exceed three years “except in exceedingly rare cases,” and Division attorneys should assess these agreements regularly to determine if they should be terminated early.
Lastly, the memorandum provides policy changes with respect to the use of independent compliance monitors. Namely, the Division will only impose such monitoring when necessary, for example, when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct, and the monitoring must be narrowly tailored to minimize expense, burden and interference with business.
Mr. Galeotti discussed these policy changes while speaking at the Securities Industry and Financial Markets Association’s Anti-Money Laundering and Financial Crimes Conference on May 13, 2025, stating that companies will now have a “clear path to declination” through self-disclosure, full cooperation with the government and timely remediation. Galeotti stated that even companies with aggravating circumstances may receive declination if the company’s cooperation and remediation outweigh these circumstances. Furthermore, Galeotti indicated that even companies that self-disclose after the government has become aware of their misconduct can still qualify for shorter-term compliance agreements, fine reduction and lessened monitoring.
Taken together, this memorandum and other guidance issued by DOJ under the direction of U.S. Attorney General Pam Bondi, indicate that the Department intends to treat corporate misconduct outside certain areas of focus with a lighter hand, incentivizing corporations to be transparent with the government and, as stated in the Division’s memorandum, “learn from their mistakes.”

“AI Policy Roadmap” Released by AdvaMed to Guide Regulators

On March 14, 2025, AdvaMed, the MedTech Association, released its AI Policy Roadmap (the Roadmap) outlining policy priorities for Congress and the U.S. Food and Drug Administration (FDA). The impetus for the Roadmap was the recognition of the important role that AI-enabled devices will play in improving the accuracy and efficiency of disease diagnosis, enabling higher quality treatments, and expanding access to health care and to innovative technologies. The Roadmap is broken down into three main policy priority areas: privacy and data access, FDA AI regulatory framework, and reimbursement and coverage.
Privacy and Data Access
The Roadmap contends that one component of AI-enabled devices that sets them apart from traditional technology is the need for large datasets to train and validate the algorithms underlying the devices. The need for large datasets creates two distinct challenges.

First, health care data is highly fragmented and generally stored in non-standardized formats. Health care data is not frequently shared across health systems, and there are very few commercial vendors that provide the services necessary to link and standardize this data.
The second significant challenge is the need to protect patient privacy and ensure that data security is prioritized. To this end, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires protection of certain types of personal health information, consent to use and/or disclose data, and strict deidentification requirements when personal health information is used. The need for high quality data measured against the need to protect patient privacy creates an inherent tension in policy priorities.

To mitigate this tension, the Roadmap provides three recommendations:

Congress and regulatory agencies such as the FDA should ensure data protection without stifling innovation.
Congress should evaluate the need to update HIPAA for the AI era and create clear guidelines specifically for data use in AI development.
Congress and regulatory agencies should develop appropriate guidelines around patient notice and authorization for the data used to develop AI.

The Roadmap strives to balance the need for a high volume of high quality standardized data with patient privacy by placing modernized consent and notification requirements at the center of the policy priorities. Recognizing the need for large datasets, the Roadmap emphasizes modernizing traditional privacy policies, such as HIPAA, to accommodate data use and collection for AI models.
FDA AI Regulatory Framework
The FDA regulates certain AI-enabled devices for safety and efficacy. However, AI-enabled devices require a different approach than FDA’s “traditional” medical device review model for those devices that undergo changes in an iterative fashion. For approved medical devices that evolve continuously, e.g., AI-enabled devices, developers must submit for FDA review any modification that could significantly affect the product’s safety or effectiveness, consistent with FDA-drafted guidance on the preapproval process for post-market changes – referred to as predetermined change control plans (PCCP). These post-market changes occur as algorithms continue to learn and validate against the data of the populations using the technology. The algorithms then adjust based on continued learning. While Congress passed legislation authorizing PCCP approval in 2022, comprehensive FDA PCCP guidance was only released in December of 2024. The complete pre- and post-market processes for AI-enabled devices are outlined in the FDA’s “Artificial Intelligence-Enabled Device Software Functions: Lifecycle Management and Marketing Submission Recommendations.”
The Roadmap’s recommendations suggest that FDA modernize regulations to align with the increasing shift from traditional medical devices to AI-enabled devices. Specifically, the Roadmap recommends that:

The FDA should remain the lead regulator responsible for overseeing the safety and effectiveness of AI-enabled medical devices.
The FDA should implement the existing PCCP authority to ensure it achieves its intended purpose of ensuring patients have timely access to positive product updates.
The FDA should issue timely and current AI guidance documents related to AI-enabled devices and to prioritize the development and recognition of voluntary international consensus standards.
The FDA should establish a globally harmonized approach to regulatory oversight of AI-enabled devices.

The Roadmap commends progress made by Congress and the FDA to modernize legislative and regulatory processes applicable to AI-enabled devices but urges continued focus on keeping pace with technological innovation. The focus of the policy recommendations is on streamlined, uniform regulations that are not overly burdensome and will not stifle innovation.
Reimbursement and Coverage
Finally, the third policy area addressed in the Roadmap is reimbursement and coverage as a critical component of increasing access to digital health technologies. Currently, reimbursement for AI-enabled devices has been considered on a device-specific basis, leading to incremental policy changes. The Roadmap suggests that Medicare, as the country’s largest health care payor supporting the medical needs of millions of Americans, could be instrumental in shifting this policy position. Further, Medicare policy initiatives heavily influence the coverage policies of private payors and state Medicaid plans. While the Roadmap acknowledges that there is no one single policy solution to increase accessibility to digital health technology through reimbursement, “accurately capturing the cost and value of [AI-enabled devices] is critical to ensuring appropriate reimbursement.”
Toward this end, the Roadmap provides five policy suggestions:

Congress should consider legislative solutions to address the impact of budget neutrality constraints, or restraining Medicare spending to a certain defined threshold, on the coverage and adoption of AI technologies.
The Centers for Medicare & Medicaid Services (CMS) should develop a formalized payment pathway for algorithm-based health care services to ensure future innovation and to protect access to this subset of AI technologies for Medicare beneficiaries.
To ensure future innovation and to protect access to algorithm-based health care services for Medicare beneficiaries, CMS should develop a formalized payment pathway for algorithm-based health care services.
Congress and the FDA should facilitate the adoption and reimbursement of digital therapeutics through legislation and regulation.
CMS should leverage its authority to test innovative alternative payment models to promote the ability of AI technologies to improve patient care and/or lower costs.

The development and adoption of AI-enabled devices to improve diagnosis, treatment, and patient care will be amplified by the adoption of appropriate reimbursement policies as health care providers and practitioners will be more readily able to learn about and use these health care tools. Sound reimbursement and coverage policies are an integral part of supporting innovation and development of AI-enabled health care devices.
Conclusion
In a recent press release, Scott Whitaker, AdvaMed CEO and President said about the release of the Roadmap, “The future of AI applications in medtech is vast and bright. It’s also mostly to be determined. We’re in an era of discovery… This is the right time to promote the development of AI-enabled medtech to its fullest potential to serve all patients, regardless of zip code or circumstance.” It is from this position of promoting new technology that AdvaMed urges Congress and the Food and Drug Administration to act in support of the development of AI-enabled medical technology.

Missouri Legislature Passes Bill to Repeal Earned Paid Sick Time Law

On May 14, 2025, the Missouri General Assembly passed House Bill (HB) 567, which would repeal the Missouri paid sick time statute and eliminate Missouri employers’ obligation to provide earned paid sick time to all Missouri employees.

Quick Hits

The Missouri paid sick time statute requires Missouri employers to provide earned paid sick time, starting May 1, 2025.
On May 14, 2025, the Missouri General Assembly passed HB-567, which would repeal the paid sick time statute. If signed by the governor, the law will be repealed effective August 28, 2025.

Proposition A, which Missouri voters passed via a ballot measure on November 5, 2024, includes a provision that raises the state’s minimum wage as of January 1, 2025, and requires employers to begin providing earned paid sick time (PST) on May 1, 2025. In addition to repealing the state paid sick time law, HB-567 would amend the minimum wage statute.
The Missouri Paid Sick Time Law
Under the current paid sick time law, most Missouri employers must provide earned paid sick time to employees working in Missouri starting May 1, 2025. The law exempts employers that are federal, state, or local governments or political subdivisions of the state. The statute also excludes some categories of workers, such as volunteers, camp counselors, babysitters, golf caddies, some rail carrier employees, and retail employees of businesses with annual gross volume sales of less than $500,000. The law does not apply to employees covered by a collective bargaining agreement (CBA) that was in effect on November 5, 2024, until the CBA is amended, extended, or renewed.
The current PST law allows Missouri employees to:

earn one hour of earned paid sick time for every thirty hours worked;
use PST for an employee’s own illness or medical reasons, illness/medical reasons of an immediate family member, closure of the employer’s business or the employee’s child’s school, and absences due to sexual assault or domestic violence;
use PST in increments of one hour;
use up to fifty-six hours of PST for covered reasons;
carry over up to eighty hours of unused PST at year-end; and
use PST without discipline or retaliation for covered use.

Repealing the Missouri PST Statute
HB-567 passed without an emergency clause because the emergency clause was defeated in the Missouri House of Representatives when it did not receive the requisite two-thirds approval before moving to the Senate. The emergency clause would have allowed the repeal to become effective immediately upon signature by the governor. The bill would take effect on August 28, 2025.
If the bill is signed into law, there will be a seventeen-week period from May 1, 2025, to August 28, 2025, during which Missouri employers must comply with the current PST law. Many employers may want to implement a temporary policy to cover the period when the PST law is still in effect. For employers that have a paid-time-off (PTO) policy that meets all the requirements of the statute, no additional PTO policy is necessary.
Key Takeaways
Missouri employers must provide earned paid sick time to eligible Missouri employees while the law is in effect. If the governor signs HB-567, employers may want to implement a short-term policy to provide the required PST benefits from May 1, 2025, to August 28, 2025. Additionally, employers may want to consider how to use an existing PTO policy for short-term compliance and address what will happen to earned PST upon repeal of the law.

Ascension Notifies 430,000 Patients of Data Breach

Healthcare system Ascension has notified 437,329 patients of a data breach exposing “demographic information, such as name, address, phone number(s), email address, date of birth, race, gender, and Social Security numbers, as well as clinical information related to an inpatient visit.”
Ascension indicated that the incident occurred when it “inadvertently disclosed information to a former business partner, and some of this information was likely stolen from them due to a vulnerability in third-party software used by the former business partner.”
Ascension is offering affected individuals two years of free identity monitoring, including credit monitoring, fraud consultation, and identity theft restoration.

FTC and DOJ Direct Agency Heads to Identify Anticompetitive Regulations for Elimination—Including in Health Care

President Trump’s Executive Order No. 14267, “Reducing Anti-Competitive Regulatory Barriers” (“EO 14267”), requires agency heads to provide by June 18, 2025, a list of anticompetitive regulations to the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ) to facilitate the review and possible elimination of these regulations.
In furtherance of EO 14267, the DOJ recently launched an Anticompetitive Regulations Task Force, and the FTC issued a Request for Information inviting members of the public to identify regulations with anticompetitive effects.
On May 5, 2025, the FTC and DOJ sent a jointly prepared letter (“joint letter”) to various agency heads that further emphasized the requirements of EO 14267. The joint letter directs agency heads to identify regulations that:

“create or facilitate the creation of monopolies;
create unnecessary barriers to entry for new market participants;
limit competition or have the effect of limiting competition between competing entities;
create or facilitate licensure or accreditation requirements that unduly limit competition;
unnecessarily limit companies’ ability to compete for agency procurements; or
otherwise impose anticompetitive restraints or distortions on the operation of the free market.”

The joint letter goes on to state that anticompetitive regulations can be found across the federal government, pointing to several industries, including health care. In this regard, the joint letter states the following:
Federal regulations in the healthcare sector, especially those promulgated under the Affordable Care Act, may have the effect of pushing low-cost insurance plans out of the market and inducing vertical consolidation that raises prices, while burdensome pharmaceutical regulations may delay the introduction of new, more affordable medicines.
No specific regulations were identified, but it is reasonable to expect health care regulations generally to be targeted for potential elimination soon.

Trump Administration Announces New Executive Order to Promote Domestic Production of Biopharmaceuticals

Key Takeaways

Regulatory Relief for U.S. Manufacturing: The EO streamlines FDA and EPA processes to encourage domestic pharmaceutical production.
Increased Scrutiny of Foreign Facilities: Foreign manufacturers face higher inspection standards and potential tariffs, raising supply chain risks.
Piece of the Puzzle: Manufacturing EO is paired with other executive orders on trade and bilateral trade agreements.
Uncertain Policy Landscape: Shifting regulations and trade policies create both opportunities and challenges for biopharma investment decisions.

On May 5, 2025, President Donald J. Trump signed an Executive Order (EO) titled “Regulatory Relief to Promote Domestic Production of Critical Medicines.” The order’s goal is to strengthen the U.S. pharmaceutical supply chain by streamlining regulatory processes, encouraging domestic manufacturing of pharmaceuticals and their inputs, and intensifying the inspection of pharmaceutical manufacturing facilities located outside of the United States.
The May 5 order is the carrot to accompany an expected tariff “stick” on pharmaceutical importations, which President Trump signaled would be forthcoming and appears to have materialized in the form of a just-announced most-favored-nation pharmaceutical pricing executive order. In addition, last month, the Trump Administration initiated a Section 232 investigation of pharmaceutical imports to determine whether imports of pharmaceuticals threaten to impair U.S. national security and therefore should be subject to tariffs or other measures. Taken together, the EO and proposed tariffs will make pharmaceuticals sourced outside the United States more expensive and, perhaps, subject to increased FDA-inspection scrutiny and potential supply disruptions.
The administration’s goal is to accelerate investment in U.S.-based manufacturing and thus onshore some of the manufacturing. This update provides a brief overview of the EO and discusses its potential short- and longer-term implications.
Key Provisions of the EO:
1. Streamlining FDA Regulations:

The EO tasks the United States Department of Health and Human Services (HHS) and U.S. Food and Drug Administration (FDA) with reviewing and eliminating duplicative or unnecessary regulations that hinder domestic pharmaceutical manufacturing.
The EO directs the FDA to maximize the timeliness and predictability of FDA review with the stated goal of accelerating the development of domestic pharmaceutical manufacturing of “pharmaceutical products, active pharmaceutical ingredients, key starting materials and associated raw materials.”
The EO instructs the FDA to work on expanding programs and guidance to provide early technical advice to domestic facilities before they are operational and to work to ensure domestic inspections “are prompt, efficient, and limited to what is necessary to ensure compliance with the Federal Food, Drug and Cosmetic Act (FDCA) and other Federal law.”

2. Enhancing Inspection of Foreign Manufacturing Facilities:

The EO directs the FDA to “develop and advance improvements to the risk-based inspection regime that ensures routine reviews of overseas manufacturing facilities involved in the supply of United States medicines.” The EO states that the increased inspections should be funded by increased fees on foreign manufacturing facilities.
The EO also directs the FDA to negotiate with countries to increase site inspections and increase the number of unannounced inspections of foreign manufacturing facilities that make pharmaceuticals or inputs to pharmaceuticals.

3. Environmental and Construction Permitting:

The EO instructs the Environmental Protection Agency (EPA) and the Army Corps of Engineers to review and streamline requirements and guidance documents related to permitting and building domestic manufacturing facilities, including by accelerating siting and permitting approvals.

Implications for Biopharma Leaders and Their Advisors
Go… But Ready and Steady? For leaders and lawyers considering investment in domestic manufacturing capabilities, the EO presents an opportunity, particularly if it offers a smoother, faster and more predictable route from investment to operation for domestic biopharmaceutical manufacturing facilities. However, even if the EO shortens the timeline from investment to commissioning of pharmaceutical manufacturing capacity, the timeline for developing and launching manufacturing facilities measures in years, not months. The Trump Administration’s policy framework, the EO and tariffs, have the benefit of quick implementation, but the drawback that they could be modified or undone by a stroke of the pen by this or another administration during the long lead time necessary to permit, build, inspect and commission new manufacturing facilities.
Good News for Biotech Investors Amidst Broader Uncertainty for Biopharmaceutical Investments. As our Polsinelli colleagues have noted, the HHS in general and the FDA in particular have been transformed in the first 100 days of the Trump Administration. The FDA has seen a reduction of approximately 3,500 employees to accompany a significant change in leadership and priorities. While the changes may create some new opportunities, there is a concern that the changes will bring delays in review and approval of new biopharmaceuticals, increase uncertainty and perhaps lead to executive oversight and prioritization that differs markedly from the past for certain types of therapies (e.g., vaccines). Some observers have correlated the policy changes to a decrease in venture-based funding to the biotech industry. This new EO may create incentives towards investment in manufacturing, but biotech companies and investors will be making decisions on manufacturing amidst broader uncertainty about whether new therapies that could be manufactured in new U.S. facilities will be approved on a timely basis.
Potential for Supply Chain Disruptions. The global supply chain for biopharmaceuticals is exceedingly complicated. Particularly for biologic medicines, the drug substance (i.e., Active Pharmaceutical Ingredients, or API) for any given drug might be made in a bioreactor in Country A. The drug product (i.e., excipients) might be made at a facility in Country B. Syringes or subcutaneous injection devices might be manufactured in Country C. Filling and finishing the drug into vials, syringes, or subcutaneous injection devices might occur in Country D. Moreover, due to the limited tight supply of manufacturing capacity and the limited shelf life of pharmaceuticals, biotech companies may schedule slots in third-party manufacturing facilities over a year in advance. If, as the EO contemplates, the FDA increases the frequency and intensity of manufacturing facility inspections outside the United States, there is a real chance for supply chain disruptions that could lead to stock-outs of pharmaceuticals. For instance, data from the Association for Accessible Medicines (AAM) suggests that only 13% of API is manufactured in the U.S., meaning that the U.S. is heavily reliant on ex-U.S. suppliers. For instance, 40% of finished doses are made in the U.S., including from APIs produced outside the U.S. See AAM Testimony on the Generic Global Supply Chain. Biotech executives and their counsel will do well to fortify their supply chains and seek reassurance from manufacturing partners that their foreign facilities are ready for enhanced FDA inspection.
Which Nations Find Favor? As we prepared this update on manufacturing, the Trump Administration announced a most-favored nation executive order on pharmaceutical pricing on May 12, 2025. “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” (MFN EO). The MFN EO authorizes the HHS to communicate price targets to pharmaceutical manufacturers within 30 days, to facilitate programs to allow U.S. patients to purchase medications directly from manufacturers, and to expand drug reimportation programs. Industry reactions have been swift, with Pharmaceutical Research and Manufacturers of America (PhRMA) CEO Stephen J. Ubl stating that “Importing foreign prices from socialist countries would be a bad deal for American patients and workers.” It is reasonable to expect that the MFN EO will be subject to litigation.
The MFN EO appears to be another layer in a multi-layered approach to tariffs on pharmaceuticals and biologics. On May 8, the Trump Administration announced a bilateral trade agreement with Great Britain. The ink is barely dry, but the White House’s fact sheet states that the agreement will “create a secure supply chain for pharmaceutical products.” May 8, 2025, White House Fact Sheet. In contrast, tariffs on Chinese imports remain high, and passage of the BIOSECURE Act, a bill pending in Congress, remains possible. The BIOSECURE Act would erect further barriers to biopharmaceuticals manufactured in China. In short, the Trump Administration’s policy on ex-U.S. foreign pharmaceutical manufacturing may become more complicated still, with certain countries granted more favorable tariff treatment and others disfavored or barred entirely.
Future Outlook and Industry Response
This EO intends to promote U.S.-based pharmaceutical manufacturing in the name of improving public health and protecting national security. The policy presents an opportunity for the U.S. biopharmaceutical industry over the medium and long term, but its implementation and effects, particularly amidst other policy changes, are hard to discern today. Change has been a constant in the Trump Administration. In the short term, stakeholders in the pharmaceutical industry should closely monitor regulatory developments and assess their supply chains to ensure that they are well-positioned to continuously meet the needs of patients and healthcare providers.