Category: Administrative & Regulatory

Calling All Whistleblowers: Department of Justice Launches Office of Environmental Justice

Last week, the United States Attorney General announced the creation of the Office of Environmental Justice (OEJ) within the Department of Justice. The OEJ will manage DOJ’s environmental justice projects and “serve as the central hub for our efforts to advance our comprehensive environmental justice enforcement strategy” and address the “harm caused by environmental crime, pollution, and climate change.”

In his speech, Attorney General Merrick B. Garland remarked that OEJ will “prioritize the cases that will have the greatest impact on the communities most overburdened by environmental harm” in partnership with the Civil Rights Division, Office for Access to Justice, Office of Tribal Justice, and United States Attorneys’ Offices.
Whistleblowers take note: violations of environmental laws (Clean Air Act, Clean Water Act) can be a basis for a False Claims Act case.

In 2019, the DOJ settled a case against a domestic producer of Omega-3 fish oil supplements, fishmeal, and fish solubles for livestock and aquaculture feed. The producer allegedly falsely certified compliance with federal environmental laws on a loan application. Under the terms of the settlement, the fish oil producer paid $1 million. A former employee blew the whistle on their employer’s fishy business and was rewarded $200,000 as part of a qui tam lawsuit.

False certification of environmental law compliance harms taxpayers, workers, residents, and the environment for generations. The Assistant Attorney General of the DOJ’s Civil Division said about the case, “Companies will face appropriate consequences if they misrepresent their eligibility to participate in federal programs and divert resources from those who should receive federal support.” It’s up to employees of manufacturers, contractors, construction companies, power plants, and others who receive government funds to report environmentally hazardous misconduct, so that, as the U.S. Attorney said, “Businessmen and companies that lie to get their hands on taxpayer money will be held accountable for their actions.”

Article By Eva Gunasekera and Renée Brooker of Tycko & Zavareei LLP

For more whistleblower legal news, click here to visit the National Law Review.

© 2022 by Tycko & Zavareei LLP

EPA Proposes TSCA Reporting and Recordkeeping Requirements for Asbestos

On May 6, 2022, the U.S. Environmental Protection Agency (EPA) proposed reporting and recordkeeping requirements for asbestos under Section 8(a) of the Toxic Substances Control Act (TSCA). 87 Fed. Reg. 27060. EPA proposes to require certain persons that manufactured (including imported) or processed asbestos and asbestos-containing articles (including as an impurity) in the four years prior to the date of publication of the final rule to report electronically certain exposure-related information. The proposed rule would result in a one-time reporting obligation. EPA “emphasizes that this proposed requirement would include asbestos that is a component of a mixture.” According to the notice, the information sought includes quantities of asbestos (including asbestos that is a component of a mixture) and asbestos-containing articles that were manufactured (including imported) or processed, types of use, and employee data. EPA and other federal agencies will use reported information in considering potential future actions, including risk evaluation and risk management activities. EPA requests public comment on all aspects of the proposed rule and also has identified items of particular interest for public input. Comments are due July 5, 2022.

Action EPA Is Taking

EPA proposes to require asbestos manufacturers (including importers) and processors to report to EPA certain information known to or reasonably ascertainable by those entities. EPA states that for this action, the term “asbestos” includes various forms of asbestos, including Libby Amphibole asbestos. The following is a brief list of the primary data requirements being proposed:

  • Asbestos Domestic Manufacturers (Asbestos Mine and Mill): The provisions in the proposed rule would require asbestos domestic manufacturers to provide the quantity manufactured per asbestos type, use, and employee exposure information to EPA. This would include situations in which asbestos is being mined or milled as an intentional or non-intentional impurity, such as in vermiculite and talc.
  • Asbestos Importers: The provisions in the proposed rule would require importers of asbestos to provide the quantity imported per asbestos type, use, and employee exposure information. This includes importers of mixtures containing asbestos, articles containing asbestos components, and impurities (in articles, bulk materials, or mixtures, such as in talc and vermiculite).
  • Asbestos Processors: The provisions of the proposed rule would require processors of asbestos (including processors of mixtures or articles) to provide the quantity processed per asbestos type, use, and employee exposure information. This includes both primary processors and secondary processors of asbestos. This would include situations in which asbestos is appearing as an intentional or non-intentional impurity, such as in vermiculite and talc.

Chemical Substances that Would Be Reportable under the Rule

EPA proposes to require the reporting of information on specific asbestos forms, or if specific information is not known or reasonably ascertainable, reporting on “asbestos” as it is more generally listed on the TSCA Inventory. EPA also proposes to require the reporting of information related to asbestos as it is manufactured (including imported) or processed in bulk, as a component of a mixture, in an article, or as an impurity in bulk materials or products.

Asbestos Forms

EPA proposes to obtain manufacturing (including importing) and processing information associated with the following different asbestos forms, and therefore is proposing to require that reporting be completed for each of the forms, to the extent that the information is known or reasonably ascertainable. If the specific asbestos type is unknown, a submitter would provide information under the general asbestos form (Chemical Abstracts Service Registry Number (CAS RN) 1332-21-4).

Asbestos — CAS RN 1332-21-4 Amosite — CAS RN 2172-73-5
Chrysotile — CAS RN 132207-32-0 Anthophyllite — CAS RN 77536-67-5
Crocidolite — CAS RN 12001-28-4 Tremolite — CAS RN 77536-68-6
Actinolite — CAS RN 77536-66-4 Libby Amphibole Asbestos — CAS RN not applicable (mainly consisting of tremolite [CAS RN 77536-68-6], winchite [CAS RN 12425-92-2], and richterite [CAS RN 17068-76-7])

Asbestos as an Impurity

EPA states that “impurity” means a chemical substance that is unintentionally present with another chemical substance, citing 40 C.F.R. Section 704.3. According to EPA, asbestos may occur naturally as an impurity in other products such as talc, vermiculite, and potentially other substances. These products are distributed and used in commerce in the United States. If all other reporting conditions are met, these products would be subject to reporting under this rule. EPA proposes to collect data on asbestos as an impurity because EPA may lack data on the extent to which asbestos as an impurity occurs in products under TSCA jurisdiction that are currently being manufactured (including imported) or processed. EPA notes that data on asbestos as an impurity could better inform the Part 2 asbestos risk evaluation where EPA will determine and then evaluate the relevant conditions of use of asbestos in talc.

Articles Containing Asbestos

The rule would require reporting on articles containing asbestos (including as an impurity). EPA notes that an “article” is defined in 40 C.F.R. Section 704.3 as “a manufactured item (1) which is formed to a specific shape or design during manufacture, (2) which has end-use function(s) dependent in whole or in part upon its shape or design during end use, and (3) which has either no change of chemical composition during its end use or only those changes of composition which have no commercial purpose separate from that of the article, and that result from a chemical reaction that occurs upon end use of other chemical substances, mixtures, or articles; except that fluids and particles are not considered articles regardless of shape or design.” EPA proposes to collect more data on imported articles containing asbestos. According to EPA, these data could inform Part 2 of the TSCA Risk Evaluation for Asbestos where EPA will determine and then evaluate the relevant conditions of use of such articles containing asbestos. Articles included in Part 1 of the TSCA Risk Evaluation for Asbestos included brake blocks for use in the oil industry, rubber sheets for gaskets used to create a chemical-containment seal in the production of titanium dioxide, certain other types of preformed gaskets, and some vehicle friction products (Ref. 18); EPA states that it “is interested in identifying if there are other articles or if there is information about specific forms of asbestos in these articles.”

Asbestos that Is a Component of a Mixture

EPA states that under TSCA Section 3(10), the term “mixture” means “any combination of two or more chemical substances if the combination does not occur in nature and is not, in whole or in part, the result of a chemical reaction; except that such term does include any combination which occurs, in whole or in part, as a result of a chemical reaction if none of the chemical substances comprising the combination is a new chemical substance and if the combination could have been manufactured (including imported) for commercial purposes without a chemical reaction at the time the chemical substances comprising the combination were combined.” EPA proposes to collect data on asbestos in circumstances where it is a component of a mixture to inform Part 2 of the TSCA Risk Evaluation for Asbestos. In the Part 2 Evaluation, EPA will determine the relevant conditions of use of asbestos in talc; EPA will use the results to evaluate asbestos exposures and associated risks.

Reporting Requirements for Small Businesses

EPA notes that although TSCA Section 8(a)(1) provides an exemption for small manufacturers (including importers) and processors, TSCA Section 8(a)(3) enables EPA to require small manufacturers (including importers) and processors to report pursuant to TSCA Section 8(a) with respect to a chemical substance that is the subject of a rule proposed or promulgated under TSCA Section 4, 5(b)(4), or 6, an order in effect under TSCA Section 4 or 5(e), a consent agreement under TSCA Section 4, or relief that has been granted under a civil action under TSCA Section 5 or 7. According to EPA, six of the asbestos types subject to the proposed rule (chrysotile, crocidolite, amosite, anthophyllite, tremolite, and actinolite) are subject to a TSCA Section 6 rule under the Asbestos Ban and Phaseout rule of 1989, and therefore EPA is proposing that these forms of asbestos are not eligible for a small manufacturer (including importer) or processor exemption. EPA states that Libby Amphibole asbestos is not subject to an applicable proposed or promulgated rule, order, or consent agreement, and is not the subject of relief that has been granted under a civil action under TSCA Section 5 or 7. Therefore, EPA proposes that Libby Amphibole asbestos continue to be eligible for such an exemption.

EPA’s experience with the TSCA Risk Evaluation for Asbestos Part 1: Chrysotile Asbestos indicates that small businesses are associated with certain identified conditions of use associated with asbestos. Because EPA has much less information on the activities of small businesses, it is concerned that certain conditions of use for which it lacks detailed information may be conducted largely or entirely by small businesses. EPA states that it believes that exempting all small businesses from reporting may exclude most or all of the reporting for some conditions of use, severely hindering EPA’s risk evaluation or risk management activities. As a result, EPA is proposing that small businesses — small manufacturers (including importers) and processors of asbestos and asbestos mixtures (other than Libby Amphibole asbestos) — will need to maintain records and report under this action.

At the time of the proposed rule, Libby Amphibole asbestos is not the subject of any of the activities described in TSCA Section 8(a)(3) and therefore manufacturers (including importers) and processors of that substance may be eligible for a small business exemption.

The Proposed Reporting Standard

EPA proposes to use the reporting standard used for certain other TSCA Section 8(a) reporting requirements, including Chemical Data Reporting (CDR). EPA states that this standard requires that manufacturers (including importers) and processors report information to the extent that the information is known to or reasonably ascertainable by the manufacturer (including importer) or processor. “Known to or reasonably ascertainable by” includes “all information in a person’s possession or control, plus all information that a reasonable person similarly situated might be expected to possess, control, or know.” According to EPA, this reporting standard requires reporting entities to evaluate their current level of knowledge of their manufactured products (including imports) or processed products, as well as evaluate whether there is additional information that a reasonable person, similarly situated, would be expected to know, possess, or control. This standard carries with it an exercise of due diligence, and EPA notes that the information-gathering activities that may be necessary for manufacturers (including importers) and processors to achieve this reporting standard may vary from case-to-case.

Under this standard, submitters conduct a reasonable inquiry within the full scope of their organization (not just the information known to managerial or supervisory employees). This may also entail inquiries outside the organization to fill gaps in the submitter’s knowledge. According to EPA, examples of the types of information that are considered to be in a manufacturer’s (including importer’s) or processor’s possession or control, or that a reasonable person similarly situated might be expected to possess, control, or know include: files maintained by the manufacturer (including importer) or processor such as marketing studies, sales reports, or customer surveys; information contained in standard references showing use information or concentrations of chemical substances in mixtures, such as a safety data sheet (SDS) or a supplier notification; and information from CAS or from Dun & Bradstreet (D-U-N-S). It may also include knowledge gained through discussions, conferences, and technical publications.

EPA states that it “acknowledges that it is possible that a manufacturer (including importer) or processor, particularly an importer of articles containing asbestos (including as an impurity), may not have knowledge that they have imported asbestos and thus not report under this rule, even after they have conducted their due diligence under this reporting standard as described previously.” According to EPA, such an importer should document its activities to support any claims it might need to make related to due diligence. In the event that a manufacturer (including importer) or processor does not have actual data (e.g., measurements or monitoring data) to report to EPA, the manufacturer (including importer) or processor would be required to make “reasonable estimates” of such information. “Reasonable estimates” may rely, for example, on approaches such as mass balance calculations, emissions factors, or best engineering judgment.

Timing of Reporting

The proposed rule would result in a one-time reporting obligation. EPA proposes reporting for persons who have manufactured (including imported) or processed asbestos at any time during the four complete calendar years prior to the effective date of the final rule. EPA anticipates that the four calendar years would be 2019 to 2022. EPA states that these entities would report during a three-month submission period that EPA proposes would begin six months following the effective date of the final rule. Therefore, according to EPA, manufacturers (including importers) and processors would have up to nine months following the effective date of the final rule to collect and submit all required information to EPA.

EPA states that it believes that providing six months between the effective date of the rule and the start of the submission period allows sufficient time for both EPA to prepare the final reporting tool and for submitters to familiarize themselves with the rule and compile the required information. Since this TSCA Section 8(a) reporting rule would result in the collection of similar information to that collected under CDR, EPA anticipates some submitters would be familiar with the types of information requested and how to report. EPA “believes that three months would be adequate time for submissions, in addition to the six-month period between the effective date and the start of the submission period.” EPA requests public comment on the submission period start date and duration, as well as alternative compliance timelines for small businesses.

Reporting of Information

EPA proposes different reporting requirements based on a two-part knowledge-based reporting approach to obtain as complete a picture as possible of the manufacturing (including importing), processing, and use of asbestos. EPA notes that because asbestos can be included in small quantities in some products, it expects that using a threshold concentration for reporting would eliminate much of the information that may be useful to support EPA’s TSCA risk evaluation and risk management efforts. Therefore, EPA proposes that reporting would be required whenever the presence of asbestos is known or reasonably ascertainable. EPA states that it is also aware that there may be circumstances under which a manufacturer (including importer) or processor is unable to provide a reliable quantity of the asbestos in their products because the percentage of asbestos in their products is not known or reasonably ascertainable by them. For those situations, EPA proposes a short form (Form A) for attestation purposes. For other situations, submitters that can determine or estimate the quantity would provide more detailed information in the full form (Form B). EPA anticipates that most submitters would know or be able to estimate the quantity of the asbestos and would complete the full form.

Request for Comments

EPA requests comment on the content of the proposed rule and the Economic Analysis prepared in support of it. In addition, EPA provides a list of issues on which it is specifically requesting public comment. EPA encourages all interested persons to submit comments on these issues, and to identify any other relevant issues as well. EPA requests that commenters making specific recommendations include supporting documentation where appropriate. The list of issues EPA has identified include:

  • EPA solicits comment on the total number of manufactures (including importers) and processors that will be impacted by the promulgation of the rule, and on the related burden and costs for reporting. In addition, due to the lack of information on the extent to which asbestos occurs as an impurity, EPA states that it was unable to determine the number of potential manufacturers (including importers) or processors of asbestos as an impurity that would report under this rule. EPA requests comment on the number of manufacturers (including importers) and processors that may be subject to the proposed rule due to the presence of impurities in their products, and on the related burden and cost for reporting.
  • Because there is no existing small processers definition that would be applicable under TSCA Section 8(a), EPA requests comment on how best to provide guidance for small processors of Libby Amphibole asbestos.
  • EPA seeks comment on what additional guidance, if any, might be useful for helping entities, including small businesses, understand the reporting standard, as well as how the reporting standard would apply to impurities. EPA requests public comment on the submission start date and duration, including for small businesses.
  • EPA requests comment on whether there should be a threshold for reporting using Form B and, if so, whether the threshold should be concentration-based (e.g., a certain percentage) or annual volume-based. In addition, EPA requests comment on whether any submitter under the threshold should alternatively report using Form A. According to EPA, having a threshold for Form B may decrease burden on certain submitters while still allowing EPA to obtain information on all bulk materials, mixtures, and articles with known asbestos content. The substances subject to the rule can occur naturally as impurities in other products that may be handled in very large volumes, such as talc, vermiculite, and potentially other substances. EPA notes that a de minimis concentration could reduce the compliance determination and reporting burdens. Comments suggesting threshold levels should include the justification for that particular level.
  • EPA requests comment on whether there should be other end product types listed in Table 4 in proposed 40 C.F.R. Section 704.180(e)(4)(iv)(B). In addition, EPA is interested in whether the units of measure listed with the product types are appropriate.
  • EPA identifies additional data elements related to employee data, wastewater discharge and waste disposal, air emissions data, and customer sites data considered for this proposed rule and solicits public comment on whether any of the additional data elements should be included in the action. While EPA believes the proposed data elements provide sufficient information for use by EPA and other federal agencies in potential actions involving asbestos, EPA seeks comment on whether any additional data elements should be included in this action.
  • EPA seeks comment on what additional guidance, if any, might be useful.

Commentary

As EPA did in its proposed per- and polyfluoroalkyl substances (PFAS) Section 8(a) reporting rule, EPA is narrowing the exemptions available. In this case, EPA is voiding the article exemption (40 C.F.R. § 711.10(b)), the impurity exemption (40 C.F.R. § 711.10(c) by reference to 40 C.F.R. § 720.30(h)(1)), and the naturally occurring substance exemption (40 C.F.R. § 711.6(a)(3)) to CDR reporting. As proposed, the research and development (R&D) exemption would be available. As EPA argues, the existing Section 6 rule on asbestos already voids the small business exemption (40 C.F.R. § 711.9).

While seeking information on asbestos that may be present in articles or may be present as an impurity, EPA must recognize that seeking the information retrospectively will likely yield little different information than if EPA were to seek the information prospectively.

EPA oddly asserts that this rule will garner information that has not been reported previously under CDR, especially from entities that have not had to report, and that reporters will be familiar with the CDR reporting tool. Bergeson & Campbell, P.C. (B&C®) expects that there will be many potential reporters, at least hundreds, if not thousands, that have never had to report because the products they manufacture, import, or process have been exempt, because of either the article or the impurity exemption. These new reporters will not be familiar with the CDR reporting tool or the CDR policies and guidance. Stakeholders, including individual companies, trade associations, and other non-governmental organizations (NGO), and EPA will address these issues to ensure non-traditional reporters are engaged. Guidance from EPA will be critically important: What is EPA’s expectation of the level of due diligence to document that an importer (of an article or a substance) has met its obligation to determine if asbestos is present in a product or article and document that reporting is not required or if reporting is required that a particular data element is not known or reasonably ascertainable?

Stakeholders are strongly urged to comment on whether a de minimis threshold (either as a quantity or a percentage, or both) is appropriate, either for neat asbestos, asbestos as part of a mixture, or asbestos as part of an article. For example, if a company imports 100 grams of asbestos, should that be a reportable event? Or if an importer knows that asbestos is not present above 100 parts per million in, for example, talc, but does not know if asbestos is or is not present below that threshold, should that import be reported? Similarly, what extent of knowledge is expected for imported articles? Suppliers may not be willing to certify that no asbestos is present at any level, especially in complex goods. Should an importer that receives that response report the presence/absence of asbestos as not known or reasonably ascertainable or not report at all?

We do not question that EPA has a legitimate need for information related to manufacturing, import, or processing of asbestos and asbestos-containing products and articles. We hope that stakeholders comment on the balance between the burden that EPA imposes under the proposal on potential reporters and the likelihood of such burden garnering meaningful information that will actually contribute to EPA’s risk evaluation and risk management. We hear stakeholders state that “EPA needs to know what is in products.” While true, it is reasonable to take the position that potential reporters “should have known” what was in products when there was no requirement to develop and document such knowledge until EPA proposed this rule. Now EPA asks for such potential reporters to go back in time and see what information might have been available, and offers the option to report that the information was not known or reasonably ascertainable without acknowledging that the significant burden is not filling out the form, it is researching the information that might have to be included in the form. Imagine if EPA imposed this burden on individuals — that each individual would have to search records of each product purchased online in a four-year period to see if there was any information provided by the supplier whether asbestos was present or not and, if present, at what level. The search would likely turn up little that is meaningful, so there would be little to report, but it is the search that would be the greatest burden.

©2022 Bergeson & Campbell, P.C.
Article by the Government Regulation practice group with Bergeson & Campbell P.C.
For more articles about the EPA, visit the NLR Environmental & Energy.

ARPA-E: Biden’s Proposed FY 2023 Budget Boosts Investment in Clean Energy Technologies

On March 28, 2022, the Biden-Harris Administration sent the President’s Budget for Fiscal Year (FY) 2023 to the United States Congress (“Congress”). The President’s proposed $5.8 trillion budget for FY 2023 allocates billions of dollars toward combating climate change and boosting clean energy development. Biden’s budget requests $48.2 billion for the Department of Energy (“DOE”), with $700 million of those funds allocated to the DOE’s Advanced Research Projects Agency-Energy program (“ARPA-E”).[1] With these increased funds, the Biden administration plans for ARPA-E to expand its scope beyond energy technology–focused projects to include climate adaptation and resilience innovations.[2]

What Is ARPA-E?

ARPA-E is a United States federal government agency under the purview of the Department of Energy that funds and promotes the research and development of advanced energy technologies. ARPA-E was recommended to Congress in the 2005 National Academies report Rising Above the Gathering Storm: Energizing and Employing America for a Bright Economic Future, which published recommendations for federal government actions to maintain and expand U.S. competitiveness.[3] In 2007, ARPA-E was officially created after Congress implemented a number of the report’s recommendations by enacting the America COMPETES Act.[4] The 2007 Act was superseded by the America COMPETES Reauthorization Act of 2010, which incorporated much of the original language of the 2007 Act but made some modifications to ARPA-E structure.[5] In 2009, ARPA-E officially commenced operations after receiving its first appropriated funds through the American Recovery and Reinvestment Act of 2009 —$400 million to fund the establishment of ARPA-E.[6]

ARPA-E’s mission is statutorily defined as overcoming “the long-term and high-risk technology barriers in the development of energy technologies.”[7] This involves the development of energy technologies that will achieve various goals, including the reduction of fossil fuel imports, the reduction of energy-related emissions, improvements in energy efficiency, and increased resilience and security of energy infrastructure.[8] The statute directs ARPA-E to pursue these objectives through particular means:

  1. Identifying and promoting revolutionary advances in fundamental and applied sciences;
  2. Translating scientific discoveries and cutting-edge inventions into technological innovations; and
  3. Accelerating transformational technological advances in areas industry is unlikely to undertake because of technical and financial uncertainty.[9]

The Impact of ARPA-E

Since 2009, ARPA-E has provided approximately $3 billion in R&D funding for over 1,294 potentially transformational energy technology projects.[10] Publishing annual reports to analyze and catalog its influence, the agency tracks commercial impact with key early indicators, including private-sector follow-on funding, new company formation, partnership with other government agencies, publications, inventions, and patents.[11]

Many ARPA-E project teams have continued to advance their technologies: 129 new companies have been formed, 285 licenses have been issued, 268 teams have partnered with another government agency, and 185 teams have together raised over $9.87 billion in private-sector follow-on funding.[12] In addition, ARPA-E projects fostered technological innovation and advanced scientific knowledge, as evidenced by the 5,497 peer-reviewed journal articles and 829 patents issued by the U.S. Patent and Trademark Office that sprung from the ARPA-E program.[13] ARPA-E recently announced that it is starting to count exits through public listings, mergers, and acquisitions. As of January 2022, ARPA-E has 20 exits with a total reported value of $21.6 billion.[14]

How Does Biden’s FY 2023 Budget Affect ARPA-E?

Biden has requested a 56% increase for ARPA-E, to $700 million.[15] The budget also proposes expansions of ARPA-E’s purview to more fully address innovation gaps around adaptation, mitigation, and resilience to the impacts of climate change.[16] This investment in research and development of high-potential and high-impact technologies aims to help remove technological barriers to advance energy and environmental missions.[17]

The request provides that ARPA-E shall also expand its scope “to invest in climate-related innovations necessary to achieve net zero climate-inducing emissions by 2050.”[18] Given the increasing bipartisan support for alternative energy funding and ARPA-E’s continuing and rising commercial impact, it is likely that ARPA-E’s funding and support of the research and development of early-stage energy technologies will continue to pave the way for the commercialization of advanced energy technologies.

Endnotes

  1. https://www.law360.com/articles/1478133/biden-budget-provides-billions-for-clean-energy
  2. https://www.energy.gov/articles/statement-energy-secretary-granholm-president-bidens-doe-fiscal-year-2023-budget
  3. https://doi.org/10.17226/24778
  4. Id. at 22
  5. Id.
  6. Id.
  7. 42 U.S.C. § 16538(b)
  8. 42 U.S.C. § 16538(c)(1)(A)
  9. 42 U.S.C. § 16538(c)(2)
  10. https://arpa-e.energy.gov/about/our-impact
  11. Id.
  12. Id.
  13. Id.
  14. Id.
  15. https://www.science.org/content/article/biden-s-2023-budget-request-science-aims-high-again
  16. https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf
  17. Id.
  18. https://www.science.org/content/article/biden-s-2023-budget-request-science-aims-high-again

Article By Kaoru C. Suzuki of Mintz

For more environmental legal news, click here to visit the National Law Review.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Banking Regulators Publish Proposed Rule to Update Community Reinvestment Act Regulations

On May 5, 2022, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively the agencies) issued a joint notice of proposed rulemaking (the Proposed CRA Rule) that proposes changes to the way the agencies evaluate a bank’s performance under the Community Reinvestment Act (CRA). The team at Bradley is conducting an in-depth review of the Proposed CRA Rule and expects to release a detailed blog post on the significant number of proposed changes to the CRA regulations in the coming days. Below are highlights of a few of the changes the agencies seek to make through the Proposed CRA Rule.

If implemented as written, the Proposed CRA Rule would:

  • Update the CRA evaluation framework, with performance standards tailored to a bank’s size and business model
  • Create four new performance tests to evaluate large bank CRA performance: the Retail Lending Test, Retail Services and Products Test, Community Development Financing Test, and Community Development Services Test
  • Establish specific performance tests for small and intermediate-sized banks
  • Update the requirements for the delineation of assessment areas
  • Create updated record-keeping, data collection, reporting, and disclosure requirements for large banks

These highlights are only a partial selection of the changes proposed by the agencies. Stay tuned for a more expansive description of the details of the Proposed CRA Rule.

The agencies are accepting comments on the Proposed CRA Rule through August 5, 2022. If your organization is considering submitting a public comment on the proposed changes to the CRA regulations, we suggest that you begin reviewing the Proposed CRA Rule soon.

© 2022 Bradley Arant Boult Cummings LLP
For more articles about banking regulations, visit the NLR Financial, Securities & Banking section.

Illinois Department of Labor Publishes Guidance for Employers Seeking Equal Pay Registration Certificate

Effective March 24, 2022, the Illinois Equal Pay Act (IEPA) was amended to require private businesses with more than 100 employees in Illinois to obtain an Equal Pay Registration Certificate (EPRC) by March 23, 2024, and every two years thereafter.

To apply for the EPRC, businesses must submit the following to the Illinois Department of Labor (IDOL): (1) a filing fee; (2) an equal pay compliance statement; (3) a copy of the employer’s most recently filed EEO-1 report; and (4) a list of employees separated by gender and the race and ethnicity categories as reported in the employer’s most recently filed EEO-1 report, and the total wages paid to each employee during the past calendar year.

The IDOL recently updated its Frequently Asked Questions (FAQs) for the EPRC, addressing, among other things, the application and submission processes, fee requirements, recertification, publicly available data, and penalties for employer noncompliance.  Here are key takeaways:

  • All employees based in Illinois, including those working remotely, should be included in the total employee count for reporting purposes. An employer’s total employee count includes the total number of people employed who worked in or were based out of Illinois on December 31 of the 12-month calendar year immediately prior the year the employer is required to submit an EPRC application.
  • For reporting purposes, “wages” means any compensation paid to an employee by an employer pursuant to an employment contract or agreement between the two parties, including wages, salaries, earned commissions, earned bonuses, stocks and ownership shares. This does not include retirement health insurance benefits, or other fringe benefits.
  • If an employer’s submitted wage data in its EPRC application shows that the employer is paying unequal wages to male and female employees or to African-American and non-African American employees, the IDOL may initiate its own investigation pursuant to Sections 10(a) and 15(c) of the IEPA and Section 320.200 of the IEPA regulations.
  • Before any fines may be imposed for a violation of the IEPA, the IDOL will provide notice to an employer that violates the IEPA and inadvertently fails to file an initial EPRC application or recertification that they have 30 calendar days to submit the application or recertification. If the employer fails to do so, it shall be fined up to $10,000.
  • An employer that falsifies or misrepresents data on an EPRC application faces suspension or revocation of the EPRC and civil penalties up to $10,000.
  • Current employees subject to the IEPA may request anonymized data from the IDOL regarding their job classification or title and the pay for that classification.

Illinois employers should audit their pay practices to ensure that any differences in wages amongst employees of similar job classifications are justified by legitimate, non-discriminatory reasons.

© 2022 Proskauer Rose LLP.
For more articles covering labor law updates, visit the NLR Labor & Employment section.

CEQ Reverses First Set of Trump-Era NEPA Regulatory Reforms

On April 20, 2022, the White House Council on Environmental Quality (CEQ) published a final rule rolling back minor regulatory changes to the National Environmental Policy Act (NEPA) review process that it had promulgated in 2020. The new rule reverts to the language of CEQ’s original 1978 NEPA regulations but otherwise does not substantially alter the regulatory landscape. This is the first of an anticipated two-step process as identified in CEQ’s October proposed rule. The next regulatory proposal is expected to “more broadly revisit” the 2020 regulations and propose further changes to promote environmental justice, climate change, and other Biden administration “objectives.”

The Phase 1 final rule attracted significant public comment and media coverage, but in practice, it should not meaningfully affect NEPA reviews. The regulatory changes themselves are very confined. The final rule features three main components:

Purpose & Need/Alternatives

NEPA reviews of proposed federal agency actions begin by defining a statement of purpose and need and identifying a reasonable range of alternatives. In doing so, agencies routinely give substantial weight to the project proponent’s objectives, rather than reinventing what is proposed. The 2020 rule had codified that longstanding policy by adding language expressly directing federal agencies to consider their statutory authority and the goals of the project proponent when formulating statements of purpose and need and identifying a reasonable range of alternatives that could meet the purpose and need. The new final rule deletes reference to the applicant’s goals to avoid perceived “bias” and restore “flexibility.” Yet, the final rule does not prohibit agencies from considering the applicant’s goals, and instead recognizes they remain “important.” The final rule also retains the fundamental NEPA concept that a “reasonable” alternative must “meet the purpose and need for the proposed action.”

Individual Agency NEPA Regulations

While CEQ’s regulations apply across the federal government, individual federal departments and agencies also have their own rules and procedures for implementing NEPA specific to the particular types of actions they typically undertake. CEQ oversees these agency efforts. To promote consistency in agency NEPA reviews, including those involving multiple agencies, the 2020 rule sought to restrict agencies from adopting requirements stricter than CEQ’s rules. The new Phase I rule removes this ceiling. To be clear, this change does not allow agency-specific NEPA rules and procedures to conflict with CEQ’s regulations, but it does increase the potential for inconsistencies in the application of NEPA procedures across federal agencies. That said, many federal agencies developed their own NEPA regulations and procedures years ago, did not amend those regulations and procedures in response to the 2020 rule, and are not expected to substantially alter their procedures at least while CEQ is still developing its future Phase 2 rule.

Effects

The 2020 rule simplified the regulatory definition of “effects” or “impacts” of the proposed action and alternatives to eliminate separate terms for “direct,” “indirect,” and “cumulative” effects, and to clarify which effects are “reasonably foreseeable.” It specifically provided that a “but for” causal relationship is insufficient to attribute an effect to a proposed project, while excluding potential effects from analysis “if they are remote in time, geographically remote, or the product of a lengthy causal chain” or if they are beyond the agency’s control. But the 2020 rule did not preclude consideration of cumulative impacts or climate change and allowed for their incorporation as part of the baseline for the “no action” alternative. The new Phase 1 rule simply reverses those minor changes including restoring the separate “effects” definitions. This reversion may foster more expansive indirect and cumulative impacts analysis in NEPA documents akin to the analyses developed before the 2020 rule. However, particularly because the 2020 rule did not overrule case law overwhelmingly requiring consideration of cumulative impacts and climate change, the practical implication of these changes should be minimal.

© 2022 Beveridge & Diamond PC
For more regulatory updates, visit the NLR Administrative & Regulatory section.

EPA Will Hold Webinar in May 2022 on Reducing Vertebrate Animal Testing

The U.S. Environmental Protection Agency (EPA) announced on April 18, 2022, that it will hold a webinar on May 11, 2022, entitled “Data-Driven Solutions to Reducing Animal Use in Ecotoxicity.” Speakers will include:

  • Carlie LaLone, Ph.D., EPA Office of Research and Development (ORD), on “The Sequence Alignment to Predict Across Species Susceptibility (SeqAPASS) Tool: Extrapolating Knowledge Computationally.” EPA states that regulatory decision-making for chemical safety relies upon toxicity data generated from laboratory test species for the protection of wildlife in the environment. Typically, ecological risk assessments integrate safety factors to account for interspecies variability. According to EPA, the SeqAPASS tool is a more informed way to extrapolate knowledge from model species to other species that does not require the use of animals in toxicity testing and instead uses existing protein sequence knowledge. LaLone will describe EPA’s SeqAPASS tool and its applications for cross-species extrapolation relative to understanding conservation of biology and predicting chemical susceptibility.
  • Michael Lowit, Ph.D., EPA Office of Pesticide Programs (OPP), on “Exploring Potential Reductions in Fish Testing in a Regulatory Context.” According to EPA, as part of its commitment to reducing animal testing, OPP is conducting retrospective analyses of existing data to evaluate critically which EPA guideline studies form the basis of regulatory decisions. EPA states that the results from these analyses can inform if reductions can be made to the number of animals used without reducing the quality of ecological risk assessments. EPA is currently conducting a retrospective analysis for fish acute toxicity tests, which are used by OPP to assess potential risk to fish species from pesticides. For each pesticide, EPA typically requires in vivo testing of three different fish species. Lowit will focus on the relative sensitivity among species subjected to in vivo fish acute toxicity studies. The results of this analysis will inform whether there is a basis for reducing the number of species while providing sufficient information to support pesticide registration decisions.

The webinar is co-organized by the People for the Ethical Treatment of Animals (PETA) Science Consortium International, EPA, and the Physicians Committee for Responsible Medicine (PCRM). EPA notes that it does not necessarily endorse the views of the speakers. Registration is now open.

©2022 Bergeson & Campbell, P.C.
For more updates on the EPA, visit the NLR Environmental & Energy section.

SEC Issues Three Whistleblower Awards Totaling Over $1 Million

On April 18, the U.S. Securities and Exchange Commission (SEC) issued three separate whistleblower awards totaling over $1 million. Each of the awarded whistleblowers voluntarily provided the SEC with original information that contributed to the success of an enforcement action.

Through the SEC Whistleblower Program, qualified whistleblowers are entitled to awards of 10-30% of the funds collected by the SEC in the relevant enforcement action. The SEC has awarded over $1.2 billion to over 250 individual whistleblowers since issuing its first award in 2012.

One of the awards issued by the SEC on April 18 was a $700,000 award granted to joint whistleblowers. The whistleblowers provided the SEC with original information and the SEC subsequently passed this information along to another agency. The whistleblowers’ information led to the successful enforcement of actions by both the SEC and the other agency. Under the Dodd-Frank Act’s related action provisions, the whistleblowers were entitled to awards based on the sanctions collected in both actions.

According to the award order, in determining the exact percentage to award the whistleblowers, the SEC considered the following: “(i) Claimants’ information prompted Commission staff to begin an examination that led to the Covered Action, (ii) Claimants’ assistance helped focus the examination; (iii) some of the charges in the Commission’s Order were based, in part, on the information submitted by Claimants; and (iv) there was substantial law enforcement interest in the information provided, as it related to an ongoing fraud involving the misappropriation of investor funds.”

The second award from April 18 was for $450,000. The whistleblower in this case first reported the misconduct internally before providing information to the SEC. According to the award order, the whistleblower’s information “significantly contributed to an existing investigation” and “helped streamline the staff’s investigation and saved the staff time and resources.” The whistleblower also provided the SEC with additional assistance including identifying witnesses and specific events of interest.

The final award, a $45,000 award based on sanctions collected to date, was issued to a whistleblower whose information prompted the SEC to open an investigation. According to the award order, the whistleblower “participated in a voluntary interview with Commission staff” and “suffered hardships as a result of the underlying misconduct.”

On April 18, the SEC also issued a whistleblower award denial. The denial covers award claims submitted by two individuals for the same enforcement action which stemmed from an investigation based on a self-report by a company. The SEC found that the individuals did not contribute to the success of the enforcement action.

According to the denial, “[t]he staff responsible for the Covered Action credibly declared, under penalty of perjury, that it neither received nor used any of the information provided by either Claimant during the Investigation or in the Covered Action, nor did it have any communications with the Claimants. Moreover, the information the Claimants provided did not relate to the matters considered in the Investigation.”

Individuals considering blowing the whistle to the SEC should first consult an experienced SEC whistleblower attorney in order to ensure they are fully protected and qualify for the largest possible award.

Geoff Schweller also contributed to this article.

Copyright Kohn, Kohn & Colapinto, LLP 2022. All Rights Reserved.
For more articles about whistleblower awards, visit the NLR Financial, Securities & Banking section.

COVID-19 Healthcare Enforcement Actions to Increase in 2022 and Beyond

“The Department remains committed to using every available federal tool—including criminal, civil, and administrative actions—to combat and prevent COVID-19 related fraud. We will continue to hold accountable those who seek to exploit the pandemic for personal gain, to protect vulnerable populations, and to safeguard the integrity of taxpayer-funded programs”

US Attorney General Merrick Garland – March 10, 2022, Remarks

The Biden Administration, US Department of Justice (DOJ), US Department of Health and Human Services Office of Inspector General (HHS-OIG), and other federal agencies have prioritized prosecuting COVID-19-related fraud since the pandemic began. Although the United States appears to be finally emerging from the pandemic, the government’s pandemic-related enforcement actions are here to stay for the foreseeable future. DOJ has made clear that the government’s COVID-19 enforcement efforts will accelerate, with a more significant focus on complex healthcare fraud cases and civil actions under the False Claims Act (FCA). As the federal government continues to devote additional resources towards its pandemic-related enforcement efforts, healthcare companies, hospital systems and providers should prepare for increased scrutiny.

Additional Resources Devoted to COVID-19 Fraud Enforcement Efforts

DOJ and other federal agencies have already devoted an unprecedented amount of resources to investigating and prosecuting pandemic-related fraud cases. These extensive efforts have led to immediate results. To date, DOJ has brought pandemic-related criminal charges against more than 1,000 individuals with the total alleged fraud losses exceeding $1 billion, and has seized more than $1.2 billion in fraudulently obtained relief funds.

DOJ’s pandemic-enforcement efforts show no sign of slowing down anytime soon. Less than a year after US Attorney General (AG) Merrick Garland established the COVID-19 Fraud Enforcement Task Force, the Biden administration announced that DOJ would appoint a chief prosecutor to expand on the Task Force’s “already robust efforts,” to focus on “most egregious forms of pandemic fraud” and to target particularly complex fraud schemes.

On March 10, 2022, DOJ announced that Kevin Chambers has been appointed as DOJ’s director for COVID-19 fraud enforcement. During his introductory remarks, Chambers said that DOJ would be “redoubling [its] efforts to identify pandemic fraud, to charge and prosecute those individuals responsible for it and whenever possible, to recover funds stolen from the American people.” He also indicated that DOJ would use “new tools” it has developed since the start of the pandemic to investigate such fraud.

In a March 2, 2022, speech before the American Bar Association’s Annual National Institute on White Collar Crime, AG Garland also announced that the Biden Administration will seek an additional $36.5 million in the 2022 budget for DOJ to “bolster efforts to combat pandemic-related fraud.” As evidence of this point, DOJ plans to hire 120 new prosecutors and 900 new Federal Bureau of Investigation agents who will focus on white-collar crime.

DOJ and HHS-OIG to Increasingly Focus on FCA Cases

For the past two years, officials from DOJ and HHS-OIG have identified civil and criminal healthcare fraud relating to COVID-19 as a high priority. As the effects of the pandemic subside, COVID-19-related civil enforcement actions targeting healthcare providers and healthcare companies seem set to increase.

During remarks at the Federal Bar Association’s annual Qui Tam Conference in February 2022, Gregory Demske, chief counsel to the inspector general for HHS-OIG, emphasized that COVID-19 remains a key enforcement priority. Demske indicated that HHS-OIG is focused on the use of COVID-19 to bill for medically unnecessary services, and fraud in connection with HHS’s Provider Relief Fund (PRF) and Uninsured Relief Fund. Demske also confirmed that HHS-OIG remains intensely focused on fraud in connection with telehealth services, the use of which increased exponentially during the pandemic. And, in March 2022, AG Garland reiterated that DOJ will use “every available federal tool—including criminal, civil, and administrative actions—to combat and prevent COVID-19 related fraud.”

The majority of pandemic-related healthcare enforcement actions to date have been criminal prosecutions involving truly blatant instances of fraud and abuse. Going forward, civil and administrative actions likely will be used to pursue cases that turn on lower mens rea requirements or involve more complex regulatory issues. These civil actions will include qui tam actions filed by whistleblowers, as well as FCA cases initiated directly by the DOJ.

In 2021, DOJ recovered more than $5 billion in connection with FCA cases involving the healthcare industry. Given the unprecedented amount of government funds expended to combat the COVID-19 pandemic, DOJ and HHS-OIG will undoubtedly rely on the FCA to maximize the government’s financial recovery. DOJ has already reached FCA settlements in several Paycheck Protection Program cases. It is only a matter of time before we see similar FCA investigations, complaints and settlements focused on relief funding to healthcare providers.

Pandemic-Related Healthcare Priorities

HHS’s PRF

The PRF was created as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide direct payments to “eligible health care providers for health care-related expenses [and] lost revenues that are attributable to coronavirus.” More than $140 billion has been disbursed to hospitals and healthcare providers under the PRF, which is administered by the Health Resources & Services Administration (HRSA).

Payments under the PRF are subject to specific terms and conditions. To retain PRF disbursements, providers must attest to “ongoing compliance” with these requirements and acknowledge that their “full compliance with all Terms and Conditions is material to the Secretary’s decision to disburse funds.” Notwithstanding ongoing concerns and confusion regarding the PRF program requirements, any noncompliance with the terms and conditions could result in criminal, civil and administrative enforcement actions. As recently as March 3, 2022, AG Garland identified fraud in connection with the PRF as a key DOJ enforcement priority.

To date, the Healthcare Fraud Unit of DOJ’s Criminal Division has already brought criminal charges against nine individuals for fraud relating to the PRF. These criminal cases, however, have almost exclusively focused on egregious allegations of fraud and abuses, such as misappropriating PRF disbursements and using the money for personal expenses. For example, in September 2021, DOJ charged five individuals with using PRF payments to gamble at Las Vegas casinos and purchase luxury cars.

DOJ, however, has long indicated that the FCA will also play a “significant role” in DOJ’s PRF enforcement efforts. It is now just a matter of time before such civil investigations and settlements emerge.

HRSA’s stated oversight plan includes post-payment analysis and review to determine whether HHS distributed PRF payments to eligible providers in the correct amounts; audits to assess whether recipients used the funds in accordance with laws, guidance, and terms and conditions; and the recovery of overpayments and unused or improperly used payments. Among other things, HRSA and HHS-OIG likely will evaluate ownership changes, double counting reimbursed expenses and losses, and compliance with the balanced billing requirements.

PRF oversight and enforcement actions have been delayed partly because of program complexities and extended reporting timelines. For example, the first report from PRF recipients on use of funds was not due until the end of 2021. Depending on the date funds were received, PRF recipients may have no reporting obligations through 2023. Entities that expended more than $750,000 in federal awards, including PRF payments, also must obtain an independent audit examining their financial statements; internal controls; and compliance with applicable statutes, regulations and program requirements. These independent audits of PRF payments must be submitted to the Federal Audit Clearinghouse, for nonprofit organizations, or the HRSA Division of Financial Integrity, for for-profit “commercial” organizations. Recipients also may be subject to separate audits by HHS, HHS-OIG or the Pandemic Response Accountability Committee to review copies of records and cost documentation and to ensure compliance with the applicable terms and conditions.

Finally, DOJ and HHS-OIG have increasingly relied on sophisticated data analytics to drive their healthcare enforcement efforts generally. Now that the first round of reports containing specific PRF data certifications are available to HRSA and HHS-OIG, we expect to see the use of such analytics, in conjunction with all the other available information, in connection with PRF enforcement.

Telehealth

Telehealth use expanded exponentially during the pandemic. A March 2022 HHS-OIG report showed that during the first year of the pandemic, more than 28 million Medicare beneficiaries (approximately 43% of all Medicare beneficiaries) used telehealth services—a “dramatic increase from the prior year” in which only 341,000 beneficiaries used telehealth. This increase was largely the result of HHS temporarily waiving statutory and regulatory requirements related to telehealth to allow Medicare beneficiaries to obtain expanded telehealth services.

Telehealth has been at the forefront of DOJ’s healthcare enforcement efforts for years now. For example, DOJ’s 2021 nationwide healthcare enforcement action included criminal charges against dozens of individuals for telehealth fraud schemes involving more than $1.1 billion in alleged loses. The majority of these telehealth enforcement actions to date have involved the use of telehealth to engage in traditional fraud healthcare schemes, such as illegal kickbacks and billing for medically unnecessary services and equipment.

DOJ, however, has increasingly pursued criminal enforcement actions directly related to the telehealth waivers HHS issued in response to the pandemic. For example, in November 2021, a defendant was sentenced to 82 months in prison for participating in a $73 million telehealth fraud scheme. The defendant owned laboratories that provided genetic testing and had paid his coconspirators to arrange for telehealth providers to order medically unnecessary genetic tests. The telehealth providers were not actually treating the beneficiaries, did not use the test results and often never even conducted the telemedicine consultation. Although this was primarily a traditional Anti-Kickback Statute/medical necessity case, DOJ also charged the defendant with using the COVID-19-related telehealth waivers to submit more than $1 million in false claims for sham telemedicine visits.

Similar criminal prosecutions and civil actions relating to the expanded telehealth waivers and sham telehealth encounters can be expected in the future. DOJ and HHS-OIG will likely focus on telehealth visits that resulted in claims for services and equipment with particularly high reimbursement rates, such as genetic testing and durable medical equipment. DOJ and HHS-OIG likely will use data analytics to focus on instances in which telehealth services were billed by providers with whom the beneficiary did not previously have a relationship.

Improper Billing Schemes

DOJ has also pursued criminal cases involving traditional healthcare fraud schemes that sought to take advantage of the COVID-19 pandemic. For example, in May 2021, DOJ announced criminal charges against numerous individuals who were improperly bundling COVID-19 tests with other more expensive laboratory tests, such as genetic testing, allergy testing and respiratory pathogen panel testing. DOJ has likewise pursued criminal cases in which defendants improperly used COVID-19 “emergency override” billing codes to circumvent preauthorization requirements and bill Medicare for expensive medications and treatments. Any improper billing schemes that relate to the pandemic will continue to be a focus of criminal and civil enforcement efforts going forward.

Key Takeaways and Recommendations

DOJ, HHS-OIG and other federal agencies remain focused on pursuing healthcare fraud relating to the COVID-19 pandemic. The best way for hospitals, health systems and other healthcare companies and providers to prepare for this increased enforcement activity and scrutiny is to ensure that they have a robust compliance program in place.

There is no one-size-fits-all approach to compliance, but companies can take several proactive and practical steps to minimize their enforcement risk:

  • Monitor federal and state regulatory and statutory changes. The rules, regulations and guidance relating to the COVID-19 pandemic, including for the PRF and expanded telehealth waivers, have repeatedly changed over the past two years and continue to evolve. Monitoring such changes will not only help prevent enforcement actions, but a company’s reasonable and good faith efforts to interpret and follow such rules and regulations can be a powerful defense should an investigation arise, as discussed in connection with the Allergan case, above. Further to that point, where regulatory requirements and associated guidance is ambiguous, a good documentary record of the basis for your entity’s interpretation of the rules is critical.
  • Incorporate data analytics into your compliance program. DOJ and HHS-OIG continue to rely heavily on sophisticated data analytics, including artificial intelligence, to identify and prosecute fraud. In March 2022, AG Garland emphasized DOJ’s use of “big data” to identify payment anomalies that are indicative of fraud. Healthcare companies already have access to vast amounts of data that they can and should use to proactively identify errors, monitor risk areas and address any potential misconduct.
  • Adapt your compliance program and internal controls, as appropriate, to support PRF compliance, reports and audits. Recipients should continue to practice good compliance hygiene and maintain contemporaneous records regarding the receipt and spending of federal funds. Doing so may involve implementing additional systems to track spending, recovery and relief to avoid overlapping use of funds among relief programs, or consulting with grant accounting and compliance advisors to augment existing infrastructure. Recipients also should periodically review policies, procedures and controls, particularly following major updates to program requirements and interpretations.
  • Ensure the accuracy of required PRF reports, certifications and submissions. Particularly in light of ongoing political pressure, HRSA and HHS-OIG likely will conduct extensive oversight of the PRF to identify potential errors, overpayments and improper use of funds. Recipients should carefully review guidance and instructions to avoid inadvertent errors and misstatements on all submissions. Recipients may consider revisiting prior submissions underlying significant disbursements to identify interpretative issues or compliance concerns that warrant additional supporting documentation or disclosure.
  • Carefully consider the implications before entering into arrangements with other parties. The biggest risk to healthcare companies often comes from those with whom they do business. Compliance programs should focus heavily on reducing the risk of entanglement with bad actors.
  • Be diligent in the design and oversight of marketing strategies. Healthcare companies and providers should regularly review their marketing strategies to ensure total transparency and compliance (both historic and prospective) with applicable state and federal anti-kickback statutes. Companies should confirm that patients are reached through appropriate channels. Although issues relating to COVID-19 may be the impetus for a government investigation, violations of the Anti-Kickback Statute frequently result in larger recoveries for the government.
  • Proactively examine coding and billing practices. Providers should immediately review and revisit their coding and billing practices to determine if their practices involved bundling COVID-19 testing with other claims, the use emergency override billing codes or billing for other COVID-19 related services with high reimbursement rates. There is a strong likelihood that the DOJ will review the claims data for any providers with statistically significant use of these billing and coding practices, particularly when the providers are located in geographical areas where the DOJ’s Healthcare Fraud Strike Force and HHS-OIG’s Medicare Fraud Strike Force operate.

Article By Julian L. André, Benton Curtis, and Dawn R. Helak of McDermott Will & Emery

For more health law legal news, click here to visit the National Law Review.

© 2022 McDermott Will & Emery

Legal News Reach – Season 2, Episode 1: Immigration & Its Impacts on the U.S. Labor Market with Raymond Lahoud [PODCAST]

Welcome to our first episode of Season 2! Rachel and Jessica speak with Raymond Lahoud, a Member of Norris McLaughlin, P.A., focusing on immigration law. Immigration issues are complicated enough, but how does that factor into boosting the U.S. economy?  Listen to our last episode to find out more.

Be sure to also check out the latest episode of Mr. Lahoud’s podcast, “Immigration Matters.”

We’ve included a transcript of our conversation below, transcribed by artificial intelligence. The transcript has been lightly edited for style, clarity, and readability.

Full Transcript

INTRO  00:02

Hello and welcome to Legal News Reach, the official podcast for The National Law Review. Stay tuned for our discussion on the latest trends, legal marketing, SEO, law firm best practices, and more.

Rachel  00:15

Today’s episode is the first of the second season, where we’re broadening our focus to trending topics in the legal industry. Today we’re speaking with Ray Lahoud, Member of North McLaughlin about the impact of COVID-19 on immigration and labor shortages. Ray, would you like to tell our listeners a little bit about yourself?

Raymond Lahoud  00:30

Well, thanks for having me, Rachel. It’s really awesome to be here on this podcast and to talk about such an interesting area of law right now, in the world, particularly immigration law. I’m a partner at Norris McLaughlin, where I serve as the Chair of the Immigration Law Group here. I handle employment-based immigration matters, removal defense, employment, verification, I noncompliance all types of immigration matters, a broad spectrum with my great team of attorneys, paralegals, and assistants here at North McLaughlin. So thank you again for having me. It’s great to be here.

Rachel  01:05

One of the first topics we wanted to focus on here is immigration’s impact on labor shortages. You’ve written a lot about the impacts on the U.S. economy due to labor shortages. Can you explain how immigration can help remedy the situation?

Raymond Lahoud 01:18

I think we can all agree that without labor without employees, without people to go and work in whatever company, whatever organization, whatever place that exists out there that that needs to provide services or goods to the American public needs, needs employees. Without labor, there’s no economy, immigration right now is really a huge part of the employment demand, or the employment shortage share. There’s a lot of Americans who are able to legally work who just don’t want to work or have you know, taken different decisions or different approaches on life or what they want to do with their life. But we still need people to perform some of these essential functions from farming, to nursing care to handling, you know, mushroom picking to manufacturing, immigration is the way that has long proven to be a way to solve that through temporary visa programs through you know, green card programs that existed out there. And under the Trump administration. And when COVID hit, things really got hit pretty hard and really slowed down the ability for people to bring in international employees to the United States that fill that gap.

Rachel  02:29

This has been an ongoing issue. So are there any policy changes on your radar that will help solve this issue, either through immigration or otherwise?

Raymond Lahoud 02:38

The only way to solve this issue is through comprehensive immigration reform. For over a decade now, we’ve been using the number of 11 million people that are in the country without documentation, I think we can all agree that that number is significantly higher, probably 20, or 30 million people, step one is going to be trying to figure out how we handle those 20 to 30 million people or even Federalists 11 million people that 11 to 20 million people that we have the United States without documentation. And that means that some people are going to have to be deported, who you know, may have certain crimes may have certain issues in terms of their background, but a significant number of these individuals have been in the country for a long time, working without authorization, pleading taxes. So there has to be a process of legalization for those individuals, which is the big issue. We don’t what is legalization for them. And then there also has to be a secure border where people can’t just cross the border without any documentation. I mean, every country has borders, borders are important. We can all see how important borders are right now with what’s happening in Ukraine. You know, comprehensive immigration reform includes having an ability for individuals to come into the United States to work to claim asylum if they have to, to help our employers here in the United States who need employees because people are just not taking part or not applying to Americans are just not applying to take on these jobs. The great resignation has, for some reason taken over the United States and it continues. So what do we need? We need comprehensive immigration reform? How do we get there? It’s getting members of Congress to agree daily, I’m talking to clients who will arrive in Pennsylvania and they’ll say how do I start working here I just crossed the border assuming that because they heard on Facebook before they came up here are on TikTok are though like that it would be very easy for them to claim asylum. So I’m dealing with a lot of clients and potentials and individuals who have just recently crossed the border now feel that they’re stuck in the United States because they can’t leave because they have to go through proceedings and they can’t work. I mean, there’s also in this representation, let’s say that we keep hearing the numbers, millions are coming to the United States. There are millions of encounters. So you may have one person try to come to the United States four or five times and each one is considered an encounter. And this is a problem that we see from President to President, by the way, and this is why I say we need comprehensive immigration reform. Because let’s go back to 1986. Ronald Reagan was going to deal with the immigration problem we had, you know, millions of people here in the United States back then. And he did put three amnesty 1213 14 million people were granted permanent resident status, they say that cost the turn of California to a blue state once they became citizens top political. In the end, they’re like going back to that every President has made immigration, much tougher, actually very tough. Actually, it was the administration that puts some of the toughest policies when it comes to what’s called the public charge rule. The way our system is written right now is that the executive branch just has so much ability and authority discretionary ability and authority over what to do or what not to do, what they can do what they can’t do in terms of immigration. And then every time a new president comes in, something changes drastically. So you had Obama come in, then he puts in place DACA, you know, gives eight 900,000 people, you know, a temporary quote-unquote, status, and you have President Trump come in, and he takes it away. And then you have President Biden come in. Again, it goes back to comprehensive immigration reform. It’s all just been patchwork since after ’86. Now we have 11, 12, 13, 14, 20 million people here. So it’s-I think the distaste is, is that we’re going to grant people status, and it’s just going to happen, again, has to be a two-fold fix as to be true, comprehensive immigration reform where we’re not, you know, 10 years down the road, we don’t have another 15 million people that don’t have documentation here.

Rachel  06:34

What can companies do to help deal with this shortage of immigrant labor or just labor in general?

Raymond Lahoud 06:39

Every day, I probably field 20 to 30 calls from employers who cannot find employees. It’s the biggest problem. I think that’s facing our country right now. And I’m not sure where it comes from, I really don’t understand what this great resignation is, I don’t know how people can live. Right now, there are several legal immigration processes that are available. One is the H Tubi. system, which is a great way of bringing in seasonal employees for farms for landscaping, contractors, painters, manufacturing work, which we bring workers over here year after year. The H1-B lottery is another visa process. So there’s visa processes that are out there, it’s good to avail as an employer to not be afraid of these processes to you know, when you’re recruiting globally recruit, and when you find a candidate, seek out an immigration attorney and say, Hey, is there a way that I can bring this person over legally sponsor them? Is there a pathway and there are. You have companies like the bigger tech companies that are getting all the big H1-B visas, you have the bigger farming companies that are getting all the H2-B visas, because the smaller ones are not really availing themselves, the legalized programs that exist there, we have a lot of people who are coming into the country across the border, these individuals, they’re turning themselves into the Customs and Border Protection. So there’s an expectation at some time that, you know, some of them have fears of returning, I mean, that they’re going to start going through processes. These are individuals that will likely have employment authorization documents, within a year or so don’t forget about the American worker offer good wages, offer good benefits offer time off the world’s change right now in terms of how things work. So if there’s, you know, remote operations that you can offer, do that offer child care services, if you could, but you have to be creative.

Jessica  08:25

So I would love to get your perspective since you’ve been involved in immigration law for so long, and you definitely have a great grasp on the history of a lot of immigration policy changes. I know with COVID, you know, the legal industry got backed up in general; just court cases being rescheduled, I would really like to know what the last two years for immigration law has looked for you how has it changed because of the pandemic updates on border restrictions? I’d love to get your take on that.

Raymond Lahoud 08:52

When the pandemic hit immigration really became incredibly, incredibly busy from the travel restrictions to a title 42 at the border expulsions to people that were detained in immigration custody that were getting COVID It was a disaster for a long time for a lot of people. A lot of people out there who are stuck in other countries, you know, travel bans were coming up and moving and changing by the minute. And companies. You know, the companies that we represent, the employers that we represent that keep operating there were essential. They were central companies and they were healthcare companies. They were companies that do industrial manufacturing or handle electricity and the like, so they needed their employees here. So during COVID, we spent a lot of time trying to figure out the ways to bring a lot of these employees into the United States through the waivers that existed. They’re reaching out to the State Department to seek special exemptions. And then at the same time, you know, the immigration to the deportation defense part of it really came to a halt. court hearings were halted for all like non detained cases, which took an already incredibly backlogged immigration court system and took it about I have four more years behind now. So you’re probably looking at a good 10 years before an immigration judge for a trial. And after continuances and the, like 10 cases COVID really spread pretty heavily, we have to file lots of petitions and requests to try to get clients that were detained by immigration out of custody within the United States. So a lot happened during COVID. And when it came to immigration, in those days, there were nights where I was awake at, you know, two, three in the morning, making sure a client was able to get back in.

Jessica  10:34

We’re in such an interesting environment at this point, especially more recently with the Ukraine crisis, but we also had a changing of the hands in the White House, all the different elections. So there’s been a lot of transition period. And you know, we touched on it a little bit already. But the changes moving forward, I mean, now that the pandemic is having some type of release, besides needing that comprehensive immigration law changes, do you see any other changes now that we’re getting out of the pandemic, whether that’s Ukraine specifically, or just in general? What do you think is gonna happen here?

Raymond Lahoud 11:07

I think that we’ve, we’ve moved on to our next disaster with our next emergency, we’ll say, which is Ukraine right now. This is all that we hear about on the news, there aren’t COVID numbers at, you know, at the bottom, how do people are dying, how many people died and the like, I just feel that, you know, Ukraine has as taken over COVID. Now COVID brought on a time of remote hearings, which are still continuing now. The immigration courts, making fun of them with, you know, video, WebEx hearings in Zoom hearings, are able to move them quicker through the system and the like, and I have some serious issues. When it comes to remote hearings. You know, there’s huge due process concerns and having my client be able to testify in person where the judge can see his or her face. You know, there’s some very serious concerns in that. So they’re changes that, you know, came about from COVID, in terms of remote operations and the like, but I don’t know if they’re necessary to our benefit, even for, you know, immigrants work were coming in. And also, you would think that we really learned how to process things a lot faster. You know, what, we’re kind of hit with the crisis, and we just aren’t, you know, our embassies are still in a huge backlog when it comes to processing visas and, you know, fiance petitions and merit-based petitions and the like, but we are seeing movement here stateside within that, honestly, in terms of change. I mean, you just, it’s all patchwork.

Jessica  12:27

If memory serves me correctly, I know the Biden administration has put more emphasis on visas for STEM. I think people coming either for schooling or for employment, if I’m remembering correctly, do you think that’s a step in the right direction, I know it’s another “patch,” but…

Raymond Lahoud 12:43

 The United States has a huge number of international students in the United States, even locally here in what’s called the Lehigh Valley, Pennsylvania, Lehigh, Lafayette, Cedar Crest Moravian, their F huge international student populations and international student populations are critical to cultural diversity to you know, just to the growth of the school and it’s bringing the world together. So as part of it, so students will come here from abroad, Saudi Arabia, countries, China, Japan, Australia, they’ll come to the F1 visa complete their courses here to get a bachelor’s degree. And if they typically, if you come in under the f1 visa, regardless of your degree, you’ll get 12 months of what’s called occupational practical training. And that’s because you 12 months of just training in your, your area of of studies, when you were in school, if you earned a STEM degree science, tech, engineering or math degree, you can get an additional 24 months of occupational practical training. To me, that’s great to me for bringing people here, and we’re educating them, we should keep them here and you know, give them jobs here. I mean, we there’s no reason that you know, we should be training talent and, you know, bringing in talent from across the world, and then just sending them, you know, back to, you know, their home country, particularly if they’re willing to stay and work here and become members of society in good standing that contribute pay taxes. Why not? Even if you were you came in, you knew you were coming in across the border, see, you’re still a kid, and then you turn over all of your information to the government when you’re 17 or 18 years old. And then, you know, four, eight years later, the Trump ministration says that they are going to get rid of it and it goes through courts who put it back in and take it out and put it back in and then there’s an injunction lifted, and these are hundreds of thousands of lives in people’s hands. People really have to recognize that there are faces to these individuals that have deferred action that have temporary protected status that there are faces to them. And it’s more than just politics. But could you imagine if you were in that position with deferred action, not knowing should I finish going to college should I spend the money should I take a job, what do I do next?

Jessica  15:01

COVID already caused a very large limbo feeling if you’re coming from another country, or you’ve been here, and then you might be told, “oh, you gotta go back to where you came from.” And I can’t imagine being young when you come here and then going back to a country you don’t even really know.

Rachel  15:17

So we wanted to get your viewpoints on Ukrainian refugees and immigration, how does this compare to other refugee crises that we’ve had in the past

Raymond Lahoud 15:27

Ukraine refugee crisis has brought the US government to its peak when it comes to refugees, and the like, they’ve acted very quickly, to bring in them what’s called Temporary Protected Status. You compare it to you know, what happened in Afghanistan and the lake, there are a lot of differences, I would say just that how quickly they are granted temporary protected status. You know, if you’re from Ukraine, there’s countries that are setting up policies like Canada to try to bring in people from Ukrainian. And I hope that these policies that these countries are putting together to help refugees in times of crisis will stay for other countries to beyond Ukraine’s. Hopefully this won’t be the last time that you’ll see other countries open their doors to help people. My mom and dad are both born in Lebanon and immigrated here during the civil war in the late 70s. And it was devastating. And the US opened its doors to the Christians from the north, they came in and became an integral part of the society life here in Pennsylvania, it’s good to see that in Ukraine, but we’re going to have other countries that are going to have similar issues. And who knows where, you know, President Putin may stop, we just really have to think long term about it. Because we also have to be realistic. And we can only handle so many people in our country. I hate to say that.

Rachel  16:49

How does that factor into maybe some of the more, like, long-term policy changes that the country could implement? Is there a need to sort of rethink how we bring in refugees, and how many people we can take and how that process really goes?

Raymond Lahoud 17:02

There is, there is, but how do you rethink that? You know, how do you it’s even just saying, you know, how many people can we take in I know you just feel I feel internally bad because you don’t want to turn anybody away, that’s really hurting, you know, and but we have to, thankfully, I’m not in Congress to make up those decisions. But I think there has to be, you know, some sense of reason, and balance. And I’m not really sure what that is.

Rachel  17:29

Like the US has to work together with other countries to make sure that we help them out of people that need to be helped. I don’t think it’s realistic for one country to sort of shoulder most of the burden.

Raymond Lahoud 17:38

It’s very hard to get refugee status. I mean, you don’t just kind of come into the United States and walk-in and may take years to go through I mean, if you’re going to the Iraqi refugee have to go in through the United Nations refugee program, there’s a huge process you have to go through, it’s not easy. The things that happened in Afghanistan kind of made known the issues with our you know, the refugee program and the lake. But it’s not, it’s not an easy process to go through. You can’t just walk into an embassy, US Embassy and say, Hey, I’m I’m afraid of where I’m living, I want to go to United States,

Rachel  18:09

Right, yeah. And I imagine on top of even having to be in a situation where you have to flee your home.

Raymond Lahoud 18:15

Anybody that goes through pain, like a harm or fear, you know, I mean, whether it’s domestic violence, and those are the worst of cases where I have clients who are coming in suffered extreme domestic violence, like at the hands of their spouses and the like, and, and with those, you know, you know, what you do, you can send them back, you know, when that when the spouse is going to kill them on, you know, they’re dead on arrival. And so those are cases that we’re dealing with inside the United States right now. It’s like we have refugees coming in. But we also have asylees, here in the United States that were people who are in here applying affirmatively for asylum, we have a lot of people in the United States that are here on like a protective status we do. We do so much. And other countries are recognizing that if you take a look at Australia, so people are coming into the to Australia, they don’t go into the country, they sit off-island for a long period of time for they claim asylum or anything like that. The other countries that are out there, I think that they all have some pretty unique set of circumstances that are there, and in ours has a lot of issues that we have to really work through.

Rachel  19:16

So you’ve written about policy changes in Pennsylvania aimed at helping undocumented immigrants, you know, entrepreneurs, people who are getting driver’s licenses, things like that. I was curious to get your insight on how you see these changes impacting both immigrants in the state as a whole, like what sort of have been the changes there?

Raymond Lahoud 19:33

Driver’s licenses in Pennsylvania, we’re seeing a movement. New Jersey, just fair aware, they pass legislation in the implement to the driver’s licenses, people who may not have a social security number or the like, right now in Pennsylvania. I believe it’s in the House Committee. It’s being discussed. I don’t see it moving out of there given the current makeup of the legislature. I don’t foresee it happening in Pennsylvania anytime soon. It does keep coming up a lot by members of the State House, I think it’s a good idea because people are driving. Let’s get real. There are people without papers in the United States. I mean, if we don’t realize that, I think that we’re just fooling ourselves. So, you know, it’s if it’s a way for them, they’re voluntarily providing their information, you know, why not register it, they can get their insurance. It’s not a federal issue. It’s a state issue as the as right to get driver’s licenses, it’s state-by-state. Pennsylvania considers that they look at it, they bring it up, but it always fills in committee doesn’t go anywhere. Pennsylvania, has the political planet as a swing state, as we all know, and immigration is a hot topic issue here.

Rachel  20:37

I’m glad to hear that at least it’s even if it’s not, you know, moving forward, I think it being on people’s minds is a good thing. So in terms of changes like that, and maybe large scale changes, like we spoken about how we just need really large scale immigration reform, I was wondering, we could talk about the changes that you think need be made to both attract and retain immigrants in the United States, I think there’s a lot of talk about specifically, after the Trump administration, a lot of international students to stop coming here, you know, the United States is losing talent to countries like Canada and other places like that. So I was curious to get your thoughts on that.

Raymond Lahoud 21:14

COVID-19 opened up a different way of kind of operating, we had spoken earlier, where, you know, these companies are now recognizing that they could get that global talent opened up a facility in India or, you know, have somebody remote in from Canada, or actually just physically move their locations to Canada, or their offices or their manufacturing sites to another country, because it’s easier to bring labor in. I think that other countries are starting to embrace certain kinds of immigration, like I know that Canada is, you know, they’ve implemented that another investment-based immigration system, they’ve made it easier for Indian workers a certain kind of ticket during COVID in the light. So there are countries that are taking no more proactive approach to bringing in people but during the Trump administration, people from abroad really felt they weren’t welcomed in the United States. And I saw that a lot with students, and there was a significant number. It’s coming back, and I’m seeing the numbers come back, and just from the schools locally, that that we’re working with. So in terms of the International Student Program, you know, I do feel that it’s picking back up after COVID. And after the Trump administration, I just think we have to kind of keep going with it to make sure that, you know, we know that the people that we’re inviting into our country, we know that we have to welcome them here and treat them kindly, and work with them. Because we’re just we are one world one people. I’m really just, I think it’s a realist here, and that, you know, you have immigration lawyers who, you know, will just, you know, push things to like an end and say, No, open borders, and you have no people on another end that would say, you know, close everything to anybody. And but I think we have to have recent ability. I mean, you just can’t close the United States to everything. I mean, you can’t close the United States to the globe’s cultures, we just have to find a middle ground. And I hope that, you know, I was able to kind of present some of that reason that no middle ground, that’s there being immigration where it’s hard to take, you know, some things that Trump did weren’t necessarily I’m going to do but if somebody heard me say that, and I will now, you know, they would be shocked at it. But I think that’s what the issue is, is that there’s no meeting of minds. People just become enemies, because somebody has a different political opinion. You know, I think there really has to come a realization that we just can’t shut the borders down completely. And you can’t open the borders up completely. There just has to be a middle ground that we all have to reach in. Our members of Congress really have to grow up and hopefully, they will. And hopefully, they’ll work with the Biden ministration. We’ll get somewhere.

Jessica  23:52

I actually have an interesting question. Since you’re located in Pennsylvania; Lancaster’s, a certified welcoming status for refugees. Do you think that’s helpful in situations like Ukraine? And like if more cities did that, do you see that as a positive direction?

Raymond Lahoud 24:06

I do, I do. I mean, like…Philadelphia has, like a welcome center for Lancaster was one of the counties like that. It’s really what they do with it is, yeah, it certainly hops. The more the better. Governor Wolf has actually taken very proactive actions towards the Ukrainian community here, even locally. But again, there’s more than just the Ukrainian community that are suffering from prosecution. So hopefully, it’ll open our minds to how we deal with other areas and in the future when this happens and how other countries can work together with it. But yeah, it does. It does help because it shows that we care you know, things like that only they can start shows that we care. You know, even if you know, New Jersey, they couldn’t give them give people a real ID driver’s license, but they gave them a license to drive and pencil and they can leave the state drive and add to it, it’s still a driver’s license so they can give What they want to know as much as they can give them and if that’s what Lancaster was able to give them, that’s what it was. They can’t give driver’s licenses but um, you know, that opens up a door for immigrants and to have stuff like that it’s good for them to have programs like that is good.

Rachel  25:14

Well, excellent. Thanks again, Ray for joining us today. We had a great conversation.

Raymond Lahoud 25:20

 It’s really been good being here talking about immigration. It’s an interesting topic. And hopefully, we’ll see things changing in the years to come and I’m here to talk to you whenever. Yeah, thank you for having me.

OUTRO  25:40

Thank you for listening to The National Law Review’s Legal News Reach podcast. Be sure to follow us on Apple Podcasts, Spotify, or wherever you get your podcasts for more episodes for the latest legal news. Interested in publishing and advertising with us? Visit www.natlawreview.com. We’ll be back soon with our next episode.

Article By Rachel Popa and Jessica Scheck of The National Law Review / The National Law Forum LLC

For more Legal News Reach podcasts, click here to visit the National Law Review.

Copyright ©2022 National Law Forum, LLC