*This post was co-authored by Paul Palma, legal intern at Robinson+Cole. Paul is not admitted to practice law.

On September 30, 2024, Judge Kathryn Kimball Mizelle of the U.S. District Court for the Middle District of Florida issued an order in United States ex rel. Clarissa Zafirov v. Florida Medical Associates, LLC, holding that the qui tam provision of the False Claims Act (FCA) is unconstitutional. Judge Mizelle’s holding reasoned that the authority given to private citizens under the qui tam provision of the FCA violates the Appointments Clause of the U.S. Constitution. This ruling comes after Supreme Court Justices Barrett, Kavanaugh, and Thomas questioned last year whether the qui tam provision violated Article II of the U. S. Constitution (see United States ex rel. Polansky v. Executive. Health Res., Inc., 599 U.S. 419 (2023)).

 As a reminder, the FCA’s qui tam provision authorizes private citizens or whistleblowers ­­– referred to as “relators” – to file FCA cases on behalf of the United States. After a relator files a complaint, the government may choose to intervene and take over prosecution of the action. The government may also choose to decline to intervene, at which point the relator may proceed to litigate the matter as they see fit. Whistleblowers and other relators often use qui tam lawsuits under the FCA to seek damages for allegedly false or fraudulent claims knowingly submitted to federal health care programs by health care providers and health care entities.

 Here, the relator (Zafirov) alleged that her employer violated the FCA by misrepresenting patients’ medical conditions to Medicare. The United States declined to intervene in the case, and Zafirov has pursued the case on its behalf for five years until recently, when the defendants moved for judgment on the pleadings challenging the constitutionality of the qui tam provision. The government continued to not intervene, instead filing a statement of interest to also contest the constitutional arguments.

The defendants argued that the qui tam provision violates the Take Care and Vesting Clauses of Article II. The defendants also argued that the qui tam provision violates the Appointments Clause of Article II. The district court agreed with the defendants’ second argument (and therefore reasoned it did not need to come to a conclusion on the Take Care and Vesting Clauses), dismissing the case and holding that FCA relators are officers of the United States and they are not properly appointed under the Appointments Clause, making the qui tam provision unconstitutional.

Judge Mizelle concluded that qui tam relators are officers of the United States under Supreme Court precedent because they “exercise[s] significant authority pursuant to the laws of the United States” and occupy a “continuing position established by law.” Thus, according to the Appointments Clause, as officers, qui tam relators must be “appointed by the President alone, in the Courts of Law, or in the Heads of Departments.”

 It remains to be seen what the immediate effect of this ruling will be and whether other defendants will have similar success with such arguments, given that this is a District Court ruling and, therefore, non-binding. The case will likely be appealed to the Eleventh Circuit as the government already expressed interest in defending the constitutionality of the FCA’s qui tam provision. If the Eleventh Circuit affirms the District Court judgment, it would create a circuit split since multiple other circuits have previously rejected similar constitutional challenges. This could potentially lead to the Supreme Court granting certiorari, where multiple justices have expressed skepticism about the constitutionality of the qui tam provision.            

We will continue to monitor for any similar decisions or appellate reviews of this decision and provide related updates.

On September 28, 2024, California Governor Gavin Newsom vetoed California Assembly Bill 3129 (the Bill). The Bill, if enacted, would have imposed new notice and consent requirements for private equity investors involved in healthcare transactions. Governor Newsom’s veto statement clarifies the Bill’s vetoing, stating that the Office of Health Care Affordability (OHCA) “was created as the responsible state entity to review proposed health care transactions, and it would be more appropriate for the OHCA to oversee these consolidation issues as it is already doing much of this work.” A summary of the Bill’s requirements is included below.

The Bill, if enacted, would have required a private equity group, or a hedge fund, to provide written notice of, and obtain the written consent of, the California Attorney General (CA AG) before certain health care transactions could become effective. This approval would have been required for any transaction in which a private equity group or hedge fund is either indirectly or directly acquiring “more than 15 percent of the market value or ownership shares of the health care facility, provider group, or provider;” or, obtaining “rights significant enough to constitute a change in control, including, but not limited to, supermajority rights, veto rights, exclusivity provisions, and similar provisions.”

The Bill provided a narrow exception from the consent requirement where all of the following apply: (1) the private equity group or hedge fund has not been involved in any healthcare acquisitions in the preceding seven years; (2) the group consists of fewer than 10 providers; and (3) the group’s gross annual revenue is less than $25 million, although notice may still be required.

The Bill would have required that the private equity group or hedge fund submit notice to the CA AG at the same time that any other state or federal agency is notified pursuant to state or federal law and otherwise at least 90 days before the transaction. The Bill would also have authorized the CA AG to extend that 90-day period under certain circumstances. The Bill does not specify the documents that would have to be submitted with the notice filing, but it does require the submission of information sufficient for the CA AG to determine whether approval is appropriate. The documents to be submitted would likely have included (at a minimum) deal documents and related information that communicate the nature of the transaction and its likely impact on competition, costs, and access to healthcare services.

At the end of the 90-day period, the Bill would have authorized the CA AG to consent to, give conditional consent to, or not consent to a transaction between a private equity group or hedge fund and a health care facility, provider group, or provider if the transaction “may have a substantial likelihood of anticompetitive effects, including a substantial risk of lessening competition or of tending to create a monopoly, or may create a significant effect on the access or availability of health care services to the affected community.”

Additionally, the Bill would have prohibited a private equity group or hedge fund involved in any manner with a physician, psychiatric, or dental practice doing business in California from interfering with the professional judgment of physicians, psychiatrists, or dentists in making health care decisions, among other things. Lastly, the Bill would also have authorized the CA AG to adopt regulations and contract with state agencies, experts, or consultants to implement its requirements, as specified.

The Bill follows a broader national trend of heightened notice and consent requirements for health care transactions involving private equity investors. We will continue to monitor the evolution of this trend and provide related updates.

*This post was co-authored by Paul Palma, legal intern at Robinson+Cole. Paul is not admitted to practice law.

On September 18, 2024, the Department of Justice (DOJ) announced a settlement with Dunes Surgical Hospital and United Surgical Partners International, Inc. (USPI), an entity holding a partial ownership interest in Dunes, in connection with alleged violations of the federal False Claims Act (FCA), Anti-Kickback Statute (AKS), and Physician Self-Referral Law (commonly referred to as the “Stark Law”). The settlement arises from the self-disclosure by Dunes and USPI of alleged improper arrangements following an internal compliance review and an independent investigation. As part of the settlement, the defendants agreed to pay the federal government $12.76 million for claims related to federal health care programs as well as $1.37 million to the states of South Dakota, Iowa, and Nebraska, respectively, for state Medicaid related claims.

According to DOJ, Dunes allegedly made “significant financial contributions” (of approximately $300-375k per year) between 2014 and 2019 to a non-profit entity affiliated with a physician group that made patient referrals to Dunes. DOJ alleged the financial contributions were made in exchange for patient referrals, as they funded salaries of employees in a position to refer to the physician group and Dunes. Additionally, DOJ alleged that Dunes provided a separate physician group with below fair market value office space, staff, and supplies. DOJ alleged that these payments and arrangements violated the AKS and the Stark Law, and accordingly claims submitted in connection with the arrangements could violate the FCA.

Notably, the defendants were given credit by the government for self-reporting the arrangements, and the “significant steps” the defendants took in doing so, including an internal compliance review, an independent investigation, and providing the government with a detailed written disclosure while also cooperating with the investigation.

This settlement is a reminder of the risk for hospitals and other health care organizations in entering into financial relationships with referral sources, and the need to vet all arrangements closely (including those with affiliated non-profit organizations). Additionally, the settlement and DOJ’s comments accompanying the settlement indicate that it is intended to incentivize cooperation and self-disclosure of potentially unlawful arrangements, and the potential benefits of doing so, in connection with ongoing compliance activities.

On August 20, 2024, the United States District Court for the Northern District of Texas (Dallas Division) struck down the Federal Trade Commission’s (FTC) non-compete rule, 16 CFR § 910.1-6, that was set to take effect on September 4, 2024. A summary of this ruling, which has significant implications for employers nationwide, is included below. This post is a follow-up to our previous post summarizing the prior conflicting opinions regarding whether the FTC had the authority to ban non-compete clauses.

This case originated when the plaintiff, Ryan LLC, challenged the lawfulness of the FTC’s non-compete rule. Ryan LLC was joined by plaintiff-intervenors, the United States Chamber of Commerce, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce, who also challenged the FTC’s authority to enact the FTC non-compete rule. The FTC’s non-compete rule would have preempted state law and invalidated employment contracts containing non-compete clauses nationwide.

The court reasoned, first, that the FTC’s non-compete rule exceeded the FTC’s authority because it does not have the authority to promulgate substantive rules regarding unfair methods of competition. The court further found the FTC’s non-compete rule to be arbitrary, capricious, and in violation of the Administrative Procedure Act as the FTC failed to justify the expansive breadth of its ban. Therefore, the court ultimately granted the plaintiff’s motion for summary judgment and denied the FTC’s cross-motion for summary judgment, setting aside the non-compete rule.

In conclusion, the court stated, “the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.” The court’s summary judgment order applies nationwide and means that the non-compete agreements that were enforceable before the rule remain enforceable, and new non-compete agreements may be entered into depending on state law. It is possible that the FTC may appeal the ruling to the Fifth Circuit; however, the FTC has not yet indicated whether it will do so. We will continue to monitor the status of the FTC’s non-compete rule and provide any subsequent updates.

*This post was co-authored by Lily Denslow, legal intern at Robinson+Cole. Lily is not admitted to practice law.

In April, the Federal Trade Commission (FTC) promulgated a new rule banning non-competes (the Rule); the FTC adopted the Rule to prohibit employers from entering into or enforcing non-compete clauses with workers and senior executives. Several lawsuits were quickly filed challenging the rules. Separate parties filed in Texas (in which cases were consolidated), and ATS Tree Services, LLC, filed an action in Pennsylvania.

On July 23, 2024, the U.S. District Court for the Eastern District of Pennsylvania issued a ruling denying ATS Tree Services’ motion for a stay and a preliminary injunction against the Rule. ATS Tree Services, LLC v FTC, No: 2:24-cv-01743-KBH, at p.18 (E.D. Pa. July 23, 2024). The Court held that ATS had not demonstrated the irreparable harm necessary to justify the issuance of a preliminary injunction and also held that ATS failed to establish a reasonable likelihood of success on the merits of its action.

The ruling is diametrically opposed to the July 3, 2024, ruling from the U.S. District Court for the Northern District of Texas, which preliminarily enjoined the Rule and postponed its effective date in Ryan, LLC v. U.S., No. 3:24-CV-00986-E, 2024 (N.D. Tex. July 3, 2024). However, the district court declined to issue a universal injunction, making its ruling applicable only to the Ryan plaintiffs.

The Decisions

In ATS Tree Services, the court first held that nonrecoverable costs of compliance do not rise to the level of irreparable harm, in that “monetary loss and business expenses alone are insufficient bases for injunctive relief.” ATS Tree Services at p.18. Additionally, the court held that the claimed loss of contractual benefits was too speculative. Id. 20-21.

Even though the court found that ATS failed to establish irreparable harm, it added an analysis of ATS’s likelihood of success on the merits, spending the majority of its decision assessing (just as the Ryan Court had) whether “[s]ection 6(g) empowers the FTC with the authority to make substantive rules related to unfair methods of competition in or affecting commerce, or whether the rulemaking authority therein is limited to procedural rules relating to adjudications of unfair methods of competition in or affecting commerce.” ATS Tree Services, at p.8. Notably, the Court relied upon the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2263 (2024) to “independently interpret the statute and effectuate the will of Congress subject to constitutional limits.” Id. at 25. In doing so, the Court harmonized sections 5 and 6 of the FTC Act, concluding:

When taken in the context of the goal of the Act and the FTC’s purpose, the Court finds it clear that the FTC is empowered to make both procedural and substantive rules as is necessary to prevent unfair methods of competition. Thus, the Court rejects ATS’s argument that it should read the word “procedural” but not the word “substantive” into the statutory text defining the FTC’s rulemaking authority. This argument is inherently inconsistent and therefore untenable. Id. at 26.

This was directly contrary to the Ryan decision where the court found under section 6(g) that the FTC lacks the authority to create substantive rules because the Act is only a “housekeeping statute” that allows the FTC to promulgate general “rules of agency organization procedure or practice,” not “substantive rules.” Ryan at *15 (citing Chrysler Corp. v. Brown, 441 U.S. 281, 310 (1979)).

The court in ATS Tree Services went on to address the FTC’s mandate to “prevent prohibited ‘unfair methods of competition’” under section 5, thereby acknowledging Congress’s terms were “intended to act prophylactically to stop ‘incipient’ threats of unfair methods of competition, not solely responsively through adjudications, as courts interpreting the statute have confirmed.” ATS Tree Services, at p. 28. In addition, the court found that the FTC’s rulemaking authority had been confirmed by other circuit courts. Finally, in the rest of the decision, the Court disposed of the other alternative challenges made by ATS. This was contrary to the Ryan decision, where the Texas court had held that the FTC acted arbitrarily and capriciously, because the Rule was “unreasonably broad without a reasonable explanation” and did not sufficiently address alternatives to issuing the Rule. 

 Key Takeaways

The two courts have issued opinions with conflicting analyses. While Texas has issued a preliminary injunction specific to the Ryan plaintiffs, the court did indicate it intends to make a final determination on the merits by August 30, 2024, prior to the Rule’s effective date. The Ryan Court will have the opportunity to vacate the Rule in its entirety as unlawful and issue a permanent injunction, with the scope of the relief ordered yet to be decided. This new ruling sets up the potential for an appeal to the U.S. Court of Appeals for the Fifth Circuit and possibly seek direct relief from the U.S. Supreme Court.

As we inch closer to the final date, businesses and health care entities should remain aware of litigation developments regarding the Rule and the potential for extended litigation. We will continue to monitor and update on any developments.

*This post was co-authored by Lily Denslow, legal intern at Robinson+Cole. Lily is not admitted to practice law.

On June 27, 2024, the Department of Justice (DOJ) announced its 2024 National Health Care Fraud Enforcement Action, which resulted in criminal charges against 193 defendants for alleged participation in various health care fraud schemes alleged to have resulted in approximately $2.75 billion in losses for Medicare. The takedown spans 32 federal districts, and charges were brought in 145 cases. 

The DOJ charged 36 of these defendants in connection with the submission of over $1.1 billion in fraudulent claims to Medicare, which resulted from schemes involving telemedicine clinical laboratories. The below discusses only a few of the cases, but the general themes run throughout and provide insight into the Government’s concerns in these prosecutions.

In one of these cases, the DOJ charged a Georgia woman with one count of conspiracy to commit health care fraud and one count of conspiracy to violate the Anti-Kickback Statute (AKS). In this case, the defendant allegedly engaged in a scheme in which she and her co-conspirators owned, operated, and had a financial interest in various companies, including durable medical equipment companies, where she would provide qualified leads to clinical laboratories regardless of medical necessity. In addition, she had a company that she used to ship out Cancer Genomic Screening (CGx) test kits to beneficiaries regardless of whether the beneficiaries wanted them or needed them. In return, she submitted invoices to the lab to be paid. The case is pending in the District of New Jersey, and the defendant faces potential criminal liability.

In another case charged as part of this action, the DOJ charged a Texas man with one count of conspiracy to defraud the United States and to pay and receive health care kickbacks, five counts of paying health care kickbacks, and three counts of money laundering. The defendant in this case was the owner of two clinical laboratories and allegedly offered and paid kickbacks to marketers in exchange for referrals for testing. The defendant also allegedly signed doctor’s orders authorizing medically unnecessary testing. Allegedly, Medicare paid the laboratories approximately $54 million as a result of kickback-tainted claims. The case is pending in the Northern District of Texas, and the defendant faces potential criminal liability.

In another case charged as part of this action, two Tennessee men were charged with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks and paying and receiving health care kickbacks. These charges resulted from the defendants’ alleged role in selling doctor’s orders for medically unnecessary genetic tests, medications, and durable medical equipment (DME) to laboratories, pharmacies, and DME companies. Allegedly, the defendants obtained orders for their DME companies by paying kickbacks and bribes to purported telemedicine companies and in exchange for doctors signing orders for DME. This scheme allegedly caused the submission of $6 million in false and fraudulent claims to Medicare. Further, Medicare paid $2 million dollars to the defendants’ DME companies on these allegedly false claims. The case is pending in the Middle District of Tennessee, and the defendants face potential criminal liability.

This widespread enforcement action by the DOJ demonstrates the government’s commitment to rooting out healthcare fraud and abuse, especially in the telemedicine and clinical laboratory spaces. This is a timely warning to telemedicine providers and clinical laboratories of the need to ensure compliance with fraud and abuse laws.

This post is co-authored by Seth Orkand, co-chair of Robinson+Cole’s Government Enforcement and White-Collar Defense Team.

On April 29, 2024, the Department of Justice (DOJ) announced a $1.3 million settlement (Settlement) with a South Carolina clinical laboratory marketer and his marketing company, and three physicians and their medical practices in North Carolina, to resolve alleged violations of the False Claim Act (FCA) arising from kickbacks in violation of the Anti-Kickback Statute (AKS).

The DOJ alleged that a marketer and his marketing company offered kickbacks to physicians on behalf of a South Carolina laboratory and that the physicians and their medical practices received kickbacks from the laboratory in exchange for laboratory referrals. These kickbacks resulted in the submission of false claims to Medicare and TRICARE in violation of the FCA. This Settlement follows previous settlements by physicians in South Carolina and Texas to resolve similar allegations with respect to the same clinical laboratory.

The marketer and his marketing company agreed to pay $400,000 to resolve allegations that disguised thousands of dollars in kickbacks to doctors by entering into purported office space rental agreements and phlebotomy payments when the real purpose was to induce them to order laboratory testing from the South Carolina laboratory. In addition, the laboratory paid the marketers on a commission basis even though they were independent contractors and, as such, fell out of the safe harbor for the AKS due to payment that is based on the volume and value of the referrals.

Three doctors and their medical practices agreed to pay a total of $973,400 to resolve allegations that they received a variety of kickbacks in exchange for laboratory referrals, including thousands of dollars in remuneration disguised as purported office space rental, phlebotomy payments, and also for purported payments for used laboratory equipment.  One physician and his practice received credit under the DOJ’s guidelines for cooperation. 

This Settlement highlights the government’s continued scrutiny of compensation arrangements between laboratories and physicians, particularly with respect to remuneration that may appear legitimate on its face but is actually made with the intent to induce referrals and compensation to independent marketers based on the volume or value of the laboratory tests they cause medical providers to refer.  It is also a timely warning to laboratory marketers, physicians, and physician practices of the need to ensure compliance with federal fraud and abuse laws.

State Law Permitting Dispensation of Emergency Contraception by Vending Machines

Legislation passed in 2022 in Massachusetts and in 2023 in Connecticut removes barriers for college students trying to obtain emergency contraception pills like Plan B One-Step. In light of uncertainty around abortion protections following the Supreme Court’s 2022 decision in Dobbs v. Jackson Women’s Health Organization, emergency contraception pills—which are not abortion medication—provide an important option for preventing an unwanted pregnancy. Several states have passed or are considering similar legislation, and colleges and universities in at least 17 states have begun installing vending machines that dispense emergency contraception.

In July of 2022, an amendment to M.G.L. c.272 § 21A went into effect in Massachusetts, which clarified that the prohibition on the sale or dispensing of contraceptives via vending machine is limited to only those that must be prescribed. Because Plan B One-Step is available over the counter, it can now be sold in vending machines. Following the passage of this amendment, several colleges and universities around the Commonwealth installed vending machines to dispense Plan B, reportedly selling Plan B or one of its generic equivalents for between $7 and $15.

In May of 2023, Public Act No. 23-52 (“the Act”) passed in Connecticut, which similarly allows colleges and universities in the state to sell and dispense emergency contraceptives via vending machines, so long as they have obtained a permit to do so from the state. The Act also allows any business to obtain a permit to operate a vending machine for emergency contraceptives and other non-prescription drugs in an effort to expand their availability across a wide range of settings. The Act outlines important flexibilities for institutions and businesses seeking to install such vending machines, including allowing multiple vending machines on a single campus under one permit and an alternative permitting process for an operator who is not licensed as a pharmacy. The Act also includes several consumer protections provisions, such as a stipulation that the products inside the vending machine must not be subject to unsafe temperatures or humidity, a prohibition on other products or medications being sold in the same vending machine, and a number for consumers to call in case of product tampering or expiration.

Federal Law Considerations to Contraceptives in Vending Machines

FDA guidance confirms that the FDA does not prohibit the sale of over-the-counter drugs in vending machines, as long as the drugs comply with mandatory labeling requirements, stating:

The [Food, Drug, and Cosmetic] Act requires that certain mandatory labeling information must appear prominently, with such conspicuousness (as compared with other words, statements, designs or devices in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use. This means that the prospective purchaser must have an opportunity to read and take such information into consideration in reaching a decision whether or not to make the purchase. The vending machine should, therefore, bear a complete copy of the required labeling for the article being offered for sale, or the article should be displayed in such a manner that the mandatory labeling can be viewed by the prospective purchaser.

Colleges and universities rolling out Plan B vending machines must ensure these labeling requirements are met, including that a complete copy of the drug label is displayed on the vending machine so that purchasers have an opportunity to read it prior to making their purchase.

Other State Based Reproductive Health Protections

In addition to emergency contraception offered in vending machines, some states have enacted laws requiring medication abortion to be made available to college students. In Massachusetts, a bill passed in 2022 included a provision requiring student health services at all public universities and community colleges across the state to either dispense medication abortion pills or make referrals for such care. While this provision only applies to public institutions, efforts have been made from within private universities in the state to get medication abortion onto private campuses as well. In 2019, California was the first state to enact a law of this kind, requiring student health clinics at campuses of two large public university networks in the state (CSU and UC campuses) to offer medication abortion on campus starting January 1, 2023. In New York, Governor Kathy Hochul signed a bill on May 2, 2023, which similarly requires SUNY and CUNY campuses to offer prescriptions for medication abortion. The bill went into effect on August 1, 2023. Connecticut does not currently require public universities to offer medication abortion on campus, but does require public universities to establish, not later than January 1, 2024, and update as necessary, a reproductive health access plan, including abortion access, in place for students who need such services.

Implications of State-Level Bans on Reproductive Health Services

Laws protecting medication abortion and those permitting emergency contraception offered in vending machines stand in stark contrast to ongoing state-level bans and other restrictions on providing, or facilitating access to, reproductive health care services. Such restrictions have created a ripple effect outside the state of their adoption as some do not specify a geographic limit on liability, resulting in unpredictability for reproductive health care services that occur out-of-state.

Importantly, such state-level bans and other restrictions may distinguish abortion from contraception. For example, the Texas law restricting abortion expressly excludes birth control devices or oral contraceptives from the definition of abortion, and would not implicate the use of contraception, even if the law otherwise reached out-of-state abortions.

Such restrictions have also prompted a wave of proposed or enacted laws shielding patients and providers from out-of-state legal action, investigation, and liability. For example, one category of laws protects patient health records through prohibitions on their disclosure. Massachusetts prohibits courts within the Commonwealth from ordering an individual to produce documents or records for use in another state’s legal proceedings if they concern “legally-protected health care activity,” including reproductive health services. Laws in both Delaware and Connecticut prohibit the disclosure of health records related to reproductive health services in a civil proceeding, unless the patient or a representative expressly authorizes it. Notably, the U.S. Department of Health & Human Services released a Final Rule that amends the Health Insurance Portability and Accountability Act (HIPAA) to strengthen safeguards on reproductive health care information, which may overlap with or complement state laws in this category, but only with respect to information constituting Protected Health Information subject to HIPAA.

Colleges and universities should be aware of new avenues for making emergency contraception available to their students, given the overall legal uncertainty with respect to reproductive health care services. We will continue to monitor this and related legislation and its effects on campuses in Massachusetts and Connecticut.

*This post was co-authored by Ivy Miller, legal intern at Robinson+Cole. Ivy is not admitted to practice law.

On May 9, 2024, Connecticut Governor Ned Lamont signed into law Public Act No. 24-4, “An Act Concerning Emergency Department Crowding,” (The Act). The Act requires all Connecticut hospitals with an emergency department to, no later than January 1, 2025, and annually thereafter until January 1, 2029, analyze certain data with the goals of:

  1. Developing policies to reduce emergency department and admission wait times.
  2. Developing methods to improve admission efficiencies.
  3. Examining causes for delays in admission times.

Hospitals with emergency departments must on their own, or in consultation with a hospital association in the state, review the following emergency department data points from the preceding calendar year in formulating these goals:

  1. The number of patients who received treatment in the emergency department.
  2. The number of emergency department patients who were admitted to the hospital.
  3. The average length of time from the patient’s first presentation to the emergency department until the patient’s admission to the hospital (for those who were admitted).
  4. The percentage of patients who were admitted to the hospital after presenting to the emergency department but were transferred to an available bed located in a physical location other than the emergency department more than four hours after an admitting order for the patient was completed.

The Act also requires hospitals to submit a report to the joint standing committee for public health of the General Assembly no later than March 1, 2025, and annually thereafter until March 1, 2029. The report must include the hospital’s findings and any recommendations for achieving the above referenced goals. The Act is effective from passage.

On May 9, 2024, Connecticut Governor Ned Lamont signed into law Public Act No. 24-6, “An Act Concerning the Reporting of Medical Debt,” (The Act). The Act prohibits health care providers from reporting medical debt to credit rating agencies and makes various updates to existing laws regarding the reporting of medical debt already applicable to hospitals and collection agents.

The Act defines health care providers by cross referencing the peer review statute definition at C.G.S. § 19a-17b which includes “any person, corporation, limited liability company, facility or institution operated, owned or licensed by this state to provide health care or professional services, or an officer, employee or agent thereof acting in the course and scope of his employment.” Under the Act, such health care providers are prohibited from reporting any portion of a medical debt to a credit rating agency for use in a credit report. Notably, many non-profit hospitals are subject to existing IRS extraordinary collection actions and regulations that, among other things, restrict their ability to report adverse information about an individual to a credit agency. Additionally, health care providers must include a clause in every contract entered into with a collection entity for the collection of medical debt on or after July 1, 2024, that prohibits reporting any portion of medical debt to a credit rating agency. Any medical debt reported in violation of the Act is void. Medical debt is any obligation to pay an amount related to the receipt of health care goods or services. Importantly, the term “health care goods” is broadly defined as “goods, including, but not limited to, products, devices, durable medical equipment and prescription drugs.” However, medical debt does not include debt charged to credit cards unless the credit card is issued under an open-end or closed-end credit plan offered specifically for the payment of charges related to health care goods or health care services.

Additionally, the Act makes changes to existing Connecticut law that prohibits hospitals, entities owned or affiliated with hospitals, and collection agents for such entities from reporting any individual patient to credit rating agencies for one year beginning on the date the patient first receives a bill. Beginning July 1, 2024, hospitals, entities owned or affiliated with hospitals, and collection agents are prohibited from reporting any individual patient to a credit rating agency, regardless of when the patient was billed.

All sections of the Act are effective July 1, 2024.