Health Law & Managed Care – Page 7

Stress, Health, and Personal Injury: Understanding the Connection

Stress is an inevitable part of life. From work deadlines to family responsibilities, we all experience stressors that can impact our physical and mental well-being. But, stress can play a significant role in personal injuries as well. This post will discuss the relationship between stress, health, and the risk of personal injury, and how understanding this can help us lead safer lives.
The Impact of Stress on Health
Chronic stress can lead to serious health issues, including:

Cardiovascular Problems: High blood pressure and heart disease can result from long-term stress.
Muscle Tension: Stress often causes muscle tension, which can lead to pain and injury, particularly in the back and neck.
Mental Health Disorders: Anxiety and depression can develop or worsen with chronic stress.

Stress and Personal Injury
When we’re stressed, our focus and judgment can suffer. This lack of concentration can increase the likelihood of accidents, whether at work, home, or on the road. Below are some ways stress contributes to personal injury:
1. Less Focus
Stress can make it difficult to concentrate and lead to mistakes, such as miscalculating a step while walking or not noticing important safety signs at work.
2. Impaired Decision-Making
Under stress, our decision-making abilities can become compromised. We may take unnecessary risks, such as driving aggressively or ignoring safety protocols.
3. Physical Symptoms
Chronic stress can be displayed as fatigue, headaches, or dizziness, all of which can affect our physical capabilities. For example, an exhausted driver is more likely to be involved in an accident.
4. Neglecting Self-Care
When stressed, people often fail to look after their health and wellness routines. Skipping meals, avoiding exercise, or not getting enough sleep can weaken our bodies and make us more susceptible to injury.
Managing Stress
Here are some key tips for managing stress effectively:
1. Practice Mindfulness
Mindfulness techniques, like meditation or deep-breathing exercises, can help you stay grounded and focused, reducing the impact of stress on your daily life.
2. Stay Active
Aim for at least 30 minutes of exercise most days to boost your mood and improve your overall health.
3. Get Enough Rest
Aim for 7-9 hours of quality sleep each night, to give your body and mind the time they need to recover from daily stressors.
4. Build a Support Network
Reach out to friends and family who can provide emotional support.
Conclusion
Understanding the connection between stress, health, and personal injury is essential for leading a safe and healthy life. By managing stress effectively, you not only strengthen your well-being but also reduce your risk of accidents and injuries. Prioritize your health, and take the necessary steps to stay safe in your daily routine.

IRS Issues Guidance on Federal Tax Treatment of State Paid Family and Medical Leave Contributions and Benefits

The Internal Revenue Service (IRS) has released new guidance on the federal income and employment tax treatment of contributions and benefits paid under state paid family and medical leave (PFML) statutes. This guidance also outlines the related reporting requirements for employers and employees. There was no published guidance that addressed the taxation or reporting requirements of state PFML statutes before the publishing of Revenue Ruling 2025-4.

Quick Hits

The IRS has clarified the tax treatment of mandatory employee and employer contributions to state PFML funds, as well as optional employer payment of mandatory employee contributions.
Employers can deduct their contributions as business expenses, while employees may deduct their contributions as state income taxes if they itemize deductions and otherwise do not exceed the SALT deduction cap.
Amounts paid to employees as family leave benefits are included in the employee’s gross income but are not wages for federal employment tax purposes.
Amounts paid to employees as medical leave benefits align with Internal Revenue Code § 104(a)(3), which are only taxable in instances where contributions were not included in the employee’s gross income or paid by the employee.
The IRS has provided a transition period for enforcement and administration of these rules for calendar year 2025.

Background
Over recent years, a number of states have enacted PFML statutes to provide wage replacement to workers for periods in which they need to take time off from work due to their own nonoccupational injuries, illnesses, or medical conditions, or to care for a family member due to the family member’s serious health condition or other prescribed circumstance. Many PFML statutes require contributions from both the employer and the employee, with some allowing the employer to cover the employee’s mandatory contribution rather than withholding the amounts from wages (“employer pick-up”).
Federal Income Tax Treatment of Contributions
Employee Contributions
Mandatory employee contributions withheld from wages are treated as state income taxes and are deductible under § 164(a)(3) if the employee itemizes deductions and the deductions are subject to the state and local taxes (SALT) deduction limitation under § 164(b)(6). These amounts are included in the employee’s gross income and wages for federal employment tax purposes.
Employer Contributions
Mandatory employer contributions are treated as state excise taxes and are deductible by the employer under § 164(a). These amounts are not included in the employee’s gross income.
Employer Pick-Up of Employee Contributions
If an employer voluntarily pays part of the employee’s required contribution, this amount is treated as additional compensation to the employee under § 61 and is included in the employee’s gross income and wages for federal employment tax purposes. The employer can deduct this amount as a business expense under § 162.
Federal Income Tax Treatment of Benefits
Family Leave Benefits
Amounts paid to employees as family leave benefits are included in the employee’s gross income but are not wages for federal employment tax purposes. The state must report these payments on Form 1099 if they aggregate $600 or more in any taxable year.
Medical Leave Benefits
Amounts paid to employees as medical leave benefits that are attributable to the employee’s contribution (including employer pick-up of employee contributions) are excluded from the employee’s gross income under § 104(a)(3) and are neither wages for federal employment tax purposes nor treated as sick pay. However, to qualify for medical leave benefits under a PFML statute, the time off from work must relate to the employee’s own serious health condition. Further, amounts attributable to the employer’s contribution are included in the employee’s gross income and are considered wages for federal employment tax purposes. The state must follow the sick pay reporting rules attributable to third-party payments by a party that is not an agent of the employer.
Transition Period for Enforcement and Administration
The IRS has designated calendar year 2025 as a transition period for the enforcement and administration of the information reporting requirements and other rules described in the guidance. This transition period is intended to provide states and employers time to configure their reporting and other systems.

Healthcare Preview for the Week of: February 3, 2025 [Podcast]

Senate Committee to Vote on RFK Jr. Nomination, House Tries to Move Forward on Budget Resolution

The Senate Finance Committee is set to vote on the confirmation of Robert F. Kennedy (RFK) Jr., President Trump’s nominee for Secretary of the US Department of Health and Human Services (HHS), on Tuesday morning. All eyes are on Senator Cassidy (R-LA), who publicly struggled at the Senate Committee on Health, Education, Labor, & Pensions hearing last week with whether to support RFK Jr. for the role of HHS Secretary. If Senator Cassidy and all Democrats on the Finance Committee vote against RFK Jr.’s confirmation, the committee would need to move him to a full floor vote without the committee’s support.
Last week, House Republicans used a retreat to try to coalesce around the reconciliation process. The House Budget Committee should hold a markup of the budget resolution this week to meet the schedule put forth by Speaker Johnson. However, so far no scheduled meeting has been posted. The House Budget Committee includes Rep. Chip Roy (R-TX) and some other very conservative members who appear to be raising concerns about the committee directives that might appear in the budget resolution – and are seeking to have higher numbers inserted than leadership had intended, because their top concern is lowering federal spending.
Turning to the Administration, there was a lot of activity over the weekend that included shutting down agency websites, Department of Government Efficiency representatives gaining access to closely controlled government databases, and layoffs of government employees.
Also over the weekend, President Trump imposed tariffs on Canada, China, and Mexico, reportedly for their roles in illegal immigration into the United States, and in producing and trafficking fentanyl. President Trump called the flow of contraband drugs into the United States a national emergency and public health crisis. On Monday morning, President Trump paused the new tariffs on Mexico for one month after Mexico agreed to reinforce its northern border with 10,000 National Guard members. Canada and Mexico indicated that they may to impose tariffs on the United States as well.
Today’s Podcast

In this week’s Healthcare Preview, Debbie Curtis and Rodney Whitlock join Julia Grabo to discuss the next steps in Robert F. Kennedy Jr.’s Senate confirmation process, budget reconciliation in the House, and the flurry of recent activity from the White House.

Human Trafficking Monitoring for Telehealth Providers

Overview: Telehealth providers are uniquely positioned to monitor for human trafficking when interacting with patients. Survivor records indicate that health services are among the most common points of access to help trafficked persons, and nearly 70% of human trafficking survivors report having had access to health services at some point during their exploitation. While there’s limited data regarding trafficked persons’ use of telehealth services, empirical evidence demonstrates that a greater proportion of trafficked persons completed telehealth appointments during the early period of the COVID-19 pandemic than pre-pandemic. To enable telehealth providers to assist trafficked patients, this article discusses the legal landscape surrounding human trafficking and lays out best practices for telehealth providers.
Background: Telehealth providers are subject to a patchwork of legal requirements aimed at reducing human trafficking. If the patient is under the age of 18 or is disabled, many states require telehealth providers to report instances in which they know or reasonably believe the patient has experienced or is experiencing abuse, mistreatment, or neglect. Some states, such as Florida and New Jersey, also require telehealth providers partake in anti-trafficking education.
Online platforms that offer telehealth services are also subject to federal legislation regarding sex trafficking monitoring. In 2018, US Congress passed the Allow States and Victims to Fight Online Trafficking Act of 2017 (FOSTA). The law was enacted primarily in response to unsuccessful litigation against Backpage.com, a website accused of permitting and even assisting users in posting advertisements for sex trafficking. Before FOSTA’s enactment, Section 230 of the Communications Decency Act essentially shielded online platforms from liability for such conduct. FOSTA, however, effectively created an exception to Section 230 by establishing criminal penalties for those who promote or facilitate sex trafficking through their control of online platforms. These penalties, generally limited to a fine, imprisonment of up to 10 years, or both, may be heightened for aggravated violations, which are violations involving reckless disregard of sex trafficking or the promotion or facilitation of prostitution of five or more people. State attorneys general and, in cases of aggravated violations, injured persons also may bring civil actions against those who control online platforms in violation of the law.
Since FOSTA’s inception, the US Department of Justice (DOJ) has brought at least one criminal charge under the law. In 2021, after being charged by DOJ, the owner of the online platform CityXGuide.com pleaded guilty to one count of promotion of prostitution and reckless disregard of sex trafficking, a violation of FOSTA’s aggravated violations provision. According to DOJ officials, more charges have not been brought under FOSTA because the law is relatively new and federal prosecutors have had success prosecuting those who control online platforms by bringing racketeering and money laundering charges. Nonetheless, it is possible that prosecutors will pursue FOSTA violations more regularly during the Trump administration, particularly because US President Donald Trump signed it into law during his first term in office, calling it “crucial legislation.”
Best Practices for Telehealth Providers
Telehealth providers and online platforms that offer telehealth services should consider adhering to the following best practices when monitoring for human trafficking:

Complete Anti-Trafficking Training. Telehealth providers should complete an anti-trafficking training or educational program on a regular basis, regardless of whether they are legally required to do so. One such program is the US Department of Health and Human Services’ Stop, Observe, Ask, and Respond (SOAR) to Health and Wellness Training program. Telehealth providers may attend SOAR trainings in person or online and, depending on the program, may receive continuing education credit for their participation.
Implement a Referral Network. Prior to monitoring patients, telehealth providers should prepare a comprehensive referral list with detailed procedures for assisting identified individuals who have been trafficked or are vulnerable to trafficking. Referral lists should help patients access services that meet various immediate, intermediate, and long-term needs. Referral lists also should include information about how to connect with both national and local anti-trafficking resources.
Be Aware of Indicators of Human Trafficking for Adults. The National Human Trafficking Training and Technical Assistance Center has developed indicators of adult human trafficking. Indicators that may arise during a telehealth visit include instances where:

The patient is not in control of personal identification or does not have valid identification as part of the visit
The patient does not know where they live (or their geolocation does not match their stated location)
The patient’s story does not make sense or seems scripted
The patient seems afraid to answer questions
The patient appears to be looking at an unidentified person offscreen after speaking
The patient’s video background appears to be an odd living or work space (may include tinted windows, security cameras, barbed wire, or people sleeping or living at worksite)
The patient exhibits or indicates signs of physical abuse, drug or alcohol misuse, or malnourishment.

Be Aware of Indicators of Human Trafficking for Children. Indicators of human trafficking for children often differ from those for adults. The National Center for Missing & Exploited Children (NCMEC) has issued a list of risk factors useful for identifying possible indicators of child sex trafficking. Although NCMEC cautions that no single indicator can accurately identify a child as a sex trafficking victim, the presence of multiple factors increases the likelihood of identifying victims. Indicators that may arise during a telehealth visit include the following:

The child avoids answering questions or lets others speak for them
The child lies about their age and identity or otherwise responds to the provider in a manner that doesn’t align with their telehealth profile or account information
The child appears to be looking at an unidentified person offscreen after speaking
The child uses prostitution-related terms, such as “daddy,” “the life,” and “the game”
The child has no identification (or their identification is held by another person)
The child displays evidence of travel in their video background (living out of suitcases, at motels, or in a car)
The child references traveling to cities or states that do not match their geolocation
The child has numerous unaddressed medical issues.

Wearable Technologies and Employment Risks – EEOC Issues New Guidance

From smart watches to exoskeletons, wearable technologies are quickly changing the landscape of the American workplace. Several states and administrative agencies have responded to this shift by enacting new laws and issuing regulatory guidance concerning the use of such technologies. The latest of these responses includes a fact sheet issued by the U.S. Equal Employment Opportunity Commission (EEOC) titled “Wearables in the Workplace: Using Wearable Technologies Under Federal Employment Discrimination Laws.” The fact sheet provides guidance on how employers can use wearable technologies while maintaining compliance with various federal employment laws. More broadly, the fact sheet signals growing concern over the use of employee-monitoring technologies.
The General State of Wearable Technologies
Wearable technologies are digital devices worn or carried by employees that are used to track and collect certain types of information. Smart watches and GPS devices are common examples of wearable technologies. However, wearable technologies include a broad range of devices, such as environmental or proximity sensors which alert employees of nearby hazards, smart glasses or helmets which measure electrical activity in the brain, and exoskeletons which provide employees with increased strength and mobility.
Wearable technologies are becoming increasingly common in the workplace – and for good reason. By augmenting employees’ physical and perceptual abilities, these technologies can enhance workplace productivity and safety. Wearable technologies can be particularly valuable for companies struggling with an aging workforce or shortages of skilled labor. They can also be particularly valuable in construction, manufacturing, and warehousing industries which experience hundreds of thousands of non-fatal injuries and thousands of fatal injuries per year.
However, these benefits come with risks. One of the biggest risks is employee privacy. Several state and federal laws, such as the Americans with Disabilities Act (ADA) and state biometric information laws, protect certain information given by employees to their employers. Other risks include employee health, data security, and data interpretation. Since the wearable technologies industry is likely to expand in the future, government regulators have started to enact new laws and to adapt existing laws to account for these risks. The EEOC fact sheet on wearable technologies represents one piece related to this growing concern.
EEOC Guidance on Wearable Technologies
The EEOC’s recent guidance on wearable technologies provides several important considerations for employers. The EEOC has explained how employers can implement wearable technologies in the workplace while maintaining compliance with a variety of federal employment laws. It remains to be seen whether the EEOC under the Trump Administration will rescind or amend this guidance that was issued at the end of Biden’s Administration.
Medical Examinations and Disability-Related Inquiries
The EEOC’s guidance provides that wearable technologies may constitute “medical examinations” and/or “disability-related inquiries” in violation of the ADA.
To determine whether a test or procedure is a medical examination under the ADA, the EEOC will consider several factors, including whether the test measures an employee’s performance, whether the test is normally given in a medical setting, and whether medical equipment is used. Wearable technologies may be deemed to be conducting medical examinations when they track and collect information about an employee’s physical or mental condition, such as blood pressure monitors and eye trackers. Wearable technologies may also be deemed to be conducting medical examinations where they are conducting diagnostic testing, such as EEGs.
Disability-related inquiries, on the other hand, are questions that are likely to elicit information about an employee’s disability. Employers may be making disability-related inquiries where employees are required to provide health information, such as information about prescription drug use or a disability, in connection with using wearable technologies.
The ADA generally limits medical examinations and disability-related inquiries to situations where they are “job related and consistent with business necessity.” This may include situations where an employee makes a request for reasonable accommodation or where an employer is concerned that an employee poses a direct threat of serious harm due to their medical condition. Medical examinations and disability-related inquiries are also permitted: (1) when required under federal law or safety regulations; (2) for certain employees in positions affecting public safety, such as police officers or firefighters; and (3) when they are voluntary and part of an employee health program. If an employer uses wearable technologies to conduct medical examinations or disability-related inquiries outside of one of these exceptions, under the EEOC’s guidance, the employer risks violating the ADA.
Non-Discrimination
The EEOC’s guidance also provides that employers must not use information collected by wearable technologies to discriminate against employees based on a protected characteristic. Protected characteristics include, but are not limited to, race, color, religion, sex, national origin, age, disability, and genetic information.
For example, according to the EEOC, employers may violate non-discrimination laws by:

Using data from wearable technologies to infer that an employee is pregnant, then taking an adverse action against the employee as a result.
Relying on data from wearable technologies which produces less accurate results for certain protected classes, then taking adverse actions against those employees based on that data.
Tracking an employee to a medical center and then researching the purpose of the employee’s visit in a way that elicits genetic information.

Moreover, employers may not selectively use wearable technologies on a discriminatory basis nor use information from wearable technologies to make employment decisions which have a disproportionate adverse effect on the basis of a protected characteristic.
Reasonable Accommodations
The EEOC’s guidance also suggests that employers may need to make exceptions to the use of wearable technologies as reasonable accommodations under Title VII (religious belief, practice, or observance), the ADA (disability), or the Pregnant Workers Fairness Act (pregnancy, childbirth or related medical conditions).
Confidentiality
If an employer collects medical or disability-related data from wearable technologies, the employer, generally, must maintain that data in separate medical files and treat it as confidential medical information.
Other Laws and Guidance on Wearable Technologies
The guidance expressed in the EEOC fact sheet is similar to that presented by other administrative agencies. For example, the National Labor Relations Board’s (NLRB) former General Counsel Jennifer Abruzzo issued a memorandum in October 2022 addressing various technologies in the workplace, including wearable technologies. The memorandum warned that wearable technologies may impair or negate employees’ ability to engage in protected activity due to “the potential for omnipresent surveillance.”
In addition, several state legislatures have enacted laws regulating employee-monitoring technologies, including wearable technologies. Some of these laws regulate the collection and handling of employee biometric information.[1] Other laws regulate certain forms of employee location tracking,[2] or regulate employee surveillance more broadly.[3]
Key Takeaways
Employers who use wearable technologies in the workplace should:

Assess the type of information collected by the wearable technologies and determine whether that collection would constitute an improper medical examination or disability-related inquiry under the ADA.
Evaluate the accuracy and validity of the information collected by the wearable technologies before making any adverse employment decisions based on that information.
Refrain from using information collected by wearable technologies to discriminate against employees on the basis of a protected characteristic.
Consider whether any state or local laws govern the use of wearable technologies or the information collected by the wearable technologies.

Because the legal framework governing wearable technologies is quickly evolving, employers would be wise to consult with employment counsel to ensure their continued compliance with federal and state laws, regulations, and guidance.
Note: Since this post was written, the EEOC Fact Sheet appears to have been removed from the EEOC website. This may indicate that the new administration is not inclined to follow or issue the same guidance.
FOOTNOTES
[1] See, e.g., 740 Ill. Comp. Stat. 14/1 et seq.; Tex. Bus. & Com. Code § 503.001; Wash. Rev. Code § 19.375; H.B. 24-1130, 74th Gen. Assemb., 2nd Reg Sess. (Colo. 2024).
[2] See, e.g., Haw. Rev. Stat. § 378‑102; N.J. Stat. Ann. § 34:6B-22; Cal. Penal Code § 637.7; N.H. Rev. Stat. § 644-A:4.
[3] See, e.g., N.Y. Civ. Rights Law § 52-C; Conn. Gen. Stat. Ann. § 31-48d.
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Proposition 65: California’s Office of Environmental Health Hazard Assessment Adopts Changes to the “Short-Form” Warning

California’s Safe Drinking Water and Toxic Enforcement Act of 1986, Health & Safety Code Section 25249.5 et seq. (“Proposition 65”) prohibits manufacturers, suppliers, distributors, retailers, and other entities in the stream of commerce from knowingly and intentionally exposing California consumers to certain listed chemicals above a safe harbor level without first providing a “clear and reasonable” warning to such individuals. (Health & Safety Code § 25249.6). The law applies to consumer product exposures, occupational exposures, and environmental exposures that occur in California. Presently, there are approximately 900 listed chemicals known by the State of California to cause cancer, reproductive harm, or both.
Since 2016, many businesses selling to California consumers have utilized “short-form warnings” on products, which alert consumers to possible risks of cancer or reproductive harm without identifying the specific chemical in the product. These abbreviated warning labels have remained popular for businesses because they streamline the process of providing necessary warnings to consumers while also protecting the businesses from costly enforcement actions brought either by the California Attorney General or private enforcers.
Following several years of failed attempts by California’s Office of Environmental Health Hazard Assessment (“OEHHA”) to limit the use of short-form warnings to products contained in or on small packaging, on December 6, 2024, OEHHA amended Proposition 65 to require companies to add at least one chemical name to the warning language—or the name of two chemicals, if the warning covers both cancer and reproductive toxicity, unless the same chemical is listed for both endpoints. While the changes are effective as of January 1, 2025, OEHHA is providing a three-year runway for companies to comply (until January 1, 2028). Importantly, products manufactured and labeled prior to January 1, 2028 using the old short-form warning do not have to be relabeled thereby providing an effective unlimited sell-through period.
These amendments do make an important concession to companies selling into California, however. Businesses now have the option to use words in the warning labels to clarify that they are specifically limited to California. But while this does allay years of concerns expressed by companies within and outside of California that the warning labels confused out of state consumers, the short-form is not really all that short anymore. Businesses selling products with truly small packaging will need to identify creative ways to label products with limited real estate.
These 2025 amendments also make explicit that: (1) short-form warnings may be used to provide safe harbor warnings for food products but do not require the yellow triangle symbol; (2) provide a 60-day transition period during the three-year implementation period for retailers to update online short-form warnings after notice from a manufacturer; and (3) provide new tailored safe harbor warnings for passenger or off-highway motor vehicle parts and recreational marine vessel parts.
While businesses in all consumer product industries have quite a bit of time to update their short form warning labels, it is important to make sure that business partners and affiliates all along the supply chain are aware of the upcoming changes and align their quality assurance testing and labeling processes to ensure timely compliance. Moreover, while the amendments do allow a lengthy sell off period for products manufactured and labeled on or before December 31, 2027, there is no doubt private enforcers will be on the hunt for non-compliant labeling. Therefore, if businesses do decide to sell off old labeling into 2028 and beyond, meticulous records should be kept of the manufacturing and labeling date on those products to allow for ease of tracking and use as an affirmative defense.

Fraud Section’s 2024 Year in Review Shows Enforcement Uptick

The Fraud Section of the U.S. Department of Justice’s Criminal Division published its Year in Review last month, which showed an uptick for white collar enforcement in foreign corruption, financial and health care fraud. The enforcement affected a range of industries including telecommunications, defense contracting, software services, aviation, consulting, and financial services. Below we highlight the enforcement trends and identify our key takeaways for 2025.
Foreign Corruption
DOJ resolved eight criminal corporate cases and entered into one declination pursuant to its Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”). The schemes involved bribery of officials in Latin America, Africa, the Middle East, and South and East Asia and over $1.1 billion on criminal fines and disgorgement. One of the matters included the first coordinated resolution with Ecuador and the third with South Africa. Four trials involving individuals charged with FCPA violations were held this year.
In late 2023, the DOJ created the Criminal Division’s International Corporate Anti-Bribery (“ICAB”) initiative aimed to grow the Department’s foreign law enforcement partnerships. Several prosecutors serve as regional ICAB representatives and DOJ has stated that ICAB members helped bring several of this year’s global FCPA resolutions.
Securities, Commodities & Cryptocurrency Enforcement
DOJ’s Market Integrity and Major Frauds Unit resolved three corporate matters and one CEP declination involving over $200 million in criminal penalties. The unit also charged 75 individuals. The schemes involved alleged abuses of 10b5-1 trading plans, insider trading in the equities and commodities market, the largest cryptocurrency nonfungible-token scheme, and the first cryptocurrency open-market manipulation case.
Federal Procurement & Program Fraud
DOJ’s Market Integrity and Major Frauds Unit also investigated and prosecuted fraud in federal procurement and programs. In 2024, DOJ also reached two corporate resolutions with major defense contractors for defective and fraudulent pricing, diversion of federal program funding, and counterfeit electronic parts used by the U.S. military in sensitive defense applications.
Health Care Fraud
DOJ charged 147 individuals for alleged scheme involving more than $3.26 billion in false and fraudulent claims. The Health Care Fraud Unit currently has strike force teams in 26 cities across the nation. Data analytics continues to be a major investigation predicate. The unit’s Data Analytics Team completed 3,229 data requests and 151 proactive investigative referrals. The schemes involved cardio genetic testing, amniotic wound grafts, controlled substance wholesalers, addiction treatment facilities, misbranded medication, laboratory testing, durable medical equipment, and telemedicine.
According to DOJ, telemedicine fraud schemes have “exploded” over the last five years and the Department has responded with seven nationwide enforcement actions. Pharmaceutical distributors also remain an area of focus with ten executives, sales representative, and brokers charged in October 2024 in four federal districts. DOJ also expanded its Sober Homes initiative to combat fraudulent addiction and rehabilitation schemes that targeted Native Americans in Arizona. The initiative has resulted in the over $1.2 billion in alleged false billings for fraudulent tests and treatments for drug and/or alcohol addiction. The Fraud Section has partnered with the U.S. Attorney’s Office for the District of Arizona in this initiative.
False Claims Act
Although not a criminal statute, the False Claims Act is another tool used to combat federal procurement, federal program, and health care fraud. 2024 was a record year for False Claims Act settlements, which exceeded $2.9 billion. The government and whistleblowers were party to 558 settlements and judgments, the second highest total after last year’s record of 566 recoveries, and whistleblowers filed 979 qui tam lawsuits, the highest number in a single year. Settlements and judgments since 1986 exceed $78 billion.
Takeaways
As we look back at the enforcement trends from 2024, there are several key takeaways to consider for the year ahead:

Data Analytics continues to be a mainstay tool for proactive detection and leads in foreign corruption, health care, and financial fraud enforcement. The Fraud Section’s data analytics team identifies outliers, trends, and patterns in federal health care benefit program billing, market activity against public filing disclosures, and even analyzes data compiled in public sources for foreign corruption matters.
Whistleblower and Voluntary Self-Disclosure Programs appear to be working. We previously wrote about each of these programs here and here. According to DOJ, the programs have resulted in 180 tips on new or existing investigations. Companies should implement a robust internal reporting system that allows employees to report potential misconduct comfortably and confidentially. Effectively responding to internal complaints can deter whistleblowers from bypassing the company’s reporting system and provides the company with a documented response to present to the DOJ if necessary.
Foreign Corruption enforcement will continue to expand its international footprint. 2024 resolutions included companies based in China, Germany, Brazil, Spain, Australia, Switzerland, and South Africa. Look to even more enforcement in 2025 with enhanced tools like the Foreign Extortion Prevention Act, the Criminal Division’s International Corporate Anti-Bribery initiative, and the Administration’s renewed focus on Latin America.
Health Care Fraud enforcement provides an average return on investment of $73.04 per $1 spent and over $3 billion in projected savings. Telemedicine, genetic testing, pharmaceutical distributors, and durable medical equipment will remain areas of enforcement focus.
Cryptocurrency remains in focus as the market continues to be fertile ground of market manipulation and schemes that exploit decentralized finance and automated trading. Enforcement will likely continue to include domestic and international laundering of crypto-fraud proceeds.

A copy of the full Year in Review report may be found here.

May the Coverage Be With You: Navigating CMS’s Changes to the Health Insurance Marketplace

The Department of Health and Human Services (“HHS”) Centers for Medicare & Medicaid Services (“CMS”) recently issued the final “HHS Notice of Benefit and Payment Parameters for 2026” (hereinafter referred to as the “Rule”) setting new and updated standards for Health Insurance Marketplaces and health insurance issuers, brokers, and agents who help connect millions of consumers to health insurance coverage. Effective January 15, 2025,[1] the Rule finalizes additional safeguards for marketplace coverage beginning plan year 2026, protecting consumers from unauthorized changes to their health care coverage, ensuring the integrity of the federally facilitated Marketplaces, and making it easier for consumers to understand their costs and enroll in coverage through HealthCare.gov. The changes in this Rule aim to minimize administrative burden, ensure program integrity, advance health equity, and mitigate health disparities.
Preventing Unauthorized Marketplace Activity Among Agents and Brokers

This Rule expands CMS’s authority to immediately suspend an agent or broker’s ability to transact information with the Marketplace if there is an unacceptable risk to the accuracy of Marketplace eligibility determinations, operations, applicants, enrollees, or Marketplace information technology systems. CMS aims to protect consumers and support the integrity of the Exchange by increasing transparency.
This Rule also allows CMS to hold lead agents accountable for misconduct or noncompliance with HHS Exchange standards and requirements. This update will allow CMS to strengthen compliance reviews and enforcement actions against agencies and their lead agents to ensure that the individuals who are directing and/or overseeing the misconduct or noncompliance are held accountable.
Additionally, CMS has updated its model consent form to help agents, brokers, and web-brokers obtain and document consumer consent for Marketplace enrollments and eligibility applications. The updates also add scripts that agents, brokers, and web-brokers may use to meet the consumer consent and eligibility application review requirements via an audio recording.

Addressing Allowable Cost-Sharing Reduction (“CSR”) Loading

CSR loading practices are allowed when the adjustments are actuarially justified and follow state law, provided the issuer does not otherwise receive reimbursement for such amounts. CSR loading increases premium rates to offset the cost of providing cost-sharing reductions, which lower the amount consumer pay for deductibles, copayments, and coinsurance. Codifying these practices likely will promote market stability and provide greater clarity for issuers.

Advancing Health Equity and Mitigating Health Disparities

The Rule allows issuers to implement fixed-dollar or percentage-based premium payment thresholds, helping consumers who owe small premium amounts to maintain coverage even if they have not paid the full amount owed.
The Rule amends the Medical Loss Ratio (“MLR”) reporting and rebate calculations for qualifying issuers’ plans that focus on underserved communities with high health needs. These plans will have the option to modify the treatment of net risk adjustment receipts for purposes of the MLR and rebate calculations, so that these net receipts impact the MLR denominator rather than the MLR numerator.
CMS will conduct Essential Community Provider (“ECP”) certification reviews to ensure issuers include a sufficient number and geographic distribution of ECPs in their provider networks.

Making It Easier to Enroll in and Maintain Health Care Coverage

The Rule extends consumer notification requirements to two consecutive tax years for failure to file and reconcile. Exchanges are required to send notices to tax filers or their enrollees for the second year in which they have failed to reconcile their advanced payment of the premium tax credit (“APTC”). A notice to the tax filer may specifically explain that if they fail to file and reconcile for a second consecutive year, they risk being determined ineligible for APTC. Alternatively, an Exchange may send a more general notice to the enrollee or their tax filer explaining that they are at risk of losing APTC, without the additional detail that the tax filer has failed to file and reconcile APTC. These notices are intended to educate consumers about the need to file and reconcile to keep health care coverage affordable.
The Rule updates to the Basic Health Program (“BHP”) payment methodology noting that CMS will recalculate the premium adjustment factor if a state is using the premiums from a year in which BHP was only partially implemented as the basis for their federal BHP payments. Also, CMS provided a technical clarification explaining that if there is more than one-second lowest-cost silver plan in a county, a state’s BHP payment will be based on the premiums of the relevant plan in the largest portion of the county, as measured by the county’s total population.

Simplifying Plan Choice and Improving Plan Selection

Issuers on the Marketplaces are required to offer standardized plan options at every product network type, at every metal level, and throughout every service area where they offer non-standardized plan options. (Standardized plan options are Qualified Health Plans (“QHPs”) with standardized cost sharing and coverage for certain benefits.) CMS is updating standardized plan options for plan year 2026 to ensure the plans’ actuarial values (“AVs”) align with the plans’ metal levels and continuity in the plans’ designs. Also, issuers offering numerous standardized plan options within the same product network type, metal level, and service area must distinguish these plans from each other to minimize duplicative offerings (which would make it easier for consumers to select and compare plan options).
The Rule amends the regulations to clarify that issuers have flexibility to determine whether to include coverage for adult dental, pediatric dental, and adult vision benefits within their non-standardized plan options.

Increase Transparency

The Rule includes CMS’s public release of State Marketplace operations data, such as spending on outreach, education, and marketing, and call center metrics to increase transparency, efficiency, and accountability. Beginning January 1, 2026, CMS will also release aggregated, summarized Quality Improvement Strategy (“QIS”) information annually, with an aim to improve the quality of health care coverage.

Further Refining the HHS-operated Risk Adjustment Program

CMS is recalibrating the risk adjustment models beginning in the 2026 benefit year using 2020-2022 data. It will also phase out market pricing adjustment to plan liability associated with Hepatitis C drugs (aligning these drugs with other specialty drugs) and add HIV pre-exposure prophylaxis (PrEP) drugs to the risk adjustment models as another factor for both children and adults (increasing coverage and access to care for these patients).
CMS is making changes to the initial and second validation audit policies required for issuers offering risk adjustment covered plans to improve the precision of these audits and the risk adjustment results.
Issuers of risk adjustment covered plans can appeal second validation audit risk adjustment results or error rate findings if the amount in dispute exceeds the materiality threshold for filing. CMS finalized a second materiality threshold to rerun the results if the appeal is successful. That threshold is met if the financial impact on the issuer is at least $10,000. It is expected that this would reduce administrative costs both to issuers and the government.

Strengthening the Marketplace’s Impact on Consumers

The Rule establishes a user fee rate of 2.5% of monthly premiums for the federal Marketplace, and 2.0% of monthly premiums for state-based Marketplaces on the federal platform. If enhanced premium tax credit subsidies are extended for consumers through the 2026 benefit year by July 31, 2025, then the user fee rates would be reduced to 2.2% and 1.8% of total monthly premiums, respectively.
The Rule finalizes a $0.20 per member per month risk adjustment user fee for the 2026 benefit year.
CMS revised its methodology to update its Actuarial Value Calculator to calculate an issuer’s level of coverage (i.e., metal tier) so that only a single, final version of it is published each year.
The Rule includes guidance for State Marketplaces to review and resolve data inaccuracies and send them to HHS within 60 days of receipt of completed submissions from issuers. This would help efficiently resolve issues with accurate and timely payments of APTC to consumers and increase their access to health care coverage.
The Rule adds the clarification that the Marketplace may deny QHP certification to any plan failing to meet certain criteria. Issuers may request reconsideration of a denial, provided that they submit a written request of reconsideration with clear and convincing evidence that the denial was in error.

FOOTNOTES
[1] The Rule is not impacted by President Trump’s pause of agency action since the Rule’s effective is before the Executive Order was issued on January 20, 2025.

FDA & OHRP Draft Guidance: Including Tissue Biopsies in Clinical Trials

The U.S. Food and Drug Administration (FDA), and the Office of Human Research protections (OHRP) released draft guidance titled, “Considerations for Including Tissue Biopsies in Clinical Trials.” Although non-binding, the guidance document reflects FDA’s and OHRP’s current view on the inclusion of biopsies in clinical trials and is informative for sponsors.
Background
The draft guidance acknowledges that biopsies involve some inherent risk, and sponsors must consider whether the risk of including biopsies in a trial are reasonable in relation to the anticipated benefits and resulting knowledge. Within clinical trials, there are two types of biopsies — mandatory biopsies (which are required as a condition of trial participation) and optional biopsies (which are not required as a condition of trial participation).
Consideration for Conducting Tissue Biopsies in Clinical Trials
Generally, the following three factors should be considered when deciding whether to include biopsies (mandatory or optional) as part of a clinical trial: the purpose of the biopsy, the reason for its inclusion, and the associated risks. Because biopsies of different tissue types can have dramatically different levels of risk, the associated risks can vary greatly depending on the trial. Whenever biopsies are included in a clinical trial, the trial protocol should state the relevant rationale and scientific justification for the decision.
The draft guidance notes that use of biopsy tissue in a trial may be reasonable, and thus mandatory, if the information from the biopsy is necessary to:

Evaluate the primary endpoint(s) or key secondary endpoint(s) of the clinical trial;
Identify participants who may derive clinical benefit from the investigational medical product or other study interventions;
Identify participants who should not be enrolled in the study due to the risk of certain side effects or toxicities associated with investigational medical products;
Identify participants whose current disease state would render it unlikely for them to derive benefit from the investigational medical product or other study interventions; and
Evaluate treatment response.

Conversely, the draft guidance states that use of biopsy tissue in a trial should be optional in clinical trials when:

Information from the biopsy will be used to evaluate non-key secondary and exploratory endpoints; and
The purpose of the biopsy is solely to obtain specimens that will be stored and used for future unspecified research.

Regardless of whether the biopsy is mandatory or optional in the trial, trial participants always retain the right to withdraw consent to undergo a biopsy. In the case of mandatory biopsies, a participant’s decision to withdraw consent for a biopsy may impact the participant’s ability to continue participating in the trial.
Considerations for Conducting Tissue Biopsies in Children in Clinical Trials
Although the above considerations are relevant for trials that involve children, the draft guidance provided that, with respect to children, any biopsy conducted for research purposes needs to be evaluated to determine if there is a direct benefit to the enrolled child. In circumstances where biopsies do not offer a direct benefit, the risk of the biopsy must be limited to “minimal risk” or a “minor increase over minimal risk.” Finally, a child’s parent or guardian must give consent to trial participation and the performance of the biopsy. There must also be adequate provisions for soliciting the assent of the children, based on the child’s age, maturity, and psychological state, when the child can provide assent.
Conclusion
Clinical trial industry sponsors and stakeholders should take note of guidance and considerations discussed in the draft guidance and implement recommendations as needed. When sponsors are considering inclusion of biopsies, whether optional or mandatory, in a clinical trial, the draft guidance is helpful in outlining risk factors that should be evaluated, considered, and addressed, in the clinical trial design. Adherence to the draft guidance could assist sponsors in expediting the reviews required to initiate clinical trials.

New York Governor Signs Privacy and Social Media Bills

On December 21, 2024, New York Governor Kathy Hochul signed a flurry of privacy and social media bills, including:

Senate Bill 895B requires social media platforms that operate in New York to clearly post terms of service (“ToS”), including contact information for users to ask questions about the ToS, the process for flagging content that users believe violates the ToS, and a list of potential actions the social media platform may take against a user or content. The New York Attorney General has authority to enforce the act and may subject violators to penalties of up to $15,000 per day. The act takes effect 180 days after becoming law.
Senate Bill 5703B prohibits the use of social media platforms for debt collection. The act, which took effect immediately upon becoming law, defines a “social media platform” as a “public or semi-public internet-based service or application that has users in New York state” that meets the following criteria:

a substantial function of the service or application is to connect users in order to allow users to interact socially with each other within the service or application. A service or application that provides e-mail or direct messaging services shall not be considered to meet this criterion on the basis of that function alone; and
the service or application allows individuals to: (i) construct a public or semi-public profile for purposes of signing up and using the service or application; (ii) create a list of other users with whom they share a connection within the system; and (iii) create or post content viewable or audible by other users, including, but not limited to, livestreams, on message boards, in chat rooms, or through a landing page or main feed that presents the user with content generated by other users.

Senate Bill 2376B amends relevant laws to add medical and health insurance information to the definitions of identity theft. The act defines “medical information” to mean any information regarding an individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional. The act defines “health insurance information” to mean an individual’s health insurance policy number or subscriber identification number, any unique identifier used by a health insurer to identify the individual or any information in an individual’s application and claims history, including, but not limited to, appeals history. The act takes effect 90 days after becoming law.
Senate Bill 1759B, which takes effect 60 days after becoming law, requires online dating services to disclose certain information of banned members of the online dating services to New York members of the services who previously received and responded to an on-site message from the banned members. The disclosure must include:

the user name, identification number, or other profile identifier of the banned member;
the fact that the banned member was banned because, in the judgment of the online dating service, the banned member may have been using a false identity or may pose a significant risk of attempting to obtain money from other members through fraudulent means;
that a member should never send money or personal financial information to another member; and
a hyperlink to online information that clearly and conspicuously addresses the subject of how to avoid being defrauded by another member of an online dating service.

Employers Who Administer PFML Programs Get Much-Needed Guidance from IRS

Takeaways

The Guidance clarifies the federal income and employment tax treatment of contributions and benefits under state-funded PFML Programs.
It does not apply to privately insured or self-insured arrangements.
Affected employers should work with their in-house finance and payroll teams to ensure that payments into the funds are treated consistent with the Guidance and that employee payments and employer pick-up payments are properly reported as taxable wages (taking into account the 2025 transition guidance).

California Supreme Court Rejects Non-Disclosure Theory for ER Evaluation and Management Fees, Holding that Hospitals owe no Additional Duty Outside Regulatory Pricing Disclosure Regime

Hospitals charge a standard evaluation and management services fee (“EMS”) for patients seen in the emergency room, in one of five amounts, depending upon the severity of the visit. This EMS fee is listed in the hospital’s public “chargemaster,” a comprehensive price list required by law. But does the hospital also have a duty to inform individual ER patients, before they receive services, about the EMS fee?
In a recent opinion, the California Supreme Court unanimously answered: No. A hospital’s duty is to comply with the existing state and federal pricing disclosure laws that already require public disclosure of all of a hospital’s fees, including its EMS fees. The Court’s opinion, in Capito v. San Jose Healthcare System, LP, resolves a split of authority in the Court of Appeal regarding whether a hospital can be liable under state consumer protection laws for not individually informing ER patients about EMS fees before treatment.
The Supreme Court’s decision relies heavily on the “extensive scheme of state and federal law” that “obligates hospitals to make specific disclosures about the prices of medical services.” Capito v. San Jose Healthcare Sys. LP, Case No. S280018 (Dec. 23, 2024). These laws require every hospital to publish a copy of its chargemaster—a lengthy document describing the base charge for each of its procedures and services. Cal. Health & Saf. § 1339.51(b)(1); 42 U.S.C. § 300gg-18(e); 45 C.F.R. § 180.20. The charges billed to patients is usually significantly lower than the base charges in the chargemaster due to reductions for insurance, discounts, charitable care or other reasons.
The California state agency governing health information access publishes chargemasters for free download on its website, along with other pricing disclosures. Hospitals must also publish a copy on their websites or at the hospital. Cal. Health & Saf. § 1339.51; see also 42 U.S.C. § 300gg-18(e) (similar federal law). In addition, hospitals must file with the state agency a form identifying its “top 25” most common charges—a short list typically including EMS fees. Cal. Health & Saf. § 1339.56(c).
These pricing disclosure laws reflect the Legislature’s desire to ensure consumers have access to pricing information regarding healthcare. But these are not the only policy goals expressed by the Legislature. As the Court explained, “emergency medical care is a vital public service that is necessary for the protection of the health and safety of all.” Capito at 2 (quoting in part Stats. 1987, ch. 1240, § 1, p. 4406). To protect public health, state and federal law require hospital with public emergency rooms to provide care to any person who needs life-saving treatment or has a serious injury or illness. Cal. Health & Saf. § 1317(a); 42 U.S.C. § 1395dd (EMTALA). Emergency care must be provided regardless of the patient’s ability to pay. H&S § 1317(b); see 42 U.S.C. § 1395dd(h); 42 C.F.R. § 489.24(a)(1). This means the hospital may not question the patient about payment until after the patient is stabilized. Id. Federal law also forbids hospitals from “unduly discourag[ing]” patients from getting treatment through its registration procedures. 42 C.F.R. § 489.24(d)(4)(iv).
California law also requires hospitals to provide ER patients with a written agreement requiring the patient to pay for services after receiving treatment. Cal. Health & Saf. § 1317(d).
The plaintiff in Capito visited the ER at San Jose Regional Medical Center twice, each time signing the hospital’s admissions agreement, in which she agreed to financial responsibility. She was billed for a “Level 4” EMS fee after each visit. There was no dispute that the hospital’s EMS fees were included on its chargemaster, which was properly submitted to the state regulator and published on its website. Nonetheless, Capito argued on behalf of a putative class of ER patients that the hospital owed a duty under California’s Unfair Competition Law (“UCL”) and the Consumer Legal Remedies Act (“CLRA”) to specifically inform her about the EMS fee when she arrived at the ER, before receiving treatment.
Capito’s allegation is virtually identical to a string of other putative class actions filed against hospitals throughout California. Most courts rejected plaintiffs’ non-disclosure theory regarding EMS fees. As the cases percolated through the court system, published and unpublished cases emerged rejecting the theory—mostly based on the extensive statutory disclosure laws. See Gray v. Dignity Health, 70 Cal. App. 5th 225 (1st Dist. 2021); Saini v. Sutter Health, 80 Cal. App. 5th 1054 (1st Dist. 2022); Moran v. Prime Healthcare Management, 94 Cal. App. 5th 166, 169-70 (4th Dist. 2023) (review granted); Yebba v. Ahmc Healthcare, 2021 Cal. App. Unpub. LEXIS 4237 (4th Dist. 2021). But a few courts agreed the patients could state a claim based on non-disclosure of an EMS fee. See Naranjo v. Doctors Medical Center of Modesto, Inc., 90 Cal. App. 5th 1193 (5th Dist. 2023); Torres v. Adventist Health System/West, 77 Cal. App. 5th 500 (5th Dist. 2022).
The Supreme Court’s Capito decision resolves this conflict in favor of hospitals—holding that neither the UCL nor the CLRA requires an additional disclosure of EMS fees beyond what the regulatory scheme already demands. Requiring additional disclosures would “alter the careful balance of competing interests” already reflected in the “multifaceted scheme developed by state and federal authorities.” Capito, __ Cal. __ at 2. The Court also noted that California law requires hospitals to provide price estimates for uninsured patients in some circumstances, but the law specifically exempts emergency rooms from this requirement—further evidencing deliberative Legislative balancing.
The Supreme Court also rejected Capito’s key argument for liability under the CLRA—that the hospital had “exclusive knowledge” the EMS fees. Capito argued disclosure of EMS fees on the chargemaster was insufficient because the chargemaster is “tens of thousands” of lines long and uses various abbreviations and codes. Again, the Court disagreed. It viewed the disclosure of EMS fees in the chargemaster as sufficiently clear. The Court also found it “notable” that the EMS fees were listed on the shorter “top 25” list of most common procedures.
The Supreme Court’s Capito decision puts a significant damper on the string of class actions based on ER fees or similar pricing issues. While the Capito decision focuses on UCL and CLRA claims based on a non-disclosure theory, the Court’s decision may also limit contract-related theories raised by plaintiffs in similar cases. The contract theory posits that EMS fees are intended to cover hospital administrative costs and overhead, and are not actually “services rendered” to the patient, so the hospital supposedly cannot lawfully bill them under the admissions agreement with the patient. See Salami v. Los Robles Reg’l Med. Ctr., 324 Cal. Rptr. 3d 45 (2024). The Capito decision debunks this theory in dicta by explaining that EMS fees reflect medical services, such as reviewing tests, ordering medications, conferring with staff and other medical decision-making.
Capito will leave a large mark on pricing lawsuits in the healthcare field. Its limitations on non-disclosure and contract theories may motivate class action plaintiffs to re-focus on unconscionability theories. But unconscionability raises difficult-to-overcome problems for plaintiffs at the class certification stage, given each patient’s unique medical and financial circumstances. The Court’s decision in Capito that hospitals have no extra duty to inform patients of ER fees will presumably also resolve two related EMS fee cases where the Court had granted review pending resolution of Capito. See Moran, 94 Cal. App. 5th 166 (2023); Naranjo v. Doctors Med. Ctr. of Modesto, 90 Cal. App. 5th 1193 (2023).