Healthcare Developments to Expect in 2025
Kimberly Ruppel
Chair, Telehealth Task Force
Co-Chair, Healthcare Litigation Task Force
Dickinson Wright, PLLC
Original Publish Date: December 3, 2024
As is the case in many industry sectors, the end of the year brings us to wonder what is in store for healthcare in 2025. Although the future is anyone’s guess, the following three areas of healthcare are most likely to experience robust activity.
1. Non-Compete Litigation
Non-compete provisions are designed to prohibit an employed or contracted healthcare provider from competing against the contracting entity by working for or starting a competing business within a particular geographic area for some time. In April 2024, the Federal Trade Commission (“FTC”) promulgated a rule (the “Rule”) generally prohibiting non-compete clauses in employment agreements except for certain “Senior Executives” with policy-making authority who were compensated greater than $151,164 per year. There was also an exception for non-compete agreements entered into as part of a sale of a business. That Rule was to become effective September 4, 2024. However, a number of lawsuits were filed seeking to prevent its application.
• Fifth Circuit Appeal Ryan
In this case, the plaintiffs argued the FTC exceeded its statutory authority in promulgating the Rule and asked the court to declare the Rule illegal, and the court agreed. As a result, the court determined the Rule was not enforceable nationwide. The FTC filed an appeal, which remains pending.
• Pennsylvania Litigation ATS Tree Services
The court, in this case, initially denied the plaintiff’s motion for a preliminary injunction, finding the FTC had authority to promulgate the Rule (contrary to the Texas court’s ruling above). The court then denied plaintiff’s motion to stay the proceedings pending the appeal of the Ryan case in the Fifth Circuit. As a result, the plaintiff ultimately withdrew the action, apparently content with a nationwide ban in place.
• 11th Circuit Appeal Properties of the Villages
In this case, the court granted a preliminary injunction, finding that the FTC had exceeded its authority to promulgate the Rule. That ruling was limited to the named plaintiff only, as opposed to implementing a nationwide ban on the Rule. The FTC filed an appeal of that decision. If the Circuit Courts in this case and the Ryan matter reach different conclusions, that could set up a possible appeal to the United States Supreme Court, in which case we would not likely have an outcome until at least 2026.
• Implications
In the healthcare setting, a restrictive covenant can protect against unfair competition by preventing the loss of patients to departing physicians, protecting an employer’s investment in specialized training of a physician, or protecting an employer’s confidential business information or patient lists. While these lawsuits remain pending, employers can use and enforce non-competes, subject to applicable state law limitations. Employers can offer training and education without fearing loss of investment in its workforce. However, employees may find themselves limited in changing employers in a geographic area because of these provisions.
While waiting for the courts to decide the enforceability of the Rule, employers can consider other alternatives to protect their interests in employment agreements, such as non-disclosure, non-solicitation, and intellectual property protection provisions, requiring repayment for training expenses, and continuing to use non-compete provisions in connection with the sale of a practice or business.
2. Antitrust Activity
The FTC ramped up its antitrust enforcement activity in 2024, intervening in a number of large healthcare merger and acquisition transactions. In October 2024, the FTC voted to finalize changes to the premerger notification form and rules, requiring additional information for review prior to approval of a merger. These new standards are scheduled to take effect in early 2025. The additional information required is expected to significantly increase the time and burden involved in reporting obligations.
However, with the change in the White House regime, next year may bring a more anti-regulation and pro-business approach to governmental scrutiny of transactions. Stay tuned for changes in FTC structure and leadership, which may affect this area.
3. Artificial Intelligence
Artificial intelligence in healthcare can be extremely efficient and useful in improving patient care when used appropriately. New applications are being launched nearly daily that offer healthcare providers assistance with medical record transcription, evaluation of test or exam results, and diagnostic decision trees. Medical schools are offering classwork in AI. However, AI is not infallible, and findings or recommendations should be confirmed as a best practice.
One risk associated with the use of AI in the healthcare arena is data privacy and security issues. The use of AI over unsecured networks or with unencrypted mobile devices potentially puts personal health information at risk. Providers are cautioned to consider and adopt appropriate security measures when using AI.
Another downside of AI in healthcare is the lack of an emotional bond between the patient and healthcare provider when there is no personal interaction. AI technology is advancing rapidly but generally does not include human qualities of empathy or compassion that create a positive patient care experience. Accordingly, providers should integrate personal contact with the use of AI for greater patient satisfaction.
About the author:
Kimberly Ruppel is Chair of Dickinson Wright, PLLC’s Telehealth Task Force and Co-Chair of the firm’s Healthcare Litigation Task Force. Kim has over 20 years’ experience as a commercial litigator who represents healthcare providers, insurers, and benefit plans in healthcare contract litigations, licensing and regulatory disputes, governmental fraud and abuse investigations, HIPAA compliance counseling, telemedicine issues and insurance claims and coverage disputes.