Capitol Insights Newsletter

Authors: Luke Schwartz, Caroline Oliver, and Matt Reiter

On Saturday, April 27th, Capitol Associates will celebrate its 40th birthday as a company. The firm has had a long and interesting history over the past four decades. We are grateful to everyone who has been a part of this journey. We look to the future with optimism for continued success in making Washington a better place for our clients.

What happened in Congress this week?

While it was a relatively quiet week on Capitol Hill with Congress being out of session, the big news is that UnitedHealth Group CEO Andrew Witty will testify before the Senate Finance Committee and the House Energy & Commerce Committee on April 30th and May 1st respectively. Lawmakers are expected to ask tough questions about how the Change Healthcare Cyberattack impacted provider revenue and patient data. Tensions will be especially high as there are recent reports that large amounts of Protected Health Information (PHI) were compromised during the attack. CAI will be closely monitoring these hearings.

FTC Bans Non-Compete Agreements

In a 3-2 decision on Tuesday, the Federal Trade Commission (FTC) banned the use of non-compete agreements in employment contracts in most instances. These agreements allowed employers to restrict employees from joining another company in the same industry.  Importantly, the ruling not only prohibits future non-compete agreements but also applies to existing non-compete agreements, ending them as soon as the new rule goes into effect. According to the FTC, 30 million US workers are currently bound by non-compete agreements.

The final rule only applies to agreements between employers and employees. The final rule does not apply to non-compete agreements for owners and senior executives. Employers, however, are prohibited from entering into or enforcing new non-competes with senior executives. The final rule defines senior executives as workers earning more than $151,164 annually and who are in policy-making positions.

To comply with the rule, employers will have to provide notice to workers bound to an existing non-compete that the non-compete agreement will not be enforced against them in the future. The FTC included model language in the final rule that employers can use to communicate with workers. 

The final rule is already facing strong legal challenges, as pro-business groups have expressed questions about the authority of the FTC to implement the ban. Some argue this decision will increase worker autonomy to move between jobs while others contend it will be harder for companies to maintain their workforce.

Non-competes are especially common between physicians and hospitals. This will likely cause healthcare organizations’ recruitment and retention strategies to change. While the final rule may face legal challenges due to its slight ambiguity, non-profit hospitals will generally be required to comply with its provisions in most instances.

The final rule will go into effect 120 days after publication in the Federal Register.

Top Stories in Healthcare Policy

The Federal Trade Commission, Justice Department, and Department of Health and Human Services (HHS) have jointly launched, an online portal that allows the public to report anticompetitive practices in healthcare. The FTC and Antitrust Division of the DOJ will review submitted complaints.

On April 22nd, the HHS Office of Civil Rights finalized a rule that applies the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule to reproductive healthcare services. The final rule protects patients’ health information on abortion, contraception, and fertility treatments from being disclosed to law enforcement for investigation purposes.

The Biden administration has finalized a series of rules that increase nursing home staffing requirements. Implementation of new minimum staffing requirements will be staggered over three years for non-rural facilities and over five years for rural facilities. The Energy and Commerce Committee’s Health Subcommittee will hold a hearing on April 30 to review various legislation, including a bill that would block these new mandates.

In a statement posted to their website, UnitedHealth shared that initial investigations of the Change Healthcare cyberattack have identified protected health information or personally identifiable information for a large proportion of Americans. The company explains that continued analysis over the coming months is necessary to identify and notify impacted customers.

The FDA’s Center for Devices and Radiological Health (CDRH) launched Home as a Health Care Hub initiative this week. The virtual reality model is designed to inform the future development of at-home health care focusing on health equity.

The Senate Committee on Health, Education, Labor, and Pensions (HELP) has launched an investigation into the prices of Ozempic and Wegovy, both products of Novo Nordisk. Senator Bernie Sanders (I-VT), Chairman of the Senate HELP Committee, has sent a letter to the CEO of Novo Nordisk requesting more information.

Leading House Republicans are pushing for an investigation into the Center for Medicare and Medicaid Innovation (CMMI), the “innovation center” that was authorized by the Affordable Care Act as a way to test alternative payment models. Some lawmakers contend that CMMI is costing the government much more money than it is saving.

This week the Departments of Health and Human Services, Labor, and the Treasury and the Office of Personnel Management (OPM) released a paper to show the work the Departments, OPM and industry have done to develop standards for successful implementation of the advanced explanation of benefits (AEOB) as required under the No Surprises Act (NSA). They are still working to develop standards for electronic data transfer to comply with the NSA. They are leaning towards adopting HL7’s FHIR standard but will pilot test their program of choice before implementing it at a large scale.