PHARMA COMPANY SETTLES ANTITRUST CLASS ACTION FOR $50 MILLION

A pharmaceutical company agreed to pay $50 million to settle a class action lawsuit accusing the company of scheming with another drug manufacturer to delay the release of a generic version of a narcolepsy drug, causing health plans to pay higher prices, in violation of US antitrust law.

$3.6 MILLION SETTLEMENT RESOLVES FENTANYL FALSE CLAIMS ALLEGATIONS

A pharmaceutical company agreed to pay $3.6 million to resolve claims that it violated the FCA by causing the submission of false claims for a transmucosal immediate-release fentanyl (TIRF) drug for individuals who did not have breakthrough cancer pain.

TWO CHARGED IN $227 MILLION MEDICARE FRAUD SCHEME RELATED TO COVID-19 TEST KITS

An Illinois man and a foreign national were arrested on criminal charges related to their alleged submission of more than $227 million in fraudulent claims to Medicare.

HEALTH SYSTEM RESOLVES ALLEGATIONS OF STARK LAW VIOLATIONS FOR MORE THAN $3 MILLION

A health system agreed to pay $3.29 million to resolve allegations that it knowingly submitted or caused to be submitted false claims to Medicare that were the result of Stark Law violations.

THIRD CIRCUIT REJECTS CHALLENGE TO DRUG PRICE NEGOTIATION PROGRAM

On May 8, 2025, the US Court of Appeals for the Third Circuit ruled against a pharmaceutical company’s challenge to the Drug Price Negotiation Program.

JUDGE DISMISSES SUIT ON GROUNDS THAT FCA QUI TAM PROVISIONS ARE UNCONSTITUTIONAL

On May 29, 2025, Judge Kathryn Kimball Mizelle of the District Court for the Middle District of Florida dismissed an un-intervened FCA qui tam lawsuit against a construction company and an insurance company, holding that the FCA’s qui tam provisions are unconstitutional because they violate the Appointments Clause under Article II of the US Constitution.

MAGISTRATE JUDGE HOLDS THAT FCA QUI TAM PROVISIONS ARE CONSTITUTIONAL

A magistrate judge in the District Court for the Western District of New York rejected an FCA defendant’s challenge to the FCA’s whistleblower provisions as unconstitutional.

COURT ALLOWS FCA QUI TAM SUIT AGAINST EMERGENCY MEDICAL SERVICES CONTRACTOR TO PROCEED

The District Court for the Northern District of California denied an FCA defendant’s motion to dismiss for failure to state a claim and rejected its argument that the FCA’s qui tam provisions are unconstitutional.

CMS ROLLS OUT AGGRESSIVE STRATEGY TO ENHANCE, ACCELERATE MA AUDITS

On May 21, 2025, CMS announced that it will expand its auditing of MA plans by auditing all eligible MA contracts for each payment year and by investing additional resources to expedite the completion of audits for payment years 2018 through 2024.

CMS RELEASES DRAFT GUIDANCE FOR THIRD CYCLE OF MEDICARE DRUG PRICE NEGOTIATION

On May 12, 2025, CMS released draft guidance for public comment regarding the third cycle of negotiations under the Medicare Drug Price Negotiation Program.

HHS SUED OVER REMOVAL OF HEALTH DATA

Nine organizations representing physicians, nurses, medical researchers, hospitals, and public health practitioners sued HHS, alleging that it violated the APA by illegally purging websites containing critical public health information related to transgender individuals, HIV care, vaccines, and prevention of communicable disease outbreaks.

BILLING DISPUTE CONSULTING COMPANY SUED OVER ALLEGED NO SURPRISES ACT VIOLATIONS

An insurance company sued a billing dispute consulting company and two hospital-based providers, alleging that they conspired to exploit the No Surprises Act (NSA) when they won higher reimbursements through the act’s independent dispute resolution system.

HHS, LABOR, AND TREASURY AIM TO BOOST HEALTHCARE PRICE TRANSPARENCY

On May 22, 2025, HHS and the US Departments of Labor and the Treasury (collectively, the departments) issued a joint request for information on how to improve prescription drug price transparency, specifically prescription drug price disclosure requirements, including information on existing prescription drug file data elements and information on implementation generally.

MAHA COMMISSION ISSUES MAKE OUR CHILDREN HEALTHY AGAIN REPORT

On May 22, 2025, the Make America Healthy Again (MAHA) Commission released its Make Our Children Healthy Again Assessment (also referred to as the MAHA report) as directed by EO 14212, released on February 13, 2025.

HHS ISSUES PROPOSED FY2026 BUDGET

On May 2, 2025, the Trump administration, through the Office of Management and Budget (OMB), released its proposed fiscal year (FY) 2026 discretionary budget request, which seeks to cut $163 billion in nondefense discretionary funding across the federal government, including cuts to programs administered by HHS.

ONE BIG BEAUTIFUL BILL ACT PROCEEDS TO SENATE

On May 22, 2025, the US House of Representatives passed the One Big Beautiful Bill Act, which now is under US Senate review. The act seeks to cut billions of dollars in Medicaid spending by, for example, introducing new work requirements for otherwise eligible Medicaid recipients, requiring states to impose mandatory cost-sharing for certain services provided to individuals enrolled through the Medicaid expansion with incomes above the federal poverty line (and allowing providers to deny services to any individual who cannot pay the required co-payment), and blocking implementation of rules finalized by CMS in September 2023 and April 2024 intended to improve Medicaid and Children’s Health Insurance Program eligibility and enrollment systems.

NO SURPRISES ACT UPDATE: CMS PUBLISHES IDR PUBLIC USE FILES, SUPPLEMENTAL TABLES FOR Q3, Q4 2024

On May 28, 2025, the departments released NSA independent dispute resolution (IDR) public use files (PUFs) and federal IDR supplemental tables for the third and fourth quarters of 2024.

Seventh Circuit Reverses DME Distributor Conviction in AKS Marketing Case

On April 14, 2025, the US Court of Appeals for the Seventh Circuit in United States v. Sorensen reversed the conviction of Mark Sorensen, owner of a Medicare-registered distributor of DME, in an opinion that redefines the boundaries of permissible marketing practices under the AKS.

Medical Practice, Physician Owner Agree to Pay $152,000+ to Resolve Telehealth Billing FCA Allegations

A West Virginia-based medical practice and its physician owner agreed to pay the United States more than $152,000 to resolve civil allegations that they violated the FCA by submitting false claims to the Medicare and Medicaid programs and falsely certifying compliance with program requirements related in part to the practice’s telehealth billing patterns.

Rehabilitation Facility Will Pay $19.75M to Resolve FCA Allegations Related to Unlicensed Care

A New Jersey drug and alcohol rehabilitation facility agreed to pay nearly $20 million to resolve allegations that it violated the FCA by allegedly submitting claims to the Community Care Program of Veterans Health Administration and New Jersey’s Medicaid program for short-term residential treatment and partial hospitalization care.

Florida Man Pleads Guilty to Medicare Fraud Scheme Involving $8.4+M in COVID-19 Test Kit False Claims

A Florida man pleaded guilty to causing more than $8.4 million in false and fraudulent claims to be submitted to Medicare using Medicare identification numbers that the man had unlawfully purchased.

Sales Director Pleads Guilty in Transcranial Doppler Kickback Scheme

A New York-based national sales director pleaded guilty to conspiring to offer and pay kickbacks to doctors in exchange for ordering medically unnecessary brain scans.

Marketing Company Operators Sentenced for Roles in Telemedicine DME Kickback Scheme

Two operators of a New Jersey marketing company were sentenced to 51 months and 80 months in prison, respectively, and ordered to pay more than $127 million in restitution for their roles in a fraud and kickback scheme.

CMS Releases Final Rule Regarding Contract Year 2026 Policy and Technical Changes to the MA Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, PACE

On April 15, 2025, CMS issued a final rule revising the MA, Medicare Prescription Drug Benefit (Part D), Medicare cost plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations.

CMS Announces CY 2026 MA Capitation Rates, Part C and Part D Payment Policies

On April 7, 2025, CMS released its Announcement of Calendar Year (CY) 2026 MA Capitation Rates and Part C and Part D Payment Policies.

OIG Issues Favorable Advisory Opinion on Community Health Center’s Primary Care Proposal

OIG issued a favorable advisory opinion regarding a community health center’s proposal to connect individuals in the community with primary care services.

Texas District Court Strikes Down CMS Nursing Home Staffing Rule

On April 7, 2025, the US District Court for the Northern District of Texas struck down a CMS rule mandating certain staffing requirements for nursing homes participating in Medicare and Medicaid.

Senate Republicans Introduce Physician Led and Rural Access to Quality Care Act

On April 9, 2025, Senator James Lankford (R-OK) and eight other Republican senators introduced S. 1390 to enact the Physician Led and Rural Access to Quality Care Act, which would repeal certain elements of the ACA’s prohibition on the expansion and creation of new physician-owned hospitals.

Jury Finds No Liability in “Usual and Customary” Pricing Case That Set SCOTS Scienter Standard

Fourteen years after the False Claims Act (FCA) case against Supervalu, Inc., was filed in the US District Court for the Central District of Illinois, a jury found that the plaintiffs had not proved damages to either the federal or state government caused by Supervalu’s pharmaceutical pricing system.

Clinical Research Facility Owners Plead Guilty to Conspiracy to Commit Wire Fraud

Two owners of a clinical research company in Florida that conducted clinical trials of prospective new drug treatments on behalf of drug sponsors seeking approval from the US Food and Drug Administration (FDA) pleaded guilty to conspiracy to commit wire fraud.

Providers, Lab Marketers Agree to Pay More Than $1.9 Million to Settle AKS Allegations

Four medical practices and a marketing company agreed to pay more than $1.9 million to resolve alleged violations of the federal FCA and AKS.

Medical Device Company Will Pay Up to $14.25 Million to Resolve Alleged FCA, State Law Violations Related to Vision Testing

A medical device company based in Pennsylvania agreed to pay up to $14.25 million to resolve allegations that it violated the federal FCA and various state laws by allegedly knowingly submitting, or causing others to submit, false claims for payment to Medicare and Medicaid in connection with certain vision testing services.

DC District Court Rejects Pharmaceutical Company’s Attempt to Limit AKS Scope

A pharmaceutical company lost at summary judgment in its challenge to an OIG advisory opinion in the US District Court for the District of Columbia.

CMS Publishes Marketplace Integrity and Affordability Proposed Rule

On March 10, 2025, CMS released its first proposed rule under the Trump administration, the Marketplace Integrity and Affordability Proposed Rule.

CMS Announces Second Round of Medicare Drug Price Negotiation Program

Beginning March 1, 2025, CMS will begin the second round of the Medicare Drug Price Negotiation Program, which gives Medicare the ability to directly negotiate the prices of certain drugs with manufacturers.

OIG Issues FY 2024 Medicaid Fraud Control Unit Report

The annual report highlights OIG recovery actions in 2024. Highlights include 1,151 convictions for patient abuse and neglect and fraud; 1,042 individuals or entities excluded from federally funded programs; 493 civil settlements or judgments; and $1.4 billion recovered.

OIG Report: MACs Did Not Consistently Meet Medicare Cost Report Oversight Requirements

On March 18, 2025, CMS published the results of an audit that reviewed individual Medicare Administrative Contractors’ (MACs) compliance with the Medicare cost report oversight requirements for fiscal years 2019 through 2021.

OIG Report: Medicare, Medicaid Payments Are at Risk of Diversion Through Electronic Funds Transfer Fraud Schemes

On March 6, 2025, OIG published a report that found that Medicare and Medicaid payments are at risk of diversion through a scheme in which fraudulent actors pretend to be hospital providers and submit incorrect electronic funds transfer (EFT) information to MACs and state Medicaid programs.

HHS Office of General Counsel Issues Revised Statement of Organization Signaling Expansion of Authority

On March 14, 2025, the US Department of Health and Human Services (HHS) issued a revised statement of organization for the Office of the General Counsel (OGC).

Proposed Massachusetts Laws Would Impact Healthcare Transaction Notice Requirements, PPM Structures

Three proposed laws would impact health transaction notice requirements in Massachusetts. All three of these laws were referred to the Senate and House committees for further consideration on February 27, 2025.

Health Plan Wins Ruling on $2 Billion in Alleged Medicare Overpayments

A health plan claimed a major victory on March 4, 2025, when a court-appointed special master found that DOJ did not have sufficient evidence to support a billion-dollar fraud case against the plan regarding overpayments for patients on Medicare Advantage plans.

Health System Agrees to $29 Million Settlement Related to Military Care Overpayments

On February 18, 2025, a healthcare system and the US Department of Justice agreed to a $29 million settlement to resolve allegations that the system retained erroneous overpayments for medical services provided to retired military members by a healthcare plan participating in the US Family Health Plan.

DME Executive Pleads Guilty in Conspiracy Scheme Related to $1 Billion in False Charges

On February 20, 2025, a vice president of a DME company pleaded guilty to operating an internet-based platform that generated false doctors’ orders for orthotic braces, pain cream, and other DME supplies.

SNF Fraudulent Billing Suit Alleges Upcoding Complexity of Services Rendered

On February 19, 2025, the US Attorney’s Office filed a complaint with the Massachusetts Attorney General’s Office under the federal and Massachusetts FCA against 19 skilled nursing facilities (SNFs) in Massachusetts and Connecticut and their present and former managers.

OIG Modifies Advisory Opinion 21-13m

OIG issued a modification to Advisory Opinion No. 21-13 regarding a proposal to subsidize Medicare cost-sharing obligations for a clinical study involving positron emission tomography (PET) scans of patients with mild cognitive impairment or dementia for the presence of beta amyloid plaque – a core feature of patients diagnosed with Alzheimer’s disease.

California SB 351 Proposes Changes to Corporate Practice Prohibitions

The California legislature introduced Senate Bill (SB) 351, which targets private equity groups and hedge funds managing physician or dental practices in California. This bill follows Assembly Bill (AB) 3129, passed in 2024 and vetoed by Governor Gavin Newsom.

Illinois SB 1998 Would Add Notification Requirements to Certain Healthcare Transactions

The Illinois state legislature introduced SB 1998, aiming to amend the Illinois Antitrust Act by adding a layer of scrutiny to covered transactions that are financed by private equity groups or hedge funds.

Healthcare Transaction Notification Proposed as Part of Wisconsin Appropriations Bill

The Wisconsin state legislature introduced AB 50, a comprehensive 2,000-page budget bill for Wisconsin’s 2025 – 2027 fiscal term. Among myriad other appropriations proposals, the bill would establish procedures for review, oversight, and transparency when healthcare entities propose to undergo material change transactions.

Litigation Over Executive Orders 14168 and 14187

In January 2025, US President Donald Trump signed executive orders (EOs) directing federal agencies to define “sex” as an immutable binary biological classification and remove recognition of the concept of gender identity (EO 14168) and targeting the provision of gender-affirming care to minors (EO 14187).

EO 14192: Unleashing Prosperity Through Deregulation

EO 14192 was signed by President Trump on January 31, 2025, and published in the Federal Register on February 6, 2025. This EO establishes an executive branch policy to be prudent and financially responsible in the expenditure of public and private funds and to alleviate unnecessary regulatory burdens.

EO 14212: Establishing the President’s Make America Healthy Again Commission

EO 14212 was signed by President Trump on February 13, 2025, and published in the Federal Register on February 13, 2025. This order establishes as federal policy an obligation to combat chronic disease challenges facing US citizens, including mental health disorders, obesity, and diabetes.

EO 14214: Keeping Education Accessible and Ending COVID-19 Vaccine Mandates in Schools

EO 14214 was signed by President Trump on February 14, 2025, and published in the Federal Register on February 20, 2025. This order states that discretionary federal funds should not be used to directly or indirectly support or subsidize educational institutions that require students to have received a COVID-19 vaccine in order to attend in-person programs.

EO 14221: Making America Healthy Again by Empowering Patients With Clear, Accurate, and Actionable Healthcare Pricing Information

EO 14221 was signed by President Trump on February 25, 2025, and published in the Federal Register on February 28, 2025. This order establishes a US policy to put patients first and ensure that they have the information necessary to make well-informed healthcare decisions.

Policy Statement From HHS Regarding Richardson Waiver

In 1971, the US Department of Health, Education and Welfare (now HHS) issued a notice stating that any rulemaking issued by the agency would go through the notice-and-comment process. On February 28, 2025, HHS issued a policy statement that rescinded this long-standing agency policy.

District Court Enjoins NIH 15% Indirect Cost Rate

On February 7, 2025, the National Institutes of Health (NIH) circulated an official notice (NOT-OD-25-068) titled Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Cost Rates.