On January 18, 2023, the Federal Trade Commission (FTC) proposed a new rule for regulating non-compete clauses. The proposed rule, which has been named the “Non-Compete Rule,” could potentially ban employers from entering into, or attempting to enter into, a non-compete clause with employees and independent contractors collectively referred to as “workers.” The proposed rule has recently sparked several discussions on the scope and constitutionality of the rule. One concern is how the proposed rule, if finalized, would impact the healthcare industry and especially non-profit hospitals.
Since the enactment of the Affordable Care Act, hospitals have faced strict and substantial regulations regarding the provision of financial assistance to patients in the form of “charity care.” An essential element in a hospital’s ability to maintain tax-exempt status and financial solvency, charity care has worked to serve uninsured and indigent patients while helping charitable hospitals serve their mission and retain the benefits that come with it. The state of Pennsylvania recently passed legislation requiring more explicit and affirmative acts to provide charity care to more eligible patients. The change is unprecedented, and other states look to be slowly responding in their own ways. Compliance with these changes is most beneficial with proactive measures and risk assessments even before change comes through the doors.