Health Care Fraud & Abuse: The Week in Review

It's been a busy week-and-a-half on the health-fraud enforcement front. I like posting these DOJ/Office of Inspector General updates for a number of reasons. [1] The scope and variety of the fraud schemes is truly impressive, exceeded only by [2] the brazenness of the fraudsters and [3] the success rate of the state and federal enforcement offices.

THE WEEK IN REVIEW

• United States Files False Claims Act Complaint Against Erlanger Health System -- July 26, 2024: This qui tam action is for alleged violations of the Stark Law in the form of "compensation Erlanger paid to [employee] physicians [that] was well above fair market value." 
  
  
• Precision Lens Agrees To Pay $12 Million To The United States For Kickbacks To Doctors In Violation Of The False Claims Act -- July 25, 2024: From the announcement -- 

"Precision Lens provided kickbacks to [ophthalmic surgeons] in the form of travel and entertainment, including high-end ski trips, fishing, golfing, hunting, sporting, and entertainment vacations, often at exclusive destinations. For many of the trips, physicians were transported to luxury vacation destinations on private jets, including trips to New York City to see a Broadway musical, the College Football National Championship Game in Miami, Florida, and the Masters Tournament in Augusta, Georgia. Precision Lens sold frequent flyer miles to its physician customers at a significant discount, enabling the physicians to take personal and business trips at well below fair market value.

 

"The jury found that Precision Lens’s conduct resulted in $43,694,641.71 in fraudulent claims submitted to Medicare. By operation of the statute, the court entered a $487,048,705.13 judgment against the company and its owner, which included treble damages and civil penalties under the False Claims Act. Following post-trial motions, the court reduced the judgment to $216,675,248.55. After the United States conducted a review of the defendants’ financial position and ability to satisfy the judgment, the parties entered into a settlement agreement which requires Precision Lens and the estate [of the deceased owner of Precision Lens] to immediately pay $12 million to resolve the United States’s claims." [emphasis added]

• Substance Use Disorder Treatment Clinics To Pay More Than $850,000 To Resolve Allegations They Knowingly Overbilled Medicaid For Office Visits -- July 25, 2024: This is a standard-issue "upcoding" case. From the announcement -- The U.S. and Virginia "contended that, from 2016 through mid-2023, the clinics submitted claims to Virginia Medicaid containing code 99215, which signifies a meeting with a patient involving at least two of the following three components: a comprehensive medical history, a comprehensive medical examination, and medical decision making of high complexity. However, the clinics knew the meetings were regular check-ins during substance use disorder treatment and did not meet those criteria."
  
  
• United States Obtains $26M In False Claims Act Judgments Against Laboratory Companies And Their Owner -- July 25, 2024: This is a default judgment (i.e., for failure to defend the government's allegations), which (based upon memory alone) seem pretty rare. The allegations were that the defendants 

"sought to profit from the unfolding COVID-19 pandemic by offering COVID-19 tests to nursing homes as a way to bill Medicare for a wide array of medically unnecessary respiratory pathogen panel (RPP) tests. The complaint alleged that these RPP tests were not medically necessary because the beneficiaries had no symptoms of a respiratory illness and because the tests were for uncommon respiratory pathogens.

 

"The complaint also alleged that Britton-Harr and Provista Health submitted claims for RPP tests that were never ordered by physicians and sometimes for RPP tests that were never performed, including over 300 claims that stated that the nasal swab test sample was supposedly collected from the beneficiary on a date after the beneficiary had died."

COVID-19 fraud and elder fraud. Despicable. 

• Santa Paula Doctor Pleads Guilty To Health Care Fraud For Role In Hospice Scam That Bilked Medicare Out Of $3.2 Million -- July 24, 2024: False certification of terminal condition --> submission of fraudulent claims of hospice eligibility.
  
  
• Riverside County Chiropractor Agrees to Pay $180,000 to Resolve Allegations of Health Care Fraud -- July 24, 2024: Another upcoding case? Medicare was billed for surgically implanted neurostimulators when the defendant actually "taped a disposable 'electroacupuncture' device called 'Stivax' to their patients’ ears. Stivax devices do not require surgical implantation and are not reimbursable by Medicare."
  
  
• Mental Health Services Providers Pay Over A Million To Settle False Claims Liability -- July 24, 2024: Defendants billed various government health care programs for physician services that were actually performed by nonphysicians who were not directly supervised by a physician. 'Some services occurred on dates when the physicians were traveling outside of the United States and thus unable to provide the services. Others allegedly occurred at times when it was not logistically possible for the physicians to have rendered them or directly supervised the services themselves due to the sheer volume of patients at multiple office locations located in and around the Houston area."
  
  
• Admera Health Agrees To Pay Over $5M To Settle False Claims Act Allegations Of Kickbacks To Third Party Marketers -- July 24, 2024: Classic.
  

• Doctor Convicted For Illegally Distributing Over 1.8M Doses Of Opioids And $5M Health Care Fraud Scheme -- July 23, 2024: Physician convicted of "conspiring to illegally distribute over 1.8 million doses of Schedule II controlled substances, including oxycodone and morphine, to drug-seeking individuals and drug abusers and for defrauding health care benefit programs of more than $5.4 million."
  
  
• Two Individuals Indicted For Stealing More Than $150,000 From MassHealth Program -- July 23, 2024: A Massachusetts Medicaid member is alleged to have falsely submitted timesheets  attesting to personal-care assistant (PCA) services that were never rendered. because the PCA was incarcerated during the time periods in question. 
  
  
• Topeka Man Charged With Embezzlement -- July 22, 2024:  Program manager and director of the Prairie Band Potawatomi Nation’s Diabetes Prevention Program is accused of embezzling $5,000 or more in federal grant money. 
  
  
• Owner Of Home Health Care Company Convicted Of Multimillion Dollar Heath Care Fraud Scheme -- July 22, 2024: For years, defendant's company billed the Massachusetts Medicaid program for home health services it did not provide, were not authorized, or were not medically necessary. The company also paid kickbacks and laundered illegal proceeds. The fraudulent billings amount to "at least" $100 million. The owner of the company used the proceeds "to treat herself to million-dollar cash bonuses, a lavish house, and a Maserati." Crime pays . . . until it doesn't.
  
  
• Attorney General Bonta Secures Sentencing of Southern California Dentist for Medi-Cal Fraud -- July 22, 2024: Defendant owned dental practice where she served as a dentist and carried out the fraudulent billing scheme. Under defendant's contract with a Federally Qualified Health Center that participates in Medi-Cal, she received reimbursement for each day of service billed rather than for the individual services provided to the patient. However, her dental practice fraudulently split its services over multiple days on its claims for reimbursement in order to maximize reimbursement from Medi-Cal. 

SCOTUS and Health Agencies (Part 2)

The totally excellent health-policy journal, Health Affairs, posted an analysis of the likely impact of the death of the Chevron doctrine on some hotly (or at least frequently) litigated federal health-law issues: "Supreme Court Overrules Chevron Doctrine: Ripple Effects Across Health Care," by Zachary Baron et al. (I have no idea if this article is available only to subscribers (like me) or is free to the public. The latter, I hope.)

The authors start with Chevron itself, a useful three-paragraph introduction especially for anyone -- lawyers and non-lawyers alike -- with limited or no familiarity with Chevron deference.

After that, the authors focus on six areas of possible impact as a result of the Court's decision in the Loper Bright Enterprises case (discussed by this blog on July 7):

1. Nondiscrimination Protections. This includes "the battle over the meaning of 'sex' under Section 1557 [of the Affordable Care Act], which prohibits discrimination in health care on the basis of race, color, national origin, disability, age, and sex."
2. Medicare Reimbursement. An early test might be a case currently pending before the Supreme Court for its 2024 Term: Advocate Christ Medical Center v. Becerra. As the authors point out, there are few statutes that rival the Medicare statute in complexity, and lower courts often decide these reimbursement disputes by relying on Chevron: If the statutory provision is unclear (which is often the case), the courts defer to any reasonable interpretation by HHS/CMS. That was the case in Advocate Christ Medical Center. If I had to guess, this case might be remanded for reconsideration in light of Loper Bright, but there will be others!
3. Medicare Advantage. Noting that "federal agencies often face hurdles to accomplishing their regulatory goals separate and aside from Chevron, . . . the path forward for litigation over the MA program following Chevron being overruled is not clear." Not necessarily good news for "more than half, or 51 percent, of the eligible Medicare population."
4. Medicare Drug Negotiation. BigPharma has been fighting this program since before its enactment, bringing "a slew of constitutional, statutory, and agency authority claims against the negotiation program, [and] industry has lost on the substance of all their legal arguments." Will Loper Bright help the drug makers in future court challenges to the program. The authors think not.
5. Private Health Insurance. In the more than 2,000 legal challenges to the Affordable Care Act and its volumes of regulations, Chevron has played a role in the final rulings of many cases but far from all. The authors look at a couple of cases involving the No Surprises Act that are currently pending before the Fifth Circuit. The authors conclude: "Now, the Administration and health care providers are sparring about the fallout from the Loper Bright decision and how it will impact the pending Fifth Circuit decisions. Yet with the current Fifth Circuit taking such a strict approach to statutory interpretation even when Chevron remained on the books, the Administration faces a challenging environment there."
6. FDA. Chevron deference has been "critical to allow FDA to use its expertise to administer very complex and technical programs that widely touch industry and health care consumers alike. . . . Overturning Chevron could open the floodgates to challenges of a wide variety of FDA regulations." 

The authors conclude:

This revised legal regulatory landscape opens up new opportunities to challenge regulations and other agency actions by future administrations. These challenges may affect the implementation of agency regulations addressing consumer protections, access to health care services, women’s rights, and other measures that impact health care costs. . . . The level of disruption remains uncertain, and may be felt unevenly, but the trend line remains clear: Courts more than ever will have the final say on complex policy decisions that affect the health of millions of Americans."

Oh, happy day. {sigh} 

SCOTUS and Health Agencies

The New England Journal of Medicine today posted a Perspective piece (apparently free, at least for now) by Rachel Sachs and Erin Fuse Brown: "Supreme Power — The Loss of Judicial Deference to Health Agencies." I won't go into the details of the recent Supreme Court opinions, but I discussed them in an earlier post here. The cause for concern is the Court's overruling of the 40-year-old Chevron case, which obligated federal courts to defer to reasonable agency interpretations of federal statutes that were silent or ambiguous with respect to the issue in question. 

The Court was vague about how lower courts should decide such cases in the future. "Deference" is out; apparently "respect" -- at least when Congress has delegated interpretive authority to the agency -- is in, but what does "respect" mean? Without guidance from the Court, "the implications . . . are highly uncertain and potentially vast. The decision could open the door to more, and broader, challenges to actions taken by health agencies, such as the Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA)."

If this sounds like a mess, it is exactly that. Eliminating a deferential standard of review will encourage litigation by opponents of the health-related decisions of agencies such as CMS (which runs Medicare and Medicaid) and the FDA (and EPA, the Public Health Service, NIH, etc.). And the final word on often technical scientific public-health issues will be decided by generalist judges. I hesitate to quote myself, but I'll make an exeption:

Consider for a moment that many of these disagreements will concern technical, scientific, or policy expertise that agencies typically have in abundance and that courts usually lack. Justice Gorsuch illustrated just such a contrast in an opinion in the past two weeks in which he confused nitrogen oxide (a pollutant that was the subject of EPA regulation at issue in Ohio v. Environmental Protection Agency, No. 23A349 [Opinion: Gorsuch; decided 6.27.2024]) with nitrous oxide ("laughing gas"). Unfortunately, this is no laughing matter.

The Cruelty of Texas's Abortion Ban (SB 8)

A recent MSNBC News report (posted July 11, 2024, 4:19 PM CDT) illustrates the casual cruelty of Texas Senate Bill 8, which bans abortions after a fetal heartbeat is detectable except when continuing the pregnancy presents a threat to the life or major bodily function of the pregnant person.

When Samantha Casiano of East Texas found out she was pregnant with her fifth child, she was ecstatic. But at a 20-week ultrasound, she received shocking news. Her baby was diagnosed with anencephaly, a rare and fatal condition that prevents the skull and brain from fully forming. . . .

“I was told that it meant that my daughter was incompatible with life. And I wouldn’t be adding another little human to our family. It was really hard to hear that. It felt like it was a dream -- a really, really bad dream, Casiano, 30, recounted. . . . 

“Just imagine yourself waking up every morning, knowing that your daughter was going to die. You can feel her kick and move, but she’s going to die. So you have to plan her funeral while she’s inside of you,” said Casiano. “And that’s probably the hardest thing any mother has to go through…It was traumatizing and hard.. Just thinking about it now is just me makes my stomach hurt. And I was forced to go through it. It was torture.”

Torture. C'mon, Legislature. Think about it.

Texas is not alone in its lack of humanity. According to the authoritative Guttmacher Institute, only D.C. and 9 states do not restrict abortion based on gestational duration. The remaining 41 states either ban abortions with very limited exceptions (14 states) or impose a gestational ban of varying lengths:

• 6 weeks (3 states)
• 12 weeks (2 states)
• 15 weeks (1 state)
• 18-23 weeks (5 states)
• 24-26 weeks (16 states)

And as the Institute says about these gestational bans: "Anyone denied abortion access in their state must either overcome the logistical and financial hurdles of traveling out of state, navigate a self-managed abortion or carry an unwanted pregnancy to term."

The Casiano case is an example: "Casiano said she was unable to travel outside of the state for an abortion due to financial and logistical constraints. So, she was forced to go to term with her baby." 

Torture. C'mon, Texas Voters. Think about it.

Controversial Donor-Organ Retrieval Technology Highlighted on NPR

It's called normothermic regional perfusion ("NRP") and was the subject of a useful story on National Public Radio ("NPR") this morning.

There are two ways to be dead in this country: dead according to neurological criteria ("brain death" -- an increasingly controversial concept) and dead according to cardio-pulmonary criteria. According to the latter, death occurs when there is an irreversible cessation of all cardiac and pulmonary function. This is the standard adopted in the Uniform Determination of Death Act and adopted by statute, regulation, or judicial decision in all 50 states and the District of Columbia. Pulselessness and lack of spontaneous respiration: They have signalled death for eons. 

The development of CPR sharpened the concept of cardiopulmonary death. If CPR (or, in a clinical setting, Advanced Cardiac Life Support) fails to reëstablish a pulse, irreversibility is established and death can be declared.

A procedure known as circulatory determination of death ("DCD") allows this sequence of events to occur in an operating room. It begins when ventilator support is withdrawn from a prospective organ donor. The surgical team waits for up to 90 minutes (times may vary by institution) for the cessation of cardiac and pulmonary function. If that occurs, the clock starts clicking (typically for 5 minutes, longer at some institutions) to see if the patient experiences autoresuscitation. If not, irreversibility is deemed to be established, the patient can be declared dead, and the organ retrieval may begin.

DCD organ donations were originally controversial -- including a Cleveland prosecutor's 1997 assertion that DCD may be tantamount to killing patients for their organs (NY Times; may be behind paywall) -- and are still opposed by a minority of experts. On the other hand, DCD is actively promoted by UNOS and is supported by a majority of ethics commentators.

NRP takes DCD one step further and arguably pushes beyond the outer limits of irreversibility. There are various forms of NRP, but most appear to involve cutting off any possible blood flow to the brain and reestablishing circulation by connecting the donor to ECMO (Extra-Corporeal Membrane Oxygenation). At least one version of this process may result in restarting the donor's heart. You can see the possible conflict with the requirement of irreversibility. 

The NPR story is a good introduction to the controversy. For a deeper dive, the American Journal of Bioethics ("AJOB") devoted an entire issue to NRP. (This, too, may be behind a paywall.) If AJOB is unavailable, run this search in NIH's PubMed service. Today it pulled up 69 articles, including some that are available for free.

SCOTUS Kneecaps the Fourth Branch; Effect on Healthcare Regulations Is Uncertain

In the final ten days of the just-concluded Supreme Court Term, SCOTUS delivered two gut punches and an upper-cut amounting to at least a TKO to federal administrative agencies. Sometimes it's only the independent agencies that are called the "fourth branch of government," and other times the term refers to all federal agencies. The underlying rationale for the term is that most agencies exercise power closely resembling the powers under Articles I (rule-making), II (enforcement), and III (adjudication) of the U.S. Constitution. This concentration of power in the hands of unelected government officials has been a matter of concern for many observers and for others a welcome innovation to meet the evolving needs -- technical, scientific, economic, and political -- of our society. (Count me as having a foot planted in both camps.)

In an email message to subscribers, WaPo editor and columnist Ruth Marcus had this to say about the three decisions:

Lost in the immunity news was the last step in this term's anti-regulatory trifecta. First, the court made enforcement harder, ruling that agencies seeking civil fines can't use in-house judges but have to go to federal court for jury trials.[1] Next, the court made regulation harder, overturning the doctrine of Chevron deference.[2] Monday, the court junked the usual six-year deadline and said regulations can be challenged at any time by someone newly affected.[3] Taken together, as Justice Jackson noted, this means "chaos."

My annotations:

[1] Securities and Exchange Commission v. Jarkesy, No. 22-859 [Opinion: Roberts, C.J.; decided 6.27.2024; 6-3] 
Held: "When the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment entitles the defendant to a jury trial rather than adjudication by an administrative law judge."

From Justice Sotomayor's dissent:

Throughout our Nation’s history, Congress has authorized agency adjudicators to find violations of statutory obligations and award civil penalties to the Government as an injured sovereign. The Constitution, this Court has said, does not require these civil-penalty claims belonging to the Government to be tried before a jury in federal district court. Congress can instead assign them to an agency for initial adjudication, subject to judicial review.  This Court has blessed that practice repeatedly, declaring it “the ‘settled judicial construction’” all along; indeed, “‘from the beginning.’”  Atlas Roofing Co. v. Occupational Safety and Health Review Comm’n, 430 U. S. 442, 460 (1977).  Unsurprisingly, Congress has taken this Court’s word at face value. It has enacted more than 200 statutes authorizing dozens of agencies to impose civil penalties for violations of statutory obligations.  Congress had no reason to anticipate the chaos today’s majority would unleash after all these years. (emphasis added) 

Today, for the very first time, this Court holds that Congress violated the Constitution by authorizing a federal agency to adjudicate a statutory right that inheres in the Government in its sovereign capacity, also known as a public right. According to the majority, the Constitution requires the Government to seek civil penalties for federalsecurities fraud before a jury in federal court.  The nature of the remedy is, in the majority’s view, virtually dispositive. That is plainly wrong. This Court has held, without exception, that Congress has broad latitude to create statutory obligations that entitle the Government to civil penalties, and then to assign their enforcement outside the regular courts of law where there are no juries. 

[2] Loper Bright Enterprises v. Raimondo, No. 22-451 [Opinion: Roberts, C.J.; decided 6.28.2024; 6-3]
Held: "The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled." Notice: Another opinion by the Chief Justice that overrules a sturdy precedent that has long been vilified by conservatives.

Chevron U.S.A. v. Natural Res. Def. Council is was a 40-year-old mainstay of federal administrative law. It recognized that statutes may contain silences or ambiguities, whether intentionally or not, that need to be resolved by agencies as part of their enforcement duties. Chevron stated that in such cases, if the agency interpretation is reasonable, federal courts should defer to the agency, even if the court would not have adopted the agency's reasonable interpretation if it were writing on a clean slate.

In Loper Bright, the Court ruled that such deference violates § 706 of the federal Administrative Procedure Act (and intimated that it was unconstitutional as either a violation of separation of powers or a violation of the nondelegation doctrine). Section 706 provides that a "reviewing court shall decide all relevant questions of law." It doesn't say how a reviewing should go about this task, and (imho) it takes a singular lack of imagination to conclude that deferring to a reasonable interpretation by an expert agency isn't a a way of deciding relevant questions of law. At the same time, it take an audacious imagination to conclude, as the majority does, that affected parties and federal judges will know the difference between "respect" for agency interpretations (which is okay) and deference to agency interpretations (which is not).

The result of the Court's overruling of Chevron is that federal judges at the trial, appeals, and Supreme Court level, are now free to substitute their preferred interpretation of Congressional silence or ambiguity in place of an agency's interpretation. 

Consider for a moment that many of these disagreements will concern technical, scientific, or policy expertise that agencies typically have in abundance and that courts usually lack. Justice Gorsuch illustrated just such a contrast in an opinion in the past two weeks in which he confused nitrogen oxide (a pollutant that was the subject of EPA regulation at issue in Ohio v. Environmental Protection Agency, No. 23A349 [Opinion: Gorsuch; decided 6.27.2024]) with nitrous oxide ("laughing gas"). Unfortunately, this is no laughing matter.

Just a comment -- for the time being -- on the implications for healthcare regulations. This industry may be the most regulated in the country. The Department of Health and Human Services -- along with its "subsidiary" agencies: the Food and Drug Administration, Center for Medicare and Medicaid Services,  Center for Disease Control and Prevention, Public Health Service, Indian Health Service, Office of Civil Rights, National Institutes of Health, etc. -- issues tons of regulations, opinions, and guidance documents each year. The statutes it enforces are among the most complex ever conceived by Congress, and they are replete with ambiguities and critical gaps, all of which require the HHS agencies in the first instance to interpret and enforce. If reasonable agency interpretations are subject to second-guessing by generalist judges -- not to mention politically-partial generalist judges -- expect a lot of chaos.

[3] Corner Post, Inc. v. Board of Governors of the Federal Reserve System, No. 22-1008 [Opinion: Barrett, .J.; decided 7.1.2024; 6-3]
Held: "An Administrative Procedures Act claim does not accrue for purposes of 28 U.S.C. § 2401(a) — the default 6-year statute of limitations applicable to suits against the United States — until the plaintiff is injured by final agency action."

The majority opinion disagrees with the decisions of eight circuit courts of appeals (a majority). The lower courts ruled that an agency's promulgation of a final rule constitutes "final agency action," which starts the six-year clock running for facial challenges to the rule. After that, only litigants who can show that they were injured in some specific way as a result of the application of an agency's rule can challenge the rule "as applied" to them.

The majority's position on when a cause of action "accrues" under the APA may be the most radical of the three decisions Ruth Marcus identified above. As Justice Jackson wrote in her dissenting opinion:

The Court’s baseless conclusion means that there is effectively no longer any limitations period for lawsuits that challenge agency regulations on their face. Allowing every new commercial entity to bring fresh facial challenges to long-existing regulations is profoundly destabilizing for both Government and businesses.  It also allows well-heeled litigants to game the system by creating new entities or finding new plaintiffs whenever they blow past the statutory deadline. 

The majority refuses to accept the straightforward, commonsense, and singularly plausible reading of the limitations statute that Congress wrote. . . .

Justice Jackson concludes with an apt epitaph that applies to all three of these administrative-procedure cases -- 

Federal Judge (in the Northern District of Texas, Of Course) Enjoins FTC from Enforcing Its Ban on Non-Competes

U.S. District Judge Ada Brown (N.D. Tex) today entered an order against the Federal Trade Commission that puts on indefinite hold the agency's controversial rule barring most non-compete clauses (previously discussed here). The opinion can be found at Law360 (behind a paywall). Once the opinion is available for free, I'll add a link to this post. 

Before a preliminary injunction can be issued, the moving party must satisfy a number of requirements. On the important issue of "likelihood of prevailing on the merits," the challengers (the Chamber of Commerce and others) persuaded Judge Brown that "the text, structure, and history of the FTC Act reveal that the FTC lacks substantive rulemaking authority with respect to unfair methods of competition under Section 6(g)" (opinion at p.1). Beyond that, Judge Brown ruled that the FTC's rule is "arbitrary and capricious," because:

On this record, the evidence put forth by the Commission does not warrant the NonCompete Rule’s expansive ban. In enacting the Rule, the Commission relied on a handful of studies that examined the economic effects of various state policies toward non-competes. . . . However, no state has ever enacted a non-compete rule as broad as the FTC’s NonCompete Rule. Further, the FTC’s evidence compares different states’ approaches to enforcing non-competes on based on the specific factual situation—completely inapposite from the FTC imposing a categorical ban. . . . As to this latter point, the FTC provides no evidence or reasoned basis. The Commission’s lack of evidence as to why they chose to impose such a sweeping prohibition—that prohibits entering or enforcing virtually all non-competes— instead of targeting specific, harmful non-competes, renders the Rule arbitrary and capricious. (opinion at pp. 21-22)

In addition:

the FTC insufficiently addressed alternatives to issuing the Rule. “The role of this court is to determine whether the [FTC] provides a sufficient explanation of the alternatives to permit a reasoned choice among the different courses of action.” Sierra Club v. Fed. Highway Admin., 715 F. Supp. 2d 721, 734 (S.D. Tex. 2010), aff’d, 435 F. App’x 368 (5th Cir. 2011). However, on this record, the FTC did not sufficiently consider alternatives. (See generally ECF No. 149). While considering less disruptive alternatives, the FTC “was required to assess whether there were reliance interests, determine whether they were significant, and weigh any such interests against competing policy concerns.” Wages & White Lion, 16 F.4th at 1139 (quoting Regents, 591 U.S. at 33, 140 S. Ct. at 1915)). The record shows the Commission did not conduct such analysis, instead offering the conclusion that “case-by-case adjudication of the enforceability of noncompetes has an in terrorem10 effect that would significantly undermine the Commission’s objective to address non-competes’ tendency to negatively affect competitive conditions in a final rule.” (record citations omitted) (opinion at p. 22)

The original effective date was September 4, and Judge Brown has promised a determination on the merits of the challengers' arguments no later than August 30. Expect one or more trips to the Fifth Circuit by the FTC to get their rule back on track.