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The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

Client Alert
January 10, 2023

A. Overview

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year.[1] The Rule would also require employers to rescind non-competes that they had already entered into with their workers.[2] For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”[3]

B. Providers

This proposed Rule would have a profound effect on the healthcare industry, as many providers, such as physicians, nurse practitioners, and physician assistants have entered into non-competes with their employers, restricting them from working within a certain proximity to their previous employers, usually for a set amount of time following their employment. The rule would also rescind this restrictive covenant that many providers have already entered into with their employers.

While the rule would undoubtedly benefit providers, and even potentially patients, by not restricting where providers can practice, the rule may present difficulties to health systems, including hospitals and clinics, particularly in areas where it is a struggle to find and/or retain healthcare workers, particularly physicians.[4]

The FTC has asked the public to submit comments on the Rule, which will be due sixty (60) days after the Rule is published in the Federal Register.[5]

C. Other Employers

BMD’s employment attorney, Bryan Meek, will be publishing a new podcast episode on his YouTube channel, Employment Law After Hours, during the week of January 9th further discussing these proposed FTC rules and the possible implications on the industry.

If you have any questions regarding this proposed rule or would like to discuss submitting a public comment to the FTC regarding this proposal, please do not hesitate to contact:

[1] Federal Trade Commission, Non-Compete Clause Rulemaking, https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking (Jan. 5, 2023).

[2] Id.

[3] Id.

[4] Association of American Medical Colleges, “New AAMC Report Confirms Growing Physician Shortage,” https://www.aamc.org/news-insights/press-releases/new-aamc-report-confirms-growing-physician-shortage (June 26, 2020).

[5] Non-Compete Rulemaking.

non-competesHealthcareJeana SingletonBryan MeekAdam D. FullerRachel Stermer
Client Alert

In Cybersecurity– A Good Offense is the Best Defense

November 16, 20212021 has been a watershed moment for cybersecurity incidents as cybercrime has become a frequent headline and cyber criminals have thrived on unsuspecting and/or unprepared businesses and institutions. For example, the Solar Winds attack exposed sensitive data from top companies like Microsoft as well government agencies[1] and the Colonial Pipeline attack substantially disrupted the petroleum supply chain[2]. We have seen an almost 20% increase in data breaches and attacks since last year.Client Alert

Changes to Medicare’s Physician Fee Schedule and Outpatient Prospective Payment System

November 15, 2021Come the beginning of 2022, both the Medicare Physician Fee Schedule (“MPFS”) and Outpatient Prospective Payment System (“OPPS”) will look a little different. As a refresher, the MPFS lists the fees associated with reimbursement of services to providers at certain facilities, taking into account geography and costs. By contrast, OPPS sets reimbursement rates for hospitals and community mental health centers for outpatient services, which are determined in advance. A summary of some of the more pertinent changes to each rule will be outlined below.Client Alert

CMS to Once Again Reprocess Outpatient Clinic Claims

November 11, 2021The Hospital Outpatient Prospective Payment System (OPPS) Rule was passed in November 2018, which was intended to prevent the Centers for Medicare and Medicaid Services (CMS) from paying more for services rendered in outpatient settings than what they paid for the same services rendered in physician offices that are simply owned by hospitals or health systems.[1]Client Alert

New Vaccine Requirement for Select CMS-Participating Facilities

November 10, 2021On November 4, 2021, the Centers for Medicare and Medicaid (“CMS”) released a new rule requiring certain healthcare facilities to implement policies requiring employees to be vaccinated against COVID-19. It does not matter if a staff member does not perform patient treatment services, they must still be vaccinated if an employee of an applicable facility.Client Alert

OSHA COVID-19 EMERGENCY TEMPORARY STANDARD (ETS) Vaccination, Testing, Recordkeeping, and Reporting

November 5, 2021The Occupational Safety and Health Administration has issued its long-awaited COVID-19 Emergency Temporary Standard (ETS). Note that the ETS does not apply to employers covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors or Subcontractors (see here), or to settings where employees provide healthcare services subject to OSHA’s ETS for the healthcare industry (see here).
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