Texas Attorney General Settles with Healthcare AI Firm Over False Claims on Product Accuracy and Safety

By Squire Patton Boggs on September 30, 2024 Posted in Artificial Intelligence, Digital Health

The Office of the Attorney General of Texas (“OAG”) announced a “first-of-its-kind healthcare generative AI” settlement with Pieces Technology, Inc. (“Pieces”). The settlement related to the Texas OAG allegations that Piece’s advertising and marketing claims about the accuracy of its generative artificial intelligence (GenAI) products in violation of the Texas Deceptive Trade Practices – Consumer Protection Act (“DTPA”), Tex. Bus. & Com. Code Ann. § 17.58. The Texas OAG states in its press release that the Piece’s investigation is a “First-of-its-Kind Healthcare Generative AI Investigation.” Squire Patton Boggs attorneys Julia Jacobson and Gicel Tomimbang discuss the OAG’s action and settlement on our Privacy World Blog, which you can read here.

Stark Law & Mailing Physician-Dispensed Prescriptions: From COVID-19 Waivers to Federal Legislative Action

By Michele Munk on September 27, 2024 Posted in Legislation, Stark Law

In August 2024, a federal district court dismissed a lawsuit filed by the Community Oncology Alliance (“COA”), holding that the “in-office ancillary services” exception to the Stark Law does not permit physicians to dispense medications through the physician’s office and then mail prescriptions to the patient’s home. COA v. Becerra, Case No. 23-cv-2168, Doc. 40, United States District Court for the District of Columbia (Aug. 30, 2024).

COA sued the Secretary of Health and Human Services (the “Secretary”) and CMS challenging the policies presented under certain of CMS’s Stark Law “Frequently Asked Questions” (“FAQs”) as violating the Medicare Act and Administrative Procedure Act. COA alleged that prior to the COVID-19 pandemic, the regulations regarding the “in-office ancillary services” exception permitted mailing prescription drugs to patients. In September 2021 and May 2023, CMS published FAQs taking the position that the “in-office ancillary services” exception does not apply when a patient receives an item outside the physician’s office, including prescriptions delivered by mail, as the prescription would not be dispensed to the patient in the physician’s office. COA argued the FAQs violated the Administrative Procedure Act by not following required rule-making procedures. COA also alleged that if physicians are prohibited from mailing prescriptions to patients such regulation would violate the Tenth Amendment of the U.S. Constitution by preventing states from regulating how physicians may dispense cancer drugs to patients.

The Changing Labor Landscape for Healthcare Employers

By Will Kishman on September 18, 2024 Posted in FTC, Labor and Employment, NLRB

In 2024, healthcare employers have faced several new challenges and developments regarding traditional labor obligations. Unions are becoming more prominent in healthcare, including by unionizing doctors at unprecedented rates and by becoming more involved in government-funded projects. At the same time, federal agencies are imposing significant new labor obligations on healthcare employers, regardless of whether or not they have unions representing their employees. While the Federal Trade Commission’s non-compete rule has garnered major attention (as we discussed further here and here), the National Labor Relations Board has its own new positions on restrictive covenants which arguably impact healthcare employers even more than the FTC rule.

These issues are covered further below. For those interested in more detail, Squire Patton Boggs’ Healthcare Industry Group and Labor and Employment Practice Group will be discussing these developments at two upcoming webinars in October. Those interested in a healthcare-focused employment law update should join us on October 22 for our webinar entitled Emerging Issues in the Healthcare Industry: What Healthcare Employers Need to Know by clicking this registration link. Those interested in more detail specifically about labor law and labor union developments should attend our webinar on October 8 entitled Labor Law’s New Landscape: How Another Year of Groundbreaking Changes Will Affect Non-Union and Unionized Employers at this registration link.

FTC Non-Compete Ban Set Aside Nationwide

By Squire Patton Boggs on August 30, 2024 Posted in Antitrust, FTC, Labor and Employment

On August 20, 2024, a Texas federal judge permanently barred the implementation of a controversial Federal Trade Commission (FTC) regulation that would have invalidated tens of millions of existing non-compete agreements and precluded the adoption of new covenants. We discussed the FTC’s non-compete regulation earlier this year. The decision comes as a relief to employers that feared the FTC’s regulation would have made it nearly impossible to prevent unfair competition and protect employers’ investment in its employees and against the misappropriation of confidential and proprietary information. Squire Patton Boggs attorney Laura Lawless discusses the decision and its implications on our Employment Law Worldview Blog, which you can read here.

Singapore Issues Game-Changing Synthetic Data Guide for AI

By Charmian Aw and Brendan Lai on August 23, 2024 Posted in AI, Singapore

On July 15, 2024, Singapore’s Personal Data Protection Commission Singapore (PDPC) released a Proposed Guide on Synthetic Data Generation (Guide). The Guide is a resource within the Privacy Enhancing Technology (PET) Sandbox which aims to assist organisations in understanding the techniques and potential applications of Synthetic Data generation, particularly in the context of artificial intelligence (AI) without compromising sensitive data.

In healthcare, where patient privacy and data accessibility are critical concerns, synthetic data presents a promising solution. For instance, it:

Preserves privacy: With strict privacy and confidentiality necessary to protect highly sensitive and data, these rules often make data sharing difficult, slowing down research and innovation. Synthetic data offers a way around these challenges by mimicking the trends of real healthcare data without linking to actual patients. This allows healthcare organisations to avoid the complexities of data sharing agreements and privacy restrictions, thereby accelerating research and development while staying compliant.

Improves treatments: By simulating patient data, healthcare providers can evaluate the effectiveness and safety of treatments and tools without compromising patient privacy. This not only improves the accuracy of medical tools but also helps identify potential issues before they are used in clinical settings.

Enhances research and development: Synthetic data enhances the training and validation of machine learning models, particularly in medical imaging. This provides the ability to augment datasets with diverse and realistic images where real data is limited, thereby reducing costs and labour associated with annotating real images and allowing researchers to refine their models more effectively.

Enables predictive analytics and personalised medicine: Synthetic data is a valuable tool in predictive analytics which is crucial for personalised medicine. Machine learning models trained on synthetic data can more accurately predict how patients will respond to treatments, leading to more personalised and effective care strategies.

Reduces risks of data breaches: By mimicking real data without including personal information, synthetic data offers a secure alternative for organisations relying on data for insights.

Expands data use in education and research: Synthetic data’s benefits extend beyond its primary applications. It can be used for educational purposes, allowing students and professionals to practice on realistic scenarios without compromising patient confidentiality.

To learn more about Singapore’s Guide, please see our original blog post on our Privacy World blog.

Singapore Consults on Cybersecurity Guidelines for AI Systems

By Charmian Aw on August 15, 2024 Posted in AI, Cybersecurity, Data Protection, Singapore

As a digital technologies hub in the Asia Pacific region, Singapore is making a big push to advance Artificial Intelligence (AI) technologies across various sectors, including healthcare.

The promise of AI in managing Singapore’s ageing population and enhancing patient care and treatment more broadly cannot be overstated. This spans the ability to better predict and diagnose diseases, enable personalised medicine, and improve remote patient monitoring.

With that said, the threat of cyber-attacks and other threats pose very real risks to these AI-driven outcomes being fulfilled.

To address this issue, the Cybersecurity Agency of Singapore has published for public consultation, two proposed sets of guidelines for securing AI systems. The consultation closes on September 15, 2024.

To read more about this development in Singapore, please see our original blog post on our Privacy World blog.

Medicare Part D Preemption: Supreme Court Review Uncertain

By Michele Munk on August 5, 2024 Posted in 10th Circuit, 1st Circuit, 8th Circuit, Medicare Part D, U.S. Supreme Court

On July 29, 2024, Pharmaceutical Care Management Association (“PCMA”) filed an opposition to Oklahoma’s petition for writ of certiorari in the United States Supreme Court, seeking review of the Tenth Circuit decision PCMA v. Mulready, 78 F.4th 1183 (10th Cir. 2023). Oklahoma seeks review of both ERISA and Medicare Part D preemption.[1]

Mulready held that Medicare preempted Oklahoma’s Any Willing Pharmacy provision (“Challenged AWP”), which requires a Pharmacy Benefit Manager (“PBM”) to allow the participation of pharmacies into preferred pharmacy networks.[2] Mulready reasoned that Medicare Part D preemption is akin to field preemption and does not require an overlapping federal and state standard to conclude that the state law is preempted.[3] Applying field preemption, Mulready concluded that the Challenged AWP “detracts from the integrated scheme of [Medicare] regulations” by regulating Part D plans above what Medicare laws and regulations require, and as the state law did not concern licensing or plan solvency, it was preempted.

Mulready could have stopped there but doesn’t. Mulready further held that under a conflict preemption standard, the Challenged AWP would still be preempted for Medicare Part D plans because Medicare has its own Any Willing Pharmacy provision (“Medicare AWP”),[4] and other regulations[5] that require Medicare Part D plans (and associated PBM) to allow pharmacies to participate in standard pharmacy networks but does not require participation in preferred networks.

In Purdue Pharma, the Supreme Court Fires a Canon of Construction Through Non-Consensual Third-Party Releases (US)

By Squire Patton Boggs on July 16, 2024 Posted in Bankruptcy, U.S. Supreme Court

On June 27, 2024, the Supreme Court ruled in a 5-4 decision that a bankruptcy court does not have the statutory authority to discharge creditors’ claims against a non-debtor without the creditors’ consent (except in asbestos cases). The decision in Harrington v. Purdue Pharma settles a long-standing dispute in the bankruptcy world that will have significant impact on Purdue Pharma and its hundreds of thousands of creditors, and more generally on the bankruptcy practice itself. Squire Patton Boggs attorney Justin Cloyd discusses the case in detail on our Restructuring GlobalView blog, which you can read here.

A New Era in Healthcare Regulation & Compliance

By Kayla Mendez on July 11, 2024 Posted in Regulations, U.S. Supreme Court

Loper Bright Shifts Statutory Interpretation Powers Back to the Courts.

On June 28, 2024, the Supreme Court overturned the Chevron doctrine with its decision in Loper Bright Enterprises v. Raimondo. Under Chevron, courts have historically deferred to a federal agency’s interpretation of ambiguity in statutes that the agency administers. Courts premised Chevron deference on the notion that Congress implicitly delegated the interpretation to the agency.

In contrast, Loper Bright rejects Chevron’s assumption of implicit delegation: “When the best reading of a statute . . . delegates discretionary authority to an agency, the role of the reviewing court under the APA is, as always, to independently interpret the statute and effectuate the will of Congress.”

Loper Bright’s requirement for independent judicial judgment as to whether an agency acted within its authority granted by Congress will necessarily require courts to review agency interpretations on a case-by-case basis. A court may still defer to or “seek aid from” an agency’s interpretations and consider the agency’s “body of experience and informed judgment,” but courts will also employ far more discretion to disagree with an agency’s interpretation of statutory ambiguity. Now, more readily, a court may weigh “other information at its disposal” and potentially give increased weight to the perspectives of litigants and amici over agency expertise. Even where a court finds an agency’s interpretation reasonable, the court may still replace the interpretation with its own.

Some caution is in order, though, because the post-Chevron landscape will not be the same for all agencies. The Supreme Court acknowledged that there are statutes calling for greater degrees of deference in specific circumstances. For example, banking agencies receive great deference for their interpretations of federal banking law. This is not due to the across-the-board presumption, from Chevron, that the Supreme Court overturned. Rather, it was a judicial reaction to the specific concerns that Congress addressed in federal banking law. These statute-specific forms of deference tended to merge into Chevron over the years. But the underlying precedents are still there, and courts may revive these statute-specific deference doctrines. This possibility is particularly pertinent in healthcare, because, for example, the lower courts have long deferred to CMS interpretations of the Medicare Act, in a manner that might survive Loper Bright.

Lawmakers Request Comments from Health Stakeholders on Medical Research and Care Delivery Reforms

By Beth Goldstein and Josephine Magnotti on June 14, 2024 Posted in 21st Century Cures Act, Policy, Research

On June 6, 2024, Reps. Diana DeGette (D-CO) and Larry Bucshon, MD (R-IN) released a letter requesting information from stakeholders on their 21st Century Cures initiative, a policy effort focused on medical research and health care transformation and reforms. With this opportunity to comment, the lawmakers have renewed their commitment to developing the initiative with the support of the health community, nearly eight years after the passage of the 21st Century Cures Act (Pub. L. 114-255).

Enacted in December 2016, the bipartisan 21st Century Cures Act was led by Reps. DeGette and Fred Upton (R-MI) and represented a landmark legislative effort to accelerate health research and delivery reforms across the United States. The legislation aimed to expedite the discovery, development, and delivery of novel treatments and cures and provide these advancements to patients efficiently. The bill allocated substantial funding to the National Institutes of Health (NIH) to support cutting-edge biomedical research; specifically, it provided $4.8 billion over 10 years to the NIH to support the Precision Medicine Initiative, the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative, and cancer research through the Cancer Moonshot. Additionally, the legislation streamlined regulatory processes at the Food and Drug Administration, including provisions to speed up the review of novel therapies, encourage the use of real-world evidence in approvals, and allow for adaptive trial designs. Notably, it also introduced crucial reforms in mental health care, supported advancements in health information technology, and emphasized the importance of patient perspectives in the development and regulation phases for emerging drugs.