Commercial Litigation Update

Since the pandemic, COVID-19-related fraud has been a consistent target of the Department of Justice. The creation of the DOJ’s COVID-19 Enforcement Task Force in May 2021 marked the start of DOJ’s commitment to combatting COVID-19-related fraud. Since then, according to the Task Force’s 2024 Report, published in April of this year, the Task Force has charged over 3,500 defendants with federal crimes related to Covid-19 fraud, recovered more than $1.4 billion in stolen funds and reached over 400 civil settlements and judgments.

Most of these matters involved unemployment insurance (“UI”) benefits fraud, Paycheck Protection Program fraud (“PPP”), and Economic Injury Disaster Loan (“EIDL”) fraud , but other types of CARES Act fraud and health care fraud related to the COVID-19 pandemic were also charged. The quantum of fraud losses associated with these cases was reported to be over $2.1 billion.

Most recently, on August 8, 2024, the DOJ issued  a press release announcing that West Coast Dental Administrative Services LLC, operating a network of dental offices in Southern California, along with its founders and former owners, agreed to pay $6.3 million to resolve allegations that they knowingly violated the False Claims Act (“FCA”) in connection with seven improper loans that the company and its affiliated dental offices received under the PPP. Additionally, an unrelated real estate holdings company owned by one of the founders agreed to pay an additional $35,149.82 to resolve its potential liability under the FCA in connection with a separate PPP loan.

A recent analysis of data released by the United States Small Business Administration (“SBA”) suggests that the vast majority of Paycheck Protection Program (“PPP”) loans extended to small businesses during the COVID-19 pandemic have been forgiven. While positive, this news is cold comfort to PPP borrowers for whom forgiveness was denied, or, as we addressed previously, whose lenders required them to apply for forgiveness in amounts less than the full amount of their PPP loans. PPP borrowers can apply for forgiveness of their PPP loans any time up until the loan maturity date (2025 in many cases), and borrowers continue to receive denials of forgiveness for both first- and second-draw PPP loans. As a result, the PPP appeal process remains as important today as at its inception.

The last two years have provided legal professionals with a crash course in the remote practice of law. Attorneys and judges have been forced to navigate COVID-19 protocols and adapt to the rapidly changing legal landscape in the digital age. While the pandemic created an abundance of new technological challenges, it also impacted one of the oldest standards in our judicial system—service of process.

On April 20, 2022, the U.S. Department of Justice (“DOJ”) announced a nationwide coordinated law enforcement action to combat health care-related COVID-19 fraud. In line with the announcement, the federal government has continued throughout this year to focus its enforcement on fraud in the COVID-19 space, particularly on misuse of Provider Relief funds and COVID-19 testing fraud.

Due to the large-scale shutdowns triggered by the Coronavirus pandemic (“COVID-19”), many businesses were unable to operate fully, or not at all. Litigants across the country have sought to be relieved of their obligations under contracts as a result of the pandemic-related disruptions, under legal theories including impossibility, frustration of purpose, and force majeure. As recently decided cases demonstrate, proponents of these theories have faced uphill battles.

As we wrote recently, the Paycheck Protection Program (“PPP”) was critical in helping small businesses stay afloat amidst the COVID-19 pandemic and resultant government restrictions on commerce. By now, most borrowers know that a crucial step in ensuring that they retain the benefits Congress intended is to submit a PPP loan forgiveness application. Unfortunately, in the process of applying for forgiveness, some borrowers have encountered difficulties when their lenders disagree that they are entitled to apply for forgiveness in the full amount of their PPP loans. In 2021, the United States Small Business Administration (“SBA”) provided a partial solution to this problem by creating the PPP Direct Forgiveness Portal.

The Paycheck Protection Program (“PPP”) was critical in helping small businesses stay afloat amidst the COVID-19 pandemic and resultant government restrictions on all manner of commerce. Now, as more businesses have applied for PPP loan forgiveness, some will receive notice that the United States Small Business Administration (“SBA”) is denying forgiveness of those loans. Small businesses whose PPP loans are denied will receive a letter that looks like this.

The Court didn’t waste time getting to a controversial matter, the applications for stays of the Occupational Safety and Health Administration’s (“OSHA’s”) COVID-19 mandate concerning alternatives of mandatory testing, masking, or vaccination directed at employers and the Department of Health & Human Services (“DHHS”) mandate directed at health care facilities and their workers.

Readers of SCOTUS Today, especially employers, might appreciate seeing an article that I co-wrote concerning the Supreme Court's rejection of a petition to enjoin New York State's vaccine mandate applicable to health care workers: “Supreme Court Lets New York’s Vaccine Mandate for Health Care Workers Stand.”

This action is consequential on its face because while future litigation by health care workers and others is certain, no fewer than six Justices have indicated support for a major mandate that allows for very limited exemptions. This marks the second time that the Court has rejected such a petition.

We recently participated in what the New Jersey Law Journal called the “first complex civil jury trial to be conducted in person since the COVID-19 pandemic.” Although the case settled shortly after opening statements, this experience taught us that New Jersey courts are ready to try complex civil cases safely and responsibly with new COVID protocols that may force trial attorneys to depart from their usual practices. We published an article in the New Jersey Law Journal about this experience that may be of interest to our readers.

As we previously reported, Judge Bough of the U.S. District Court for the Western District of Missouri denied an insurance carrier’s motion for summary judgment in K.C. Hopps Ltd. v. The Cincinnati Ins. Co. Inc., No. 20-cv-00437-SRB (W.D. Mo. Sept. 21, 2021) and sent the case to trial.

On October 28, after a three day trial, the jury returned a verdict in favor of the insurer. The case involved claims by a group of restaurants under their insurance policies’ business income (and extra expense) coverage form. Under that coverage, the insurer is obligated to pay for the insured’s ...

Although insurers largely have continued to have success in federal court defeating COVID-19 business interruption lawsuits, one judge – Judge Stephen Bough of the United States District Court for the Western District of Missouri – continues to be pro-policyholder. As we previously reported, last year he refused to dismiss several suits brought by policyholders seeking business interruption coverage for COVID-19 related losses.

Last week, in K.C. Hopps Ltd. v. The Cincinnati Ins. Co. Inc., No. 20-cv-00437-SRB (W.D. Mo. Sept. 21, 2021), Judge Bough gave policyholders ...

Our colleague Lauren Petrin of Epstein Becker Green has a new post on Health Law Advisor that will be of interest to our readers:  "DOJ's Recent Telehealth Enforcement Action Highlights Increased Abuse of COVID-19 Waivers."

The following is an excerpt:

On May 26, 2021, the Department of Justice (“DOJ”) announced a coordinated law enforcement action against 14 telehealth executives, physicians, marketers, and healthcare business owners for their alleged fraudulent COVID-19 related Medicare claims resulting in over $143 million in false billing.[1] This coordinated ...

Scores of insureds have sued their insurance carriers seeking coverage for business interruption losses stemming from the COVID-19 pandemic and related governmental closure orders. A vast majority have lost. Time and again, courts presiding over these cases have rejected them on the ground that there was no physical loss or damage to the insured’s property. In one Pennsylvania state court, that trend has changed.

In MacMilles, LLC d/b/a Grant Street Tavern v. Erie Insurance Exchange, Judge Christine Ward of the Court of Common Pleas of Allegheny County, Pennsylvania, recently ...

As we have written here previously, businesses across the country have brought lawsuits against their insurers seeking coverage for losses related to COVID-19. According to the COVID Coverage Litigation Tracker at the University of Pennsylvania Carey Law School, over 1,500 suits have been filed since March 2020 in state and federal court. Some interesting statistics based on that information:

• Over one third of the cases have been filed by food services establishments.
• Almost one quarter of the cases were brought as class actions.
• Approximately one third of the cases involved ...

The COVID-19 pandemic has foisted ten years of technological advances on the legal sector in a period of ten months. In June of 2020, when the novel Coronavirus was truly novel, we blogged (here) about whether virtual jury trials would be part of the “new normal” and discussed some of the potential pitfalls associated with remote courtroom proceedings.

What seemed revolutionary just a few short months ago, does, indeed, appear to be the “new normal,” ushered in by the pandemic. On January 7, 2021, the New Jersey Supreme Court issued an Order resuming civil jury trials in a ...

EBG attorney William O. Stein recently obtained a complete defense verdict in one of the few jury trials to be tried during the pandemic. I recently sat down with him for a Q&A regarding his experience trying a “socially distanced” jury trial during the pandemic and how it differed from a regular jury trial.

Q: What was it like trying a “socially distanced” jury trial case during the pandemic?

Following up on our prior discussion of Studio 417, Inc., et al. v. The Cincinnati Ins. Comp., a different federal judge in the Western District of Missouri recently ruled in Zwillo V, Corp. v. Lexington Insurance Co. that a Kansas City restaurant could not recover for COVID-19 business interruption losses under an insurance policy and, in the process, questioned the reasoning of Studio 417, Inc. and other recent decisions.

The owner of a restaurant in Kansas City (the “Insured”), purchased a commercial property insurance policy from Lexington Insurance Company (the ...

We have previously discussed (here and here) the complex issues surrounding the resumption of jury trials during the COVID-19 pandemic. We cautioned that the various experimental efforts to resume jury trials taking place in courts around the country were likely to meet with a host of practical and jurisprudential problems. A few weeks later, it appears that our assessment was, if anything, too optimistic. Many of the states that had been taking first steps toward resuming jury trials in some form are now shutting down those experiments because of the spike in COVID-19 cases that is ...

In what can be considered a victory for the drinking classes (see Taps & Bourbon on Terrace, LLC v. Underwriters at Lloyds London, et al.), a Philadelphia judge recently ruled that a tavern’s lawsuit for business interruption coverage for losses caused by COVID-19 will survive for another round. Taps & Bourbon on Terrace (“Taps & Bourbon”) alleged that it sustained business losses resulting from “the COVID-19 pandemic and [] state and local orders mandating that all non-essential businesses be temporarily closed.” In what has become a familiar rejoinder during this ...

Mark Twain once said: “Trial by jury is the palladium of our liberties. I do not know what a palladium is, but I am sure it is a good thing!” If Mr. Twain were alive today, he wouldn’t be quite so sure that jury trials conducted during the COVID-19 pandemic are really such a good thing.

Recent news reports suggest that a vaccine may not be available until next spring at the earliest, and it may take months before that vaccine can be widely distributed. But the demands of justice do not rest, and courts—already overburdened with growing dockets before the pandemic—are struggling to ...

Following up on our recent post about a business interruption insurance decision by a Washington D.C. court, a federal judge in Missouri ruled last month, in Studio 417, Inc., et al. v. The Cincinnati Ins. Comp., No. 20-cv-03127-SRB, that businesses can sue their insurance carrier for business interruption losses caused by COVID-19.

Plaintiffs, owners of a hair salon and various restaurants (the “Insureds”) purchased an all risks policy from Cincinnati Insurance Company (the “Insurer”). As a result of losses sustained due to COVID-19, the Insureds sought business ...

On August 6, 2020, in Rose’s 1 LLC, et al. v. Erie Insurance Exchange, a District of Columbia trial court granted an insurer’s cross motion for summary judgment on the issue of whether COVID-19 closure orders constitute a “direct physical loss” under a commercial property policy. Plaintiff insureds (“Insureds”) own several restaurants in Washington D.C. that were forced to close and suffered serious revenue losses stemming from the Mayor’s orders to close non-essential businesses and ordering people to stay home. As a result, the Insureds made claims to Defendant Erie Insurance Exchange (the “Insurer”) under their policies that included coverage for “loss of ‘income’ and/or ‘rental income’” sustained “due to partial or total ‘interruption of business’ resulting directly from ‘loss’ or damage” to the property insured. The policy also stated that it “insures against direct physical ‘loss.’”

Dictionary Definitions Open to Interpretation

As the Court framed the issue, “[a]t the most basic level, the parties dispute whether the closure of the restaurants due to Mayor Bowser’s orders constituted a ‘direct physical loss’ under the policy.” To support their argument, the Insureds relied on dictionary definitions of “direct” as “[w]ithout intervening persons, conditions, or agencies; immediate;” and “physical” as pertaining to things “[o]f or pertaining to matter, or the world as perceived by the senses; material as [opposed] to mental or spiritual.” The policy defined “loss,” as “direct and accidental loss of or damage to covered property.”

The Insureds relied on these definitions to make three arguments. First, they argued that the loss of use of their restaurant properties was “direct” because the closures were the direct result of the Mayor’s orders without intervening action. The Court rejected that argument because those orders commanded individuals and businesses to take certain actions and “[s[tanding alone and absent intervening actions by individuals and businesses, the orders did not affect any direct changes to the properties.”

Second, the Insureds argued that their losses were “physical” because the COVID-19 virus is “material” and “tangible,” and because the harm they experienced was caused by the Mayor’s orders rather than diners being afraid to eat out. The Court also rejected that argument because the Insureds offered no evidence that COVID-19 was actually present on their properties at the time they were forced to close and the mayor’s orders did not impact the tangible structure of the properties.

Third, the Insureds argued that the policy’s definition of “loss” as encompassing either “loss” or “damage,” required the insurer to “treat the term ‘loss’ as distinct from ‘damage,’ which connotes physical damage to the property,” and thus “loss” incorporates “loss of use.” The Court rejected that argument and held that the words “direct” and “physical” modify the word “loss” and therefore any “loss of use” must be “caused, without the intervention of other persons or conditions, by something pertaining to matter—in other words, a direct physical intrusion [onto] the insured property.” The Court held that the Mayor’s orders did not constitute such a direct physical intrusion.

While businesses and their employees continue to operate in the “new frontier” of working-from-home during the COVID-19 pandemic and the gradual reopening of the economy, a serious risk continues to present itself: the threat of cybercrime. The increased use of remote access to work systems and related applications has made businesses a prime target for those unscrupulous individuals seeking to encroach on companies’ cyber-landscape. Flaws in VPNs, firewalls, and videoconferencing, for example, have exposed many companies’ electronic infrastructures to these incursions. Similarly, the at-home workforce has increasingly been subjected to social engineering attacks often cloaked as communications purporting to provide information about pandemic-related issues.

In addition to the technical measures necessary to confront these threats, businesses would be well-advised to ensure that their cyber insurance is up to date and responds to this challenging new environment. Such coverage may be found in a variety of insurance, including property policies, commercial crime bonds or in stand-alone cyber risk policies. Regardless of where it resides, cyber insurance typically provides coverage for data breaches, ransomware attacks and employee wrongdoing, and for loss of business income occasioned by covered occurrences.

While the jurisprudence related to these issues continues to develop, some recent cases provide insight into how courts may decide cyber coverage questions in the current environment. 

Ransomware - Covered

Earlier this year the U.S. District Court for the District of Maryland considered the issue of how first-party “computer coverage” responded to data loss resulting from a ransomware attack. In National Ink & Stitch, LLC v. State Auto Property & Casualty Ins. Co., No. SAG-18-2138, 2020 WL 374460 (D. Md. Jan. 23, 2020), the insured was an embroidery and screen printing business that stored business-related art, logos, designs and graphics software on a server that became compromised by a ransomware attack. Id. at *1. As a result, the insured needed to recreate stored data that it was unable to access because of the incursion. Id. Further, after the software was replaced and reinstalled by experts, there remained a likelihood that remnants of the virus lingered on the system, leaving the insured with the unpalatable choice of either “wiping” the entire system or purchasing a new server. Id.

The policy at issue responded to “direct physical loss of damage to Covered Property at the premises…caused by…any Covered Cause of Loss.” Id. “Covered Property” included electronic data processing, recordings or storage media such as film, tapes, disks, etc. in addition to data stored on such media. Id. at *1-2. Software was included as “covered property” in the policy. Id. at *1. The insurer denied the claim on the basis that the insured had not experienced direct physical loss or damage to its computer system to justify reimbursement of the cost of replacing the entire system. Id. at *2. That is, because the insured “only lost data and could still use its computer system,” the insurer took the position that there was no “direct physical loss” and, therefore, no coverage. Id.

In finding that the insured should be reimbursed for its losses, the court determined that the plain language of the policy “contemplates that data and software are covered and can experience ‘direct physical loss or damage’” Id. at *3. The court refused to credit the insurer’s argument that a loss of software and its related functionality was not a direct loss to tangible property simply because the insured could still use the system albeit in a diminished fashion. Id. Instead, relying on relevant case law, the court it recognized that the insured’s computer system, while still functional, had been rendered inefficient and its storage capability was damaged in a way that its data and software could not be retrieved. Id. at *4. Accordingly, the court ruled that the policy did not require the computer system to be completely unable to function in order to constitute covered “physical loss or damage”. Id. at *5.

In granting summary judgment in favor of the insured, the court viewed the system’s loss of use and reliability and impaired function to be consistent with the “physical loss or damage to” language in the policy. Id. This was so because “not only did [insured] sustain a loss of its data and software, but [it] is left with a slower system which appears to be harboring a dormant virus, and is unable to access a significant portion of software and stored data.” Id.

Much ink has been spilled in recent weeks about how some recipients of Paycheck Protection Program (“PPP”) relief obtained their loans through mistakes or false pretenses. Now banks are coming under fire for their lending practices in connection with this hastily prepared and implemented program, which left them grappling with how to properly issue loans in the face of procedural and substantive gaps in the law. Many lenders tried to fill these gaps by supplementing the PPP application to address practical concerns not covered in the law. Two recent cases, however, demonstrate ...

Just a few months ago, the idea of a virtual jury trial probably seemed inconceivable to most judges and lawyers.  Now, with the COVID-19 pandemic shuttering courthouses throughout the nation and most in-person proceedings suspended, many judges and attorneys are left wondering when and how civil jury trials will be able to safely resume.  We suspect that most prospective jurors will not be enthralled with the idea of sitting shoulder to shoulder in a jury box while the outbreak is still raging.  As litigators and the courts become comfortable with Zoom and other videoconferencing tools, it is apparent that we have the technology to hold virtual trials – the questions is should we?

The prospect of remote jury trials raises a host of serious issues ranging from how to overcome the constitutional hurdles to ensuring that witnesses, parties and jurors have access to high-speed internet so that they can participate in the first place.  Some potential solutions for accessibility concerns are having pre-wired government offices for those who lack access or distributing common technology (such as an iPad, with a cellular connection).  In addition to technology access, there will also be questions of whether a potential juror has access to a room where they can be alone and deliberate in private.

The Paycheck Protection Program (“PPP”) provided forgivable loans to assist small businesses with expenses during the COVID-19 shutdown, seemingly creating a lifeline for many of these enterprises.  As explained here, a borrower could obtain a loan equal to the lesser of $10 million or the sum of its average monthly payroll costs for 2.5 months, (reduced to the extent that any individual was paid more than $100,000 per year) plus the balance of any Economic Injury Disaster Loan received between January 31, 2020 and April 3, 2020.  Like many federal programs, however ...

On March 23, 2020, Governor Phil Murphy signed Executive Order 109, which “limit[ed] non-essential adult elective surgery and invasive procedures, whether medical or dental, [in order to] assist in the management of vital healthcare resources during this public health emergency.” The purpose of EO 109 was to “limit[] exposure of healthcare providers, patients, and staff to COVID-19 and conserve[] critical resources such as ventilators, respirators, anesthesia machines, and Personal Protective Equipment (‘PPE’) [that] are essential to combatting the spread of the virus.” At the time EO 109 was executed, coronavirus cases were rapidly increasing within the State. On March 23rd, New Jersey had 2,844 coronavirus cases in all 21 counties, an increase of 935 over the previous day, and at least 27 people had died.

In the weeks that followed, New Jersey saw the surge in cases for which it was preparing. On April 4, the three-day average of new confirmed positive COVID-19 cases peaked at 4,064 cases, and by April 14th, there were 8,084 of COVID-related hospitalizations and a staggering 1,705 patients on ventilators. But since that time, thanks to social distancing and New Jersey’s ability to flatten the curve, these numbers have fallen drastically. By May 11th, the three-day average of new, positive cases had fallen to 1,572 new cases—a 61 percent decrease. Likewise, the three-day average of new hospitalizations had fallen to 4,277 patients—a 48 percent decrease.

In light of this decreased burden on the healthcare system, Governor Murphy signed Executive Order 145, which allows for elective surgeries to resume as of 5 am on May 26, 2020. EO 145 provides that elective surgeries and invasive procedures may proceed at both licensed healthcare facilities and in outpatient settings not licensed by the Department of Health (e.g., health care professional offices, clinics, and urgent care centers), subject to limitations and precautions set forth in policies to be issued by the Division of Consumer Affairs, in consultation with the Department of Health, by Monday, May 18, 2020. EO 145 further states that the Department of Health and/or the Division of Consumer Affairs may issue supplemental or amended policies concerning elective surgeries and elective invasive procedures on or after Monday, May 18, 2020.

Consumer complaints regarding alleged price gouging have been increasing as the COVID-19 pandemic continues. Generally, price gouging occurs when there unreasonable increase the price of a consumer good (or service) during a public emergency. Although we are facing a national emergency, except for a March 23, 2020, executive order issued by President Trump prohibiting hoarding and price gouging of certain critical supplies, there is no federal price gouging law. Although there are proposal pending in Congress to more broadly prohibit price gouging, currently, the issue is ...

On March 23, 2020, shortly after the Governors of California, New York, Connecticut and New Jersey issued orders closing non-essential businesses, we recommended that businesses review their insurance policies to determine if they had either business interruption coverage or civil authority coverage that might be available to lessen the economic blow of COVID-19.  As explained here, business interruption coverage generally allows a business to recover certain  losses in the event that the business suffers physical damage or loss that prevents it from operating its business ...

Sometimes a crisis can be an opportunity to embrace new technologies and changes that were already on the horizon – albeit at a much more expedited pace.  As employees are required to work remotely and practice social distancing due to the COVID-19 pandemic, the federal government and several state governments (including New York and New Jersey) are moving (New York more quickly than New Jersey) to enable remote online notarization and keep businesses operating.

A Potential Federal Solution

On March 18, 2020, Senator Kevin Kramer, R-N.D. and Mark Warner, D-Va, introduced ...

Imagine these scenarios:

• Your company cannot perform a contract because of the COVID-19 pandemic.
• A vendor informs you that she cannot provide your company with necessary goods because of supply chain issues caused by a governmental emergency declaration.
• A subcontractor cannot perform because its employees are self-quarantining.

These are not hypotheticals. Scenarios like these are playing out around the country. The real-world impact of the COVID-19 pandemic is colliding with contractual requirements, and there is new attention to the legal doctrines of “impossibility,” “frustration of purpose,” “impracticability, and “force majeure.”

What do they mean? In a nutshell, traditional contract law says that an unforeseeable event occurring after the contract was formed can excuse contract performance, and determining whether an event was unforeseeable will depend heavily on the specific facts and the language of the contract.

Across the nation, authorities are scrambling to meet the new challenges posed by COVID-19. The United States Centers for Disease Control and Prevention (“CDC”) has recommended that individuals remain six feet apart in order to prevent the spread of COVID-19. On March 13, 2020, the White House proclaimed a national emergency and many State governments have ordered non-essential businesses to close, and residents to self-distance. However, these emergency measures conflict with the rules for personal service of process established by Federal Rule of Civil Procedure 4.

Personal service of process is among the oldest and commonest means by which a court can obtain personal jurisdiction over a defendant. F.R.C.P. 4(e) provides that personal service of process can be accomplished by handing the process papers to the defendant personally or leaving the papers with a responsible person at the defendant’s dwelling.

In most cases, personal service involves the physical act of handing papers from one person to another. The very act of accomplishing personal service therefore violates the CDC’s recommendation that individuals remain six feet apart. However, it can also run contrary to more stringent restrictions imposed by State governments.

On Monday March 23, 2020, President Donald Trump signed an executive order aimed at preventing hoarding and price gouging.  Attorney General William H. Barr indicated that the order is authorized under the Defense Protection Act, which allows the United States to compel private industry to assist in meeting national defense needs in response to national emergencies.

The new executive order empowers the Health and Human Services Secretary to designate supplies as “critical.”  Hoarding – accumulating quantities beyond those reasonable to satisfy personal or business needs ...

The COVID-19 pandemic has leveled a blow against businesses everywhere. The Governors of New York, California, Illinois, and Pennsylvania, for example, have ordered all non-essential businesses to close their physical locations and the California Governor has ordered all residents, except those performing essential functions, to stay home. Governors across the country have issued orders restricting various business activities. The trend is likely to continue in the coming weeks and to adversely impact the bottom line of many businesses.

Some businesses, however, may have ...

As the coronavirus spreads throughout the country, hospitals and other health care providers are finding themselves inundated with patients. Those providers who are in-network with payors have and will likely continue to experience difficulty in complying with certain provisions of their contracts. For instance, as payors are also experiencing an unexpected influx of telephone traffic, the wait time for various approvals, including, but not limited to, pre-authorizations are being delayed.

Providers are often contractually obligated to obtain pre-authorizations for certain procedures and services prior to rendering the care. Due to the increased telephone traffic and increased wait times on the payor end, these providers are now faced with a dilemma. A process that as of two weeks ago only took a matter of ten to fifteen minutes now can take up to an hour or more. This creates a serious dilemma for those providers who need to render care to their patients and comply with their contractual obligations to payors.

The Senate has spoken to this issue via the Families First Act which prohibits cost sharing and imposing prior authorizations for COVID-19 related testing under Medicare, CHIP, and individual and small/large self-funded group plans. See Division F-Health Provisions, § 6001, Coverage of Testing for COVID-19. While some payors have recognized and acknowledged the difficulties posed by COVID-19 and have made exceptions to the standard requirements, those exceptions have been limited. For example, the Blue Cross Blue Shield Association has indicated that its network of 36 BCBS companies will waive prior authorizations for diagnostic tests and covered services that are medically necessary for members diagnosed with COVID-19. Similarly, Wellmark and Anthem, Inc., have waived prior authorizations for covered services related to COVID-19. While these limited pre-authorization waivers are a start, they do not resolve the dilemma faced by those providers treating patients who are not suffering from COVID-19.

On March 10, 2020, the New York Department of Financial Services (“DFS”), which regulates a wide variety of financial institutions, including banks, insurance companies, and investment advisors doing business in New York, issued a series of letters regarding the response to the Novel Coronavirus (“COVID-19”). In addition to providing guidance, DFS has asked all regulated financial institutions to provide “assurance” that they have plans to address the operational and financial risks associated with COVID-19. A copy of the letter to regulated financial ...

At the time of publication, at least twenty four states, plus Washington D.C. have declared states of emergency related to the novel coronavirus (“COVID-19”), with that number growing by the hour.  In addition to making more resources available to residents, in many cases, the declarations also trigger additional protections to consumers in the form of anti-price gouging laws. These laws, which automatically go into effect, are intended to prevent merchants from significantly increasing the cost of consumer goods and services during a crisis.

For instance, in New Jersey a ten ...