The Department of Justice (DOJ) lost its third jury trial in its mission to secure criminal convictions against companies and executives accused of labor-side antitrust violations on March 22, 2023, when a jury in Maine acquitted four home healthcare staffing executives of violating Section 1 of the Sherman Act. In United States v. Manahe, the DOJ charged Faysal Kalayaf Manahe, Yaser Aali, Ammar Alkinani, and Quasim Saesah with entering into an approximately two-month conspiracy between April and May 2020 not to hire each other’s caretakers and to fix caretaker wages.[1] After the district court declined to dismiss the indictment, holding the DOJ had successfully alleged a per se conspiracy to fix wages and allocate employees, the case proceeded to a two-week trial. At trial, defendants—all immigrants from Iraq, many of whom served as translators for U.S. forces there—admitted that they discussed setting wage levels and refraining from hiring each other’s employees, and even drafted an agreement with signature lines that outlined the terms of defendants’ discussions.[2] Defendants argued that they never reached an agreement in violation of Section 1 because the draft agreement was never signed. Defense counsel emphasized in opening statements that in defendants’ culture, “when dealing with business matters . . . the only way to confirm a commitment is to put it into a formal written contract.” Given the verdict, it appears the jury agreed.…

Continue Reading DOJ Loses Third Consecutive Antitrust Labor Trial

Following remarks made on March 2 and March 3, 2023 at the American Bar Association’s 38th Annual National Institute on White Collar Crime, the U.S. Department of Justice (“DOJ”) issued revisions to its Evaluation of Corporate Compliance Programs (“ECCP”). The newly revised ECCP guidance contains two important changes: (1) the DOJ has directed prosecutors to “consider more closely compensation structures and consequence management when evaluating compliance programs”, and (2) the DOJ will consider corporate practices surrounding the use of personal devices, communications platforms, and messaging applications, including ephemeral messaging applications, and the company’s ability to access and produce underlying data.

Continue Reading DOJ Revises Guidance on Evaluation of Corporate Compliance Programs Concerning Compensation and Employee Use of Personal Devices and Personal Messaging Applications

In light of the increasing demand for mental health treatment and simultaneous provider shortages, the private insurance industry is rolling out targeted initiatives to increase mental health support for members by mitigating many of the barriers to entry facing the mental health industry today.…

Continue Reading Payor-Led Initiatives to Strengthen Mental Health Resources

The Inflation Reduction Act (the “IRA”) requires drug manufacturers to pay rebates to Medicare when the prices of their Part B and Part D prescription drug increase faster than the rate of inflation. We recently discussed the guidance documents issued by the Centers for Medicare and Medicaid Services (“CMS”) detailing the proposed implementation of the Medicare Part B and Medicare Part D Prescription Drug Inflation Rebate Programs.…

Continue Reading CMS Releases First Set of Part B Rebatable Drugs for Coinsurance Adjustment Under IRA

According to the White House, the end of the COVID-19 national emergency and public health emergency (PHE) declarations is now barely two months away, as they are scheduled to end on May 11, 2023. These declarations provided the federal government with flexibility to waive or modify certain regulatory requirements applicable to the healthcare industry. Once the declarations end, so will the vast majority of these flexibilities and waivers. Accordingly, a relatively short and closing window remains for the healthcare industry – including but not limited to health plans, hospitals, home health agencies, clinics, and entities that offer telehealth services – to prepare their operational, administrative, and clinical teams for the reinstatement of previously waived requirements.…

Continue Reading Tracking the Waivers: Implications of the Wind Down of the COVID-19 Public Health Emergency

California has a new regulatory review process that could have implications for healthcare mergers and acquisitions and similar transactions in the state. By way of background, after nearly two years of negotiations with state legislators, Governor Gavin Newsom signed into law healthcare omnibus bill SB 184 on June 30, 2022, which created the new Office of Health Care Affordability (OHCA). With this new law and state agency, California joins several other states, including Massachusetts, New Jersey, Oregon, Washington and Nevada in implementing oversight and funding measures geared towards healthcare cost growth targets and containment. While the goal of the law appears to be clear – monitoring and managing the costs of healthcare in California – healthcare industry stakeholders seeking to carry out applicable transactions will now need to be mindful of OHCA’s regulatory review authority.…

Continue Reading California Office of Health Care Affordability: Another Regulatory Hurdle for California Healthcare M&A Transactions?

On Thursday, February 23, the Office of the Inspector General for the Department of Health and Human Services (“OIG”) issued its first Advisory Opinion (“AO”) of the new year – OIG AO No. 23-01 – permitting a drug manufacturer to provide financial assistance for transportation, lodging, meals, and other out-of-pocket expenses to eligible patients receiving the manufacturer’s drug (the “Arrangement”). Overall, OIG concluded that: (1) the risk of fraud and abuse presented by the manufacturer’s Arrangement was sufficiently low under the Federal anti-kickback statute; and (2) the remuneration offered under the Arrangement was not likely to influence a beneficiary to order the manufacturer’s drug (the “Drug”) from a particular provider and therefore did not constitute grounds for the imposition of sanctions under the Beneficiary Inducements CMP. Ultimately, the crux of this decision came down to the unique manufacturing and distribution of the Drug, which (i) is the only available potentially curative treatment for an ultra-rare disorder; (ii) pursuant to its FDA approval, can only be manufactured at a single facility, located on the campus of a treatment center (the “Treatment Center”); (iii) can only be administered within 3 hours after being manufactured; and thus, can only be administered at the single Treatment Center site.…

Continue Reading OIG Advisory Opinion Alert: Medical Flights for Patient Access

Since its launch in November 2022, ChatGPT (“GPT” stands for Generative Pre-trained Transformer), a type of artificial intelligence model, has gained over a million users. ChatGPT is used by entities in a wide variety of industries. On March 1, 2023, OpenAI, the developer of ChatGPT, updated its data usage policies[1] noting that (i) OpenAI will not use data submitted by customers to train or improve its models unless customers expressly opt-in to share such data, and (ii) OpenAI also will enter into business associate agreements in support of applicable customers’ compliance with the Health Insurance Portability and Accountability Act (“HIPAA”).…

Continue Reading ChatGPT And Healthcare Privacy Risks

The Centers for Medicare & Medicaid Services (“CMS”), on behalf of the U.S. Department of Health and Human Services (“HHS”), recently issued a proposed rule to adopt standards under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) for “health care attachment” transactions (the “Proposed Rule”). The Proposed Rule would implement requirements of HIPAA’s administrative simplification regulations, which are intended to support healthcare claims and prior authorization transactions while also introducing a standard format for electronic signatures to be used in conjunction with health care attachments.…

Continue Reading CMS’s Administrative Simplification Rule Aims to Increase Efficiency and Standardization for Health Care Attachments

On February 24, 2023, the Drug Enforcement Agency (“DEA”) announced a new proposed rule, which provides some much-anticipated guidance related to the implications of telemedicine prescribing under Ryan Haight Act of 2008 (“RHA”) after the COVID-19 Public Health Emergency (“PHE”) terminates on May 11, 2023. The proposed rule extends certain flexibilities beyond the PHE and proposes to make permanent certain scenarios, in which a practitioner may prescribe controlled substances without a prior in-person medical evaluation.…

Continue Reading DEA Proposes Rule for Post-PHE Telemedicine