Health Law & Managed Care – Page 7

Second Department Affirms Right to Multiple IMEs: A Strategic Win for Product Liability Defendants

When a plaintiff alleges complex and overlapping injuries, such as traumatic brain injury (TBI), psychological trauma, or cognitive impairment, defendants must have access to the right tools to fairly evaluate and defend against the claim. In a recent decision, the Appellate Division, Second Department affirmed a critical procedural right for defendants: the ability to compel multiple independent medical examinations (IMEs) when justified by the nature of the injuries at issue.
In Mazzola v. Claridge’s Co., LLC, 2025 NY Slip Op 01918, the court reversed the lower court’s denial of a defense motion to compel an additional IME by a neuropsychologist, following an earlier IME conducted by a specialist in neurology and psychiatry. The plaintiff alleged significant psychological and cognitive injuries. The court emphasized that CPLR 3121(a) does not limit the number of IMEs a defendant may obtain and that additional examinations are appropriate when supported by necessity:
“There is no restriction in CPLR 3121(a) limiting the number of medical examinations. However, a defendant seeking an additional medical examination must demonstrate the necessity for it” (Mazzola, citing Abdelfattah v Treviacano, 204 AD3d 738).
“[T]he defendants sufficiently demonstrated the necessity for an additional IME by a specialist in neuropsychology in light of the plaintiff’s allegations as to the severity of his psychological injuries and since the prior IME was not conducted by a specialist in neuropsychology.”
This decision offers much-needed appellate support to defendants in cases involving multidimensional injury allegations. In today’s product liability landscape, where claims often combine orthopedic, neurological, psychiatric, and cognitive symptoms, this ruling validates a common-sense approach mirroring the growing complexity and specialization of physicians (and attorneys): different injuries call for different specialists.
Why This Matters for Product Liability Defendants

Claims Evaluation with Clinical PrecisionProduct liability defendants and insurers are frequently faced with TBI claims that span a range of diagnoses and disciplines. A psychiatrist is not a neuropsychologist, and the two bring vastly different methodologies to evaluating cognitive function. The Mazzola decision acknowledges this and ensures the defense is not handcuffed by a rigid, one-and-done IME limitation.
Strategic Use of Litigation ResourcesThough multiple IMEs require upfront coordination, they often lead to more cost-effective litigation by clarifying injury scope early, narrowing issues for summary judgment, or positioning a case more favorably for settlement. Investing in the right expert at the right time can significantly reduce long-term litigation spend.
Procedural Authority to Push Back Against RestrictionsPlaintiffs’ counsel often object to multiple IMEs on grounds of burden or duplication. Mazzola gives defense counsel the appellate authority to counter these objections, so long as the additional examination is narrowly tailored and necessary to address specific allegations.

ConclusionDefendants are not limited to a single IME when a plaintiff’s injury claims involve multiple, medically distinct allegations. Where a plaintiff alleges cognitive injury, psychiatric trauma, and neurological dysfunction, the defense is entitled to a thorough, specialized evaluation from each relevant discipline.
At Wilson Elser, we know how to leverage case law such as Mazzola to secure critical examinations and build a defense that withstands scrutiny. If your organization is facing a product liability claim involving complex or catastrophic injuries, contact our team to learn how we can help you develop a smart, calculated defense strategy that protects your interests and controls litigation costs.
Read the full Mazzola decision here.

New Maryland Laws—Delay to Paid Family and Medical Leave, Expanded Military Protections, and Parental Leave Clarification

The Maryland General Assembly’s 2025 legislative session ended at 11:59 p.m. on Monday, April 7. Unlike previous years’ editions, this session ended up being a relatively positive one for employers.
Although many concerning bills were proposed (e.g., increased minimum wage, an increased salary level for overtime exemptions, expansion of the Workplace Fraud Act to include all employers, harassment reporting and training requirements, etc.), there were only three employment-related bills that passed: another delay to the forthcoming paid family and medical leave insurance (FAMLI) program, an expansion of protections for military service members and their families, and a clarification of the definition of “employer” under Maryland’s Parental Leave Act.

Quick Hits

The Maryland General Assembly passed legislation delaying the implementation of the paid family and medical leave insurance (FAMLI) program, with contributions starting on January 1, 2027, and benefits beginning by January 3, 2028.
The Employment and Insurance Equality for Service Members Act would expand employment protections to include all uniformed services and reserve components, effective October 1, 2025.
Legislation amending the Parental Leave Act to clarify that employers covered by the federal Family and Medical Leave Act are excluded from the definition of “employer,” effective October 1, 2025, passed the General Assembly.
Maryland Governor Wes Moore is not expected to veto the bills.

All of these bills have been sent to Governor Wes Moore, and he can sign them into law, veto them, or allow them to become law without his signature. Vetoes are not expected on any of these bills, however.
FAMLI Program—Revisions, House Bill (HB) 102
As most employers in Maryland know, in 2022, the General Assembly passed a law, over then-Governor Larry Hogan’s veto, that set up a paid family and medical leave insurance program (FAMLI). The program will apply to all employers with employees in Maryland. It will provide eligible employees with twelve weeks of paid family and medical leave, with the possibility of an additional twelve weeks of paid parental leave (for a possible total of twenty-four weeks of paid leave). We discussed the detailed requirements of the law in our article, Maryland’s FAMLI Program, Part I: An Overview of the Law.
This $2 billion program will be administered by the state and funded by contributions from employers and employees. Contributions were originally set to begin October 1, 2023, with benefits starting January 1, 2025. The Maryland Department of Labor (MDOL) was directed to issue regulations to implement the provisions of the law.
Setting up the FAMLI program has been challenging, and the General Assembly passed legislation to delay implementation, first in 2023, then again in 2024, and yet again this year. Under the most recent delay, contributions from employers and employees to fund the program will begin January 1, 2027, and benefits will begin at some point thereafter, but no later than (and most likely) January 3, 2028.
Other important dates were also changed. The initial contribution rate will now be set by the secretary of labor on or before May 1, 2026. Thereafter, the secretary will set the rate by November 1 each year, to take effect on the following January 1.
The legislation also proposes a new definition: “Anchor Date,” meaning the earlier of when an application for benefits is complete or when FAMLI leave begins. The wage rate for the employee will then be based on the highest of the previous four calendar quarters immediately preceding the anchor date.
Finally, the legislation also provides for a possible annual increase in the weekly benefit amount tied to the Consumer Price Index.
One additional note: The MDOL has engaged in an extensive regulatory process over the past several years, and it finally released proposed regulations in parts last fall and earlier this year. We reviewed the proposed regulations in our articles, “Maryland’s FAMLI Program, Part II: The Proposed Regulations” and “Maryland’s FAMLI Program, Part III: Claims and Dispute Resolution Proposed Regulations.” However, those regulations have now been removed from their website in light of the implementation delay. It is unclear what the MDOL is planning to do with the proposed regulations.
Once signed by the governor or approved without his signature, the law will take effect on June 1, 2025.
Employment and Insurance Equality for Service Members Act, HB 895/Senate Bill (SB) 279
Among other things, this legislation expands employment protections for military members from just the U.S. Armed Forces and National Guard and Reserve to include all uniformed services and reserve components. This means that, in addition to the Army, Navy, Air Force, Marine Corps, Space Force, and Coast Guard, the employment protections under Maryland law now also apply to the National Oceanic and Atmospheric Administration and the Public Health Service.
The affected employment protections under Maryland law are the following:

Permissible hiring preferences for eligible veterans (meaning one who received an honorable discharge or certificate of satisfactory completion of uniformed service), as well as the spouse of an eligible veteran who has a service-connected disability, the surviving spouse of a deceased eligible veteran, and the spouse of a full-time active member of the uniformed services.
Leave on the day that the employee’s spouse, (step)parent, (step)child, or sibling is leaving for, or returning from, active duty outside the United States as a member of the uniformed services. Notably, employees are only eligible for this leave right if they have a year of service with the employer and have worked 1,250 hours in the twelve-month period prior to the leave.
Once FAMLI finally takes effect, employees will (eventually) be able to receive FAMLI leave for certain family military leave reasons: to care for an injured or ill member of the uniformed services who is next of kin, or for certain qualifying exigency reasons related to the active duty of a member of the uniformed services.

When enacted, this law will take effect on October 1, 2025.
Parental Leave Act—Definition of ‘Employer,’ SB 785
Under the Parental Leave Act, employers with fifteen to forty-nine employees in Maryland must provide up to six weeks of unpaid leave for purposes of childbirth, adoption, or foster care placement. In order to be eligible for this leave, the employee must have been employed with the employer for at least twelve months and have worked at least 1,250 hours in the twelve-month period looking back from the date that leave is requested. This legislation clarifies that the definition of “employer” does not include those who are covered by the federal Family and Medical Leave Act (which applies to employers with fifty or more employees anywhere) in the current year.
This amendment will take effect on October 1, 2025.

A Texas Federal Court Sides with Laboratories, But There May Be Unintended Consequences for FDA

The obvious result of the legal shootout between the U.S. Food & Drug Administration (FDA) and clinical laboratory trade associations, the American Clinical Laboratory Association and the Association for Molecular Pathology, in the Eastern District of Texas to determine whether the Federal Food, Drug, and Cosmetic Act (FD&C Act) permits the agency to regulate laboratory developed tests (LDTs) is a complete victory for clinical laboratories. The U.S. district judge’s decision, issued on March 31, 2025, vacated the May 2024 final rule through which FDA sought to specify that LDTs are agency-regulated in vitro diagnostic products (IVDs) and to describe a plan for phasing-in enforcement of existing medical device regulations for such products over four years (see our previous posts on the LDT final rule here and here). In adopting the plaintiffs’ arguments wholesale, however, the judge created some incongruities in the relevant regulatory frameworks, as well as several quandaries for FDA and the clinical laboratory industry going forward. These inconsistencies could have greater consequences down the road if the Trump administration decides not to appeal the ruling.
The key issue at the core of the ACLA v. FDA litigation was whether LDTs are “devices” as defined in the FD&C Act and thus subject to FDA’s regulatory authority under the Act. The answer to this question could have been decided on much more narrow grounds than it ultimately was. In particular, the judge could have decided that the distinction between the design and manufacture of a laboratory-based diagnostic assay – which is, essentially, an assembly of individual medical devices and equipment and a predetermined methodology for specimen collection and analysis – and the performance of the assay by lab professionals is too vague to support the argument that such diagnostic assays are definitively medical devices under the statute. Instead, the judge’s opinion broadly held that LDTs cannot be medical devices because they are not physical, tangible products and because “no article of personal property is transferred such that title passes from one party to another” in the commercialization of an LDT.
By framing his determination in the broadest way possible, the judge implicates other aspects of FDA’s regulatory authority, which could be used to challenge the agency in the future. Some of these potential future consequences include:

The court concluded that only LDTs (diagnostic assays that are designed, manufactured, validated, and used within a single laboratory that is CLIA-certified for high-complexity testing) are not subject to FDA regulations because they are clinical laboratory professional services rather than products and that the agency was only authorized by Congress to oversee “material things or products, not medical methodologies, processes, or services.” But FDA presumably continues to regulate any diagnostic assay developed by multiple entities and performed by one or more laboratories as an IVD subject to medical device regulations, because such an assay would not fall within the agreed-upon definition of an LDT. The outcome of this dichotomy is that, for the moment, FDA cannot regulate a diagnostic assay designed and performed by a single laboratory because that is a service rather than a product, but it can regulate as a product a diagnostic assay designed and performed by multiple laboratories. A plain text reading of the statutory definition of “device” does not provide support for such an interpretation, so it would be unlikely to prevail. Such an inconsistent outcome is likely to become the subject of a future lawsuit, due to the arguably unfair application of the FD&C Act to clinical laboratories performing multi-lab versus single-lab diagnostic assays.
The judge’s opinion implies that software cannot be a medical device because it is intangible and not a physical product that could meet one of the terms listed in the Act’s definition of device. In addition, when software is commercialized, the customer typically accepts a license to use the software (especially for software as a service arrangements, in which all or much of the software is cloud-based), so no “title” for an item of personal property passes from the seller to the customer. Such an interpretation of the ACLA v. FDA district court decision could trigger massive lawsuits seeking to liberate software intended for medical uses from FDA’s jurisdiction, even though Congress has recognized through recent amendments to the FD&C Act – such as in the 21st Century Cures Act from 2016 and the Food and Drug Omnibus Reform Act of 2022 – that standalone software can be a medical device depending upon its intended use.
In addition, due to the district judge’s determination that LDTs are not devices, our expectation is that FDA will no longer accept submissions for device pre-market review of LDTs—even voluntary submissions, which the agency previously accepted from any clinical laboratory interested in obtaining regulatory authorization for its assays—because the agency cannot provide authorization to “professional services” that fall outside of its statutory authority. This outcome denies clinical laboratories access to FDA device authorization pathways, which are widely recognized by payors and customers as official confirmations of a diagnostic assay’s safety and quality. Furthermore, LDTs will no longer qualify for Breakthrough Device designation and the potential expedited pathways to coverage and reimbursement (a prior post discusses that topic, here). The loss of such regulatory options may have a significant impact on clinical laboratories that have already committed resources toward obtaining pre-market authorization from FDA in anticipation of the final rule becoming fully effective or that may have been depending on a Breakthrough Device designation to attract investors. It is also unclear what may happen to LDTs that have already been granted such a designation from FDA’s Center for Devices and Radiological Health.

Although clinical laboratories have hailed the decision in the case as a return to the status quo (presumably of LDTs not being subject to active FDA regulation), the reality is much different—it creates a striking vacuum in the U.S. regulatory framework for LDTs. Before ACLA v. FDA was decided, the agency exerted some oversight over the design, safety and efficacy of LDTs and could issue warning letters or initiate investigations into laboratories developing tests that could harm patients or adversely affect public health, even though clinical laboratories historically denied that FDA had any such authority. According to the district court, however, FDA does not have any oversight role in the safety and efficacy of LDTs due to the unambiguous holding that they are not and have never been “devices.” The Centers for Medicare & Medicaid Services (CMS), which regulates laboratory professionals and operations under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), previously stated in the context of the litigation that it has no authority over the safety and efficacy of LDTs so it seems unlikely that CMS would attempt to fill the new regulatory gap. It is important for labs to keep in mind, however, that even though the limited oversight authority that FDA had to mitigate or address potential harm to patients from LDTs is now gone, the agency has alternative methods of monitoring clinical laboratories with respect to FD&C Act compliance as we discuss here.
This is just a brief look at the potential fallout from ACLA v. FDA if the Trump administration’s FDA and Department of Justice decide not to appeal the ruling; while any previous administration definitely would file an appeal, given the breadth and possible unintended consequences of this ruling, but the actions of the current administration are difficult to predict. The district court’s decision in this case is a new major inflection point in the regulatory history of IVDs, and stakeholders should pay close attention to how the laboratory and IVD industries, medical professionals, regulatory agencies, and politicians respond. We will continue to monitor and report on key developments in this space.

Missouri’s New Sick Leave Law Effective May 1, Requires Notice By April 15

On May 1, 2025, Missouri’s new paid sick leave law goes into effect, and most private employers are covered. Beginning May 1, employees will earn one hour of paid sick leave for every 30 hours worked. There is no cap on how many hours an employee may accrue and employees may roll over up to 80 hours from one year to the next; employers with 15 or more employees may cap usage at 56 hours per year. Smaller employers may cap usage at 40 hours per year.
Employees may use paid sick leave if they or a covered family member have an illness, injury, or health condition, require medical care, treatment, or preventative medical treatment, if their place of employment or their child’s school has been ordered closed due to a public health emergency, or if they need to be absent to attend to matters relating to domestic violence, sexual assault, or stalking.
By April 15, 2025, employers must provide employees with written notice of their paid sick leave policy. This must be a single page in 14-point font or larger that states: 1) employees accrue one hour of paid sick leave for every 30 hours worked, 2) employers are prohibited from retaliating against employees who request or use paid sick leave, 3) employees have a right to bring a civil action if they are denied paid sick leave, and 4) the contact information of Missouri’s Department of Labor and Industrial Relations.
Employers that already have a paid time off policy may keep their current policy if that policy makes available enough leave to meet the new law’s accrual requirements and leave can be used for the same purposes and under the same conditions as it can under the new law.

Opthamalogy Group Cannot Turn Blind Eye to TCPA Requirements

The “healthcare exemption” to the TCPA’s consent requirements is one of the more misunderstood parts of the TCPA. And a recent case in North Carolina just gave a lesson to an ophthalmology group to help them see the requirements of the exemption a little more clearly.
Before discussing the case, let’s look at the healthcare exemption. The healthcare exemption exempts certain calls from the consent requirements found in 47 C.F.R. § 64.1200(a)(1)(iii) which require prior express consent when using an ATDS or an artificial or prerecorded voice to dial cell phones.
The healthcare exemption only applies in certain circumstances. First, the calls must be made by, or on behalf of, healthcare providers. Second, there are several conditions that the calls being made by healthcare providers are required to meet, including but not limited to:

Calls or texts must be sent only to the wireless telephone number provided by the patient
Calls or texts must be limited to the “following purposes: appointment and exam confirmations and reminders, wellness checkups, hospital pre-registration instructions, pre-operative instructions, lab results, post-discharge follow-up intended to prevent readmission, prescription notifications, and home healthcare instructions”
Calls or texts must not include any telemarketing, solicitation, or advertising
Calls or texts are limited to only one message (either by call or text message) per day and no more than three messages combined per week.
The healthcare provider must honor opt-out immediately.

In Hicks v. Raleigh Ophthalmology, P.C., 2025 WL 1047708 (E.D. N.C. Apr. 8, 2025), Deanna Hicks visited her optometrist about some vision issues. Her optometrist referred her to Raliegh Ophthalmoghy (“Raliegh”). Hicks had never provided Raliegh with any paperwork and had no prior patient relationship with Raliegh.
However, according to the complaint, Raliegh called Hicks using a pre-recorded call to her cell phone which stated the call was from Raliegh. Hicks used the automated menu to speak with an employee and told the employee she was not interested in booking an appointment. She received a text message from Raliegh which also requested her to book an appointment, and she responded “STOP” to the text message.
This did not end the communication carousel that Hicks found herself on with Raliegh. She received several more calls and she talked to live employees and asked to be removed from their list. Even after speaking to a manager, the calls continued. Unsurprisingly, Hicks sued, and the remaining count addressed in the opinion is that Raliegh called Hicks without her consent.
Raliegh raised three arguments in their motion to dismiss. The first is that they had the consent of Hicks because she gave her number to the optometrist and that was consent for Raliegh to call her. Hicks’s complaint states that she did not provide consent to Raliegh or provide them with paperwork. The Court stated that to infer there was consent for her optometrist to call Hicks, it is not reasonable to extend that to Raliegh as a third-party healthcare provider with no preexisting relationship with Hicks. Furthermore, consent is a fact issue and not suitable for a motion to dismiss.
Raliegh’s second argument is related to the healthcare exemption. The Court stated the healthcare exemption is limited to calls about a certain number of topics, and Raliegh “has not identified any authority to support that the TCPA authorizes an entity to make a prerecorded call to an individual to book an appointment prior to establishing a treatment relationship with that individual, and the court is unable to locate any.”
[SIDE NOTE: The Court did not address this, but I would also call out that these calls could be considered telemarketing under the TCPA because they were initiated for the purpose of encouraging the purchase of Raliegh’s services. Therefore, they would fail under the healthcare exemption due to that as well.]
The Court stated that even if the first call qualified under the exemption, the exemption requires the healthcare provider to “honor opt-out requests immediately”. Clearly, Raliegh failed to do so. Therefore, the second argument was insufficient for dismissal.
The third argument was related to the proposed class definition, but the Court said that argument is better left for opposing class certification. And therefore, Hicks survives the motion for dismissal.
This case illustrates the power of the healthcare exemption. But, much like Peter Parker, with great power comes great responsibility. To rely on the healthcare exemption, a healthcare provider, such as Raliegh, must not turn a blind eye to the requirements of the exemption. Because if the requirements are not met completely, the future reliance on the exemption for TCPA purposes could get very hazy.

New Dates Announced for Maryland’s Delayed FAMLI Program

Takeaway

Payroll deductions will begin 01.01.27, with leave benefits availability slated for 01.03.28.

Diagnosing Health Care: Executive Actions Impact Federally Funded Research: What Institutions Should Do Now [Podcast]

From removing diversity, equity, and inclusion initiatives to suspending foreign aid and canceling federal funding, it is clear that the current administration is drastically changing the landscape of government-funded research as we know it.
What should research institutions be doing now to best prepare themselves for what’s to come?
On this episode, Epstein Becker Green attorneys Marylana Saadeh Helou, Emily Chi Fogler, and Elizabeth McEvoy discuss how recent executive actions are impacting federally funded research at ambulatory medical centers, hospitals, universities, and other institutions, as well as how these actions may impact existing or future grants from the government.

Complying With the ADA When Managing Employees With Alcoholism

Employers sometimes encounter intoxicated employees at work, but there are some compliance challenges under the Americans with Disabilities Act (ADA) when managing employees with alcoholism.

Quick Hits

Alcoholism may be considered a disability under the ADA.
Employers may be required to offer reasonable accommodations to workers with alcoholism.
Employers do not have to permit workers to drink alcohol at work or be impaired during working hours.

The National Institutes of Health defines alcohol use disorder as “a medical condition characterized by an impaired ability to stop or control alcohol use despite adverse social, occupational, or health consequences.” About 29 million Americans age twelve and over had alcohol use disorder in 2023, according to the National Institute on Alcohol Abuse and Alcoholism.
Some workers with alcoholism qualify for protections under the ADA. Workers may qualify for ADA protections if they have a physical or mental impairment that substantially limits a major life activity, such as sleeping, eating, concentrating, learning, or performing manual tasks. Alcohol addiction may implicate several of these activities, such that it is categorically considered a disability in many cases. A worker with alcoholism may have other coexisting conditions that could qualify as a disability under the ADA, such as insomnia, depression, or anxiety.
If a person’s alcohol addiction qualifies as a disability, an employer must provide a reasonable accommodation, unless the accommodation would impose an undue hardship on the employer.
For an employee with alcoholism, reasonable accommodations may include Family and Medical Leave Act (FMLA) leave or sick leave, job restructuring, remote work, modified break schedule, or flexible scheduling to allow time to attend Alcoholics Anonymous meetings, therapy sessions, or even yoga classes.
Employers cannot harass or discriminate against employees because of an ADA-qualified disability. However, employers can prohibit workers from consuming alcohol during work hours or being intoxicated during work hours. They can discipline or fire an employee when alcohol use contributes to poor job performance or unprofessional conduct that is not allowed under company policies.
Employers cannot ask employees questions about an ADA-qualified disability, including alcoholism, unless it is “job-related and consistent with business necessity.” Unlike random drug tests, employers cannot subject employees to random alcohol tests, unless they have reasonable suspicion of alcohol impairment at work. There are exceptions to this rule, particularly for federally regulated safety-sensitive transportation employees, such as truck drivers and pilots.
Next Steps
When an employee is intoxicated at work, there might be signs like slurred speech, stumbling, or breath that smells like alcohol. Employers may want to carefully document the signs they have observed. They can require the employee to take an alcohol test if there is reasonable cause, including the aforementioned signs or a workplace accident.
Employers may wish to ensure that their policies and practices do not treat workers with alcoholism differently than workers without a disability.

Safety Basics XI: OSHA Citations—From Costs to Compliance [Podcast]

In this installment of Ogletree Deakins’ Safety Basics podcast series, John Surma (Houston) and Frank Davis (Dallas) delve into the intricacies of handling Occupational Safety and Health Administration (OSHA) citations. Frank and John discuss the stakes involved with OSHA citations, explore the potential hidden costs that extend beyond just the fines, and outline the key steps employers should consider when they receive a citation. The speakers also cover the informal conference process, the procedure for contesting citations, and the importance of evaluating how citations can impact business operations.

This Week in 340B: April 1 – 7, 2025

Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.
Issues at Stake: Contract Pharmacy; Antitrust; Rebate Model

In an appealed case challenging a West Virginia law governing contract pharmacy arrangements, amici filed amicus briefs in support of the plaintiff-appellee.
A group of drug manufacturers filed a suit against the Utah Attorney General and Insurance Commissioner to challenge a Utah law restricting manufacturers’ ability to restrict contract pharmacy arrangements.
In an antitrust class action case, the plaintiff filed an amended complaint.
In two cases challenging a Minnesota law governing contract pharmacy arrangements, the court granted the government’s motion to dismiss.
In a case by a drug manufacturer challenging an Arkansas state law governing contract pharmacy arrangements, the intervenor defendant filed a reply brief in response to the drug manufacturer’s motion for judgment on the pleadings.
In six cases against the Health Resources and Services Administration (HRSA) related to rebate models:

In three cases, the plaintiffs filed a joint brief in opposition to Intervenor-defendants’ cross motion for summary judgment and reply in support of summary judgment.
In three cases, the plaintiffs filed a brief in opposition to defendants’ cross-motion for summary judgment and reply in support of summary judgment.
In one case, the plaintiff filed a reply memorandum in support of its motion for summary judgment and in opposition to the government’s cross-motion for summary judgment. In the same case, amici filed a motion for leave to file an amicus brief in support of the government.
In one case, the government filed a cross motion for summary judgment and opposition to plaintiff’s motion for summary judgment. In the same case, amici filed a motion for leave to file an amicus brief in support of the government.

New York Department of Health Issues Long-Awaited FAQs for New York’s Disclosure of Material Transactions Law

The first quarter of 2025 has been eventful for New York’s Disclosure of Material Transactions Law. As discussed in our recent blog post, the proposed Fiscal Year 2026 New York State Executive Budget (FY 26 Executive Budget) contains an amendment that would alter reporting parties’ notice requirements, extend waiting periods, and increase oversight of material health care transactions by the New York State Department of Health (DOH). Now, nearly a year and a half after the Disclosure of Material Transactions Law took effect, DOH has published Public Health Law Article 54-A, Material Transactions Frequently Asked Questions (FAQs) on its website. The law currently requires “health care entities” engaged in a “material transaction” to provide written notice of the transaction to DOH at least 30 days before the transaction closing as well as notice to DOH upon the transaction closing. With the FAQs, DOH seeks to “provide responses to common questions the Department has received to date” and clarify health care entities’ obligations under the Disclosure of Material Transactions Law. The FAQs expand on the statute’s language, providing guidance on what “health care entities” are subject to the law, what constitutes a “material transaction,” how a transaction’s impact will be assessed, and the ability to comment on a proposed transaction.
Health Care Entities Subject to the Disclosure of Material Transactions Law
First, the FAQs address questions involving which entities are subject to the Disclosure of Material Transactions Law. DOH reiterates that the definition of “health care entities” under the Disclosure of Material Transactions Law, includes, but is not limited to:

A physician practice or group;
A management services organization or similar entity that is under contract with at least one physician practice (MSO);
A provider-sponsored organization;
A health insurance plan; and
Any other kind of health care facility, organization, or plan that provides health care services in New York.

DOH then expands on the definition with specific examples, confirming that dental practices, clinical laboratories, pharmacies, wholesale pharmacies (including secondary wholesalers), independent practice associations, and accountable care organizations are considered “health care entities.” under the law.
The FAQs also discuss whether entities located entirely outside of New York and/or hold a non-New York license or operating certificate come under the scope of the definition. DOH confirms that the definition “does not turn on whether or not an entity is physically located or domiciled in New York” and that both in-state and out-of-state entities are covered under the Disclosure of Material Transactions Law. The determining factor is whether the transaction would result in a “health care entity” generating the threshold amount of gross in-state (NYS) revenue regardless of whether such entity is physically located or domiciled in New York.
Clarifying the Definition of a “Material Transaction”
The FAQs confirm that a “Material Transaction” includes any of the below that occur during either (1) a single transaction or (2) a series of related transactions, in each case, within a rolling 12-month period that results in a “health care entity” increasing its gross in-state (NYS) revenue by $25 million or more:

A merger of one or more health care entities;
An acquisition of one or more health care entities, including the assignment, sale, or other conveyance of (i) assets, (ii) voting securities, (iii) membership or partnership interests, or (iv) the transfer of control, such as contracting for services commonly provided through a management or administrative services agreement between a practice and a MSO;
An affiliation agreement or contract formed between a health care entity and another person; and
The formation of a partnership, joint venture, accountable care organization, parent organization, or MSO to administer contracts with health plans, third-party administrators, pharmacy benefit managers, or health care providers.

It is important to note that “contracting for services” pursuant to a management or administrative services agreement is now explicitly clarified in the FAQs. If a management or administrative services agreement will result in a transfer of control and the “health care entity” meeting the relevant revenue thresholds, then such arrangement will be subject to the Disclosure of Material Transactions Law. This section also addresses whether a transaction that consists of multiple components some of which are subject to review under Certificate of Need (CON) laws could be exempt from the Disclosure of Material Transactions Law’s reporting requirements. The FAQs flag that parties to such a transaction must make a good faith estimation of the difference between the total in-state gross revenues of the transaction and the total in-state gross revenues of those elements subject to CON review and approval. If the difference is at least $25 million, then the non-CON portions of the transaction must be reported. Otherwise, the transaction does not constitute a Material Transaction and notice does not need to be submitted to DOH. The FAQs also note that the parties “are responsible for determining whether any discrete portion(s) of a transaction” are subject to the reporting requirements.
Assessing a Material Transaction’s Impact
The FAQs also inform on the factors that should be considered when determining the impact of a proposed Material Transaction. DOH recommends that the parties should provide a good faith assessment and report on whether:

Services will be eliminated, reduced, added, or expanded (in terms of staffing available or available hours/days of service);
Contracts with certain insurance carriers will be added or eliminated as a result of the transaction, including whether Medicaid participation will be impacted;
Locations will open or close, or expand or reduce service availability;
Healthcare staffing changes are expected (i.e., staff additions or cuts);
Contracted commercial payor rate increases are anticipated;
Changes in the share of services provided to historically underserved populations are anticipated; and
The parties expect any increase in market consolidation (as evidenced by changes in market share in any region of the state).

Public Comment on Proposed Material Transactions
When the Disclosure of Material Transactions Law was initially proposed in Governor Hochul’s Fiscal Year 2024 New York State Executive Budget it was drafted to include not only a pre-closing notice requirement but a DOH approval process as well. As we know, the law as enacted eliminated the approval process, but still provided that DOH should provide details on how the public can submit comments on the proposed transactions. The FAQ reemphasizes this, stating that comments can be emailed to [email protected]. DOH notes that it does not maintain a Material Transactions LISTSERV, and as such, those who are interested in commenting on Material Transactions must check the List of Material Transactions regularly for updates.
Conclusion
As of the date of this blog post, DOH has received notice of 9 material transactions. The publishing of the FAQs indicates DOH’s desire to ensure that all proposed transactions involving a “Material Transaction” are captured. With the additional detail provided by DOH, “health care entities” that may have previously avoided New York’s regulatory regime may determine that the reporting requirements now apply. Time will tell whether this additional information will lead to a greater number of transactions being reported to DOH.

New Mexico Becomes Third State in the U.S. to Legalize Access to Psilocybin

On April 7, 2025, New Mexico Governor Michelle Lujan Grisham signed into law SB-219, the Medical Psilocybin Act (the Act), making New Mexico the third state in the country to create a legal pathway for patients to access psilocybin, a naturally occurring psychedelic compound produced by certain types of mushrooms. Notably, New Mexico is the first state to do so through legislation. Oregon and Colorado, the first two states to legalize access to psilocybin, were approved through voter initiatives. The Act had bipartisan support; it passed in the House with a vote of 56 to 8 with 6 abstentions and passed in the Senate with a vote of 33 to 4 with 5 abstentions. The passage of the Act is a historic milestone that demonstrates state lawmakers continue to recognize the potential medical benefits psilocybin can offer their constituents in treating a variety of medical conditions.
Below are key takeaways from the Act:

The New Mexico Department of Health (the Department) will be responsible for the development and oversight of a program that provides regulated access to psilocybin for qualifying patients to alleviate certain medical conditions (the Program). Psilocybin must be administered to patients by an approved health care provider who is licensed in New Mexico and in an approved setting.
A “qualifying patient” as currently defined could include minors, so long as a licensed health care provider has judged the patient to be a medically appropriate candidate for the use of medical psylocibin based on being diagnosed with a qualifying condition.
A “qualifying condition” is limited to: (1) major treatment-resistant depression; (2) PTSD; (3) substance use disorders; and (4) end-of-life care. However, other conditions may be approved by the Department for inclusion in the Program.
The Act instructs the Secretary of the Department to create a Medical Psilocybin Advisory Board (the Board). The Board is made up of nine members who are “knowledgeable about the medical use of psilocybin.” The Board must include at least one member who is enrolled in an Indian nation, tribe, or pueblo located wholly or partially in New Mexico, at least one member who is a mental or behavioral health equity advocate, at least one member who is a representative of the health care authority, and at least one member who is a veteran of the U.S. armed forces. Among other things, the Board will be responsible for recommending approved medical conditions for inclusion in the Program, assist the Department in establishing, monitoring, and evaluating best practice standards for psilocybin, and recommend dosage standards for psilocybin.
The Act created two funds: the medical psilocybin treatment fund, which is to be used to fund treatments of qualified patients who meet defined income requirements, and the medical psilocybin research fund, which will be used to provide grants to state research universities and health care providers studying any facet of the medical use of psilocybin.
The Act expressly excludes U.S. Food and Drug Administration (FDA)-approved products that contain psilocybin from use in the Program. Notably, the Act carved out the use of FDA-approved products containing psilocybin in two circumstances: (1) in any research conducted by state research universities or health care providers using awarded grants from the medical psilocybin research fund, and (2) by qualified patients whose treatments may be funded through the medical psilocybin treatment equity fund.
Lastly, the Act included an amendment to the New Mexico Controlled Substances Act which carves out psilocybin and psilocin (the compound that psilocybin converts to in the body) from the Schedule I substances list when used under the Act .

The Program must be implemented by December 31, 2027. In developing the Program, the Department must work in collaboration with a variety of stakeholders, including the Board, health care providers, and state higher education institutions. The Department must also engage in a tribal consultation in compliance with the State-Tribal Collaboration Act.
Foley will continue to monitor developments in New Mexico, including but not limited to the Department’s development of the Program. In its current form, however, the Act offers licensed health care providers in New Mexico the opportunity to expand services offered to their patients to include medical psilocybin services under the Program. This could have a profound effect on patients who are suffering and getting little alleviation with their current treatment options. We recommend health care providers keep a watchful eye on New Mexico as the states in which they are licensed may soon enact similar medical psilocybin programs that could impact their practices.