McDermott Will & Schulte, a global law firm

HHS TERMINATES 340B REBATE MODEL PILOT PROGRAM

Following a successful lawsuit filed by the American Hospital Association alleging that HRSA’s 340B rebate model pilot program violated the Administrative Procedure Act, HRSA agreed to rescind the previously approved rebate models.

DOJ AND SLEEP SPECIALIST SETTLE FCA ALLEGATIONS

A sleep specialist practice, two physicians, and a medical supply company agreed to pay more than $750,000 to resolve three sets of allegations stemming from a whistleblower lawsuit.

SURGICAL HOSPITAL AGREES TO PAY $5.6M TO RESOLVE FCA LIABILITY FOLLOWING SELF-DISCLOSURE

An Arizona surgical hospital agreed to pay $5.6 million to resolve FCA allegations that from 2011 through 2018, the hospital made improper financial contributions to a physician group that referred patients to the surgical hospital.

CMS DEFERS $259.5M IN MEDICAID FUNDING TO MINNESOTA OVER FRAUD CONCERNS

Following a review of Minnesota’s Medicaid spending in the fourth quarter of fiscal year 2025, CMS announced it will defer nearly $259.5 million in federal matching funds to Minnesota’s Medicaid program until the agency is satisfied with the state’s corrective action plan to address ongoing program integrity concerns.

CMS ANNOUNCES NATIONWIDE MORATORIUM ON CERTAIN MEDICARE DMEPOS ENROLLMENTS

On February 27, 2026, CMS published a notice in the Federal Register announcing a six-month moratorium on Medicare enrollments for certain DMEPOS suppliers, effective immediately.

CMS RELEASES UPDATED MEDICARE OUTPATIENT OBSERVATION NOTICE

On February 20, 2026, CMS released an updated Medicare Outpatient Observation Notice (MOON), which hospitals and critical access hospitals are required to provide to Medicare beneficiaries who receive observation services as outpatients for more than 24 hours.

HHS PROPOSES SWEEPING CHANGES TO ACA EXCHANGE POLICIES

In the 2027 Notice of Benefit and Payment Parameters proposed rule, published in the Federal Register on February 11, 2026, HHS pitched an expansive set of changes to the standards that qualified health plans participating in the Affordable Care Act (ACA) marketplace must comply with and new requirements for state-based exchanges, brokers, and agents.

OIG ISSUES FAVORABLE ADVISORY OPINION 26-02 ON LAB SERVICES ARRANGEMENT

On February 12, 2026, OIG issued Advisory Opinion 26-02, concluding that a proposed arrangement in which an urgent care management entity would provide laboratory services to its affiliated urgent care centers would not generate prohibited remuneration under the AKS.

OIG ISSUES AUDIT REPORTS FOR MISSOURI, WEST VIRGINIA ON FAILURE TO OBTAIN REBATES FOR MEDICAID OUTPATIENT DRUGS

Two recent OIG audits conducted in Missouri and West Virginia resulted in recommendations that the states refund the federal government for their failure to obtain rebates from manufacturers for certain Medicaid physician-administered drugs.

HRSA REQUESTS INFORMATION ON 340B REBATE PROGRAM

After withdrawing the previously approved 340B rebate models earlier this month, the HRSA issued an RFI seeking stakeholder input on the potential use of rebates to “effectuate the ceiling price under the 340B Program, including the standards and procedures that should govern the approval of manufacturer rebate plans and the impacts on all stakeholders.”

FDA TO DROP TWO-STUDY REQUIREMENT FOR NEW DRUG APPROVALS

On February 18, 2026, FDA Commissioner Marty Makary and a top deputy, Vinay Prasad, published an article in the New England Journal of Medicine announcing FDA’s plan to drop its two-study requirement for new drug approval with the goal of reducing sponsor costs and speeding drugs to market.

FDA ISSUES UNTITLED LETTER TO JANSSEN BIOTECH FOR FALSE OR MISLEADING ADVERTISING

On February 6, 2026, FDA sent an untitled letter to Johnson & Johnson’s Janssen Biotech unit regarding its advertising of the ulcerative colitis drug Tremfya.

CMS ANNOUNCES PLEDGE BY HEALTH PLANS TO LAUNCH DIGITAL PAYMENT MODELS

Health plans representing 165 million beneficiaries across Medicare Advantage, Medicaid managed care, and private insurance signed a pledge with CMS to adopt an outcomes-based payment model aligned with CMS’s Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model, according to an announcement from CMS.