Telehealth companies and other industry stakeholders have had a watchful eye towards the end of 2024 and the impending “telehealth cliff” as COVID-era Drug Enforcement Agency (DEA) flexibilities and Medicare expanded telehealth coverage are set to expire. Although a recent temporary joint rule from the DEA and the Department of Health and Human Services (HHS) along with the 2025 Medicare Physician Fee Schedule final rule has provided some hope, questions regarding telehealth access in 2025 and under a new Administration remain unclear. Further, calls continue for increased oversight of telehealth services. 

On September 28, 2024, California Governor Gavin Newsom vetoed California Assembly Bill 3129 (AB-3129) originally introduced by California Attorney General Rob Bonta (AG) and Assembly Speaker pro Tempore Jim Wood and passed by the California legislature earlier in the month.  While the California legislature can override the Governor’s veto, legislators likely will not take this extraordinary step, which has not been taken in several decades.

Read about different health care priorities that may be pursued by the presidential candidates Donald Trump and Kamala Harris in the latest edition of our 2024 Pre-Election Analysis series on how the November 2024 election will impact the legislative and regulatory landscape.

The indictment, arrest, and arraignment of Ruthia He, the founder, CEO, and clinical president of Done Global (Done), and David Brody, clinical president of Done and the sole shareholder of Done Health, P.C. (PC) in connection with their alleged criminal conspiracy to distribute controlled substances, commit health care fraud, and obstruct justice may bring heightened scrutiny to behavioral health telemedicine companies and other virtual health platforms. The seven-count indictment represents the Department of Justice’s (DOJ’s) first criminal drug distribution prosecutions related to telemedicine prescribing. The prosecution of the defendants is proceeding in federal court in the Northern District of California and several additional Done personnel including an executive, physician, and nurse practitioners are similarly being prosecuted.

States are increasingly exercising regulatory oversight of health care transactions by enacting laws requiring prior notice or approval of certain health care transactions. Currently, 15 states have enacted health care transaction review laws applicable to for-profit transactions. On Wednesday, March 20, 2024, Mintz members Daniel A. Cody, Deborah A. Daccord, and Karen S. Lovitch engaged in an insightful discussion with Lois Johnson, General Counsel of Massachusetts Health Policy Commission, to discuss the latest developments surrounding these laws and gain valuable insight from Ms. Johnson’s expertise, as Massachusetts was one of the first states to implement a health care transaction review process. The highlights of this informative conversation are summarized below, and the webinar can be viewed here.

Despite the DOJ Criminal Division’s January 2023 revisions to its Corporate Enforcement Policy defining the criteria for declining to prosecute a criminal case, based on the two case examples from this past year, it is unclear how often the DOJ will actually put that policy into practice and decline or defer prosecution.

In the past year, DOJ obtained some of its largest recoveries in cases where violations of the Stark Law, which bars physicians from profiting from self-referrals for certain services payable by Medicare or Medicaid, served as a predicate offense for FCA claims. These included cases against Community Health Network, Covenant Healthcare System, Cardiac Imaging, and Steward Health entities.

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, the Supreme Court and the US Courts of Appeals published a number of significant decisions involving FCA issues with implications for health care and life science entities, including a deepening circuit split on the causation standard applicable to FCA cases based on theories under the Anti-Kickback Statute.