health Archives - The National Law Forum

Supreme Court Declines to Hear “Willfulness” Case

On Monday, October 7, 2024, the U.S. Supreme Court declined to consider a petition for certiorari in United States ex rel. Hart v. McKesson Corp., Case No. 23-1293, where relator, Adam Hart (“Relator”), sought review of a Second Circuit decision upholding the dismissal of Relator’s complaint against pharmaceutical distributor, McKesson Corporation (“McKesson”).

The case involved allegations that McKesson violated the Anti-Kickback Statute (“AKS”), which prohibits offering, paying, soliciting, or receiving remuneration to induce the purchase of goods and services paid for by a federal health program. Relator, a former McKesson employee, filed a qui tam action, claiming McKesson provided valuable business management tools—valued at over $150,000—to oncology practices at no cost, in order to induce them to purchase oncology pharmaceuticals from McKesson.

The Second Circuit dismissed Relator’s federal claims, reasoning that the allegations failed to meet the mens rea (intent) element under the AKS. The Court held that, to act willfully under the AKS, a defendant must know that its conduct is unlawful, either under the AKS or other law. Since Relator’s allegations did not plausibly suggest McKesson acted with knowledge of illegality, his federal False Claims Act claims based on the federal AKS were dismissed.

The Supreme Court’s refusal to hear Relator’s case preserves the existing circuit split regarding the interpretation of “willfulness” under the AKS. The Second Circuit, along with the Eleventh Circuit, has adopted the view that the AKS is violated when a defendant intends to violate a legal standard. This contrasts with the Fifth Circuit, which interprets the mens rea element to prohibit acts done knowingly and willfully, as opposed to by mistake or accident, and the Eight Circuit, which requires intent to commit an act known to be wrongful, but not necessarily known to be unlawful.

As it stands, the unresolved split among the circuits on this critical issue remains, and providers should be mindful that, at least in the Second and Eleventh Circuits, the stricter interpretation of “willfulness” under the AKS will continue to apply.

A Guidebook to Lawsuits Over PFAS, or Forever Chemicals

Lawsuits over the effects of per and polyfluoroalkyl substances (PFAS) have become some of the most momentous legal battles since the Big Tobacco lawsuits. PFAS compounds, also known as “forever chemicals,” are used in so many different products that you are almost guaranteed to have one in your home. Since 2000, it has been discovered that these chemicals do not break down, have contaminated numerous water sources in America, that virtually everyone has been exposed to them, and that they carry serious health risks, including several types of cancer.

Already, PFAS manufacturers and other companies that use PFAS in the course of their daily business have paid over $11 billion in PFAS lawsuits, and that is just to mitigate the damage of PFAS exposure by cleaning up contaminated soils and waters. The lawsuits to compensate victims of PFAS exposure are just beginning, and may eclipse this massive total.

What are PFAS Chemicals?

PFAS chemicals are synthetic compounds that have multiple fluorine atoms attached to a chain of alkyl, which includes carbon atoms. There are thousands of different compounds that fall into the category of PFAS chemicals. Importantly, though, the fluorine-carbon bond that is present in all of them is one of the strongest in organic chemistry, with no natural processes for breaking it down. As a result, once a PFAS compound is created, it will continue to be a PFAS compound until something is done to it to break down its chemical structure, like superheating it when it is in water.

What are They Used For?

PFAS chemicals have been used by several major corporations for a variety of applications since they were first used to invent Teflon in 1938. Broadly speaking, PFAS chemicals are extremely useful at resisting, cleaning, or preventing:

Heat
Water
Stains
Grease
Oil

These broad applications, however, have meant that they have been used in a huge number of specific ways. For example, PFAS chemicals are included in the following products to resist water:

Paint
Clothing
Raincoats
Tents
Shoes
Personal care products, like mascara and sunscreen

As a heat resistant chemical, PFAS compounds are frequently used in:

Non-stick cookware
Electrical wire insulation
Firefighting foam
Building materials, including adhesives and insulation

As a stain resistant material, PFAS chemicals have been used in:

Carpeting
Stain-resistant clothing
Window curtains
Furniture and varnishing
Dental floss
Food packaging

PFAS chemicals have also been used as oil- and grease-resistant products, like:

Lubricants
Hydraulic fluids
Pizza boxes and microwave popcorn bags

The practical effect of all of this is that PFAS chemicals are everywhere. There are very few days that you do not interact with one. Worse, because the chemical structure of PFAS compounds do not break down, when they are used or discarded they can contaminate the area around them.

What Have PFAS Chemicals Contaminated?

Virtually everything.

In the early days after PFAS chemicals started to get used for a variety of consumer products, the public and the companies behind the compounds disposed of them with no regard or understanding for the dangers that they were causing.

That lack of understanding by the corporations behind PFAS chemicals, however, began to disintegrate in the 1970s. It was around then that 3M, one of the leading PFAS manufacturing companies, discovered its PFAS chemicals inside fish in local waterways.

Rather than sound the alarm, though, 3M and its competitors continued to dispose of used or unwanted PFAS materials in whatever means they wanted or were most convenient at the time. They burned them, buried them, or dumped them into the water. Some PFAS manufacturers even developed a new firefighting foam, aqueous film forming foams (AFFFs), that relied heavily on PFAS chemicals to put out fires involving airplane jet fuel. Firefighters used this PFAS containing firefighting foam on actual fires at airports and trained with it on controlled fires at airports across the country.

The PFAS chemicals in the foam leeched into the soil and waterways near these airports for decades.

The problem was not discovered, at least not by regulators from the federal government, until 1998. That was when the U.S. Environmental Protection Agency (EPA) learned of an internal study by 3M. In that study, researchers exposed pregnant rats to PFAS materials. Inevitably, the newborn rats died within a few days. Alarmed by the news, the EPA began to investigate in an effort to regulate PFAS.

It was also at this time that a cattle farmer in West Virginia lost his animals to a mysterious health condition. Suspecting that the culprit was a major chemical plant upriver that was owned by PFAS manufacturer DuPont, the farmer sued. Over the next couple of years, the PFAS litigation expanded into a class action of over 3,500 plaintiffs and multiple water districts in the West Virginia region. A temporary settlement was reached in which DuPont would provide $30 million of funding for an independent health and environmental study to address PFAS contamination in the soil and water, the C8 Science Panel.

The findings of this Panel and subsequent studies were dire: There was PFAS contamination virtually everywhere. It was in the soil. It was in the water. It was in the animals that ate plants from the soil and that drank the water. Fish from contaminated waterways had especially high levels of PFAS chemicals in them. And PFAS chemicals were in human beings.

Who Has Been Exposed to Them?

According to one study, 95 percent of Americans had a detectable amount of PFAS chemicals in their blood.

Anyone who is exposed to PFAS chemicals has a risk of ingesting it or it getting into their body some other way – PFAS chemicals are readily absorbed through the skin, and can even get inside your body through your tear ducts. The most common way for your PFAS exposure to become PFAS contamination are:

Eating contaminated food or drinking contaminated water
Touching anything with PFAS chemicals in it, including clothing and soil
Inhaling contaminated dust or air
Swallowing anything that has PFAS chemicals in it, like makeup or lipstick
Being in contaminated air, which can get into your body through your skin pores and sweat

This means different people are at higher risk of PFAS exposure and contamination than others.

For example, people who live in or near communities that have PFAS industries that emit the chemical into the air are likely to get exposed to the dangerous chemical every single day. Firefighters who use or train with PFAS-heavy AFFF are likely to get severe exposure to the chemical whenever they use the foam, but especially when they use it on a real fire, which burns the chemical and releases it into the air where it is more easily inhaled or absorbed through the skin.

Once they are in your body, PFAS chemicals work their way into your bloodstream. Once there, they pass through your body as your blood circulates. This takes them through all of the organs that handle your blood, including your kidneys and liver. While these organs are responsible for breaking down toxins in your blood, they cannot handle PFAS chemicals. Unless PFAS chemicals are excreted somehow, they will continue to pass through your organs, causing harm to them each time they go by.

Excreting PFAS chemicals seems to be difficult. Studies have found that many people do not excrete PFAS chemicals in their urine very well, though others can do it better. These variations in excretion mean that similar people with similar exposures to PFAS chemicals may have different levels of contamination.

Aside from urinating, the only ways to get PFAS chemicals out of your body are to bleed out contaminated blood and to breastfeed, though breastfeeding just gives the contamination to the newborn child who drinks the milk.

What Health Risks Come With PFAS Contamination?

It is important to know that there is still a lot that researchers have to learn about the health conditions caused by PFAS contamination. Collecting more data may connect new health conditions to high levels of exposure to the chemical, or may even undermine what we think we know at this point.

Right now, though, medical research has found that exposure to toxic PFAS chemicals and high levels of PFAS contamination are associated with higher risks of:

Liver damage and cancer
Kidney cancer
Prostate cancer
Testicular cancer
Thyroid Disease
Fertility problems
Pregnancy issues, including:
- Fetal death
- Low birth weight
- Developmental delays in newborns
- Preeclampsia
- Hypertension
Obesity
Hormonal disruption and irregularities
Dysfunction in the immune system
High cholesterol

Some of these conditions are debilitating. Others may prove to be fatal.

Have There Been Any Settlements?

At this point, the only lawsuits that have been settled by PFAS manufacturers have been those brought by public municipalities and water districts. These class actions and multidistrict litigation (MDL) cases demanded compensation from these companies for the costs of decontaminating soil and upgrading water filtration system to eliminate PFAS from the drinking water.

Already, though, these lawsuits have recovered over $11 billion in settlements.

The first settlement is probably the most telling. This was the West Virginia case that led to the creation of the C8 Science Panel. In 2005, the Panel was created as a part of a temporary settlement that also required DuPont and its spin-off company, Chemours, to pay $71 million and cover the costs of fixing local water treatment facilities.

After the C8 Science Panel began publishing its findings, though, DuPont and Chemours reached a final settlement agreement of $671 million.

Both the settlement and the Panel’s findings led to numerous other studies, as well as to lawsuits by water districts against PFAS manufacturers.

The biggest of these has proven to be the MDL consisting of claims of over 300 water municipalities against the company 3M. This one nearly went to a bellwether trial, settling at the last moment in June, 2023, for between $10.3 billion and $12.5 billion, with the final amount depending on the amount of PFAS contamination that is found in the water. A similar lawsuit against DuPont and its subsidiaries and spin-offs settled soon thereafter for $1.185 billion. More recently, the MDL against Tyco Fire Products, one of the companies behind the firefighting foam AFFF, settled in April, 2024, for $750 million, and the one against BASF settled in May for $316.5 million.

What About Mass Tort Claims?

These massive settlements, totaling over $11 billion, are just to cover the costs of cleaning up the soil and water of the plaintiff municipalities. We have not even begun to recover compensation for the individual victims who have suffered the healthcare issues connected to PFAS exposure and contamination.

Several of these cases are ongoing, though.

Some are being pursued by small groups of plaintiffs against smaller PFAS businesses, like this Connecticut community that is suing a local paper company for contaminating local waterways with PFAS chemicals.

Many more, however, have been consolidated into an MDL in South Carolina. As of July, 2024, it had more than 9,000 claims in it. This MDL, though, is strictly concerned with PFAS exposure from AFFF firefighting foam. However, it does include individual plaintiffs who have suffered actual harm from PFAS exposure, rather than public municipalities. These individual plaintiffs are demanding compensation for their adverse health conditions, medical monitoring, and even for the costs of cleaning up contaminated private property or for the reduction in property values caused by the contamination.

According to PFAS mass tort lawyer Dr. Nick Oberheiden, founding partner of the national law firm Oberheiden P.C., “It seems safe to say that these individual claims for compensation related to PFAS exposure and contamination are going to continue to get filed for decades into the future. One likely outcome is that an MDL will form for non-AFFF specific claims related to medical conditions and property value loss due to PFAS contamination. Victims who have been exposed to PFAS chemicals could then join the MDL and benefit from the expedited process that it entails. If PFAS manufacturers and defendants go bankrupt, we will likely see a trust fund being created, similar to how asbestos manufacturers handled the thousands of cases against them.”

OSHA Proposes New, Far-Reaching Workplace Heat Safety Rule

In July 2024, the Department of Labor’s Occupational Safety and Health Administration (OSHA) announced a proposed rule (the “Proposed Rule” or “Rule”) aimed at regulating and mitigating heat-related hazards in the workplace. If enacted, the long-anticipated Rule will have far-reaching impacts on businesses with employees who work in warm climates or who are otherwise exposed to heat-related hazards.

According to OSHA, out of all hazardous weather conditions, heat is the leading cause of death in the U.S. The Proposed Rule seeks to protect employees from hazards associated with high heat in the workplace and would apply to both indoor and outdoor work settings. Among other requirements, the Proposed Rule would mandate that employers evaluate heat-related workplace hazards and implement a Heat Illness and Injury Prevention Plan (HIIPP) to address heat hazards through methods which include rest breaks, shade requirements, the provision of drinking water, acclimatization procedures, heat monitoring, and other tactics to protect workers. The proposed HIIPP requirement takes cues from state-level occupational safety and health agencies — like Cal/OSHA (California) and Oregon OSHA — which have already implemented heat safety and HIIPP requirements.

One provision of the Proposed Rule that has garnered significant attention is the paid rest break provision. As currently drafted, the Proposed Rule would require employers to provide one paid15-minute rest break every two hours on days where the heat index reaches 90° F or higher. The paid rest break provision implicates questions about the concurrent application of the Fair Labor Standards Act. For example, does this 15-minute break period count toward an employee’s “hours worked” for the purposes of calculating overtime?

Moreover, in light of the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo — in which the court overturned the longstanding principle of deference to agency interpretations previously set out under the 1984 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. case — significant questions remain about whether far-reaching mandates (like the paid rest break provision) are within OSHA’s authority. Given this new administrative landscape, if the Proposed Rule is enacted, we can expect challenges stemming from Loper Bright.

The Proposed Rule has not yet been published in the Federal Register. However, when such publication occurs, the Rule will be open to commentary from the public before becoming final. When OSHA announced the Proposed Rule, it simultaneously “encourage[d] the public to participate by submitting comments when the proposed standard is officially published in the Federal Register[,]” in order to “develop a final rule that adequately protects workers, is feasible for employers, and is based on the best available evidence.”

For more information regarding how to provide comments on this Proposed Rule, visit https://www.osha.gov/laws-regs/rulemakingprocess#v-nav-tab2.

A Guide for All Medicare Whistleblowers

Becoming a whistleblower and notifying federal authorities of Medicare fraud is a big public service and can even lead to a lucrative whistleblower award. Furthermore, the chief concern for interested whistleblowers is whether they could get reprimanded at their job for blowing the whistle on healthcare fraud or even fired, but any form of whistleblower retaliation is unlawful under the Whistleblower Protection Enhancement Act.

If you think that you have uncovered evidence of Medicare fraud and want to learn more about what could happen next, here are four things to know.

There are Lots of Known Ways to Defraud Medicare

Medicare is an $800 billion federal program, but estimates are that tens of billions, if not nearly $100 billion of that is lost to fraud every year – and that estimate is widely regarded as a conservative one.

A lot of this type of health care fraud can be categorized into one of the following types of schemes, many of them having to do with fraudulent billing tactics:

Phantom billing, where medical goods or services are billed against Medicare even though they were never provided or the purported patient does not exist
Double billing for the same goods or services
Providing medically unnecessary healthcare
Buying prescription drugs with Medicare drug plan money and then reselling them
Upcoding, or providing a healthcare service to a patient, but then billing Medicare for a similar but more expensive one
Unbundling, or billing for each service independently even though they are normally charged in a discounted package because they are often performed together
Paying or taking financial kickbacks for referring patients to a certain healthcare provider, or to a provider that the referring party has a financial stake in

However, these are just the types of Medicare fraud that have been discovered. There are likely other ways of defrauding the program that have yet to be detected. Therefore, even if the evidence that you have uncovered does not fit squarely into one of these types of Medicare fraud does not necessarily mean that it is not a problem.

What Happens After Deciding the Blow the Whistle on Medicare Fraud

Most people are not completely familiar with how other civil or criminal cases move forward in the justice system. Because whistleblower cases are different and even more nuanced and complex, even fewer people understand the process – and those that presume that they are just like other cases find themselves misinformed.

Whistleblower cases are nearly unique in that they have three parties to them:

The whistleblower
The government
The defendant

After you have found evidence of Medicare fraud and abuse, decided to report suspected fraud and become a whistleblower, and hired a law firm well versed in federal laws to represent you, you will continue to gather evidence to support your allegations. This is a sensitive endeavor, as most whistleblowers only have access to the incriminating evidence through their employment, and their employer may be actively trying to cover up the fraudulent activity.

Being represented by an experienced whistleblower lawyer is essential for this stage of the process. They will have gone through it before and will see how to gather evidence to support your case without exposing yourself to the risk of being detected for reporting fraud.

Once you have a strong case, the next step is to present it to the law enforcement agency that would have jurisdiction over your case. Typically you would present information to the Health and Human Services Office or Office of the Inspector General (OIG) hotline. For Medicare fraud, reports are often made to the Centers for Medicare and Medicaid Services, or CMS. The goal is typically to persuade agents there to intervene in your case, conduct the investigation that you started, and prosecute the fraudsters.

If the agency declines to intervene, you can still pursue the case on the government’s behalf.

You Can Receive a Financial Award

One of the main incentives for whistleblowers is the award that they can receive for bringing the evidence to the attention of federal law enforcement. That award can be substantial.

Because Medicare is a federal program, most claims of Medicare fraud advance under the False Claims Act (31 U.S.C. §§ 3729 et seq.). This federal law provides an avenue for whistleblowers who have evidence of fraud against the government.

Importantly, the False Claims Act offers quite generous whistleblower awards, even when compared to other whistleblower statutes. The amount that you receive depends on several factors, the most important of which is whether the government intervened in your case or not. If it did, you can receive between 15 and 25 percent of the proceeds of the case. If it did not and you prosecuted the case on behalf of the government, you can recover up to 30 percent of the case’s proceeds.

Other factors include:

Whether there are other whistleblowers who played a role in the case
How important the evidence was that you brought to the table
Whether you played a part in the Medicare fraud

Your Job is Protected

Because workplace retaliation is such a foreseeable outcome of becoming a whistleblower, and because the federal government relies so heavily on whistleblowers, it should come as no surprise that the False Claims Act and other whistleblower statutes provide legal protections in the workplace for those who engage in lawful whistleblower activities.

For Medicare fraud whistleblowers, the False Claims Act’s anti-retaliation provision, 31 U.S.C. § 3730(h), is particularly strong. Not only does it protect you from retaliatory conduct that falls short of termination, like workplace harassment and threats to fire you, it also entitles you to significant remedies if your employer breaks the law and commits an act of reprisal.

What the FTC’s Rule Banning Non-Competes Means for Healthcare

The FTC unveiled its long-awaited final rule banning most non-compete agreements during a live broadcast of a Commission meeting on April 23, 2024. The proposed rule, which was first announced in January 2023, underwent an extensive public comment process in which approximately 26,000 comments were received. According to the FTC, approximately 25,000 of these comments supported a total ban on non-competes. While there was some expectation that the final rule would be less aggressive than the proposed rule, that turned out not to be the case. By late summer 2024, most employers, except for non-profit organizations, will not be able to enforce or obtain non-competes in the U.S. except in extremely narrow circumstances. The new rule will take effect 120 days after it is published in the Federal Register. Assuming the rule is published this week, we can expect it to take effect by late August. That is, of course, if a court does not enjoin the rule first. Shortly after the rule was announced on April 23, the U.S. Chamber of Commerce stated its intention to sue the FTC. U.S. Chamber to Sue FTC Over Unlawful Power Grab on Noncompete Agreements Ban | U.S. Chamber of Commerce (uschamber.com) The first lawsuit challenging the new rule was filed on April 23, Ryan, LLC v. Federal Trade Commission, Case No. 3:24cv986 (N.D. Tex. Apr. 23, 2024). Among other relief, the Ryan suit seeks to have the rule vacated and set aside. There are significant legal questions concerning whether the FTC has the authority to take this action by rulemaking or whether this is best left to the legislative process. While some U.S. states have banned non-competes, many U.S. states have not banned them.

As written, the rule will have profound effects on virtually every industry, especially health care, where non-competes are common in physician and mid-level practitioner employment agreements. As several Commissioners indicated during the April 23 meeting, they are particularly concerned about non-competes in health care and believe this rule will save approximately $74-194 billion in reduced spending on physician services over the next decade.

Following is Nelson Mullins’ quick take on what health care employers need to know:

The rule does not apply to non-profits. The basis for the rule making is Section 5 of the FTC Act, which doesn’t apply to non-profits. So, a non-profit health system that has non-competes with physicians or other workers is not impacted by the rule. Be aware, though, that the FTC may be looking to test whether some non-profit health systems are really operating as true non-profits. Tax exempt status alone will not be enough. We believe, however, that given significant and quantifiable charitable benefits that most non-profit systems provide, the FTC may be hard pressed to find a good test case within the non-profit health care industry.
For all others, the rule bans all non-compete agreements for any worker, regardless of title, job function, or compensation, after the effective date. Thus, a for-profit health system or for-profit physician practice that uses non-competes will be significantly limited. The only non-competes that will be allowed to remain in force are non-competes for “Senior Executives” that were entered into before the rule becomes effective.
The rule will take effect 120 days after it is published in the Federal Register. This will likely occur this week, so we expect the effective date to be approximately August 20, 2024.
The rule rescinds existing non-competes for all workers who are not “Senior Executives.”
“Senior Executive” is a narrowly-defined term meaning:
1. a person in a policy making position; and
2. who was paid at least $151,164 in the prior year.
Existing non-competes for Senior Executives are not rescinded. New non-competes with Senior Executives entered into prior to the effective date are still allowed. However, no new non-competes with Senior Executives may be entered into after the effective date.
“Policy-making position” means: President, CEO, or equivalent, or other person who has policy making authority, i.e., decisions that control a significant aspect of a business entity. Most clinicians will not meet the definition of “Senior Executive.”
Non-senior executives who are now under a non-compete must be given notice by the effective date that their non-compete will not be, and cannot legally be, enforced. Model language for the notice is in the rule.

Curb Your Pollution: EPA Issues Final Rule to Reduce Toxic Air Pollution

EPA Issues Final Rule to Reduce Toxic Air Pollution from the Synthetic Organic Chemical Manufacturing Industry and the Polymers and Resins Industries

On April 9, 2024, the U.S. Environmental Protection Agency (EPA) announced its final rule that is touted to provide critical health protections to hundreds of thousands of people living near chemical plants. The final rule, signed March 28, 2024, will reduce emissions of hazardous air pollutants, including the toxic chemicals chloroprene and ethylene oxide (EtO). The rule implements sections 111 and 112 of the Clean Air Act.

When fully implemented, the final rule will reduce more than 6,200 tons a year of over 100 air toxics – including EtO and chloroprene – from covered equipment and processes at plants in Texas and Louisiana, along with plants in other parts of the country including Delaware, New Jersey, and the Ohio River Valley.

As part of the final rule, the EPA is also issuing new emissions limits for dioxins and furans. This will reduce more than 23,000 tons of smog-forming volatile organic compounds (VOCs) each year.

EPA’s final rule will also require plants to conduct fenceline monitoring if any of the equipment or processes covered by the rule use, produce, store, or emit EtO, chloroprene, benzene, 1,3- butadiene, ethylene dichloride or vinyl chloride. Fenceline monitoring is used to measure levels of pollution in the air around the perimeter of a facility. The fenceline monitoring provisions of the rule require owners and operators to ensure that levels of these six pollutants remain below a specified “action level.” Fenceline monitoring provides owners and operators the flexibility to determine what measures to take to remain below the action level, while ensuring that they are effectively controlling toxic air pollution.

The final rule will significantly reduce emissions of air toxins, especially those that are potentially harmful for surrounding communities. According to the EPA, these emission reductions will yield significant reductions in lifetime cancer risk attributable to these air pollutants, in addition to other health benefits.

Recent Healthcare-Related Artificial Intelligence Developments

AI is here to stay. The development and use of artificial intelligence (“AI”) is rapidly growing in the healthcare landscape with no signs of slowing down.

From a governmental perspective, many federal agencies are embracing the possibilities of AI. The Centers for Disease Control and Prevention is exploring the ability of AI to estimate sentinel events and combat disease outbreaks and the National Institutes of Health is using AI for priority research areas. The Centers for Medicare and Medicaid Services is also assessing whether algorithms used by plans and providers to identify high risk patients and manage costs can introduce bias and restrictions. Additionally, as of December 2023, the U.S. Food & Drug Administration cleared more than 690 AI-enabled devices for market use.

From a clinical perspective, payers and providers are integrating AI into daily operations and patient care. Hospitals and payers are using AI tools to assist in billing. Physicians are using AI to take notes and a wide range of providers are grappling with which AI tools to use and how to deploy AI in the clinical setting. With the application of AI in clinical settings, the standard of patient care is evolving and no entity wants to be left behind.

From an industry perspective, the legal and business spheres are transforming as a result of new national and international regulations focused on establishing the safe and effective use of AI, as well as commercial responses to those regulations. Three such regulations are top of mind, including (i) President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of AI; (ii) the U.S. Department of Health and Human Services’ (“HHS”) Final Rule on Health Data, Technology, and Interoperability; and (iii) the World Health Organization’s (“WHO”) Guidance for Large Multi-Modal Models of Generative AI. In response to the introduction of regulations and the general advancement of AI, interested healthcare stakeholders, including many leading healthcare companies, have voluntarily committed to a shared goal of responsible AI use.

U.S. Executive Order on the Safe, Secure, and Trustworthy Development and Use of AI

On October 30, 2023, President Biden issued an Executive Order on the Safe, Secure, and Trustworthy Development and Use of AI (“Executive Order”). Though long-awaited, the Executive Order was a major development and is one of the most ambitious attempts to regulate this burgeoning technology. The Executive Order has eight guiding principles and priorities, which include (i) Safety and Security; (ii) Innovation and Competition; (iii) Commitment to U.S. Workforce; (iv) Equity and Civil Rights; (v) Consumer Protection; (vi) Privacy; (vii) Government Use of AI; and (viii) Global Leadership.

Notably for healthcare stakeholders, the Executive Order directs the National Institute of Standards and Technology to establish guidelines and best practices for the development and use of AI and directs HHS to develop an AI Task force that will engineer policies and frameworks for the responsible deployment of AI and AI-enabled tech in healthcare. In addition to those directives, the Executive Order highlights the duality of AI with the “promise” that it brings and the “peril” that it has the potential to cause. This duality is reflected in HHS directives to establish an AI safety program to prioritize the award of grants in support of AI development while ensuring standards of nondiscrimination are upheld.

U.S. Department of Health and Human Services Health Data, Technology, and Interoperability Rule

In the wake of the Executive Order, the HHS Office of the National Coordinator finalized its rule to increase algorithm transparency, widely known as HT-1, on December 13, 2023. With respect to AI, the rule promotes transparency by establishing transparency requirements for AI and other predictive algorithms that are part of certified health information technology. The rule also:

implements requirements to improve equity, innovation, and interoperability;
supports the access, exchange, and use of electronic health information;
addresses concerns around bias, data collection, and safety;
modifies the existing clinical decision support certification criteria and narrows the scope of impacted predictive decision support intervention; and
adopts requirements for certification of health IT through new Conditions and Maintenance of Certification requirements for developers.

Voluntary Commitments from Leading Healthcare Companies for Responsible AI Use

Immediately on the heels of the release of HT-1 came voluntary commitments from leading healthcare companies on responsible AI development and deployment. On December 14, 2023, the Biden Administration announced that 28 healthcare provider and payer organizations signed up to move toward the safe, secure, and trustworthy purchasing and use of AI technology. Specifically, the provider and payer organizations agreed to:

develop AI solutions to optimize healthcare delivery and payment;
work to ensure that the solutions are fair, appropriate, valid, effective, and safe (“F.A.V.E.S.”);
deploy trust mechanisms to inform users if content is largely AI-generated and not reviewed or edited by a human;
adhere to a risk management framework when utilizing AI; and use of AI technology. Specifically, the provider and payer organizations agreed to:
develop AI solutions to optimize healthcare delivery and payment;
work to ensure that the solutions are fair, appropriate, valid, effective, and safe (“F.A.V.E.S.”);
deploy trust mechanisms to inform users if content is largely AI-generated and not reviewed or edited by a human;
adhere to a risk management framework when utilizing AI; and
research, investigate, and develop AI swiftly but responsibly.

WHO Guidance for Large Multi-Modal Models of Generative AI

On January 18, 2024, the WHO released guidance for large multi-modal models (“LMM”) of generative AI, which can simultaneously process and understand multiple types of data modalities such as text, images, audio, and video. The WHO guidance contains 98 pages with over 40 recommendations for tech developers, providers and governments on LMMs, and names five potential applications of LMMs, such as (i) diagnosis and clinical care; (ii) patient-guided use; (iii) administrative tasks; (iv) medical education; and (v) scientific research. It also addresses the liability issues that may arise out of the use of LMMs.

Closely related to the WHO guidance, the European Council’s agreement to move forward with a European Union AI Act (“Act”), was a significant milestone in AI regulation in the European Union. As previewed in December 2023, the Act will inform how AI is regulated across the European Union, and other nations will likely take note of and follow suit.

Conclusion

There is no question that AI is here to stay. But how the healthcare industry will look when AI is more fully integrated still remains to be seen. The framework for regulating AI will continue to evolve as AI and the use of AI in healthcare settings changes. In the meantime, healthcare stakeholders considering or adopting AI solutions should stay abreast of developments in AI to ensure compliance with applicable laws and regulations.

Multiple Concussions Result in Greater Cognitive Deficits

A new study published in the Journal of Neurotrauma examined the lifetime traumatic injury and cognitive domain deficits following traumatic brain injury. Most interesting for those representing clients who sustained mild traumatic brain injuries is that the number of prior mild traumatic brain injuries and the role they play in affecting one’s cognitive abilities.

The study examined the longer-term cognitive effects of traumatic brain injury severity and the number of mild TBI’s in later life. The researchers examined the subset (n=15,764) of the PROTECT Study, a cohort assessing risk factors for cognitive decline between the ages of 50 and 90 years. The study found that those who had suffered at least a single mild TBI demonstrated significantly poorer attention scores at baseline compared with the no head injury group. Compared with those with no mild TBI’s, those in the 3 MTBI group manifested poorer baseline executive function and attention scores, while those who had suffered 4 or more mild traumatic brain injuries demonstrated poorer attention, processing speed, and working memory compared with those reporting no mild traumatic brain injuries. The researchers stated:

“TBI’s associated with fixed, dose and severity-dependent cognitive deficits. The most sensitive cognitive domains are attention and executive function, which approximately double the effect compared with processing speed and working memory. Post-TBI cognitive rehabilitation should be targeted appropriately to domain-specific effects…. Significant long-term cognitive deficits were associates with three or more lifetime MTBI’s, a critical consideration when counselling individuals post-TBI about continuing high-risk activities.”

The citation for the study is Lennon MJ, Brooker H, Creese B, Thayanandan T, Rigney G, Aarsland D, Hampshire A, Ballard C, Corbett A, Raymont V. Lifetime Traumatic Brain Injury and Cognitive Domain Deficits in Late Life: The PROTECT-TBI Cohort Study. J Neurotrauma. 2023 Jan 27. doi: 10.1089/neu.2022.0360. Epub ahead of print. PMID: 36716779.

Article By Bruce H. Stern of Stark & Stark

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

Federal PFAS Drinking Water Standards: 2023 Is the Year

On Friday, October 7, 2022, the EPA formally sent its proposed federal PFAS drinking water standards to the White House Office of Management and Budget (OMB) for consideration and approval or rejection. The proposed rule cleared OMB review on November 30, 2022; however, the EPA has not yet released the proposed rule. While the details of the rule under consideration are not yet known, what is evident from the title of the document logged on the OMB website is that the drinking water standards will address PFOA and PFOS. At least from the document title, it does not appear that any other PFAS will be subject to Safe Drinking Water Act (SDWA) regulation at the moment.

The delay in releasing the proposed drinking water standards for over a month now, though, could suggest that the proposed rule may seek to regulate more than just PFOA and PFOS, and the EPA may be looking to shore up language and support language in the proposed rule for such a proposal in light of comments from the OMB. Similarly, many wonder whether the EPA proposed a limit so low that the OMB had concerns as to whether the limits were detectable. With the EPA keeping its proposed language a closely guarded secret for the time being, much of the discussions rest on speculation. What we do know is that he EPA is statutorily required to put forth a proposed standard before the first half of 2023, and it has publicly pledged repeatedly to act more quickly than that statutory requirements.

Thus, 2023 will see federal PFAS drinking water standards for at least two PFAS from the EPA and we predict that it is only a matter of days before the country sees the EPA’s proposal, which will kick off what promises to be an extremely contentious public comment period.

Now more than ever, the EPA is clearly on a path to regulate PFAS contamination in the country’s water, land and air. These regulations will require states to act, as well (and some states may still enact stronger regulations than the EPA). Both the federal and the state level regulations will impact businesses and industries of many kinds, even if their contribution to drinking water contamination issues may seem on the surface to be de minimus. In states that already have PFAS drinking water standards enacted, businesses and property owners have already seen local environmental agencies scrutinize possible sources of PFAS pollution much more closely than ever before, which has resulted in unexpected costs. Beyond drinking water, though, the EPA PFAS Roadmap from 2021 shows the EPA’s desire to take regulatory action well beyond just drinking water, and companies absolutely must begin preparing now for regulatory actions that will have significant financial impacts down the road.

Article By John Gardella of CMBG3 Law

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

Will CMS’s Proposed Rule on “Identified Overpayments” Increase Reverse FCA Cases?

On December 27, 2022, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule which, in part, seeks to amend the existing regulations for Medicare Parts A, B, C, and D regarding the standard for when an “identified” overpayment must be refunded, pursuant to the Affordable Care Act (ACA) and the False Claims Act (FCA) reverse false claims provision. As written, the proposed rule would remove the existing “reasonable diligence” standard for identification of overpayments, and add the “knowing” and “knowingly” FCA definition. As a result, an overpayment would be “identified” when the entity has actual knowledge of an identified overpayment, or acts in reckless disregard or deliberate ignorance of an identified overpayment. And, a provider is required to refund overpayments it is obliged to refund within 60 days of such identified overpayment.

If this proposed rule is finalized, the Department of Justice (DOJ) and Health and Human Services (HHS) Office of Inspector General’s (OIG) should be applying the same intent standard to their evaluation of potential reverse false claims and Civil Monetary Penalty liability.

The Lay of the Land

Currently, the applicable overpayment regulations state:

A person has identified an overpayment when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. A person should have determined that the person received an overpayment and quantified the amount of the overpayment if the person fails to exercise reasonable diligence and the person in fact received an overpayment.

42 C.F.R. § 401.305(a)(2). In the 2016 Final Rule, CMS agreed “the 60-day time period begins when either the reasonable diligence is completed or on the day the person received credible information of a potential overpayment if the person failed to conduct reasonable diligence and the person in fact received an overpayment.” This reasonable diligence standard allows entities to not only determine credibility of allegations, or issues relating to, a potential overpayment but also, when credible, to conduct a properly scoped internal investigation, during which an entity also accurately quantifies any associated overpayment due for refund.

In the proposed rulemaking, CMS is suggesting instead the following standard:

A person has identified an overpayment when the person knowingly receives or retains an overpayment. The term “knowingly” has the meaning set forth in 31 U.S.C. 3729(b)(1)(A).

31 U.S.C. 3729(b)(1)(A) defines “Knowingly” as any circumstance in which “a person, with respect to information—(i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of the information.”

The currently proposed provision has similar effect to the language CMS proposed in 2012 and, after consideration of comments, ultimately rejected in the 2014 Final Rule (Medicare Advantage and Part D) and 2016 Final Rule (Medicare Part A and Part B). In that final rulemaking, CMS removed the “actual knowledge,” “reckless disregard,” and “deliberate ignorance” terms in favor of the reasonable diligence standard, leaving practitioners to argue that CMS had lowered requisite intent to a standard less than required by the FCA.

Potential Impact

The FCA is a fraud statute, requiring intent. If a company investigating the credibility, issue, and scope of a matter (i.e., exercising reasonable diligence) also diligently determines the scope of a possible refund obligation, it would be difficult for DOJ to credibly claim an entity has acted recklessly, or with deliberate indifference to repayment under the FCA. DOJ’s general practice has been to bring reverse FCA cases when a provider does not investigate credible allegations and does not refund associated overpayments, after identifying them. For example, in a 2015 case, DOJ attorneys stated in a court conference, “[T]his is not a question … of a case where the hospital is diligently working on the claims and it’s on the sixty-first day and they’re still scrambling to go through their spreadsheets, you know, the government wouldn’t be bringing that kind of a claim.” United States ex rel. Kane v. Healthfirst, Inc., 120 F. Supp. 3d 370, 389 (S.D. N.Y. 2015).

It remains to be seen whether this change will result in an increased pursuit of reverse FCA cases. The proposed rule would eliminate an explicit diligence period (generally not to exceed six months, except in particularly complicated analyses, such as under the Physician Self-Referral or “Stark” Law) to ascertain the validity and amount of a potential obligation to refund an overpayment. The proposed rule does not explain whether providers, suppliers, and others still will have an opportunity to conduct a reasonably diligent inquiry into whether any obligation to refund exists at all, prior to the ACA 60-day clock starting to run. Ideally CMS would make clear in any preamble that the government still expects reasonable and professional efforts be undertaken before making refunds, even if that process may take some time to complete

Absent such clarity, the fact remains that it is difficult to “identify” an obligation to refund, much less any refundable amounts, without first validating the alleged overpayment and quantifying any obligation.

Additionally, this standard may prompt entities to submit an HHS-OIG self-disclosure before all facts are known. While OIG requires a disclosing party to conduct an internal investigation prior to submission, it is near impossible to thoroughly investigate issues and identify any refund 60 days from learning of a possible issue that might result in a refund (especially when multiple payors are involved). Even if a disclosing party notes within a self-disclosure that an investigation is ongoing, the disclosing party must certify that it will complete its investigation within 90 days of the submission date – which still may not be enough time based on the complexity of the allegations or claims review required. The resulting back-and-forth of incomplete information likely would create unnecessary delays in reaching a resolution and frustration among all parties involved.

We encourage all providers, suppliers, Medicare Advantage organizations, Part D participants, and other stakeholders to submit comments on this proposed rule. The public has until 5 p.m. ET on February 13, 2023 to submit comments, which are accepted, electronically or by mail.

Article By Kara (Schoonover) Sweet, Lisa M. Noller, and Lawrence W. Vernaglia of Foley & Lardner LLP

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

Tag: health

Supreme Court Declines to Hear “Willfulness” Case

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