Health Care

Health care companies using algorithms and AI applications face increased compliance risks. Previous technology-related enforcement suggests how relators and enforcement agencies might use AI to detect potential fraud and develop allegations based on how the technology is being used.

Since May 2023, federal legislators have introduced more than 50 bills focused on issues related to AI technologies, with patient privacy, the role of clinicians, and health equity emerging as areas of focus. In addition, the Biden administration released an Executive Order focused on promoting AI safety in October 2023.

In 2023, DOJ announced significant updates to the Criminal Division’s Corporate Enforcement Policy, the agency’s Voluntary Self-Disclosure Policy for corporate criminal enforcement, and a new safe harbor for voluntary self-disclosures made in connection with M&A deals, all aimed at incentivizing companies to self-disclose their misconduct.

An uptick in DOJ cybersecurity enforcement in 2023, includes two FCA settlements, an unsealed qui tam complaint, and significant regulatory activity that could pose future enforcement risk.

This Q&A with John Koss, Managing Director of Mintz’s E-Data Consulting Group, delves into the work of the group along with the benefits, challenges, and emerging issues related to using AI in e-discovery.

Several case dispositions from this past year, both criminal and civil, reaffirm DOJ’s policy of ensuring individual accountability in resolving allegations of wrongdoing and underscore the importance of considering that issue in the resolution of any FCA case.

With the goal of enhancing health care quality and outcomes for individuals with moderate to severe behavioral health conditions and substance use disorders (SUD), the Centers for Medicare & Medicaid Services (CMS) recently announced it will launch the state-based, voluntary Innovation in Behavioral Health (IBH) Model in fall of 2024.

CMS will circulate a Notice of Funding Opportunity (NOFO) in spring of 2024 and select up to eight states to participate in the IBH Model, which is expected to last for eight years. Selected states will align with their respective state Medicaid agencies (SMAs) on clinical policies for integrated care and work with Medicaid Managed Care Organizations (MCOs) or other partners for model development and implementation. 

On January 11, 2024, the Office of Civil Rights (OCR) issued its highly anticipated Final Rule regarding conscience protections. The Final Rule clarifies the religious beliefs and moral convictions protections practitioners and entities may assert in their health care practices. The Final Rule, entitled Safeguarding the Rights of Conscience as Protected by Federal Statutes, becomes effective March 11, 2024. 

As we reflect on the flurry of activity in the health care data privacy and security space in 2023 and look ahead to what will continue to be a busy 2024, we are seeing the early stages of federal agency movement to align the regulatory environment with modern health care delivery, cutting-edge technologies, and innovative data-sharing techniques. Some of this work has been done in the form of federal agency guidance in which health care organizations will be looking for additional updates and there are also a handful of pending U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) proposals that call for substantial changes to the HIPAA Privacy Rule.

A Virginia Federal Judge recently rejected a challenge to a negative Advisory Opinion issued by the Department of Health & Human Services’ Office of Inspector General (OIG) that disapproved of a proposal where certain pharmaceutical manufacturers would fund financial assistance for the manufacturers’ Part D oncology drugs. The Advisory Opinion was requested by the Pharmaceutical Coalition for Patient Access (PCPA), which is a charitable organization formed and fully funded by pharmaceutical manufacturers of oncology drugs. Subsequently, PCPA brought the lawsuit alleging that the negative Advisory Opinion violated the Administrative Procedure Act (APA). 

The Department of Health and Human Services (HHS) was tasked with formalizing and coordinating efforts to regulate artificial intelligence (AI) in health care under the November 2023 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (AI EO) and has already begun its regulation of AI within certain certified health IT.  HHS and Office of the National Coordinator for Health Information Technology (ONC) recently published the Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing (HTI-1) Final Rule.

The Office of Inspector General (OIG) started 2024 with a flurry of activity by issuing four new Advisory Opinions on January 3, 2024. In one of these Advisory Opinions, the OIG approved a vendor’s referral program that offered gift cards to physician practices that are existing customers in exchange for recommending the vendor’s services to prospective physician customers.  In doing so, the OIG adopts a position that directly contradicts the position that the Department of Justice (DOJ) espoused in multiple False Claims Act (FCA) settlements involving similar referral programs offered by electronic health record (EHR) vendors in which the DOJ alleged these programs violated the federal Anti-Kickback Statute (AKS).

An important new initiative focused on women’s health research – defined as “the study of health across a woman’s lifespan in order to preserve wellness and to prevent, diagnose, and treat disease” – was recently kicked off in the United States. On November 13, 2023 the White House announced the Initiative on Women’s Health Research, to be led by First Lady Jill Biden and the Gender Policy Council. The Initiative aims to recognize and address the historic and persisting gaps in women’s health research and, by extension, in our collective knowledge about women’s health as well as how women experience certain conditions or respond to certain treatments differently than men. 

A year has passed since Congress enacted the Modernization of Cosmetics Regulation Act (MoCRA) and enhanced the Food and Drug Administration’s (FDA) authority to regulate the cosmetics industry. Although MoCRA implementation efforts steadily increased throughout the calendar year, as the December 29, 2023 compliance date for most MoCRA provisions approached, FDA’s release of information and deployment of new systems for the industry came to a climax. Several recent MoCRA-related developments will influence how cosmetic industry stakeholders, consumers, and even the FDA will approach and navigate the law’s requirements over the next year. In this blog post, we will discuss each of these developments and forecast the law’s future as we move into 2024.

California’s new Office of Health Care Affordability (OHCA) is set to start pre-closing regulatory review of certain health care transactions on January 1, 2024. As further explained in our previous post, subject to certain exceptions, a broad range of health care entities (collectively, Health Care Entities) soon will be subject to potential pre-closing transaction review.

In 2023, the FDA navigated challenges while achieving significant public health milestones. Member Joanne Hawana and Of Counsel Benjamin Zegarelli highlight key takeaways from the year, addressing multifaceted issues such as CBD regulation, the overhaul of in vitro clinical tests, and the management of manufacturing failures. These pivotal topics underscore the FDA’s proactive approach to evolving healthcare regulations and technological advancements. 

The U.S. Department of Health and Human Services (HHS) released a concept paper on December 6, 2023 outlining its action plan to enhance cyber resiliency in the health care sector by proposing certain voluntary cybersecurity actions and standards that may ultimately become requirements. For health care organizations such as hospitals, “cyber resiliency” generally means how organizations anticipate, operate during, respond to, and recover from cyber attacks such as ransomware attacks, cloud exploitations, phishing or spear-phishing attacks, software and zero-day vulnerabilities, or distributed denial of service attacks.

Mintz recently launched a new series of Health Law Diagnosed titled Women Leaders in Health Care. This new series highlights women leaders in the health care industry and includes discussions on key issues in the health care industry, women leaders’ reflections on their career, and the impact of mentorship. In our inaugural episode, Leah Pollema, Vice President and General Counsel at InhibRx, and Serene Katranji, Chief Operating Officer, Chief Compliance Officer, and Corporate Counsel at Orchard Laboratories, join host Bridgette Keller to share personal stories about their experiences as both mentees and mentors, shedding light on the invaluable impact mentorship has had on their professional journeys.

This July, we detailed the Supreme Court’s surprising revival in United States ex rel. Polansky v. Exec. Health Resources, No. 21-1052 (S. Ct. June. 16, 2023), of the question of whether the qui tam provisions of the False Claims Act (“FCA”), see 31 U.S.C. § 3730(b)(1), violate the Executive Branch’s exclusive grant of authority under Article II of the United States Constitution. In Polansky, a lengthy dissent by Justice Thomas questioned whether the False Claims Act qui tam provisions violated the Appointments Clause and Take Care Clause of Article II of the United States Constitution, arguments that had been endorsed by the Department of Justice (“DOJ”) in the 1989, though ultimately repudiated by DOJ just seven years later. A concurrence by Justice Kavanagh, joined by Justice Barrett, stated that “the Court should consider the competing arguments on the Article II issue in an appropriate case.” Shortly after Polansky was decided, a defendant in a declined qui tam case pending in the United States District Court for the Northern District of Alabama accepted Justice Kavanagh’s invitation, and moved to dismiss on Article II grounds. In a decision entered in November, the District Court rejected that challenge.

As we wrote about in our prior blog post, on September 29, 2023, John D. Bates of the U.S. District Court for the District of Columbia struck down a federal rule that permitted health plans and pharmacy benefit managers (PBMs) to exclude drug manufacturer copayment (copay) assistance from a patient’s cost sharing limits. In two separate filings this week, HHS signaled that it intends to support the continued use of copay accumulator programs as the industry has been using them since 2021.