News & Insights


January 3, 2023

Health Headlines – January 3, 2023

HHS Proposes Rule Regarding Moral and Religious Beliefs of Health Care Workers – HHS recently announced a proposed rule (Proposed Rule) that modifies, rescinds, and retains previous conscience provisions that allow health care workers to deny care based on their religious or moral beliefs. HHS is requesting comments on the Proposed Rule, including those that will help assess alternatives and the necessity of additional regulations.

Previous Conscience Provisions and Rules

There are currently several federal provisions that protect health care workers from being required to participate in care that is contrary to their moral or religious beliefs. For example, the “Church Amendments,” enacted in the 1970s, prohibit entities receiving grants, contracts, or loans under certain HHS statutes from requiring workers to participate in a sterilization procedure or an abortion if it would be contrary to the worker’s moral or religious beliefs. Several other conscience provisions have been enacted since, including in the Medicare and Medicaid statutes. Additionally, since 2008, HHS has proposed several rules aimed at ensuring that HHS funds “do not support coercive or discriminatory practices, or policies in violation of federal law.”

In 2019, a final rule was issued (2019 Final Rule) that, among other things, added several statutory provisions and enforcement provisions to a prior rule. After the issuance of the 2019 Final Rule, several lawsuits were filed to challenge the rule, which resulted in the courts deciding that the rule was defective for multiple reasons. The Proposed Rule seeks to make changes to address the issues of the 2019 Final Rule that were challenged in court.  

Proposed Rule

The Proposed Rule partially rescinds and partially retains (with modifications) the 2019 Final Rule, and generally reinstates the “2011 framework that has been in effect for some time.” The aspects of the 2019 Final Rule that the Proposed Rule retains are: (i) the application to statutes first referenced in the 2019 Final Rule; (ii) several enforcement provisions; and (iii) a voluntary notice provision.

First, HHS proposes to expand the conscience statutes covered by the rule to include the statutes that HHS added to Section 88.3 of the 2019 Final Rule. These include the conscience protections included in several HHS programs including the Affordable Care Act, Medicare and Medicaid, health screenings, and more.

Second, HHS proposes to retain several provisions from the 2019 Final Rule and expand upon the 2011 Final Rule regarding “complaint handling and investigations.” This involves Office of Civil Rights’ (OCR’s) authority to handle complaints, seek voluntary compliance, and ensure compliance through enforcement. It also includes a description of how OCR will conduct investigations, proceed with an investigation, and seek resolution of violations.

Third, HHS proposes to retain and modify the 2019 Final Rule’s voluntary notice provisions to “advise persons and covered entities about their rights and the Department’s [HHS’s] and/or recipients’ obligations under Federal conscience and nondiscrimination laws” and may provide information about how to file a complaint or seek care. Among other additions, it also describes where the notice should appear. HHS proposes to rescind the other portions of the 2019 Final Rule.

The statutory authority of the Proposed Rule rests in 5 U.S.C. 301, which allows the head of an Executive department to create regulations “for the government of his department, the conduct of his employees, the distribution and performance of its business, and the custody, use, and preservation of its records, papers, and property.”

Request for Comments on Proposed Rule

HHS seeks comments to determine whether to rescind or modify the 2019 Final Rule, and whether the framework in effect from the 2011 Final Rule should be replaced or modified. The notice of the Proposed Rule outlines several specific topics on which HHS seeks responsive comments.

Comments must be received on or before 60 days after the date of publication in the Federal Register and identified by RIN 0945-AA18.

The Proposed Rule can be found here

Reporter, Lindsay Greenblatt, Los Angeles, +1 213 218 4032,

OIG Issues Favorable Advisory Opinion on a Drug Manufacturer’s Provision to Hospitals of Trial Units of Antipsychotic Medication for Inpatient Use

On December 22, 2022, OIG issued a favorable advisory opinion concluding that it would not impose administrative sanctions on a pharmaceutical manufacturer for providing trial units of a certain antipsychotic drug (Drug) to hospitals for inpatient use (Proposed Arrangement) even though the Proposed Arrangement would implicate the federal anti-kickback statute (AKS).

Under the Proposed Arrangement, the pharmaceutical manufacturer would allow participating hospitals to request up to twenty (20) units of the Drug per month, limited to two (2) free units of the Drug per eligible inpatient per calendar year. Participating hospitals would be required to register through an online portal and renew their participation in the Proposed Arrangement annually. Once registered, the participating hospitals would receive up to five (5) free trial doses of the Drug for administration to eligible inpatients. The participating hospitals would be able to order units of the Drug to replace those administered as long as the hospitals would have no more than five (5) units of inventory. Participating hospitals would also be required to comply with certain terms and conditions, including requiring prescribers to act in accordance with professional standards and ensuring that the Drug is administered only to patients for whom the prescriber has independently determined that the Drug is clinically appropriate and immediate onsite treatment of the Drug would increase the likelihood of a positive treatment outcome.

OIG concluded that the Proposed Arrangement would implicate the AKS because the free trial units of the Drug would constitute remuneration that the pharmaceutical manufacturer offers to the hospitals, and the hospitals may be referral sources for the Drug. However, OIG concluded that it would not impose administrative sanctions on the pharmaceutical manufacturer because the risks posed by the Proposed Arrangement under the AKS would be low for the following reasons:

  1. The Proposed Arrangement presents a low risk of patient steering. The risk of a participating hospital steering inpatients to the Drug based on receipt of free trials of the Drug is low. OIG reasoned that the hospitals would be required under the Proposed Arrangement to allow clinicians to make independent decisions about the suitability of the Drug for a particular patient, and prescribers would not be given any financial incentive to prescribe the Drug to inpatients as opposed to a competing drug.
  2. The Proposed Arrangement is unlikely to increase costs to Federal health care programs. OIG concluded that the Proposed Arrangement is unlikely to inappropriately increase costs to federal health care programs because the free trials of the Drug would only be given to patients diagnosed with the disorder for which the Drug is meant to treat and for whom a prescriber independently determined that (1) the Drug is clinically appropriate and (2) immediate onsite treatment with the Drug would increase the long-term likelihood of a positive treatment outcome. OIG also reasoned that the Drug could reduce negative outcomes for patients, which would decrease aggregate costs to federal health care programs over time.
  3. The Proposed Arrangement contains adequate safeguards. OIG concluded that the Proposed Arrangement includes several safeguards that minimize the risk of misuse of the free trials of the Drug. These safeguards include: (1) prohibiting participating hospitals from selling, reselling, trading, or distributing for sale the trial units of the Drug, or billing any patient or payor for the trial units of the Drug; (2) ensuring that participating hospitals receive only a limited number of trial units per year per patient; (3) requiring participating hospitals to ensure prescribers act in accordance with professional standards; and (4) ensuring participating hospitals understand that neither the prescriber nor the participating hospital are under an obligation to continue using, prescribing, or recommending the Drug as a condition of receiving a trial unit.

For these reasons, OIG concluded that it would not impose sanctions on the pharmaceutical manufacturer even though the Proposed Arrangement would implicate the AKS. However, OIG noted that it was not expressing an opinion regarding the pharmaceutical manufacturer’s potential liability under the Prescription Drug Marketing Act of 1987 or the False Claims Act. The OIG Advisory Opinion is available here.

Reporter, Brittany Bratcher, Austin, +1 512 457 2071,

OIG Will Not Impose Sanctions on State’s EMS Division Lease Arrangement with Private Ambulance Company

On December 20, 2022, OIG issued a favorable Advisory Opinion allowing for the political subdivision of a State and its Department of Health EMS division (Requestor) to accept the provision of emergency transportation services and EMS communications center coordination services pursuant to an EMS Agreement (EMS Agreement) from a private ambulance company (Ambulance Supplier), to which it also subleases office and parking space pursuant to a separate sublease agreement.

Requestor entered into the EMS Agreement after engaging in a competitive bidding process in connection with an RFP to identify an exclusive provider of ambulance transports in a designated geographic area and to operate Requestor’s EMS communications center.  The exclusive contract was awarded to the Ambulance Supplier.  Under the arrangement, Ambulance Supplier subleases certain space and equipment from Requestor, and also pays Requestor for certain rent-related expenses, in connection with the operation of the EMS communications center.  Finally, Ambulance Supplier agreed to pay Requestor for certain maintenance costs related to leasehold improvements on the leased space and equipment.

Requestor does not pay Ambulance Supplier for its provision of services except with respect to transports of patients for whom the Requestor is financially responsible for (e.g., inmates and jail detainees).  Ambulance Supplier’s primary compensation consists of payments from patients and payors, including Medicare and Medicaid.

OIG determined that although payments by Ambulance Supplier to Requestor for space and equipment rental, rent-related expenses and maintenance would produce remuneration prohibited by the Federal anti-kickback statute (AKS) if the requisite intent were present, OIG would not impose sanctions on the Requestor.

OIG considered the following factors in deciding that the arrangement ultimately provided a low risk of fraud and abuse under the AKS:

  1. The arrangement appears to be a reasonable means for the parties to fulfill their obligations under the EMS Agreement because the remuneration being paid all stems from the sublease agreement which furthers the purposes of the EMS Agreement.
  2. Ambulance Supplier only pays for expenses related to the subleased space and equipment, and Ambulance Supplier does not assume any rent-related expenses for space or equipment used by Requestor, nor will Requestor profit from the receipt of rent-related expense payments.
  3. Requestor also does not profit from the maintenance services provided to Ambulance Supplier, which are reasonable for the purposes of the EMS Agreement.
  4. The items rented do not exceed that which is reasonably necessary to accomplish the commercially reasonable business purpose of the rental as required under the EMS Agreement.
  5. The rent-related expenses are fair market value and were not computed to take into account the volume or value of referrals; and were not adjusted based on proximity or convenience to sources of referrals or business otherwise generated for which payment may be made by a Federal health care program.

The full text of the OIG Advisory Opinion is available here.

Reporter, Kimberly Rai, New York, +1 212 556 2198,


CMS Proposes Changing Standard for Identification Under the 60-Day Overpayment Rule – In a proposed rule published on December 27, 2022 (Proposed Rule), CMS proposes to modify the regulations for reporting and returning Medicare overpayments.  By way of background, CMS previously issued two separate overpayment final rules, one for Part C Medicare Advantage Organizations (MAOs) and Part D plan sponsors in 2014 and one for Part A/B providers and suppliers in 2016. Both of those final rules adopted a “reasonable diligence” standard for identification of overpayments, although CMS had previously proposed standards that relied on the concepts in the False Claims Act definition of “knowing” and “knowingly.”  The December 2022 Proposed Rule would change the identification standard for Part A/B providers and suppliers, MAOs, and Part D plan sponsors by returning to the identification standards originally proposed by CMS.  Specifically, CMS proposes to remove the existing “reasonable diligence” overpayment identification standard and adopt by reference the False Claims Act definition of ‘‘knowing’’ and ‘‘knowingly’’ in 31 U.S.C. § 3729(b)(1)(A).  This proposal comes in response to litigation in the District of Columbia Circuit, UnitedHealthcare Ins. Co. v. Becerra.

CMS indicates the reason for its proposed reversal of course is the UnitedHealthcare Insurance Co. v. Azar litigation. 330 F. Supp. 3d 173 (D.D.C. 2018), rev’d in part on other grounds sub nom. UnitedHealthcare Ins. Co. v. Becerra, 16 F.4th 867 (D.C. Cir. 2021), cert. denied, 142 S. Ct. 2851 (U.S. June 21, 2022).  That litigation involved challenges to the Medicare Parts C/D overpayment regulations.  UnitedHealthcare argued, and the District Court agreed, that the final Medicare Parts C/D regulation with its “reasonable diligence” standard unlawfully imposed a negligence standard that was inconsistent with the standards for liability under the False Claims Act.  330 F. Supp. 3d at 191.

The Proposed Rule leaves certain questions open.  For example, it is not clear how the concept of quantification would apply to the identification standard in the Proposed Rule.  Under the current 42 U.S.C. § 401.305(a)(2), Medicare Part A/B providers and suppliers have not “identified an overpayment” until they “have quantified the amount.”  The newly proposed 42 U.S.C. § 401.305(a)(2) does not retain that quantification language and thus there could be an additional layer of ambiguity as to when the 60-day clock begins ticking. 

Comments on the Proposed Rule must be received by February 13, 2023.  The Proposed Rule is available here.

Reporters, Lauren S. Gennett, Atlanta, + 1 404 572 3592,, Stephanie Johnson, Atlanta, + 1 404 572 4629, and Isabella E. Wood, Atlanta, + 1 404 572 3527,