Attorneys Mike Cassidy and Adam Appleberry co-authored an insightful article, 2025 Medicare Final Rule Highlights, featured in the December 2024 issue of the Allegheny County Medical Society (ACMS) Bulletin. The article explores the key updates to Medicare regulations and their implications for healthcare providers.
Click here to access the ACMS Bulletin to read the full article and stay informed on the latest developments impacting the healthcare industry.
This is a last in a series of client alerts and blog posts we’ve issued over the last year designed to inform you of the new Federal and Pennsylvania corporate reporting obligations.
ALERT: The U.S. District Court E.D. Texas has issued a nationwide preliminary injunction against enforcement of the reporting rules below.
Federal
The financial crimes enforcement network (FinCEN) issued a final rule implementing the Corporate Transparency Act passed in 2022. This is designed to identify the owners of corporation and limit the ability to engage in illegal financial conduct.
This is a fairly simple process, much like registering with the TSA to obtain a known traveler number. You log on to the website, identify yourself via scanning your driver’s license, and fill in the blanks asking for ownership information for your corporation. Click here for access to that information.
Contact us if you need assistance.
Pennsylvania Law
Act 122, passed in 2022, requires annual reports from all organizations, i.e. corporation, limited liability companies, and most partnerships. This is merely a change to make the reporting requirements annual rather than biennial. Click here for Pennsylvania reporting.
The filing deadlines are as follows:
You will be required to report the entity name, jurisdiction of formation, address, a name of at least one director, manager, member or partner, the names and titles of the principal officers, the address of the principal office, and the entity number issues by the Pennsylvania Department of State.
As with the federal reporting requirements, please contact us if you need further assistance.
Our Introduction to Telehealth, Technology and Federal Enforcement chapter was published in the Thomson Reuters 2025 Health Law Handbook. It reviewed a number of telehealth Medicare revisions, both permanent and temporary, enacted by a series of consolidated appropriation acts and physician fee schedule amendments arising out of the 2020 COVID pandemic.
The temporary telehealth provisions currently due to expire after December 31, 2024 are:
The Telehealth Modernization Act of 2024 has been introduced to permanently extend the following flexibilities:
We will keep you advised of developments in that area. In the meantime, please contact Mike Cassidy or Adam Appleberry with questions.
The final Medicare Physician Fee Schedule was issued on November 1st for calendar year 2025. Attached is a link to both the Press Release describing all of the Medicare changes and the link to the entire Final Rule.
The Medicare Conversion Factor for the Physician Fee Schedule was decreased from $33.29 from 2024 to $32.35 for 2025, i.e. 2.93%.
Mike Cassidy and Adam Appleberry have had a chapter published in the Thomson Reuters Health Law Handbook: “Introduction to Telehealth, Technology, and Federal Enforcement”.
In a continuation of the saga surrounding the FTC’s ban on non-compete agreements for for-profit businesses, on August 20, 2024, a ruling from the United States District Court for the Northern District of Texas struck down the FTC’s final rule. In the Texas court’s ruling, U.S. District Judge Ada Brown stated that the FTC’s authority to police unfair methods of competition couldn’t be used to issue substantive regulations that ban an entire category of conduct. According to Judge Brown, this action by the FTC exceeds its authority granted by Congress. This ruling is effective nationwide and not just limited to the Texas case.
The FTC is considering an appeal to this ruling, but for now, the FTC’s ban on non-compete agreements will not go into effect on September 4, 2024. As the situation continues to develop, we will monitor and update on this blog as further updates become available.
On July 17, 2024, Pennsylvania Governor Josh Shapiro signed the Fair Contracting for Health Care Practitioners Act into law, which will become effective as of January 1, 2025 (click here see the full bill). Any noncompete covenants that are greater than one year in length in an employment agreement for a healthcare provider, entered into after the effective date, are void and unenforceable. The exception that allows for noncompete covenants that are one year in length or less only applies to situations where the healthcare provider departs on their own volition; if a healthcare provider is terminated or dismissed by the employer, the noncompete covenant is not enforceable.
Employers are still authorized to recover reasonable expenses from a healthcare provider for expenses “related to the relocation, training, and establishment of a patient base,” but these expenses can only be recovered if the healthcare provider left on his or her own volition and was not terminated or dismissed by the employer.
Additionally, any noncompete covenants related to the sale of an ownership interest or the sale of all or substantially all of the assets of a practice are not subject to the restrictions in this Act. If a provider is not a party to the sale, however, the noncompete agreement is void and unenforceable. This exception only applies to those with ownership interests in a practice.
Per the Act, the Health Care Cost Containment Council will perform a study of the effects of this Act within three years following its effective date and will report its findings back to the State Senate’s and State House’s Health and Human Services Committees.
CMS proposed several telehealth changes in the 2025 Medicare Physician Fee Schedule Proposed Rule, issued July 10, 2024.
Interactive Telecommunication
Beginning January 1, 2025, an interactive telecommunication system may include two-way, real-time audio-only communication technology for any telehealth service furnished to a beneficiary in their home, if the distant site physician or practitioner is technically capable of using an interactive telecommunication system but the patient is not capable of, or does not consent to, the use of video technology.
Distant Site Address
CMS will continue to permit the distant site practitioner to use their currently enrolled practice location instead of their home address when providing telehealth services from their home.
Direct Supervision
CMS is proposing to adopt, for a certain subset of services that are required to be furnished under direct supervision of a physician or other supervising practitioner, to permanently adopt the definition of direct supervision that allows the physician or supervising practitioner to provide such supervision through real-time audio and visual interactive telecommunications. CMS is specifically proposing that the physician or supervising practitioner may provide such virtual direct supervision for services furnished incident to a physician service when they are provided by auxiliary personnel employed by the physician and working under his or her direct supervision.
CMS has also proposed that “immediate availability” for purposes of direct supervision for all other services will include real-time audio and visual interactive communications only through December 31, 2025.
Challenges to the FTC Rule
As we previously discussed on Med Law Blog, following the FTC’s approval of the final rule to ban non-compete agreements for for-profit businesses in April, several businesses have challenged the FTC’s authority to enforce this rule. The final rule is set to take effect on September 4, 2024, but in light of the number of challenges still pending, it’s unclear as to whether the FTC’s rule will remain intact. In one such challenge in the Northern District of Texas, the federal judge issued a preliminary injunction on July 3, 2024, that stays this ban for the named plaintiffs in the case, who were Ryan LLC, the Chamber of Commerce of the United States of America, Business Roundtable, the Texas Association of Business, and the Longview Chamber of Commerce. On or before August 30, 2024, the court intends to rule on the merits of the legal challenge that seeks to invalidate the rule for businesses nationwide.
In a separate challenge to the FTC’s rule in the Eastern District of Pennsylvania, ATS Tree Services, LLC claims that the FTC has exceeded its authority beyond what Congress intended. ATS provides tree removal services and firewood sales in Pennsylvania. To be able to effectively provide these services, ATS invests in its employees by offering specialized training in tree care skills. ATS employees sign a non-compete agreement, in exchange for receiving such training, that restricts an employee from directly competing with ATS for one-year following the employee’s termination of employment. According to ATS, by removing the ability to enforce these non-compete agreements, ATS risks losing these employees to competitors after investing a significant amount of time and financial resources, which could jeopardize its business. The motion for a preliminary injunction is still pending in this case, and a decision is expected to be issued on or before July 23, 2024.
Pennsylvania Healthcare Legislation Update
On a separate but related topic specific to healthcare providers in Pennsylvania, the Pennsylvania House of Representatives passed a ban for healthcare non-compete agreements in April, as we previously discussed. This bill, as passed by the Pennsylvania House, will be effective immediately for new restrictive covenants following a provider’s current license renewal. The bill was amended in the Pennsylvania Senate on July 10, 2024, and is currently under review by the Pennsylvania Senate’s Appropriations Committee. We will continue to monitor as this bill progresses through the legislative process, and we will update on this blog as further updates become available.
Click here for the CMS Announcement on July 10, 2024 proposing a reduction in the Medicare Conversion Factor payment from $33.29 to $32.36, i.e. 2.8%
There are a host of other changes in the 24 page Release, which we will address in due course.
