Fraud, Abuse & Enforcement
- CMS has imposed six-month, nationwide moratoria on new Medicare enrollment for hospices and home health agencies, blocking both initial enrollment applications and certain changes in majority ownership. The moratoria do not affect existing providers, who may continue serving Medicare beneficiaries. CMS has already suspended payments to approximately 800 hospices and home health agencies in Los Angeles suspected of fraud — providers responsible for $1.4 billion in Medicare spending last year — with $70 million in payments suspended to date. The action marks the third such moratorium CMS has imposed, following a similar measure earlier this year targeting durable medical equipment, prosthetics, orthotics, and supplies companies. CMS has also launched a public hospice scoring system, expanded pre- and post-claim review of home health claims in six states, and imposed heightened oversight of newly enrolled hospice providers in Arizona, California, Georgia, Nevada, Ohio, and Texas. Source: CMS
- Texas Children’s Hospital agreed to pay more than $10 million and overhaul its operations to settle DOJ and Texas Attorney General allegations that it violated a state ban on gender-affirming care for minors and submitted false claims to federal and private payers. The DOJ and Texas AG alleged that TCH used false diagnosis codes to conceal puberty blocker and cross-sex hormone treatments in violation of Texas Senate Bill 14 (2023), which prohibits healthcare providers from facilitating gender-affirming care for minors. Under the settlement, TCH must cease administering puberty blockers and cross-sex hormones to minors, terminate five physicians who provided the care, and establish the nation’s first detransition clinic offering services at no cost for five years. The settlement is the first of its kind under Executive Order 14187, signed January 28, 2025, which directed federal agencies to investigate fraud related to gender-affirming care for minors. Acting Attorney General Todd Blanche stated the DOJ would “use every weapon at its disposal” to end the practice. Source: Vedder
- Dental billing fraud enforcement is intensifying as regulators deploy AI and data analytics to identify outliers across Medicaid-heavy practices. Dental practices face False Claims Act and overpayment liability not only from intentional misconduct but from documentation errors that repeat across high-volume services like imaging and routine cleanings, where a single miscoded procedure aggregates into material exposure over time. State attorneys general in Connecticut and Texas have pursued enforcement actions against dental providers for kickback arrangements and referral schemes that violate state Medicaid laws, regardless of whether the practices billed Medicare. Multiple dental entities paid $540,000 to resolve claims that services were billed under the national provider identifiers of credentialed dentists who did not perform the work. Dental service organizations face additional scrutiny under corporate practice of medicine doctrines, fee-splitting prohibitions, and the federal Anti-Kickback Statute, particularly where management compensation structures may influence clinical utilization. Source: McDermott Will & Emery
- OIG Advisory Opinion No. 26-10 concludes that an orthopedic device company’s proposed Product Line royalty arrangement with physician consultants would generate prohibited remuneration under the Federal AKS. The Requestor, a manufacturer of hip, knee, shoulder, spine, and sports medicine implants, proposed paying certain Consultants a “royalty”—calculated as a percentage of net invoice price for all Products sold within a Product Line—in exchange for teaching, training, proctoring, design feedback, and clinical evaluation services, provided the Consultant met minimum hour requirements and received a “royalty-eligible” rating from an Evaluation Panel. OIG determined the arrangement would not fit within the safe harbor for personal services and management contracts because the payment methodology would take into account the volume or value of referrals and other business generated between the parties, particularly since the Requestor could not certify that the Product Line Services would not contribute to revenue generation. OIG identified risks of skewed clinical decision-making, patient steering, unfair competition, inappropriate utilization, and increased costs to Federal health care programs, noting that the payments could financially motivate Consultants to recommend the Products over competitors even when a competitor’s product might be more clinically appropriate. Source: Advisory Opinion 26-10
- OIG Advisory Opinion No. 26-11 declines to impose sanctions on a precision oncology company that provides consenting patients a free supplemental multi-cancer detection report in connection with its FDA-approved blood-based colorectal cancer screening test. The Requestor performs the CRC Screening Test—the first FDA-approved blood-based biomarker test for primary colorectal cancer screening, covered by Medicare once every three years—in its CLIA-certified laboratory, and runs a Breakthrough Device-designated algorithm on the same blood sample to generate a Supplemental Report identifying potential signals for bladder, breast, CRC, esophageal, gastric, liver, lung, ovarian, pancreatic, and prostate cancers. To receive the Supplemental Report, a patient must have a valid CRC Screening Test order from an independent, unaffiliated physician who opts in to the additional results, and must sign a consent authorizing release of medical information up to four times over five years to support FDA approval and future payor coverage of the MCD Test. OIG concluded the risk of fraud and abuse is low because the MCD Test is not separately reimbursable and adds no cost to Federal health care programs, physicians receive no compensation for ordering the test or opting in, the Requestor’s laboratory is the only laboratory performing the CRC Screening Test, six of the detected cancers have no USPSTF-recommended screening alternative, and the Requestor refrains from direct-to-consumer advertising or targeted marketing of the Supplemental Report. Source: Advisory Opinion 26-11
Antitrust & Competition
- The FTC and DOJ Antitrust Division closed public comments for new guidelines governing competitor collaborations, replacing the 2000 Antitrust Guidelines for Collaborations Among Competitors, which the agencies withdrew in December 2024 as obsolete. The incoming guidelines are expected to address vertical integration, roll-ups, joint licensing, algorithmic pricing, data sharing, and labor collaborations. The agencies had originally set an April 24 deadline for comments but extended it to May 21 to allow more time for input. Healthcare companies face particular exposure, as the 2000 Guidelines had established a safety zone for R&D collaborations that no longer exists, leaving businesses without clear guidance until new rules are issued. Companies should consult antitrust counsel before entering competitor collaborations while the agencies review public comments and draft the replacement framework. Source: Williams Mullen
- The FTC and DOJ pursued an broad range of healthcare antitrust enforcement actions in the first quarter of 2026, spanning merger challenges, civil lawsuits, criminal prosecutions, and new policy initiatives. The FTC launched a Healthcare Task Force on March 20, 2026, and settled with Express Scripts over insulin drug pricing practices that the agency estimated cost patients up to $7 billion over 10 years, while also blocking or triggering the abandonment of three healthcare mergers — Sevita Health’s $835 million acquisition of BrightSpring’s community living business, Edwards Lifesciences’ $945 million acquisition of JenaValve Technology, and Alcon’s $430 million acquisition of LENSAR. DOJ filed civil antitrust suits against OhioHealth and New York-Presbyterian, alleging both hospital systems used payor contract restrictions to block the development of budget-conscious insurance plans, and secured a guilty plea in a bid-rigging scheme involving healthcare supply sales to the U.S. Air Force. In private litigation, a Massachusetts federal court allowed antitrust claims to proceed against Zelis and five major insurers for allegedly conspiring to suppress out-of-network provider reimbursement rates, while the Fifth Circuit dismissed claims against group purchasing organization Vizient after finding the plaintiff defined the relevant market too narrowly. Source: Vinson & Elkins LLP
Coverage & Reimbursement
- Medicare beneficiaries enrolled in Part D will gain access to GLP-1 weight-loss medications for $50 per month starting July 1, 2026, under a program called the Medicare GLP-1 Bridge. The demonstration runs through December 31, 2027, and operates under the Secretary’s authority to test new approaches to care delivery under Medicare. CMS will handle claims adjudication and payments to pharmacies through a centralized process. Beneficiaries should consult their doctor to determine eligibility for a specific GLP-1 medication. Source: CMS
- Texas Senate Bill 2544, which took effect June 20, 2025, requires out-of-network facility providers — including hospitals, ambulatory surgery centers, freestanding emergency rooms, and birthing centers — to request mediation within 180 days of receiving an initial payment or forfeit the right to dispute the claim. The law amends Texas Insurance Code Chapter 1467, which already required completion of Texas Department of Insurance mediation before a facility provider could file a civil lawsuit over a billing dispute with a health benefit plan. Missing the 180-day window bars both mediation and any subsequent civil action to recover the disputed amount. The deadline applies to disputes with TDI-regulated commercial HMOs and PPOs, as well as self-insured ERISA plans that have opted into the Chapter 1467 process, but does not cover Medicare, Medicaid, or ERISA plans that have not opted in. The change mirrors the existing 90-day deadline already imposed on out-of-network non-facility providers such as physicians and physician groups under the same framework. Source: Hendershot Cowart P.C.
Transactions, M&A & Investment
- Private equity consolidation is reshaping the pharmacy sector through vertical integration, selective asset acquisitions, and structural restructurings as drug costs rise and margins compress. U.S. drug spending rose 11.4% in 2024, with oncology, autoimmune, and metabolic therapies projected to sustain increases through 2027, while PBM scrutiny and 340B Program litigation continue to erode margins for specialty pharmacies. CVS Health acquired 63 Rite Aid store locations and more than 600 prescription files across 15 states, and Walgreens Boots Alliance completed a take-private transaction in August 2025—both moves reflecting a shift away from broad ownership toward scale and operational flexibility. CVS Health, OptumRx, and Express Scripts now collectively manage pharmacy benefits for more than 75% of Americans, and Cigna’s Evernorth Health Services made a $3.5 billion investment in Shields Health Solutions to expand specialty dispensing control. Freestanding ambulatory infusion centers are projected to overtake hospital outpatient infusion volume by 2029 at a 30–40% cost advantage, and EBITDA across the pharmaceutical value chain is forecast to reach approximately $114 billion by 2029. Source: VMG Health
- Provable ROI has displaced innovation as the primary criterion for securing capital in health tech, as multiple expansion fades and investors now require mid-teens EBITDA growth to hit target returns. Healthcare IT deal activity hit record volume and value in 2025, but valuations in 2026 are under pressure from AI uncertainty and a more selective buyer pool. Capital is concentrating in infrastructure-layer and tech-enabled services companies embedded in core workflows — revenue cycle, billing, staffing, and care navigation — where inefficiencies are measurable and switching costs are high. Investors evaluate AI on cost reduction (48%) and workflow efficiency gains (34%), not on narrative, and diligence now scrutinizes data usability, workflow integration depth, retention quality, and ROI attribution. Most liquidity is coming through PE-backed M&A and strategic buyers rather than IPOs, with exits bifurcating sharply between companies that can demonstrate repeatable ROI and those that cannot. Source: McDermott Will & Emery
Privacy & HIPAA
- HIPAA privacy protections extend to deceased persons, with disclosure permitted only under specific conditions. Providers may share a decedent’s health information for treatment, payment, or healthcare operations — including treatment of living relatives — without authorization, and may disclose relevant information to family members or others who were involved in the decedent’s care, provided the disclosure does not conflict with the decedent’s prior expressed preferences and is limited to information relevant to that involvement. A personal representative — such as an executor or estate administrator — is entitled to a decedent’s health information regardless of prior involvement in the decedent’s care or the decedent’s own wishes regarding disclosure. Additional exceptions permit disclosure to law enforcement when criminal conduct is suspected, to coroners, medical examiners, and funeral directors, for decedent-only research, and to organ procurement organizations. HIPAA protections expire entirely 50 years after death, though providers must also check state laws and other federal rules, such as 42 CFR Part 2 for substance use disorder records, which may impose stricter requirements. Source: Holland & Hart’s Health Law Blog
AI & Emerging Technology
- AI tools used in clinical trial protocol development and patient recruitment create unresolved compliance risks that sponsors bear alone, even when AI vendors cannot provide validation documentation. Because large language models produce non-deterministic outputs, sponsors cannot reproduce AI-generated inclusion criteria or satisfy ICH E6(R2) requirements for validated computerized systems, and the FDA’s January 2025 draft guidance on AI in drug development does not cover protocol design or drafting, leaving validation standards undefined. The FDA’s own internal AI tool, Elsa, has generated false citations and fabricated studies, illustrating that hallucinations in protocol development can produce incorrect dosing regimens or flawed statistical approaches without human verification. AI-powered recruitment tools, while capable of reducing trial costs by up to 40%, train on historically non-diverse datasets and can systematically exclude racial and ethnic minorities, older adults, children, and patients with comorbidities—contrary to the FDA’s December 2025 guidance requiring enrollment that reflects the intended-use population by age, sex, race, and ethnicity. To address these gaps, sponsors should validate reproducibility before IRB submission, audit recruitment algorithms for bias before enrollment, and require AI vendor contracts to include audit rights over model architecture, version control documentation, cooperation obligations for FDA proceedings, performance warranties, and indemnification for AI-specific harms. Source: Healthcare Law Insights
Hospital & Health System Governance
- Hospital and health system boards are not keeping pace with the governance demands created by cybersecurity risks, AI adoption, workforce shortages, shifting reimbursement models, and compliance requirements. A study from The Governance Institute finds that governance structures and board education have fallen behind today’s healthcare challenges, with trustees now expected to engage on topics ranging from M&A activity and physician alignment to data privacy and quality outcomes. Knowledge gaps are inconsistent across boards — some trustees carry financial expertise but lack grounding in cybersecurity, while others bring community leadership experience but are unfamiliar with reimbursement dynamics or physician compensation structures. Traditional education models, including long board meeting presentations and generic materials, fail to address these gaps or fit the schedules of trustees who carry outside professional responsibilities. Ongoing, tailored board education — rather than annual or compliance-driven training — is now considered necessary for effective oversight, organizational strategy, and patient outcomes. Source: VMG Health