Health Law Advisor

On August 15, 2023, the U.S. Food and Drug Administration (“FDA”) released final guidance on informed consent for clinical investigations (“Final Guidance”). This update follows FDA’s draft guidance, which was issued in July 2014, and supersedes the FDA’s “A Guide to Informed Consent,” which was issued in September 1998. The Final Guidance is intended to assist clinical research stakeholders, such as institutional review boards (“IRBs”), investigators, and sponsors, in complying with FDA’s informed consent regulations for clinical ...

On February 22, 2023, the U.S. Food and Drug Administration (“FDA”) announced a much-anticipated draft guidance regarding the naming and labeling of plant-based milk alternatives.[1] Significantly, under the draft guidance, FDA will not prohibit the use of the identifier “milk” in plant-based milk alternatives but does recommend the product be labeled with “voluntary nutrient statements” to help consumers understand the nutritional differences in the products.

Over the past decade, plant-based milk alternatives have dramatically increased in both availability and consumption. During this time, industry stakeholders have disagreed over the use of the term “milk” for plant-based alternatives that do not contain milk from cows. The dairy industry has lobbied both federal and state governments to restrict the use of “milk” to only fluid “obtained by the complete milking of one or more healthy cows.”[2] To address this debate and to acknowledge the exponential increase in the sale of plant-based milk products, FDA issued a notice for public comment in September 2018 on the “Use of Name of Dairy Foods in the Labeling of Plant-Based Products” that amassed over 13,000 comments. The recently issued draft guidance indicates that the agency did in fact rely on the findings from this notice in developing its recommendations.

In the era of abortion regulation and the wind-down of the COVID-19 public health emergency (“PHE”), new legislation in states such as Utah may be a sign of what is to come for online and telehealth prescribing. On February 14, 2023, the Utah Senate passed a bill that would repeal the State’s “Online Prescribing, Dispensing, and Facilitation Licensing Act” (“Online Prescribing Act”). Utah H.B. 152. The bill currently awaits Governor Spencer Cox’s signature and would take effect sixty (60) days after its signing.[1] Originally enacted in 2010, the Online Prescribing Act has allowed health care providers to register with the State to prescribe and dispense certain FDA-approved drugs via online pharmacies and utilization of telehealth visits. Utah Code § 58-83-306. While providers have been required under the Online Prescribing Act to obtain a comprehensive patient history and assessment prior to issuing a prescription, at present, this may be done via telehealth. Utah Code § 58-83-305. Once signed into law, the effect of H.B. 152 would be to make asynchronous telehealth-only prescribing unlawful in the state, with Utah’s law on the scope of telehealth practice amended to prohibit “diagnos[ing] a patient, provid[ing] treatment, or prescribe[ing] a prescription drug based solely on . . . an online questionnaire; []an email message; or []a patient-generated medical history. Utah H.B. 152, amending Utah Code § 26-60-103.

The Food and Drug Administration (FDA) recently issued both draft and final guidance regarding food allergen labeling requirements.  The draft guidance document, Questions and Answers Regarding Food Allergens, Including the Food Allergen Labeling Requirements of the Federal Food, Drug, and Cosmetic Act (Edition 5), updates the previous (fourth) edition with new and revised guidance concerning food allergen labeling. FDA also issued a final guidance document with the same title in order to preserve questions and answers that were unchanged from the previous (fourth) edition, which was published in 2004 and last updated in 2006.

On November 18, 2022, the Alliance Defending Freedom (“ADF”), a conservative legal group, filed a motion with the federal district court in the Northern District of Texas against the U.S. Food and Drug Administration (“FDA”) to withdraw approval of Mifepristone, an FDA-approved drug used to end pregnancies in the first trimester.[1]  While this case addresses access to a single product and was prompted by abortion opponents’ efforts to eliminate access to medication abortion, a loss for FDA in this case could have far broader implications.

Much like the ambiguous landscape involving cannabidiol (CBD) products on the consumer market, an influx of delta-8 THC containing products for consumption has highlighted a recurrent regulatory issue surrounding the legality of hemp derived products at the federal level. The Agricultural Improvement Act of 2018 (the “2018 Farm Bill”), which, among other things, offered a federal definition of hemp and removed it from the list of Schedule I controlled substances, specifically carved out hemp derived products with less than 0.3% delta-9-tetrahydocannabinol (THC) on a dry weight basis, thereby allowing products that meet this definition to flood the consumer markets.

The New Jersey Department of Health (the “Department”) recently finalized regulations initially proposed in April 2020 that will now require all telehealth organizations providing telemedicine services to patients located in New Jersey to register their business with the Department before October 15, 2021, and annually thereafter.  In addition to annual registrations, telehealth companies will also be required to submit annual reports on activity and encounter data.

On May 26, 2021, the Department of Justice (“DOJ”) announced a coordinated law enforcement action against 14 telehealth executives, physicians, marketers, and healthcare business owners for their alleged fraudulent COVID-19 related Medicare claims resulting in over $143 million in false billing.[1] This coordinated effort highlights the increased scrutiny telehealth providers are facing as rapid expansion efforts due to COVID-19 shape industry standards.

Since the outset of the COVID-19 pandemic, the DOJ has prioritized identifying and prosecuting COVID-19 ...

On April 19, 2021, the Office of Inspector General’s (OIG) Office of Audit Services (OAS) released the results of an audit conducted on the accuracy of diagnosis codes submitted to CMS by Humana, Inc. for 2015 dates of service. Based on the audit results, the OIG recommended Humana return a whopping $197.7 million in alleged overpayments and enhance its policies and procedures to prevent, detect and correct noncompliance with Federal requirements for diagnosis codes that are used to calculate risk-adjusted payments.

Under the Medicare Advantage (MA) program, the Centers for ...

On March 26, 2021, the U.S. Department of Justice (“DOJ”) reported on the agency’s heightened criminal and civil enforcement activities in connection with COVID-19-related fraud.[1]  As of that date, DOJ had publicly charged 474 defendants with criminal offenses in connection with COVID-19-related schemes across 56 federal districts to recover more than $569 million in U.S. government funds.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law, enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  The CARES Act provides relief through a number of different programs, including the Paycheck Protection Program (“PPP”), Economic Injury Disaster Loans (“EIDL”), the Provider Relief Fund, and Unemployment Insurance (“UI”).[2]  With the promulgation of these programs, DOJ has ramped up efforts in identifying and investigating fraud to protect the integrity of the $2.2 trillion in taxpayer funds appropriated under the CARES Act.

Criminal Enforcement Activities

The majority of fraud cases brought by DOJ have originated in the Criminal Division’s Fraud Section, accounting for at least 120 defendants charged with PPP fraud.[3]  The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent, and utilities.  Most of these defendants are facing charges for allegedly misappropriating loan payments for prohibited purposes, such as luxury purchases, while another significant portion are charged in connection with allegedly inflating payroll expenses in order to obtain larger PPP loans.[4]

DOJ also announced that it has seized over $580 million in fraudulent application proceeds in connection with the EIDL program, which is designed to provide loans to small businesses and agricultural and nonprofit entities.  DOJ’s primary concerns with respect to this program have related to fraudulent applications for EIDL advances and loans on behalf of shell or nonexistent businesses.

In response to a rise in UI fraud schemes, DOJ has established the National Unemployment Insurance Fraud Task Force to investigate domestic and international organized crime groups targeting unemployment funds through the use of identity theft.  Since the start of the pandemic, over 140 defendants have been publicly charged with federal offenses related to UI fraud.[5]

The Department of Justice (DOJ) announced on January 12, 2021, the first civil settlement to resolve allegations of fraud against the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.[1] SlideBelts Inc. and its president and CEO, Brigham Taylor, have agreed to pay the United States a combined $100,000 in damages and penalties for alleged violations of the False Claims Act (FCA) and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).[2]

The CARES Act was enacted in March 2020 to provide emergency financial assistance to individuals and businesses affected by the COVID-19 pandemic.[3] The CARES Act established the PPP, which provided $349 billion in forgivable loans to small businesses in order to assist in job retention and business expenses.[4] Since March 2020, Congress has authorized an additional $585 billion in PPP spending to be distributed under the Small Business Administration (SBA).

SlideBelts operates as an online retail company, and filed a petition for relief under Chapter 11 of the Bankruptcy Code in August 2019. Between April and June of 2020, while its petition was pending in the U.S. Bankruptcy Court for the Eastern District of California, SlideBelts and Taylor allegedly made false statements to federally insured financial institutions that the company was not involved in bankruptcy proceedings in order to influence the institutions to grant, and for SBA to guarantee, a PPP loan. SlideBelts received a loan for $350,000 based off of these purported false claims, which SlideBelts repaid in full to the PPP.

The government was able to recover damages and civil penalties from SlideBelts under the FCA for submitting alleged fraudulent claims for payment to the government and under the FIRREA for violations of federal criminal statutes that affect federally insured banks. This settlement is the end result of the first, but not the last, of many civil investigations and, ultimately, litigations relative to the CARES Act in the coming months and years under the FCA. In fact, during a June address to the Chamber of Commerce, Principal Deputy Attorney General Ethan Davis stated, “Going forward, the Civil Division will make it a priority to use the False Claims Act to combat fraud in the Paycheck Protection Program.”[5]

As the SBA prepares to issue a second round of PPP loans, the DOJ is likely to continue to use the FCA and the FIRREA to pursue entities receiving funds on the theory that those entities intend to exploit for their benefit these federal programs.[6]