EPA Releases Draft Risk Assessment of PFOA and PFOS in Biosolids, Will Hold Webinar on January 15, 2025
The U.S. Environmental Protection Agency (EPA) announced on January 14, 2025, a draft risk assessment of the potential human health risks associated with the presence of perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) in biosolids, also known as sewage sludge. According to EPA, the findings show that there may be human health risks associated with exposure to PFOA or PFOS with all three methods of using or disposing of sewage sludge — land application of biosolids, surface disposal in landfills, or incineration. The draft risk assessment focuses on those living on or near impacted sites or those that rely primarily on those sites’ products (e.g., food crops, animal products, drinking water). EPA notes that the draft risk assessment does not model risks for the general public. EPA states that once prepared in final, the assessment will help EPA and its partners understand the public health impact of per- and polyfluoroalkyl substances (PFAS) in biosolids and inform any potential future actions to help reduce the risk of exposure. EPA has posted a pre-publication version of the Federal Register notice announcing the availability of the draft risk assessment. Publication of the notice in the Federal Register will begin a 60-day comment period. EPA will hold a webinar on January 15, 2025, at 12:00 p.m. (EST) to provide information on the draft risk assessment. The webinar will include an opportunity for questions and answers. EPA will post a recording of the webinar.
Keeping Fraud Out of Research: Government Grant Whistleblower Awarded Over $200,000
A whistleblower recently played a pivotal role in exposing research misconduct, leading to a $4 million settlement from Athira Pharma Inc. under the False Claims Act. This case highlights the importance of safeguarding government-funded research and enforcing transparency in scientific investigations. Whistleblowers contribute to protecting taxpayer dollars, and under the qui tam provision of the False Claims Act, they may be entitled to 15-25% of the government’s recovery.
The Case Against Athira Pharma Inc.
The Bothwell, Washington-based biotechnology company allegedly failed to disclose research misconduct to the National Institutes of Health (NIH) and the Department of Health and Human Services (HHS) Office of Research Integrity. Athira’s former CEO, Leen Kawas, allegedly manipulated scientific images in her dissertation and published works. These publications were then referenced in multiple grant applications submitted to the NIH, one of which led to a successful grant award in 2019. The timeline of the alleged misconduct spans from January 1, 2016, to June 20, 2021, during which Athira violated its regulatory obligations to disclose these concerns.
The Role of the Whistleblower in Exposing Fraud
Whistleblower Andrew P. Mallon, Ph.D. filed the case under the qui tam provisions of the False Claims Act. The False Claims Act allows private individuals to act on behalf of the U.S. government and bring attention to fraudulent claims submitted to government programs. For his role in uncovering the misconduct, Dr. Mallon is set to receive $203,434 as part of the settlement.
Taxpayer Dollars and the Impact of Research Misconduct
This case underscores the need for ethical conduct in government-funded research programs. When federal agencies such as the NIH distribute grants, they trust recipients to provide accurate and truthful information. Any form of fraud, including the manipulation of research data, not only undermines the scientific process but also wastes public funds. As the Principal Deputy Assistant Attorney General said about the case, “The partnership between the scientific community and the federal government is built on trust and shared values of ethical scientific conduct.”
Why the False Claims Act Matters
The False Claims Act remains one of the U.S. government’s most effective tools for recovering taxpayer funds lost to fraud. Originally enacted to combat fraud against military supplies during the Civil War, the False Claims Act has since evolved to encompass broader areas of misconduct, including government research grants, healthcare programs, and other federally funded activities.
French Insider Episode 38: Securing the Future: Cybersecurity & Data Privacy in the Trump Era with Jonathan Meyer, Liisa Thomas and Carolyn Metnick of Sheppard Mullin [Podcast]
In this episode of French Insider, Sheppard Mullin partners Jonathan Meyer, Liisa Thomas and Carolyn Metnick join host and French Desk Co-Chair, Valérie Demont, to explore the evolving landscape of cybersecurity and privacy under a new Trump administration.
What We Discussed in This Episode:
What is CISA and what is its role in cybersecurity?
What can we expect from the Trump administration regarding cybersecurity?
Could we see less regulation but greater enforcement?
Might there be more stringent regulation with respect to cyber attacks and private ransomware?
Where does the United States currently stand in terms of privacy law?
What is the current status of state and federal privacy laws in relation to the healthcare industry?
In terms of privacy, where could enforcement be headed under the incoming administration?
How do the various state attorneys general and federal agencies coordinate on enforcement?
What enforcement trends should businesses be aware of, and what do they need to focus on?
What specific enforcement trends are we seeing in the healthcare space?
Generally speaking, what types of penalties could result from enforcement actions?
Could a company’s officers and directors face personal liability, either criminal or civil?
How might class action litigation originate from a cybersecurity or privacy incident?
What should businesses prioritize in terms of cybersecurity and privacy compliance?
Massachusetts: New Year, New Law — Governor Signs “An Act enhancing the market review process” (House Bill No. 5159)
On January 8, 2025, Governor Maura Healey signed into law H.B. 5159, “an Act enhancing the market review process.” This new law promises sweeping reform to reshape how health care businesses operate and grow. With stricter oversight, expanded reporting obligations, and new licensing requirements, the legislation signals an uptick in regulatory oversight of health care transactions and operations in Massachusetts. These changes have wide-ranging implications for stakeholders across the health care space. Many provisions of the new law will become effective once the applicable agencies issue implementing regulations. This is an expansive set of statutory changes, and this blog highlights only a few of the material provisions. Foley will provide several issue-specific analyses in the coming weeks, including implications for investors.
Here is what stakeholders need to know — and how to prepare.
Key Changes at a Glance
Increased Oversight of Health Care Transactions: The Massachusetts Attorney General, the Health Policy Commission (HPC), and the Center for Health Information and Analysis (CHIA), have greater authority to scrutinize mergers, acquisitions, and other significant market changes. The HPC will now have oversight over a number of other actors and activities in the local market, including private equity players, sale/leaseback transactions.
New Licensing Categories: Office-based surgical centers and urgent care centers face stricter licensing requirements. Implementing regulations must be issued by October 1, 2025.
Massachusetts False Claims Act: Imposes liability on owners and investors that know about and fail to disclose violations of the Massachusetts False Claims Act.
Required Assessments from Health Care Entities: Non-hospital provider organizations, pharmaceutical manufacturing companies and pharmacy benefit managers are now required to pay estimated expenses of the HPC (in addition to acute hospitals and ambulatory surgical centers).
Expanded Reporting Obligations: Requirements to include additional information regarding private equity (PE) investors, management services organizations (MSOs) relationships, and real estate leaseback arrangements in 2025 Provider Organization Registration Program renewals and registrations to enhance market transparency throughout the Commonwealth.
Office for Health Resource Planning: A new office will be established within the HPC to develop a state health resource plan. The office will be tasked with studying many aspects of the sector, including “health care resources”, which are expansively defined to include “any resource, whether personal or institutional in nature and whether owned or operated by any person, the commonwealth or political subdivision thereof, the principal purpose of which is to provide, or facilitate the provision of, services for the prevention, detection, diagnosis or treatment of those physical and mental conditions, which usually are the result of, or result in, disease, injury, deformity or pain; provided, however, that the term “treatment”, as used in this definition, shall include custodial and rehabilitative care incident to infirmity, developmental disability or old age.”
Expanding Studies on Health Care: Establishes a primary care task force to address access, provider, and payment issues in the primary care setting that shall issue its first report to legislature by September 15, 2025, and expands the scope of CHIA’s functions.
Prohibitions on Hospitals Leasing its Main Campus from a real estate investment trust (“REIT”). This exempts hospitals that had a main campus/REIT arrangement prior to April 1, 2024.
These sections reflect the legislature’s efforts to balance the changing landscape of health care and consumer protection, but they also create challenges for businesses navigating this complex regulatory environment.
HPC’s Expanded Role in Oversight Measures
For the past decade, the HPC has overseen health care transactions in the Commonwealth through the Notice of Material Change process. “Providers” or “Provider Organizations” (including organizations in the business of health care management) that plan to undergo “Material Changes” to their operations or governance structure must submit notice to the HPC 60 days prior to closing. “Material Changes” include:
A Provider or Provider Organization entering into a merger or affiliation, or acquisition of, by, or with a carrier or involving a hospital or hospital system;
Any other acquisition, merger, or affiliation of, by, or with another Provider or Provider Organization that would result in:
an increase in annual Net Patient Services Revenue of the Provider or Provider Organization of US$10 million dollars or more, or
the Provider or Provider Organization having a near-majority of market share in a given service or region.
A clinical affiliation between two or more Providers or Provider Organizations that each had annual Net Patient Service Revenue of US$25 million or more in the preceding fiscal year; or
Creating an organization to administer contracts with carriers or third-party administrators or perform current or future contracting on behalf of one or more Providers or Provider Organizations.
Upon receipt of a completed notice to the HPC, the HPC is required, within 30 days, to conduct a preliminary review to ascertain whether the Material Change may result in a “significant impact” on the Commonwealth’s health care cost growth benchmark goals, or on the competitive market. If the HPC determines that there will be a significant impact by the Material Change on the health care cost growth benchmark, or on the market, the HPC may initiate a cost and market impact review.
The new law expands the scope of regulated transaction by revising “Materials Changes” to also include:
Significant expansions in provider or provider organization’s capacity;
Transactions that involve a significant equity investor, which result in a change of ownership or control of a Provider or Provider Organization;
Significant acquisitions, sales, or transfers of assets including, but not limited to, real estate sale lease-back arrangements; and
Conversion of a Provider or Provider Organization from a non-profit entity to a for-profit entity.
While the new law has not set thresholds for these new categories, we expect additional clarity in forthcoming guidance and regulations.
The HPC will be also seeking far more intrusive access to the financial and operational conditions of significant equity investors, including but not limited to “information regarding the significant equity investor’s capital structure, general financial condition, ownership and management structure and audited financial statements.”
Notably, the statute exempts from the definition of “significant equity investor” venture capital firms “exclusively funding startups or other early-stage businesses,” which terms are not defined.
The role of the HPC is expanding well-beyond the state legislature’s initial intent. Rather than just being an advisory review body that looks at initial material change transactions, it will now have ongoing oversight for a period of five years following the completion of a material change, including the right to request additional documentation “to assess the post-transaction impacts of a material change.” Cost and market impact reviews are also being tasked to ask deeper questions than before including quality of care and patient experience as well as referral patterns. Similarly, the statute empowers CHIA to require registered provider organizations to provide additional annual internal and financial and operational information to the HPC.
Massachusetts False Claims Act Liability of Owners and Investors
In a broad statutory challenge to the historic protections of the corporate veil that insulates shareholders from underlying liability, the new law imposes liability under the state false claims act on shareholders with an ownership or investment interest in a violating entity, who knows about the violation, and fail to disclose the violation to the Commonwealth within 60 days of identifying the violation. This change is directly related to a high-profile case brought by the Office of the Attorney General resulting in $25MM settlement paid by investors in a behavioral health company in Massachusetts in 2021. Investors will now have a more direct risk of liability for the activities of their portfolio companies.
Licensing Changes
The law also established two new license types: Office-Based Surgical Centers and Urgent Care Centers. The law has delegated broad discretion to the Massachusetts Department of Public Health (DPH) to create and implement specific licensure requirements for each of the new categories. Many medical practices historically offered urgent care under the historic exception to licensure for physician practices. This new law will require physician-based urgent care centers to submit to DPH regulatory and licensure oversight. Once regulations are drafted and implemented, any person or entity that “advertises, announces, establishes, or maintains an office-based surgical center [or urgent care center] without a license” will be subject to a fine of up to US$10,000.
(1) Office-Based Surgical Centers, which provide:
“ambulatory surgical or other invasive procedure requiring: (i) general anesthesia; (ii) moderate sedation; or (iii) deep sedation and any liposuction procedure, excluding minor procedures and procedures requiring minimal sedation, where such surgical or other invasive procedure or liposuction is performed by a practitioner at an office- based surgical center.”
This category is distinct from ambulatory surgical centers, which are already subject to clinic licensure by DPH and follow the federal definition.[1] Licensed hospitals are also exempt from obtaining an office-based surgical center license, though their affiliated physician organizations may need to be exempted through rulemaking.
(2) Urgent Care Centers, which are clinics not affiliated with a licensed hospital that provide urgent care services:
“a model of episodic care for the diagnosis, treatment, management or monitoring of acute and chronic disease or injury that is: (i) for the treatment of illness or injury that is immediate in nature but does not require emergency services; (ii) provided on a walk-in basis without a prior appointment; (iii) available to the general public during times of the day, weekends or holidays when primary care provider offices are not customarily open; and (iv) is not intended and should not be used for preventative or routine services.”
Licensed hospitals (and entities “corporately affiliated with hospitals”), clinics, limited service clinics, and community health centers receiving federal grants are exempt from obtaining an urgent care center license. In other words, this new oversight is directed to urgent care centers offered in a freestanding physician office and “friendly PC” environment.
Other Notable Provisions and Exclusions
It appears that the New Year brought about a spirit of compromise, as some of the changes previewed this summer in S.B. 2881, “an Act enhancing the market review process” discussed in our prior blog, “Massachusetts Health Care Act Dies at the End of Legislative Session But Previews Sweeping Changes for the Health Care Industry,” were excluded from the new law. Most notably, restrictions on (i) who can employ registered practicing clinicians (physicians, advanced practice providers, psychiatric nurse mental health clinical specialists, nurse anesthetists, nurse-midwives, psychologists, and licensed clinical social workers) and (ii) the corporate practice of medicine were excluded from the enacted version of the law.
While the emphasis of the law expands the scope and scale of what stakeholders are subject to state oversight, the law also establishes and expands the Commonwealth’s ability to monitor and study primary care services, access, delivery, cost, and payment, to name a few.
What Happens Next?
Stakeholders should apprise themselves of these new requirements and be on the lookout for forthcoming regulations as increased governmental scrutiny has come to the Commonwealth.
[1] 42 CFR 416.2 “Ambulatory surgical center or ASC means any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission. The entity must have an agreement with CMS to participate in Medicare as an ASC, and must meet the conditions set forth in subparts B and C of this part.”
Health Care Providers Should Seriously Consider Claims Under Two Antitrust Class Actions
Now is the time for health care providers to consider participating in the recent Blue Cross Blue Shield (BCBS) antitrust class action settlement and the newly filed antitrust cases alleging widespread price fixing for out-of-network claims by MultiPlan and health insurers.
Health care provider antitrust litigation challenging health insurer anticompetitive conduct is on a recent hot streak, with health care providers securing billions of dollars in a class action settlement with BCBS health plans for alleged anticompetitive price-fixing in the prices they pay health care providers. Additionally, last year, health care providers filed antitrust suits seeking damages from MultiPlan and health insurers due to MultiPlan’s alleged price-fixing of out-of-network medical claims.
These two cases deserve providers’ attention right now before important deadlines pass.
First, a nationwide settlement was preliminarily approved in the class action of providers alleging that BCBS health plans around the country conspired to fix payment rates to providers. The details of the settlement are available at www.bcbsprovidersettlement.com.
Key deadlines in the BCBS settlement are coming up soon:
March 4, 2025: Opt Out/Objection Deadline
July 29, 2025: Provider Claims Submission Deadline
July 29, 2025: Final Approval Hearing
As a result, it is critical that health care providers — both facilities and physicians — promptly consider:
Whether they have claims at issue subject to the settlement.
Whether they want to participate in the settlement or opt out.
If they choose to participate, what information and data they need to obtain and should submit that could increase their settlement payment.
Analyze the scope of the class action settlement releases and how those provisions may impact future legal claims against the settling BCBS health plans.
Meanwhile, another potentially massive antitrust class action is gearing up right now in In re Multiplan Health Insurance Provider Litigation, Civ No. 1:24-CV-06795 (N.D. Ill.), where the American Medical Association and dozens of health care facilities and providers allege that nearly all of the largest US health insurers engaged in price-fixing for the payment of out-of-network claims by using a single vendor, MultiPlan, to share pricing information and set common, low prices. These cases are still quite early in the litigation process. But health care providers with out-of-network claims affected by the alleged price-fixing could recover a significant monetary award or settlement if the litigation proceeds and is successful.
If you have significant commercial health plan out-of-network claims exposure, now is the time to evaluate participating in the MultiPlan litigation in Illinois federal court.
NNCO Releases NNI Supplement to President Biden’s 2025 Budget
On December 19, 2024, the National Nanotechnology Coordination Office (NNCO) released The National Nanotechnology Initiative Supplement to the President’s 2025 Budget, which also serves as the annual report for the National Nanotechnology Initiative (NNI). According to the report, President Biden’s fiscal year (FY) 2025 budget requests over $2.2 billion for NNI, with cumulative funding totaling over $45 billion since the inception of NNI in 2001 when Congress approved increased funding for nanotechnology in FY 2021 appropriations. The funding includes over $900 million in annual investments by the National Institutes of Health alone (along with other important contributions from the U.S. Food and Drug Administration, Centers for Disease Control and Prevention, Biomedical Advanced Research and Development Authority, and basic research agencies, e.g., the U.S. National Science Foundation and U.S. Department of Energy), as nanotechnology-enabled diagnostic and therapeutic technologies for a wide variety of human health threats successfully compete for funding. The report includes examples of how NNI participating agencies are harnessing nanotechnology research and development and education programs to reduce barriers and inequities, from workforce development to economic progress in historically underserved communities. The report states that NNI participating agencies support applied research, experimental development, pre-commercialization, and standards-related efforts that build economic competitiveness, facilitating the adoption of a wide range of nanotechnologies, and helping create good-paying jobs across the country, including in both traditional and emerging industries. The report notes that the coordination provided through NNI has facilitated the proactive responsible development of new technologies, thereby streamlining their adoption.
Rethinking Alcohol Labels: The Surgeon General Calls for Change
In a recent advisory, U.S. Surgeon General Dr. Vivek Murthy underscored the connection between alcohol consumption and increased cancer risk. Citing alcohol as the third leading preventable cause of cancer in the U.S., the advisory links it to at least seven types of cancer, including breast and colorectal cancers. Despite this, according to Dr. Murthy, less than half of Americans recognize alcohol as a cancer risk factor. Dr. Murthy notes that alcohol is implicated in around 100,000 cancer cases and 20,000 cancer deaths annually, exceeding alcohol-related traffic fatalities. The advisory recommends updating the health warning label on alcohol beverages, reassessing recommended limits for alcohol consumption, strengthening public educational awareness, and promoting alcohol screenings in the clinical setting.
The health warning label on alcohol products, mandated pursuant to 27 U.S.C. 215, has remained unchanged since 1988. Although Dr. Murthy provides his recommendation to update the warning, his advisory admits that the “power to change the label statement lies with Congress.” Notably, Dr. Murthy’s advisory does not provide a sample of the language he would recommend to add to the existing health warning label on alcoholic beverages. However, his advisory points out that Ireland has a new health label going into effect in 2026 that will state that “there is a direct link between alcohol and fatal cancers”. Given the existing research showing some benefit from limited consumption of some alcohol, we expect that if Congress adopted such language, it would be challenged in the courts.
While the advisory calls for a reassessment of alcohol consumption guidelines and increased public health education, critics might question whether the recommendations adequately consider the complexity of cancer risk factors. The advisory also suggests a significant role for health care providers in informing patients about the risks, which may be challenging given the nuanced nature of individual risk factors. Dr. Murthy explains the cancer risk is also heavily determined by complex factors– biological, environmental, social, and economic factors. For example, as explained in the advisory, individuals of East Asian descent have a genetic variant that results in flushing, producing a higher biological risk for certain alcohol-related cancers. Social factors includes social norms, such as cultural norms. Asking individuals to commit to long-term quitting could be difficult due to the role alcohol plays in different social backgrounds and cultures. Additionally, the practicality of implementing widespread label changes and public awareness campaigns could face logistical and economic hurdles, potentially limiting the advisory’s effectiveness. The effectiveness could also be limited by incomplete or conflicting scientific findings, as noted above.
Alcohol is not alone in being targeted for health warnings by government actors. For instance, recently the sugar-sweetened beverage segment undertook a multi-year fight against an ordinance passed in San Francisco requiring that outdoor signs advertising sugar-sweetened beverages include a warning label, covering twenty percent of the sign, advising of the negative health impact of consuming such products. Round one of that litigation ultimately went for industry, with the Ninth Circuit ruling that the ordinance likely violated industry’s First Amendment rights. In response, San Francisco passed a new ordinance in 2020 that imposed a similar warning requirement but which reduced the size requirement to ten percent. Litigation again ensued, but this time resulted in San Francisco repealing the ordinance in 2021.
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Government Outlines Qui Tam’s Constitutionality in Detailed Brief to Eleventh Circuit
On January 6, the U.S. federal government filed a brief in U.S. ex rel. Zafirov v. Florida Medical Associates urging the U.S. Court of Appeals for the Eleventh Circuit to reverse a district judge’s ruling in a qui tam whistleblower case. In September, the U.S. District Court for the Middle District of Florida ruled that the False Claims Act’s qui tam provisions are unconstitutional, threatening to undermine the United States’ number one anti-fraud law.
The district court ruling found that the qui tam provisions were unconstitutional because they violated the Appointments Clause of Article II. The court ruled that by filing a qui tam lawsuit alleging Medicare fraud, whistleblower Clarissa Zafirov was granted “core executive power” without any “proper appointment under the Constitution.”
In its brief, the government claims that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.” It therefore urges the Eleventh Circuit to “join that consensus and reverse the district court’s outlier ruling.”
The government points to the Supreme Court decision in the 2000 case Vermont Agency of Natural Resources v. United States ex rel. Stevens, which held that the False Claims Act’s qui tam provisions are consistent with Article III. This decision “makes clear that relators do not exercise Executive power when they sue under the Act,” the brief states. “Rather, they are pursuing a private interest in the money they will obtain if their suit prevails. As private litigants pursuing private interests, relators are not enforcing federal law in a manner inconsistent with the Vesting and Take Care Clauses and need not be appointed in the manner required by the Appointments Clause.”
The brief further clarifies that while a relator’s qui tam suit “may also vindicate a federal interest in remedying and deterring fraud on the United States” “they are distinct from the government’s enforcement efforts even though they can supplement those efforts.”
The government additionally argues that qui tam relators are not government officers; do not exercise significant government authority due in part to the numerous statutory constraints which allow the government to “ensure that qui tam actions are consistent with its own priorities for the enforcement of federal law;” and do not occupy a continuing position since their role “is limited in time and scope, confined to a particular case, and fundamentally personal in nature.’
Further referencing Stevens and the Supreme Court’s emphasis on the long history of qui tam statutes in that decision, the government details “the prevalence of early qui tam statutes and the body of evidence that such statutes were understood to be constitutional.”
“The historical record.. suggests that all three branches of the early American government accepted qui tam statutes as an established feature of the legal system,” the brief states.
Overall, the government provides a detailed and comprehensive overview of the constitutionality of the False Claims Act’s qui tam provisions, rooted in both prior court precedent and the historical record.
Healthcare Preview for the Week of: January 13, 2025 [Podcast]
Final Week of Biden Administration
During the Biden Administration’s final week, congressional Republicans are moving full steam ahead with Senate confirmation hearings for Trump-nominated officials and with ongoing budget reconciliation discussions. Nomination hearings this week include Doug Collins for secretary of Veterans’ Affairs and Russell Vought for Office of Management and Budget (OMB) director. Hearings have yet to be scheduled for Robert F. Kennedy Jr., nominated for Health and Human Services (HHS) secretary, and other HHS agencies.
We are waiting to see if certain Biden Administration proposed rules, some of which have cleared OMB review, will be finalized this week, before President-elect Trump is inaugurated on January 20, 2025. These proposed regulations include the Marketplace Notice of Benefit and Payment Parameters, a regulation that would require coverage of over-the-counter contraception without cost-sharing or a prescription, and a rule on telemedicine prescribing of controlled substances, among others. Other proposed regulations with comment periods still open, including the 2026 Medicare Advantage policy and technical rule, could be substantially changed when Trump takes office.
Looking ahead to the new Administration, congressional Republicans are eyeing healthcare policies as potential savers for their forthcoming budget reconciliation, which is expected to target significant cuts in federal spending. At a December 2024 Republican conference meeting, $2.5 trillion in mandatory spending cuts were put on the table in exchange for a $1.5 trillion increase in the debt limit. The Congressional Budget Office (CBO) recently released options for reducing the deficit; CBO periodically releases such options, providing legislators with price tags for various policies. Healthcare options outlined by CBO include a version of Medicare site neutral payment reforms, Medicaid per capita caps, and a reduction in payment rates for 340B entities. The House Budget Committee also circulated a spending reform options document late last week detailing up to $5.7 trillion in savings. Healthcare is a primary target for savings as it makes up almost $3.5 trillion of the total figure, with $2.3 trillion coming solely from Medicaid savings.
The key House and Senate healthcare committees (Senate Finance; Senate Health, Education, Labor and Pensions; House Energy and Commerce; and House Ways and Means) are officially formed for the 119th Congress, with new members on both sides of the aisle for all four committees. The House Rules Committee is still without a chair, however, and other committees, including the House Education and Workforce Committee, are not yet formed.
Today’s Podcast
In this week’s Healthcare Preview podcast, Debbie Curtis joins Maddie News to discuss the final week of the Biden administration and the week ahead in the 119th Congress, with the Senate focused on confirmation hearings for Trump-nominated officials, and Congressional Republicans eyeing healthcare policies as potential savers for upcoming legislation.
Non-Competes: New Limits for Pennsylvania Health Care Practitioners
Pennsylvania’s new law, the Fair Contracting for Health Care Practitioners Act (the Act) went into effect on January 1, 2025. This law restricts the ability of employers and health care practitioners to enter into non-compete agreements. Governor Josh Shapiro signed the Act on July 23, 2024, aiming to ensure continuity of care between patients and their health care practitioners. The Act marks a notable change in employment practices for health care professionals in Pennsylvania, reflecting a broader movement to scrutinize restrictive covenants, especially in the health care sector. Its key goals include retaining health care talent, enhancing patient care, and promoting a competitive health care market.
The new law bans new non-compete covenants longer than a year for “Health Care Practitioners,” defined to include medical doctors, doctors of osteopathy, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants. Certain non-competes entered into after January 1, 2025, are deemed “contrary to public policy and void and unenforceable by an employer.” However, non-compete provisions limited to one year or less are enforceable if the Health Care Practitioner terminates the employment relationship or if they are connected to the sale of a practice.
Key Provisions
Non-Compete Restrictions: Non-compete clauses that hinder Health Care Practitioners from treating or accepting patients are void and unenforceable. However, non-compete clauses lasting up to one year may still be enforced if the practitioner voluntarily resigns. These agreements become unenforceable if the employer terminates the practitioner’s employment, even if for cause.
Cost Recovery for Employers: Employers can recoup reasonable expenses, such as relocation, training, or patient acquisition costs, incurred within three years before a Health Care Practitioner voluntarily leaves.
Non-Competes in Business Sales: Non-compete agreements remain valid when tied to the sale or transfer of a business if the Health Care Practitioner is a party to the transaction.
Patient Notification: Employers must notify patients within 90 days if a practitioner with whom they have had a two-year outpatient relationship departs from the employer’s practice. The notice must explain the practitioner’s departure, how to transfer medical records, and options for continuing care with the employer or another provider.
Effective Date: Non-compete agreements executed before January 1, 2025, remain unaffected. Employers and health care practitioners should review existing agreements to prepare for the Act’s implications.
Moving Forward
Pennsylvania is among a growing number of states, including Iowa, Maryland, and Louisiana, that are restricting non-compete clauses in or health care providers’ employment agreements, joining over a dozen states have introduced similar measures. Although, the Federal Trade Commission’s proposed ban on non-compete agreements, which is currently facing legal challenges, does not apply to not-for-profit entities, such as many hospital systems. Now, Pennsylvania not-for profit health care organizations along with those in the private sector will have to consider this law when seeking to place covered Practitioners under post-employment restrictions.
FDA Finalizes Lead Restrictions in Processed Foods for Babies and Young Children
On January 6, 2025, the U.S. Food & Drug Administration (FDA, or the Agency) issued a final guidance ,“Action Levels for Lead in Processed Food Intended for Babies and Young Children: Guidance for Industry” which aims to regulate lead levels in processed foods for infants and toddlers under two years old.
As we have previously blogged, in 2021, FDA initiated its Closer to Zero policy which identified actions the Agency will take to reduce exposure to toxic elements, including lead, to as low as possible while maintaining access to nutritious foods.
As part of this initiative, FDA has also evaluated mercury, cadmium, and arsenic in foods intended for babies and young children, as well as lead in juices. Under this initiative, FDA has prioritized babies and young children as they are especially vulnerable to lead exposure, which accumulates in the body over time.
Lead is naturally present in the environment, but human activities have also released elevated levels of lead, contaminating soil, water, and air. This contamination can affect crops used in food production.
Lead exposures can lead to developmental harm to children by causing learning disabilities, behavioral difficulties, lowered IQ, and may be associated with immunological, cardiovascular, and reproductive and or/developmental effects.
To address this concern, FDA established the following action levels in the final guidance for processed foods intended for babies and young children:
10 parts per billion (ppb) for fruits, vegetables (excluding single-ingredient root vegetables), mixtures (including grain- and meat-based mixtures), yogurts, custards/puddings, and single-ingredient meats;
20 ppb for single-ingredient root vegetables; and
20 ppb for dry infant cereals.
If a processed food intended for babies and young children reaches or exceeds the aforementioned levels of lead, the product will be considered adulterated within the meaning of section 402(a)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C Act).
After publishing the final action levels, the Agency will establish a timeframe for assessing industry’s progress toward meeting the action levels and resume research to determine whether the scientific data supports efforts to further adjust the action levels.
Workplace Safety Review: Navigating Change: OSHA’s 2024 Wrap-Up and a Look Ahead to 2025 [Podcast]
In the latest episode of Greenberg Traurig’s Workplace Safety Review podcast, co-hosts Adam Roseman and Joshua Bernstein provide a comprehensive wrap-up of the significant OSHA developments from 2024 and explore what’s on the horizon for 2025. They delve into the impacts of administrative changes, including the Supreme Court’s Loper Bright decision, which overturned Chevron deference, and how it may affect OSHA litigation. Their discussion highlights key regulatory updates, like the proposed heat stress and lockout/tagout standards, and examines the potential implications of the Kenrick Steel case challenging the constitutionality of the Occupational Safety and Health Review Commission. As the Trump administration prepares to take office, the hosts consider the prospective leadership and policy direction under Secretary of Labor nominee Lori Chavez-DeRemer and the next OSHA head. Workplace Safety Review is a podcast where the hosts interview influential environmental, health, and safety professionals across the country regarding timely and important topics in the environmental, health, and safety world.