In response to Republicans’ failure to repeal the Affordable Care Act (ACA), the Trump Administration is using administrative action to modify the ACA and health insurance options for Americans. On October 12, 2017, President Trump signed an executive order that instructs various departments to consider regulations related to association health plans and short-term insurance. Shortly after, the Administration announced that they would no longer make cost sharing reduction (CSR) payments to insurers on the Exchanges.  Section 1402 of the ACA requires insurance companies to reduce the amount that eligible low-income policyholders pay out of pocket for co-payments and deductibles.  Accordingly, the federal government must reimburse insurers for reductions when the Secretary of HHS is notified.

Without these payments, insurers will either increase premiums or pull out of the Exchanges altogether. In anticipation of the announcement, some insurers have already increased premiums for the 2018 enrollment period. In spite of this, policy makers can mitigate the harm that could be felt as a result of not funding CSR payments.

The Passage of the Murray-Alexander Stabilization Bill

Senator Lamar Alexander (R-TN), Chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP) and Ranking Member Senator Patty Murray (D-WA) revealed a bipartisan plan to help stabilize the insurance market. The Murray-Alexander Bill seeks to stabilize the insurance market by funding the CSR subsidies and increasing state flexibility in their administration of the Marketplace.

The bill proposes to fund CSR payments for the remainder of 2017, as well as 2018 and 2019. The bill also reduces the time for the Center for Medicare and Medicaid Services (CMS) review of 1332 waivers, from 180 days to 90 days and creates a new 45 day expedited review process for qualifying circumstances. Through Section 1332 waivers, states are allowed to implement insurance market innovations that provide coverage “comparable” in benefits and affordability.

The Congressional Budget Office (CBO) scored the Murray-Alexander Bill and found that it would cut the federal deficit by $3.8 billion in the next decade. The CBO notes that savings would come from states offering lower-cost policies, attracting younger and healthier individuals into the market.  Insurers would lower their premiums because of the influx of younger individuals and in the long-term, save the government more than $1.1 billion in premium tax credits. Despite the savings scored by CBO, the Murray-Alexander bill will not have an affect on 2018 plans. Further, the bill may not pass before open enrollment ends on December 15.  The bill has bipartisan support in the Senate, but will have difficulties in the House because of Speaker Paul Ryan’s opposition to the current version.

State Efforts

States can play a role in telling insurers where to apply their premium increases. For example, states could tell insurers to apply premiums to only Silver marketplace plans, all metal level plans inside and outside the marketplace, or all Silver plans inside and outside the marketplace. About 30 states assumed that CSR payments would not be disseminated and either encouraged or required states to increase premiums onto marketplace silver plans only. States that choose this option allows consumers in the marketplace to receive premium tax credits and consumers outside the marketplace to not experience any increase in premiums. Additionally, some legal scholars and health policy experts argue that states could pay for the premium themselves and then bill the federal government.

Legal Challenges

Eighteen states and the District of Columbia sued the Trump Administration seeking an immediate injunction to block President Trump from ending CSR payments to insurers. California federal judge, U.S. District Judge Vince Chhabria, denied the motion for an injunction.  Judge Chhabria argued that states had enough time to plan for the end of the cost-sharing payments and adjusted accordingly. Although Judge Chhabria has denied the injunction, California Attorney, General Xavier Becerra, will still proceed with the lawsuit.

Despite the Trump Administration’s attempt to unravel parts of the ACA, states and Congress are working to anticipate more downstream impacts and must act to find solutions or ways to mitigate the issues that will arise for low-income policy holders.

Stakeholders should anticipate a continuation of unstable markets as insurers will have to adjust their rates or leave the Exchanges if there are no changes made to fund CSR payments. State regulators will have to use creativity and flexible ways to help their constituents.

The Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“Antitrust Division”) released their respective year-end reviews highlighted by aggressive enforcement in the health care industry. The FTC, in particular, indicated that 47% of its enforcement actions during calendar year 2016 took place in the health care industry (including pharmaceuticals and medical devices). Of note were successful challenges to hospital mergers in Pennsylvania (Penn State Hershey Medical Center and Pinnacle Health System), and Illinois (Advocate Health Care Network and North Shore University Health System). In both actions, the FTC was able to convince the court that the merger would likely substantially lessen competition for the provision of general acute-care hospital services in relevant areas in violation of section 7 of the Clayton Act. See FTC v. Penn State Hershey Med. Center, 838 F. 3d 327 (3d Cir. 2016); and FTC v. Advocate Health Care Network et al No. 1:15-cv-11473, 2017 U. S. Dist. LEXIS 37707 (N.D. Ill.Mar. 16, 2017)

The Antitrust Division, in similar fashion, touted its actions to block the mergers of Aetna and Humana, and Anthem and Cigna. Complaints against both mergers were filed simultaneously in July of 2016, and tried before different judges in the Federal District Court for the District of Columbia. After extensive trials, Judge Bates blocked the Aetna/Humana deal, and Judge Amy Berman Jackson blocked the Anthem/Cigna transaction. United States v. Aetna Inc., No. 1:16-cv-1494, 2017 U.S. Dist. LEXIS 8490 (D.D.C. Jan 23, 2017) and United States v. Anthem Inc., No. 1:16-cv-01493, 2017 U.S. Dist. LEXIS 23614 (D.D.C. Feb8, 2017).

In addition to their enforcement activities, the agencies promoted jointly issued policy guidelines, including their “Antitrust Guidance for Human Resources Professionals.” Although not specific to any industry, this guidance has particular relevance to the health care industry. Among other things, this guidance makes clear that naked wage-fixing (such as the wave of wage fixing claims relating to nurses) and no-poaching agreements (that would include agreements not to hire competing physicians) are not only per se illegal, but also subject to criminal prosecution.

While a marginal enforcement shift may be in store as a result of the change in administration, most signs point to a continued focus on the health care industry. Maureen K. Ohlhausen, appointed by President Trump as acting Chair of the FTC, reiterated in a speech recently delivered at the spring meeting of the American Bar Association’s antitrust section, that “[i]t’s extremely important we continue our enforcement in the health care space.” Likewise the Acting Director of the FTC’s Bureau of Competition – Abbott (Tad) Lipsky, appointed by Chairman Ohlhausen, applauded the FTC’s success in challenging the Advocate/Northshore Hospital merger noting, in a related FTC press release, that the “merger would likely have reduced the quality, and increased the cost, of health care for residents of the North Shore area of Chicago.”

Makan Delrahim, President Trump’s selection (awaiting confirmation) to head the Antitrust Division, recently lobbied on behalf of Anthem and its efforts to acquire Cigna, and has openly stated with respect to certain announced mergers, that size alone does not create an antitrust problem. Nevertheless, given the political climate and overall impact the health care industry has on the U.S. economy, the Antitrust Division’s efforts to open markets in the health care sector, particularly to generics and new medical technologies by challenging pay for delay deals and scrutinizing unnecessarily restrictive agreements among medical device manufacturers is likely to continue.

A wild card affecting future antitrust enforcement is increasing possibility of passage of the Standard Merger and Acquisitions Review Through Equal Rights Act of 2017 (H.R. 659 a/k/a the “SMARTER ACT”). This bill, recently approved by the House Judiciary Committee, would eliminate the FTC’s administrative adjudication process as it relates to merger enforcement, forcing the FTC to bring all such actions in court. In addition, it would align current preliminary injunction standards such that both the FTC and DOJ would face the same thresholds required of the Clayton Act rather than the more lenient standard under the FTC Act. A similar bill passed the House in 2016, but was not taken up by the Senate.

Surprisingly amidst the Federal Bureau of Investigation (FBI) uproar, President Trump today signed an executive order addressing cybersecurity for the federal government and critical infrastructure, along with international coordination and cyber deterrence. The substance of the order, which is about to be made public, comes from various press releases and interviews with administration officials. The order is composed of three sections on cybersecurity and IT modernization within the federal government, protecting critical infrastructure, and establishing a cyber deterrence policy and coordinating internationally on cyber issues. In directing cabinet agencies to protect critical infrastructure, the order references the Obama administration’s “section 9” list of most critical entities, which already has prompted questions from industry.  Specifically, the order directs the Commerce Department and the Department of Homeland Security to coordinate an effort to reduce botnet cyber-attacks through a voluntary partnership with industry. This effort mirrors health industry association comments to Commerce’s National Institute of Standards and Technology (NIST), which next week will have an open forum to address the many comments made to its  rulemaking proposals. Interestingly, the Order directs the cabinet agencies to coordinate their own efforts with NIST.  The White House staff has been quoted as saying that “it is about time” the federal government was held to the same standard as private industry in addressing cybersecurity. Consistent with Industry requests, the framework is a voluntary tool actually developed in collaboration with industry, which argues that flexibility is required because policies must be adapted to the needs of different entities.

On the health care cyber front, it is interesting to note that James Comey’s last formal speech was given on May 8th to the American Hospital Association in which he raised concerns about the ability of the FBI to combat cyber-attacks and urged cooperation with hospitals and health systems not to get patient records but “fingerprints of digital intrusion.” I note that this is the point of the work of InfraGard, a cooperative effort between industry and the FBI, and is consistent with the public proposals of the Information Sharing and Analysis Organization Standards Organization (ISAO-SO), established by executive order.  Further information regarding those efforts, in which this author is active, can be provided at sgerson@ebglaw.com.

Comey’s abrupt departure suggests that his statements may quickly become passing memories, but the cooperative tone struck is more than a little inconsistent with proposals, for example, from the Department of Health & Human Services’ Office of Civil Rights (OCR), the enforcement agency for Health Insurance Portability and Accountability Act (HIPAA) matters, and from the Federal Trade Commission (FTC), which soon may inherit enhanced powers as the Federa l Communications Commission is attempting to leave the cyber security enforcement field.  Both the Office of Human Rights and the FTC stress enforcement as the optimal mode of gaining cyber compliance.

In the coming days, you may expect further analysis by Epstein Becker Green of OCR’s developing enforcement stance and other emergent government policies in the wake of the new Executive Order.

Executive Order Delay Trumps Administration Policy Development

President Trump’s first hundred days did not produce the event that most people in the cybersecurity community expected – a Presidential Executive Order supplanting or supplementing the Obama administration’s cyber policy – but that doesn’t mean that this period has been uneventful, particularly for those in the health care space.

The events of the period have cautioned us not to look for an imminent Executive Order. While White House cybersecurity coordinator Robert Joyce recently stated that a forthcoming executive order will reflect the Trump administration’s focus on improving the security of federal networks, protecting critical infrastructure, and establishing a global cyber strategy based on international law and deterrence, other policy demands have intruded. Indeed as the 100-day mark approached, President Trump announced that he has charged his son-in-law, Jared Kushner, with developing a strategy for “innovation” and modernizing the government’s information technology networks. This is further complicating an already arduous process for drafting the long-awaited executive order on cybersecurity, sources and administration officials say.

The Importance of NIST Has Been Manifested Throughout the Hundred Days

The expected cyber order likely will direct federal agencies to assess risks to the government and critical infrastructure by using the framework of cybersecurity standards issued by the National Institute of Standards and Technology, a component of the Department of Commerce.

The NIST framework, which was developed with heavy industry input and released in 2014, was intended as a voluntary process for organizations to manage cybersecurity risks. It is not unlikely that regulatory agencies, including the Office of Civil Rights of the Department of Health and Human Services, the enforcement agency for HIPAA, will mandate the NIST framework, either overtly or by implication, as a compliance hallmark and possible defense against sanctions.

NIST has posted online the extensive public comments on its proposed update to the federal framework of cybersecurity standards that includes new provisions on metrics and supply chain risk management. The comments are part of an ongoing effort to further revise the cybersecurity framework. NIST will host a public workshop on May 16-17, 2017

Health Industry Groups Are Urging NIST to Set up a ‘Common’ Framework for Cybersecurity Compliance

Various health care industry organizations including the College of Healthcare Information Management Executives and the Association for Executives in Healthcare Information Security have asked NIST to help the industry develop a “common” approach for determining compliance with numerous requirements for protecting patient data. Looking for a common security standard for compliance purposes, commenters also argue that the multiplicity of requirements for handling patient data is driving up healthcare costs. Thus, the groups urge NIST to work with the Department of Health and Human Services and the Food and Drug Administration “to push for a consistent standard” on cybersecurity. One expects this effort, given strong voice in the First Hundred Days, to succeed.

The Federal Trade Commission is Emerging as the Pre-eminent Enforcement Agency for Data Security and Privacy

With administration approval, the Federal Communications Commission is about to release today a regulatory proposal to reverse Obama-era rules for the internet that is intended to re-establish the Federal Trade Commission as the pre-eminent regulatory agency for consumer data security and privacy. In repealing the Obama’s “net neutrality” order, ending common carrier treatment for ISP and their concomitant consumer privacy and security rules adopted by the FCC, the result would be, according to FCC Chairman Pai, to “restore FTC to police privacy practices” on the internet in the same way that it did prior to 2015. Federal Trade Commission authority, especially with regard to health care, is not without question, especially considering that the FTC’s enforcement action against LabMD is still pending decision in the 9th Circuit. However, the FTC has settled an increasing number of the largest data breach cases The Federal Trade Commission’s acting bureau chief for consumer protection, Thomas Pahl, this week warned telecom companies against trying to take advantage of any perceived regulatory gap if Congress rolls back the Federal Communications Commission’s recently approved privacy and security rules for internet providers.

OCR Isn’t Abandoning the Field; Neither is DoJ

While there have been no signal actions during the First Hundred Days in either agency. The career leadership of both has signaled their intentions not to make any major changes in enforcement policy.  OCR is considering expanding its policies with respect to overseeing compliance programs and extending that oversight to the conduct off Boards of Directors.

The Supreme Court Reaches Nine

Many would argue that the most important, or at least most durable, accomplishment of the Trump Administration to date is the nomination and confirmation of Neil Gorsuch to the Supreme Court. Justice Gorsuch is a conservative in the Scalia mold and is expected to case a critical eye on agency regulatory actions. There is no cybersecurity matter currently on the Supreme Court’s docket, but there will be as the actions and regulations of agencies like the FTC, FCC and DHHS are challenged.

On Monday, January 23rd, Senators Bill Cassidy (R-LA) and Susan Collins (R-ME) introduced the Patient Freedom Act of 2017 (“PFA”), the first of what may be many Republican Affordable Care Act (“ACA”) “replacement” alternatives. The PFA is notable for several reasons. It is the first replacement plan to be introduced in the 115th Congress, it is sponsored by Senators who are considered comparatively moderate on health issues, and thus its content may represent an opportunity for compromise in the future, and, perhaps most interestingly, does not actually repeal the ACA. The overarching feature of the PFA is that it allows states to control which course they chart for health reform.

The ACA: What Stays and What Goes  

If enacted, the PFA would eliminate the majority of the provisions contained in Title I of the ACA. This includes the individual and employer mandates, the community rating provision, essential benefits requirements, and the establishment of the health benefit exchanges. However, the ACA provisions the PFA retains are just as notable as the provisions it removes. The PFA maintains the bans on lifetime and annual coverage limits, maintains the ACA ban on coverage exclusions based on preexisting conditions, continues to permit dependents to remain on their parents’ plan until age 26, keeps in place the ACA non-discrimination requirements, and maintains the ACA mental health parity coverage requirements. The PFA also does not repeal any provisions outside of Title I, leaving many features in place, such as Medicaid expansion and Medicare prescription drug plan provisions.

State Options

The PFA would shift the decision of how to implement health reform to individual states. The PFA allows states to choose between three options: 1) maintain the current ACA model using subsidies and health benefit exchanges to provide insurance coverage; 2) enact a market-based option or “state alternative;” or 3) select to design its own health system without federal funding. If a state fails to select one of the options by a certain date they will be deemed to have selected the market based option.

Option 1: Keep the ACA

States that elect to continue to operate under the ACA will be treated as if the changes to Title I of the Act in the PFA were never enacted. This will allow states to maintain health benefits exchanges and for eligible enrollees to receive federal subsidies and cost sharing reductions to purchase coverage from qualified health plans (“QHPs”). However, States may see a reduction in the exchange subsidies and costs sharing reductions available to enrollee as the PFA includes an additional provision designed to align federal funding between ACA states and states that elect the new market-based approach.

Option 2: Market-Based Approach

The market-based approach, or “State Alternative” option, will allow states to essentially shift residents enrolled in QHPs and potentially Medicaid into a standard high-deductible health plan containing basic pharmaceutical coverage and some coverage for preventive care and free immunizations. Residents currently enrolled in QHPs will receive Roth health savings accounts (“HSAs”) funded through tax credits.  These tax credits will replace the advanced premium tax credits QHP-enrollees are currently eligible to receive with a tax credit that is similarly advanceable and refundable.  The tax credit is also adjustable based on the age, income, and geographic location of the enrollee.

States may also include the Medicaid expansion population under this market-based alternative, but only enrollees not otherwise eligible for Medicare coverage, and eligibility for federal Roth HSA contributions will be limited to those not enrolled in a federal healthcare or veterans benefit program. States can either administer the market-based solution themselves or they can allow the federal government to administer the system. The total amount of the tax credits available under the market based approach will be equal to 95 percent of the total projected ACA premium tax credits and cost-sharing subsidies that the state would have otherwise received.

What’s Next and What to Watch?

The PFA is the first of what may be many Republican plans to replace the ACA. Reports indicate other members of Congress, including Senator Rand Paul, are expected to release alternative plans in the near future. It is unlikely that any one plan will be enacted in the form that it is introduced. However, significant insight into what ultimate changes may occur can be gained by monitoring how stakeholders- such as members of Congress, the administration, and governors- respond to the various provisions contained in these proposals. Health care entities should closely monitor the provisions that appear to have support among the various stakeholders to ensure that there is sufficient time to react and adapt to the changing health care environment.

On his first day in office, President Trump issued an Executive Order entitled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.” The Executive Order is, in effect, a policy statement by the new administration that it intends to repeal the Patient Protection and Affordable Care Act (the “ACA” or the “Act”) as promptly as possible. The Executive Order also directs the Secretary of Health and Human Services and the heads of all other executive departments and agencies that, pending repeal of the ACA, they are to exercise the full extent of their authority and discretion to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”

Impact on the Individual Mandate

The Executive Order does not explicitly name provisions of the ACA to be targeted by executive agency and department heads. However, Section 2 appears to be aimed at the ACA’s “individual mandate,” which requires that individuals obtain health care insurance or pay a fine, and one potential effect of the Executive Order may be limited enforcement of the individual mandate:

To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.

Impact on the Insurance Marketplace

The Executive Order also mandates that executive agency and department heads “provide greater flexibility to States and cooperate with them in implementing healthcare programs,” and “encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.”

Regulatory Freeze

Also on January 20, 2017, the White House issued a memorandum to the heads of executive departments and agencies entitled “Regulatory Freeze Pending Review.” The memorandum directs that, except for certain emergency situations, no regulation be sent to the “Office of Federal Register (the “OFR”) until a department or agency head appointed or designated by the President after noon on January 20, 2017, reviews and approves the regulation.” “[W]ith respect to regulations that have been published in the OFR but have not yet taken effect,” the memorandum directs agency and department heads to postpone the effective date for 60 days from the date of the memorandum, as permitted by law and subject to exceptions for emergency situations. The memo also instructs executive agency and department heads to consider delaying effective dates beyond the 60-day period to address substantial questions of law or policy.

So, What Does This Mean…..From the Counselor to the President 

On Sunday, January 22, 2017, Kellyanne Conway, Counselor to the President, said that President Trump “wants to get rid of that Obamacare penalty almost immediately, because that is something that is really strangling a lot of Americans…”[1]

When asked if Trump would stop enforcing the individual mandate, she replied, “He may.” Conway also stated that the Trump Administration planned to end ACA’s requirement that employers with more than 50 full-time workers offer affordable coverage to their workers. “We’re doing away with this Obamacare penalty,” she said. “This tax has been… a burden on many small business owners…”[2]

Conway also noted that the Trump Administration does not intend to eliminate ACA entirely: “For the 20 million who rely upon the Affordable Care Act in some form, they will not be without coverage during his transition time.”[3] Conway noted that the President is “going to replace this with a plan that allows you to buy insurance across state lines, that is much more centered around the patient, and access to health care. . .”[4]

What’s Next And What To Watch?

Earlier today, Republican Senators Susan Collins of Maine and Bill Cassidy of Louisiana unveiled a bill intended to be an “Obamacare replacement plan,” “The Patient Freedom Act of 2017.” The Senators’ proposal, which is based upon a proposal originally put forward by the Senators in 2015, is intended to provide more power to the states on health care policy, to increase access to affordable insurance, and to help cover those who are currently uninsured.[5] For instance, states who like Obamacare will be able to keep it. Senator Cassidy explained as follows: “So, California and New York, you love Obamcare? You can keep it.”

In sum, uncertainty remains as to the extent that ACA will be changed, replaced, or otherwise amended, whether the changes will be administrative or legislative, and how much the changes to the Act will disrupt the health care marketplace. A flurry of further activity by the President, agency administrators, and members of Congress is expected over the coming days and weeks. Health care entities should closely follow these developments to ensure that they have sufficient time to react and adapt to the changing health care environment.

___

[1] ‘This Week’ Transcript 1-22-17: Kellyanne Conway, Sen. John McCain, and Sen. Chuck Schumer, http://abcnews.go.com/Politics/week-transcript-22-17-kellyanne-conway-sen-john/story?id=44954948 (last accessed Jan. 23, 2017).

[2] Trump’s ACA executive order heightens insurance market jitters, Modern Healthcare, Jan. 22, 2017, http://www.modernhealthcare.com/article/20170122/NEWS/170129985/breaking-trumps-aca-executive-order-heightens-insurance-market (last accessed Jan. 23, 2017).

[3] Emily Schultheis, Top Trump Aide: 20M on Obamacare “Will Not Be Without Coverage” in Transition to New Plan, http://www.cbsnews.com/news/top-trump-aide-20m-on-obamacare-will-not-be-without-coverage-in-transition-to-new-plan/ (last accessed Jan. 23, 2017).

[4] ‘This Week’ Transcript 1-22-17: Kellyanne Conway, Sen. John McCain, and Sen. Chuck Schumer, http://abcnews.go.com/Politics/week-transcript-22-17-kellyanne-conway-sen-john/story?id=44954948 (last accessed Jan. 23, 2017).

[5] https://www.collins.senate.gov/newsroom/senators-collins-cassidy-introduce-aca-replacement-plan-expand-choices-lower-health-care (last accessed Jan. 23, 2017).

As discussed previously in this blog, efforts to curb fraud, waste and abuse are generally “bi-partisan.” Given the significant monetary recoveries the Government enjoys through enforcement of the federal False Claims Act (“FCA”), we have predicted that efforts in this arena will continue under a Trump administration. However, this is dependent, in part, on the priorities of the new administration and the resources it devotes in this arena. To this end, the testimony of Attorney General nominee Sessions during his confirmation hearing on January 10th may have given us some insight into how he views the FCA.

Notably, as part of his opening testimony, Attorney General nominee Sessions said:

“Further, this government must improve its ability to protect the United States Treasury from waste, fraud, and abuse. This is a federal responsibility. We cannot afford to lose a single dollar to corruption and you can be sure that if I am confirmed, I will make it a high priority of the Department to root out and prosecute fraud in federal programs and to recover any monies lost due to fraud or false claims.”

During questioning by Senate Judiciary Committee Chairman Charles Grassley (R. IA.), Sessions elaborated on his intent to focus on the FCA. When asked whether he would “pledge to vigorously enforce the False Claims Act and devote adequate resources to investigating and prosecuting False Claims Act cases,” Sessions testified:

“In the qui tam provisions and the part of that, I’m aware of those. I think they are valid and an effective method of rooting out fraud and abuse. I even filed one myself one time as a private lawyer…. It has saved this country lots of money and probably has caused companies to be more cautious because they can have a whistleblower that would blow the whistle on them if they try to do something that’s improper. So, I think it’s been a very healthy thing…”

In addition, after commenting that, in his opinion, some qui tam cases remain under seal for an “awfully long time,” Sessions testified that, if confirmed, he would provide Congress with “regular timely updates on the status of…. False Claims Act cases including statistics as to how many are under seal and the average length of seal time.”

Sessions’ testimony seems to have offered something to those on “both sides” of the FCA. His statements suggest that he recognizes the value of the FCA and its qui tam provisions; indeed, we learned that he even brought a qui tam case when he was in private practice. However, his testimony also reflects concern about unreasonably long seal periods, which are a significant problem for defendants in FCA cases. Extended seal periods plainly provide a unilateral litigation advantage to the Government and qui tam Relators by allowing extensive time to investigate while providing defendants no corresponding opportunity. Instead, extended seal periods often force defendants to be relegated to face aged claims once they are finally able to defend themselves. (Most FCA actions are filed under whistleblower, or qui tam, provisions. According to the Department of Justice, whistleblowers filed 702 qui tam suits in fiscal year 2016—an average of 13.5 new cases every week.) Only time will tell if a Justice Department under Attorney General Sessions will press to expedite consideration of FCA cases and improve the “playing field” in the process.