The National Law Forum

Top 5 Telehealth Law Predictions for 2021

With 2020 officially behind us, what does 2021 have in store for telemedicine and digital health policy? A year ago, our team predicted 2020 would bring “notable expansions in Medicare and Medicaid coverage” and “the reimbursement landscape looks promising for virtual care services.” Looking back, that was an understatement (if an easy one). Below are five new predictions for what legal changes telemedicine and digital health companies might expect to see this year.

1. Licensing: More Efforts to Increase Reciprocity and Reduce Barriers

In an effort to balance workload nationally and expand access to health care practitioners during the Public Health Emergency (PHE), many states temporarily suspended medical licensing requirements. As these temporary waivers begin to sunset, some state legislatures will seek to make the waivers permanent, allowing practitioners licensed in other states to deliver telehealth services across state lines, provided the out-of-state practitioner follows local state practice standards. While this may be a topic of discussion among policy shops, we expect few states will actually enact such changes in 2021.

Federally, the PREP Act allows practitioners to deliver telehealth services across state lines under a licensure exemption for COVID testing and certain limited “covered countermeasures” (e.g., treatment of COVID-19 infections). The PREP Act also grants certain immunities and protections, preempting state laws during the PHE. Given its Constitutional complexity and political nature, interstate licensing does not have a widely-accepted “solution,” nor does it have the bipartisan support seen in other areas of telehealth. Licensure will be a friction point between virtual care stakeholders and traditional practitioners invested in brick and mortar locations industry. The status quo (i.e., profession-specific interstate compacts and state-by-state patchwork legislative efforts) has left many digital health stakeholders unimpressed, frustrated, and increasingly searching for an alternate solution. Yet, a federal “top-down” preemption approach will be perceived as an unconstitutional encroachment on states’ rights under the 10^th Amendment. Keep an eye out for a third channel to thread the needle, perhaps tying federal funds (e.g., Medicaid or COVID relief dollars) to state adoption of certain licensure waivers, enticing states to opt-in to interstate licensure reciprocity rather than federally compel it.

2. Modalities: Technology-Neutral State Laws that Prioritize Quality of Care.

In 2020, many states enacted new telehealth laws and rules to change prior practice standards, allowable modalities, or prescribing requirements. Changes included eliminating face-to-face exams, practicing via telephone only, or waiving modality prescribing restrictions on telemedicine. Some of these changes were made by legislation while others by executive order or regulation. Many of the changes were on a temporary basis during the pandemic (with expiration dates that, confoundingly, often did not match the federally declared Public Health Emergency date). These waivers created a telehealth regulatory environment that focused less on technical modalities of care delivery (e.g., audio-video vs. asynchronous) and more on meeting the standard of medical care for a given patient. Aiding in this effort, the American Telemedicine Association (ATA) published model policy language for state telehealth rules, to serve as a reference tool for best practices. This trend towards technology-neutral telemedicine laws will continue in 2021, with stakeholders emphasizing the importance of medical standard of care and clinical quality of services, rather than proscriptive modality requirements.

3. Privacy: Greater Sensitivity to Patient-as-Consumer in Digital Health

Telemedicine and digital health companies handling patient information on substance use disorder treatment can expect to see favorable changes to HIPAA laws, designed to encourage easier sharing of patient data, particularly for treatment purposes. Similar changes are anticipated to regulations under 42 C.F.R. Part 2 to ease payment and health care operations. Telehealth companies should also keep an eye on state data privacy laws. More states are expected to enact their own consumer laws to protect data privacy, as California did with its California Consumer Privacy Act. And the Federal Trade Commission (FTC)—the nation’s top federal privacy regulator—will continue enforcement investigations against organizations that violate consumer privacy rights. Given the proliferation of new telehealth services and startup companies launched in 2020, increased privacy regulation is likely to occur in 2021.

4. Enforcement: OIG/DOJ Will Build on Prior Investigations

Building on its 2019 and 2020 criminal and civil investigations, HHS OIG and DOJ will continue its takedown of companies engaged in “telefraud“: scams that couple aggressive online marketing tactics with telemedicine services to serve as a conduit for illegal kickback arrangements with pharmacies, DME suppliers, and laboratories. Most telemedicine enforcement actions to date have involved kickback schemes and billing for medically unnecessary equipment and diagnostic tests, and few have centered on billing and coding of telehealth professional services. The ATA has commented how these companies do not represent the industry at large, and issued a letter articulating hallmarks of legitimate telemedicine providers.

With many traditional in-person providers having newly (and quickly) moved into telehealth in 2020, along with new temporary waivers of billing and coding rules and a relaxed regulatory environment, the future will likely see more Medicare audits and overpayment claims of telehealth professional services. Some niche areas of enforcement may be marketing/referral arrangements with pharmacies and laboratories, waivers of patient financial responsibility, ordering high-cost genetic tests, billing for practitioners located outside the United States, and arrangements seeking to take advantage of the global pandemic.

5. Payment: Continued Expansion of Telehealth Reimbursement

The pandemic compelled health plans, both government and commercial, to remove prior restrictions on telehealth and expand coverage for virtual care at a rate previously unseen. The new policy changes on Medicare reimbursement followed the previously established pathway of coverage, but the pace at which they were made was stunning. CMS also introduced nearly 100 telehealth service codes covered on a temporary basis until the Public Health Emergency expires. Much of 2020’s reimbursement expansion will continue through 2021, as commercial payers follow CMS’ lead. Remote patient monitoring still has plenty of room to grow. Despite the recent payment expansions RPM has seen, it has yet to have its “breakout year” in widespread use and payment.

Employers will explore more telehealth services for employees to deal with the stress of the pandemic, focusing on tele-primary care, behavioral health, and specialty care like fertility. As more traditional providers offer telehealth services in addition to in-person care, we may see telehealth increasingly paid on a fee for service basis (rather than a PEPM enterprise model). At the same time, value based models focusing on or centered around virtual care, including bundled payments and shared savings, will grow beyond the pilot phase, as providers begin to “own” certain care pathways.

Time will tell how these five predictions will hold up over the next 12 months. What is certain, however, is that telemedicine and virtual care continues to be one of the fastest-growing areas in healthcare.

ARTICLE BY Nathaniel M. Lacktman, Alexis Finkelberg Bortniker, Thomas B. Ferrante, Aaron T. Maguregui and Jennifer J. Hennessy of Foley & Lardner LLP

For more, visit the NLR Health Law & Managed Care section.

EPA Releases Late-Term “Secret Science” Rule

Regulated industries pay close attention to how regulators use scientific data, because the stakes are high. While scientific knowledge may evolve rapidly, regulatory processes — and the business decisions that rely on them — tend to proceed more deliberately. As a result, the regulated community has long pushed the U.S. Environmental Protection Agency (EPA) to base its decisions only on scientific information that is present in the public domain and thus subject to greater scrutiny.

On January 6, 2021, EPA finalized its long awaited anti-“secret science” rule, which requires EPA both to disclose the science on which significant regulatory actions are based and to assign weight to scientific evidence in part on whether underlying data is available. EPA frames this rule as an incremental, internal process-oriented step toward the transparency that is an essential part of the scientific method. Businesses in the regulated community should not expect to be able to point to this rule to control evidence coming into site-specific rulemaking, but may benefit from increased investor confidence that EPA actions with industry-wide impact will be based on data available for independent validation.

Scope of the Rule

The rule, entitled “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information”, applies to the two categories of EPA actions indicated in the title: the promulgation of significant rules, such as those that have nationwide impact, and the dissemination of scientific information likely to have nationwide policy- or decision-making impacts. Furthermore, the rule targets EPA’s analysis of only one type of scientific evidence, dose-response data, which are facts that characterize the relationship between the amount of an exposure to a substance and the observation of an effect.

How EPA Will Evaluate Dose-Response Data

The key provision of the rule is a three-step funneling process to winnow the universe of “convincing and well-substantiated evidence” relevant to making a decision about relationship between exposure to a substance and an effect:

First, EPA must identify a subset of the universe of evidence from which it could “characterize a quantitative relationship” between exposure and effect.
Second, EPA must designate as “pivotal science” the particular studies on which it could rely to reach its own conclusion about the quantitative relationship between exposure and effect.
Third, EPA must identify whether those particular studies allow for reanalysis of results (actual validation is not required). While EPA may consider all studies available to it, the rule requires it to give greater consideration to those studies that can be independently validated. For those studies at the end of the funnel whose data cannot be readily reanalyzed, the rule sets out factors EPA must consider when determining how much weight to assign their results.

The rule also requires EPA to identify the science that serves as the basis for significant regulatory action and to state the reasons for relying on any studies based on dose-response data that is not available for reanalysis.

A Lasting Move Toward Transparency?

Regulations issued in the waning hours of a presidential term often can be rescinded by executive action or under the Congressional Review Act (CRA). The CRA allows certain of these regulations to be vacated by a joint resolution of Congress. EPA has taken the position that the CRA does not apply here because this is an internal “housekeeping” regulation. Whether it applies or not is likely to among the potential challenges the “secret science” rule faces in court in rulemakings involving human health. We will keep you posted on how any court challenges progress.

ARTICLE BY Matthew H. Griffin and J. Michael Showalter of Schiff Hardin LLP

For more, visit the NLR Environmental, Energy & Resources section.

It’s Time for Employers to Revisit Their Employment Policies to Be Ready to Address Political Disputes Among Coworkers

With political division in the United States on full display in the midst of a pandemic, Americans are faced with deepening rifts that touch not only their social circles and family units, but also their work lives. It therefore behooves employers to recognize the reality that disagreements about politics are likely to arise in one form or another in the workplace. With that in mind, employers should review their employment policies and related practices to ensure they are ready to address workplace disputes centered on politics, especially in light of the telecommuting arrangements that many employers are still utilizing during the pandemic.

The First Amendment’s right to free speech generally does not cover private employers, so employers are not required to permit their workplaces (virtual or otherwise) to be veritable political soapboxes. That said, employees in the private sector do have certain workplace rights relevant to politics and subject to applicable state law, including—in Texas, for example—the right to paid voting leave and the right to attend political conventions (if eligible to participate or a delegate). Further, employees generally have the right to be free from harassment based on a protected class and have certain protections against workplace bullying or violence of any kind.

Keep in mind that even though a lot of employees are still working remotely during the ongoing COVID-19 pandemic, email accounts, social media outlets, and general virtual connectivity create other avenues for discrimination, retaliation, harassment, bullying, or threats between employees. Frankly, as some assert, the virtual “wall” may embolden individuals to say things that they otherwise would not. Employers must therefore strike an appropriate balance between the competing interests and employment rights in play in a deeply divided workforce when it comes to politics.

The following policies should be reviewed and updated (as necessary) and implemented to strike that balance:

Codes of Conduct and / or Harassment / Discrimination Policies: Generally, neither Texas nor federal laws protect individuals from discrimination based on their political affiliations or political opinions, but some state laws have related protections. See, e.g., Cal. Lab. Code § 1101 (prohibiting employers from discriminating against employees based on employees’ political activities or affiliations); Wis. State. § 111.365(1) (stating that “employment discrimination” includes discrimination against an employee for “declining to attend a meeting or to participate in any communication about religious matters or political matters”). Of course, current political issues involve a number of protected classes, such as race, national origin, gender, and sexual orientation. So the potential for there to be workplace discrimination, harassment, and bullying based on protected classes under the guise of political affiliations or opinions is very real. Employers must therefore ensure they have implemented employment policies prohibiting discrimination (including discrimination and related bullying in a virtual or remote working environment) and establishing procedures for employees to lodge complaints about discrimination. They should also train all employees, including managers, regarding the same.

Social Media: For better or worse, social media outlets have moved even more into the front lines of politics this election cycle. The potential for discrimination and harassment is likewise increasing with the advent of new and more pervasive social media technology. The Texas Workforce Commission (TWC) minces no words about this reality when it states, “while the technology has improved dramatically, there has been no corresponding upswing in common sense or decency in society,” when it comes to social media usage. Social media policies should therefore make clear that employees are not allowed to purport to speak on the employer’s behalf on social media or otherwise use social media outlets to discriminate against or harass coworkers.

Computer / Internet Usage: Similarly, employers should exercise their rights to monitor employees’ work emails and use of company computers and prohibit the use of company technology and Internet to discriminate against or harass coworkers. Such policies should clarify that employees have no reasonable expectation of privacy in company computers and work email accounts. Note, however, that under the federal Stored Communications Act, employers generally do not have the right to monitor employees’ personal email accounts, even if the employee uses a work computer to access the personal account. That said, discriminatory or harassing communications sent by an employee to a coworker using either a work or personal account are potentially actionable and can serve as the basis of a legitimate complaint by the victim of the same.

These are certainly not the only policies that are in play in these unprecedented times, but they are key places for employers to start as they consider these issues in their workplaces. Employers should ensure such policies are up to date and provided to and acknowledged by their employees. And, as always, employers are well-advised to involve their senior management team and appropriate legal counsel when workplace disputes and issues arise, including when reviewing, updating, and implementing personnel policies.

ARTICLE BY Taylor E. White of Winstead

For more, visit the NLR Labor & Employment section.

How A Sack Of Flour Healed A Divided Electorate

In 1864, the voters of Austin, Nevada were almost evenly divided between supporters of the Union (Republicans) and advocates for an immediate peace treaty with the Confederacy (Copperheads). Two eminent citizens bet on the outcome of the election. Ruel C. Gridley, an ardent Copperhead, lost the bet and, as agreed, carried a 50 pound sack of flour from his store down the town’s main street, marching to the tune of “Old John Brown”. At the end of the March, he auctioned off the sack with the proceeds going to the Sanitary Commission, a private agency for the support of sick and wounded Union soldiers. Samuel Clemens, aka Mark Twain, gives an account of what happened next:

“Gridley mounted a dry-goods box and assumed the role of auctioneer. The bids went higher and higher, as the sympathies of the pioneers awoke and expanded, till at last the sack was knocked down to a mill man at two hundred and fifty dollars, and his check taken. He was asked where he would have the flour delivered, and he said:

“Nowhere–sell it again.”

Now the cheers went up royally, and the multitude were fairly in the spirit of the thing. So Gridley stood there and shouted and perspired till the sun went down; and when the crowd dispersed he had sold the sack to three hundred different people, and had taken in eight thousand dollars in gold. And still the flour sack was in his possession.”

Roughing It, Chap. XLV. The local newspaper, The Reese River Reveille, publicized the story and soon Ridley was traveling the West auctioning and re-auctioning his famous sack of flour. Ridley eventually raised about $275,000 for the Sanitary Commission.

Ridley eventually moved to California where he died in 1870. He was interred in an unmark grave in Stockton, but in 1887 on California Admission Day (Sept. 9) an imposing monument was erected to mark his burial site.

Austin’s mining boom did not last, but the town, unlike many other Nevada boomtowns, has lingered on. Last month, I took this photo of Austin’s Main Street where Ridley so long ago marched with his flour sack:

Ridley’s store still stands in Austin, but apparently is no longer selling flour:

ARTICLE BY Keith Paul Bishop of Allen Matkins Leck Gamble Mallory & Natsis LLP

For more, visit the NLR Election Law / Legislative News section.

This Mashup Is Not a Place You’ll Go – Seuss Copyright Will ‘Live Long and Prosper’

Presented with a publishing company defendant’s mashup of Dr. Seuss’ copyrighted works with Star Trek in a work titled Oh, the Places You’ll Boldly Go!, the US Court of Appeals for the Ninth Circuit tackled claims of both copyright and trademark infringement, including the defense of fair use and the use of trademarks in expressive works. The Ninth Circuit reversed the district court’s summary judgment in favor of defendants on the copyright infringement claim and affirmed the district court’s dismissal and grant of summary judgment in favor of defendants on the trademark claim. Dr. Seuss Enterprises, L.P. v. ComicMix LLC, et al., Case No. 19-55348 (9th Cir. Dec. 18, 2020) (McKeown, J.)

Seuss Enterprises owns the intellectual property in the works of late author Theodor S. Geisel, better known as Dr. Seuss. Seuss Enterprises carefully yet prolifically licenses the Dr. Seuss works and brand across a variety of entertainment, media, art and consumer goods, including derivative works of Dr. Seuss’ final book, and graduation favorite, Oh, the Places You’ll Go! When Seuss Enterprises encountered a Kickstarter campaign to raise funds for the Oh, the Places You’ll Boldly Go! mashup work created by ComicMix (a company whose employees include an author of Star Trek episodes), it filed suit for copyright and trademark infringement. The district court granted ComicMix’s motion for summary judgment, holding that the Boldly work was a fair use of Dr. Seuss’s Oh, the Places You’ll Go! and that Seuss Enterprises did not have a cognizable trademark infringement claim under the Lanham Act. Seuss Enterprises appealed.

On appeal, ComicMix asserted its defense of fair use by arguing that its copying of the Dr. Seuss works (described at one point in the record as painstaking attempts to create “identical” illustrations) resulted in a parody of the works. The Ninth Circuit examined the facts under the four non-exclusive factors of fair use reflected in § 107 of the Copyright Act:

The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes
The nature of the copyrighted work
The amount and substantiality of the portion used in relation to the copyrighted work as a whole
The effect of the use upon the potential market for, or value of, the copyrighted work.

Remarking that the outcome of the purpose and character of the use factor influences the assessment of the third and fourth factors, the Ninth Circuit concluded that the Boldly work was not transformative as a parody or otherwise, and that the “indisputably commercial” nature of the work weighed against fair use. The Court explained that a parody exists only if the resulting work critiques or comments on the underlying copyrighted work. The Ninth Circuit cited its decision in another Seuss case (Dr. Seuss Enters. v. Penguin Books), which involved the retelling of the O.J. Simpson murder trial through the lens of The Cat in the Hat. Here, the Court similarly found that Boldly only “evokes” Oh, the Places You’ll Go!, rather than ridiculing the original copyrighted work in any manner. Further, the otherwise unchanged nature of the Seussian world featuring Star Trek characters without the addition of any “new expression, meaning, or message” to the Dr. Seuss work did not result in a transformative use.

Under the second factor, the nature of Oh, the Places You’ll Go! as a creative, expressive work (versus an informational or functional work) was found to weigh against fair use. The court explained that creative works are “closer to the core of intended copyright protection,” and fair use is more difficult to establish when such creative works are at issue.

With respect to the third fair use factor, the Ninth Circuit found that the quantitative amount and qualitative value of the original work used was “substantial” and weighed “decisively” against fair use. Quantitatively, close to 60% of the Seuss book was “replicated, as much and as closely as possible” along with other copied Seuss illustrations. Qualitatively, ComicMix was found to have taken the “heart” of the Dr. Seuss works. Harkening back to the first factor, without any parody or transformative work at hand, the Court found little justification for the amount and substantiality of the Dr. Seuss works used.

The Court found that the fourth and final factor also weighed against fair use because of the value of, or potential market for, the Seuss works. Specifically, having established the non-transformative and commercial uses of the Dr. Seuss works under the first factor, the Court found such uses to have the potential to lead to market harm for the original works. The Court pointed to the “crucial right” of a copyright owner to access the derivative works market, in “which Seuss engaged extensively for decades,” and determined that ComicMix did not meet its burden of proof in bringing forward favorable evidence about the relevant markets. With all four factors weighing against ComicMix’s defense of fair use, the Ninth Circuit reversed the district court’s grant of summary judgment in favor of ComicMix and remanded.

The Ninth Circuit did, however, affirm part of the district court’s dismissal and grant of summary judgment in favor of defendants with respect to Seuss Enterprises’ claim of trademark infringement based on its rights in the Oh, the Places You’ll Go! trademark, as well as the “Seussian” brand typeface, illustration and style. Under the test established in Rogers v. Grimaldi, when a trademark is used in an expressive work (such as Boldly), there is no actionable claim under the Lanham Act unless the trademark has zero relevance to the underlying work or explicitly misleads consumers as to the source or content of the work. Here, the Court found the Seuss trademarks relevant to the artistic purpose of Boldly and did not find Boldly to be explicitly misleading as to its source. The Court thus held that the Lanham Act did not apply and affirmed the denial of Seuss Enterprises’ trademark claim.

ARTICLE BY Sarah Bro of McDermott Will & Emery

For more, visit the NLR Intellectual Property section.

“Gig” Workers May Become Eligible to Receive Equity Compensation

The Securities and Exchange Commission (the “SEC”) recently voted to propose temporary rules to permit companies to provide equity compensation to certain workers known as “gig” or “platform” workers.

Under the Securities Act of 1933 (the “33 Act”), every offer or sale of securities must be registered with the SEC unless the issuer relies upon an exemption to such registration. Recognizing that the offers or sales of securities in the form of equity compensation differ from the regular process of raising capital from investors, a limited exemption is provided to issuers under Rule 701 of the 33 Act. Rule 701 currently exempts certain sales of securities by private companies made to compensate employees, consultants, and advisors.

Through the proposed new Rule 701, the SEC is recognizing the existence of certain types of employment relationships in the “gig economy” that fall outside the scope of the traditional employer-employee relationship. These are the “gig” or “platform” workers who have become important to the economy with the increased use of technology. Gig workers use a company’s internet platform to find a specific type of work or “gig” to provide services to end-users. Some common examples are ride-sharing, food delivery, and dog-sitting services. These workers are generally not considered employees, consultants, or advisors, and thus have not been eligible to receive securities pursuant to compensatory arrangements under Rule 701. Under the proposed amendment to Rule 701, however, companies would be permitted to compensate these platform workers with equity compensation, subject to certain conditions.

For an issuer to compensate platform workers pursuant to the proposed new Rule 701, the platform workers will have to provide bona fide services pursuant to a written contract or arrangement by means of an internet platform or other technology-based marketplace platform or system provided by the issuer. Additionally, the issuer is required to operate and control the platform, the proposed issuance of securities to the platform worker must be pursuant to a written compensation arrangement or plan, the issuer must take reasonable steps to prohibit transfer of the securities offered to the platform worker, and the securities issued must not be subject to individual bargaining or the worker’s ability to elect between payment in securities or cash. The offering per worker must be within certain caps on the amount ($75,000) during a 36-month period and a percentage of the value of the compensation (15%) received by the platform worker during a 12-month period. This exemption, if adopted, would be available for a period of five years.

The proposal is subject to a 60-day comment period following its publication in the Federal Register.

Given the benefits that equity compensation offers to both employers and employees, this exemption should provide benefits to both issuers and platform workers in the “gig economy.”

ARTICLE BY Daniel I. DeWolf of Mintz

For more, visit the NLR Corporate & Business Organizations section.

Costs of COVID-19 Vaccines: What We Do and Don’t Yet Know

The roll-out of vaccine approvals has led to some confusion over what charges consumers might be asked to cover. This echoes the confusion previously discussed with respect to COVID-19 diagnostic and antibody test pricing. But consumers, providers, and others that will have any involvement with vaccine production, distribution, or administration should be aware that the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides different rules for treatment (including testing) than it does for preventative care, like the recently approved vaccines.

The CARES Act provides that all insurance plans that are subject to the Affordable Care Act’s preventative services coverage standards must cover any qualifying coronavirus preventive services, including approved vaccines, without cost-sharing. It also provides that Medicare plans must cover the cost of the COVID-19 vaccine and its administration, without cost-sharing. This coverage applies to both in- and out-of-network providers. In short, if the primary purpose of a medical visit is to receive a covered vaccine, then the vaccine recipient should not be responsible for any out of pocket costs. However, if their appointment or doctor’s visit includes health services unrelated to COVID-19—such as bloodwork—the recipient may be charged for those services.

Notably, federal rules require that coverage must begin to apply within 15 days of a vaccine’s approval by the Advisory Committee on Immunization Practices (ACIP), accelerating the usual timeline required for plans to incorporate a new recommendation. Insurance plans are therefore currently required to cover the cost of both of the vaccines that have been approved in the United States. (The ACIP provided its interim recommendation for the Pfizer-BioNTech COVID-19 vaccine on December 12, 2020 and subsequently issued its interim recommendation for the Moderna COVID-19 vaccine on December 19, 2020.)

Not all health care plans are covered by these requirements. Plans that are not subject to the ACA’s preventative services coverage standards are not subject to the CARES Act and its vaccine coverage requirement. These plans—which could include short-term health plans, fixed indemnity plans, or some grandfathered plans—may take varying approaches to vaccine coverage. It appears that these plans can require that beneficiaries pay cost sharing for vaccines or can exclude recommended vaccines from coverage altogether. Individual states may ultimately require plans to cover the vaccine and waive cost-sharing. Alternatively, the plans may decide, for any number of reasons (including, e.g., concerns about employee health and safety) to provide coverage, though they may or may not decide to waive cost-sharing. At least one such plan has already said that COVID-19 vaccine costs will be “shareable.”

Several open questions remain. First, it is unclear how much the vaccine could cost (either to recipients or to insurers) in the future, following the conclusion of the public health emergency.

Second, uninsured vaccine recipients may see differences in billing in the long term. Providers that administer an approved COVID-19 vaccine to uninsured recipients will be reimbursed for vaccine administration costs through a provider relief fund created by the CARES Act. The federal government has not indicated how it will handle these reimbursements if that relief fund should be depleted.

Third, because vaccine coverage arises from the ACA’s preventative services coverage standards, the Supreme Court’s forthcoming decision on a pending challenge seeking to invalidate the law’s individual mandate could greatly impact this area, and potentially eliminate or reduce cost coverage.

Finally, and of particularly salience for price gouging concerns, even though the vaccine itself is free, vaccine recipients might still see bills. Some providers can legally charge an administration fee for giving the shot, according to the CDC. Those providers can seek reimbursement for such a fee from either the recipient’s “public or private insurance company or, for uninsured patients, by the Health Resources and Services Administration’s Provider Relief Fund.” Several states prohibit price gouging for medical services, and it remains to be seen whether and how any fees could be justified or challenged under different state laws.

In summary, most but not all COVID vaccines costs should be covered without cost sharing to recipients, related additional charges for the treatment visit might not be covered, and all the non-covered charges likely are subject to state price gouging laws.

ARTICLE BY Christopher E Ondeck, John R Ingrassia, Kelly Landers Hawthorne, Nathaniel Miller. Nicollette R. Moser, Jennifer E. Tarr of

Proskauer Rose LLP

For more, visit the NLR Coronavirus News section.

DOL Judge Awards Airline Pilot $500,000 in Compensatory Damages in AIR21 Whistleblower Retaliation Case

In a decision finding that Delta violated the anti-retaliation provision of the AIR21 whistleblower protection law, Judge Morris awarded pilot Karlene Petit $500,000 in compensatory damages for emotional distress, humiliation, and reputational harm.

Delta Pilot Suffers Retaliation for Raising Safety Concerns

While working as a first officer for Delta, Petit reported safety concerns, including inadequate flight simulator training, deviation from line check evaluation procedures, pilot fatigue, and inadequate training and falsification of training records. Soon after Petit raised her concerns, Delta grounded her from flying and referred her for a mental health evaluation. Delta’s selected psychiatrist diagnosed Petit with bipolar disorder, precluding her from maintaining the medical certificate necessary to operate commercial aircraft. The psychiatrist that Delta retained to evaluate Petit conducted no interviews in making his determination and failed to consult with the physician that had determined for several years that Petit was mentally fit to fly.

After the diagnosis, Petit sought another examination from a panel of physicians at the Mayo Clinic. Those physicians submitted a unanimous report concluding that Petit had no mental health impairment. Twenty-one months later, Delta reinstated Petit to flight status, after inflicting significant harm to Petit’s reputation and career considerably.

In his decision, Judge Morris held that Delta’s referral of Petit for a mental health evaluation was an adverse action in violation of the AIR21 whistleblower protection law because it placed at issue her career and livelihood. Formally questioning a pilot’s mental fitness stigmatizes that pilot in the eyes of the close-knit aviation community. Judge Morris also concluded that Petit’s submission of the safety complaint was a contributing factor in Delta’s decision to refer her for a mental health evaluation.

Evidence Warranting Award of $500,000 in Compensatory Damages

In determining an appropriate award of compensatory damages, Judge Morris surveyed awards under AIR21 and other whistleblower protection laws and found that compensatory damages are typically low, ranging from $3,000 to $100,000. He found that a higher award was warranted in Petit’s case because the retaliation was egregious and will continue to inflict harm for the remainder of Petit’s career. Judge Morris cited these factors in support of a $500,000 compensatory damages award:

The length of time Petit was unable to fly for Delta due to the retaliation – nearly two years;
The cruelty of informing Petit on Christmas Eve of Delta’s finding that she suffered from bipolar disorder;
Petit’s credible reports of sleeplessness due to the retaliation;
The strain of multiple psychological tests Petit was subjected to because Delta wrongly diagnosed her with a mental health disorder;
The permanent damage to Petit’s reputation as a pilot, regardless of the ALJ’s findings, including permanent records in her FAA medical file that could create special reporting requirements to the FAA;
Delta’s reporting the medical results that included the diagnosis to the FAA, in direct violation of Petit’s contract with the company and after the Mayo Clinic doctors had cleared her.

Further, Judge Morris found that throughout the years-long process during which Delta retaliated and Petit attempted to clear her record, Petit reasonably feared that her career as a pilot was over. She had worked tirelessly to become a successful pilot and had a lifelong passion for aviation, and the prospect of losing the career and position that she had worked so hard to achieve caused her to suffer severe mental distress and suffering. And due to the staffing structure in the airline industry, Petit will continue to work under the supervision of many of the Delta employees who retaliated in the first place, and will continue to be the subject of gossip and speculation about her ability to fly, regardless of the results of the case. Therefore, the retaliation will likely harm Petit’s future prospects of promotion, and Delta’s retaliation will cause permanent harm to her career and reputation.

ARTICLE BY Katherine Krems and Jason Zuckerman of Zuckerman Law

For more, visit the NLR Criminal Law / Business Crimes section.

Mixed-Status Families to Finally Receive Stimulus Checks

Last week, Congress passed the $900 billion coronavirus relief package that was signed into law by President Donald Trump on December 27, 2020. In this package, the U.S. government will allow mixed-status households to receive stimulus checks. In mixed-status families, at least one member of the household must have a Social Security number (SSN). These families were denied stimulus checks in the first round of payments offered in late March this year.

Who Can Expect Stimulus Checks?

United States citizens and legal permanent residents (green card holders) will receive $600 in direct aid, even if they previously filed their taxes jointly with an undocumented spouse. An additional $600 checks will be sent for each dependent child. The new compromise is also retroactive to the mixed-status families where at least one household member has an SSN. These families will receive checks for $1,200 per household and $500 per child as previously allocated by the CARES Act.

Individuals with an adjusted gross income higher than $75,000 in 2019, heads of household who earned more than $112,500, and couples who made $150,000 will not be eligible for the checks. Undocumented immigrants and other non-citizens who do not have an SSN and file individual tax returns are ineligible for aid. U.S. Citizen children will not receive this aid at least one parent has an SSN.

Many undocumented immigrants and some non-citizens are ineligible for Social Security Numbers. They use government-issued Individual Taxpayer Identification Numbers (ITIN) to pay taxes. Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) beneficiaries have Social Security Numbers.

Reactions to the Coronavirus Relief Package

“It was unfair and absurd that millions of taxpayers in need of assistance to feed their families, many in the immigrant community with U.S. citizen children and working on the frontlines, were previously denied access to these survival funds,” said Senate Democratic Leader Chuck Schumer. “I am pleased we were able to extend this economic lifeline to additional families in need.”

“Given there are 5.5 million immigrants working at the front lines of this crisis as essential workers, Congress should provide protection to all tax filers in the U.S regardless of immigration status,” Kerri Talbot, the Director of Federal Advocacy at The Immigration Hub, a lobbying group, said in a statement.

The nonprofit Migration Policy Institute estimated that 14.4 million people in mixed-status families were excluded from relief. This included 5.1 million who are either citizens or green cardholders. Specifically, the figure includes 1.4 million spouses and 3.7 million children who are citizens or legal residents.

ARTICLE BY Raymond G. Lahoud of Norris McLaughlin P.A.

For more, visit the NLR Election Law / Legislative News section.

A New Year’s Booster Shot: Congress Grants the SEC a Statutory Disgorgement Remedy and Extended Statute of Limitations

Congress opened 2021 by overturning one of President Trump’s vetoes for the first time. By large bipartisan majorities, the House and Senate overturned a presidential veto and enacted the 2021 National Defense Authorization Act (“NDAA”).¹ Tucked away in the $740.5 billion defense bill were provisions granting the U.S. Securities and Exchange Commission (“SEC”) statutory authority to seek disgorgement in federal court and providing a 10-year statute of limitations for that remedy.²

Congress’s actions were in response to two landmark Supreme Court decisions that curtailed the SEC’s disgorgement powers—Kokesh v. SEC³ and Liu v. SEC⁴. As we detailed previously, Kokesh limited the SEC’s ability to obtain disgorgement in cases of long-running frauds, as the Supreme Court held that disgorgement was a “penalty” and thus subject to the five-year statute of limitations for penalties found in 28 U.S.C. § 2462. In Liu, the Court answered the question of whether the SEC could obtain disgorgement awards in federal court at all, which was previously unresolved as the SEC’s authorizing statutes only provided for disgorgement in administrative proceedings but were silent on disgorgement in federal court. The Court held that federal courts could continue to award the SEC disgorgement, subject to certain limiting principles.⁵

The 2021 NDAA addresses limitations placed on the SEC’s ability to obtain disgorgement in both cases:

First, the law grants the SEC express statutory authority to seek disgorgement in federal court actions. Specifically, Section 6501 of the NDAA grants the SEC the authority to seek, and the federal district courts jurisdiction to “require disgorgement .. . of any unjust enrichment by the person who received such unjust enrichment as a result of” a violation of the federal securities laws.
Second, the law establishes a ten-year statute of limitations—up from the five-year limitations period set by Kokesh—for securities violations that involve an element of scienter, e., knowledge of wrongdoing. Specifically, Section 6501 provides a ten-year statute of limitations for violations of: (1) Section 10(b) of the Exchange Act⁶; (2) Section 17(a)(1) of the Securities Act⁷; (3) Section 206(1) of the Investment Advisers Act⁸; or (4) “any other provision of the securities laws for which scienter must be established.”

While the statue provides the SEC with the express authority to seek disgorgement in federal court actions, the extent of its impact remains to be seen. These new amendments do not purport to define to what extent or in what amount disgorgement may be awarded. Notably, the law does not address any of the limiting principles laid out by the Supreme Court in Liu. As we previously detailed, those principles have already impacted federal court decisions regarding appropriate disgorgement amounts to be awarded to the SEC, and it will largely be up to the courts to see whether, or how, they implement these equitable limitations going forward. What seems clear, however, is that Congress’s actions give the SEC the footing it needs to continue pursuing aggressive disgorgement awards in federal court, extending its reach to conduct as far back as a decade in time. The impact will be most acutely felt in cases of long-running, intentional frauds, which may have gone unaddressed under the previous five-year statute of limitations.

1 H.R. 6395.

2 President Trump’s veto was unrelated to these provisions; it is reported that he objected to the annual bill because it failed to place limits on social media companies and allowed the renaming of military bases named after Confederate leaders. See AP News, Trump vetoes defense bill, setting up possible override vote, https://apnews.com/article/donald-trump-politics-defense-policy-bills-babbd8bbce66db1b1b28b0f4f3cb3f13 (Dec. 23, 2020).

3 581 U.S. ___; 137 S. Ct. 1635 (2017).

4 591 U.S. ___ (June 22, 2020).

5 Specifically, Liu limited federal court disgorgement awards in three material ways: (1) by indicating that disgorged funds typically should be disbursed to harmed victims; however, the Court left open whether returning funds to the U.S. Treasury could be considered to the benefit of victims; (2) by casting doubt on whether joint-and-several liability may be imposed for disgorgement awards; however, as the defendants in Liu were a married couple, the Court left it to the lower courts to determine whether joint liability should be imposed; and (3) by holding that disgorgement awards should be limited to “net” profits, i.e., profits after deducting legitimate business expenses.

6 15 U.S.C. § 78j(b).

7 15 U.S.C. § 77q(a)(1).

8 15 U.S.C. § 80b-6(1).

ARTICLE BY Kyle DeYoung, Lex Urban, Kendra Wharton (Clayton) and Wesley Wintermyer of Cadwalader, Wickersham & Taft LLP