On September 28, 2024, California governor Gavin Newsom vetoed AB 3129, a bill that, among other things, would have required private equity firms and hedge funds to provide 90 days’ prior written notice to, and for some transactions, obtain consent from, the state attorney general prior to proceeding with certain health care transactions.

In a

Private equity investments in health care to be subject to increased oversight from federal and state regulators, including antitrust officials

Federal and state governmental regulation of health care transactions continues to increase rapidly.  At the federal level, there is increased focus on the role of private equity in health care and the perceived impact on access to care, quality of care and pricing.  At the same time, a growing number of states have passed and continue to propose legislation that increases state oversight of health care transactions.  As a result of this increase in regulatory scrutiny from federal and state regulators, parties interested in conducting health care transactions must consider various regulatory requirements and the factors regulators take into account when analyzing proposed health care transactions. Continue Reading Health Care Transactions Facing Increased Federal and State Regulatory Scrutiny

On April 26, 2024, the Federal Trade Commission (FTC) announced that it had finalized changes to the Health Breach Notification Rule (HBNR). These changes, which go into effect on June 25, 2024, are intended to modernize aspects of the HBNR such that the HBNR applies to entities not covered under the Health Insurance Portability and Accountability Act (HIPAA). The updated HBNR follows the FTC’s previously stated intention in a 2021 policy statement to broaden the interpretation of the HBNR to address the growing number of digital health applications, websites, and consumer-facing technology that were not subject to HIPAA. The scope of the finalized rule therefore aims to apply the HBNR to health care technology and digital health companies that obtain personal health records (PHR) and PHR identifiable health information.Continue Reading FTC Finalizes Broader Changes to the Health Breach Notification Rule

On May 9, 2024, the Department of Justice (“DOJ”) announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (“HCMC”). The HCMC “will guide the division’s enforcement strategy and policy approach in health care, including by facilitating policy advocacy, investigations and, where warranted, civil and criminal enforcement in health care markets.” Continue Reading DOJ Focus on Health Care Marches Forward with Formation of Task Force

On June 27, 2023, the Department of Health and Human Services (HHS), Office of Inspector General (OIG), posted a final rule on its website that amends the civil money penalty (CMP) regulations under the Information Blocking Rule. The final rule incorporates new CMP authority and increases the maximum penalties for certain CMP violations. The final rule was published to the Federal Register on July 3, 2023.Continue Reading HHS Final Rule Imposes New Civil Money Penalties for Information Blocking

On June 1, 2023 the U.S. Supreme Court vacated and remanded two Seventh Circuit decisions involving the False Claims Act (FCA), holding in a unanimous opinion that the FCA’s scienter element turns on a defendant’s subjective belief and intent, not by an after-the-fact analysis of whether the defendant’s actions were “objectively reasonable.”

The two cases at issue, United States et al. ex rel. Schutte et al. v. SuperValu Inc. et al. and United States et al. ex rel. Proctor v. Safeway Inc., alleged that respondents SuperValu and Safeway separately defrauded Medicaid and Medicare by offering discount programs to their customers while knowingly submitting claims for the higher retail prices exceeding the “usual and customary prices” customers paid. Ruling in favor of SuperValu and Safeway, the Seventh Circuit applied an “objectively reasonable” scienter standard, determining that SuperValu and Safeway would be liable for submitting false claims only if their respective interpretation of the FCA’s “usual and customary” language was not “objectively reasonable.”Continue Reading U.S. Supreme Court Clarifies Usage of Subjective Standard for FCA Scienter Element