Wade’s Health Law Highlights for May 27, 2025

Antitrust

State attorneys general are intensifying antitrust enforcement across multiple fronts. States are implementing “baby HSR” statutes requiring merging companies to file notifications directly with state AGs, with Washington recently adopting such laws and Colorado’s taking effect in August 2025. Litigation activity is increasing around healthcare and labor issues, exemplified by Michigan’s lawsuit against pharmacy benefit managers for price fixing and California’s action against no-poach agreements in the food processing industry. States are also bolstering criminal enforcement through initiatives like BRACE—a bid-rigging and criminal enforcement working group—while legislatures in California and New York advance bills to increase criminal penalties for antitrust violations. Companies must now consider state enforcement as carefully as federal oversight, with particular attention to transaction notifications, litigation risk, and enhanced criminal enforcement. Source: McCarter & English, LLP
The Department of Justice secured its first criminal wage-fixing conviction when a federal jury found a home health care operator guilty of conspiring with competitors to fix wages for home healthcare nurses. The April 14, 2025 verdict in the District of Nevada case relied heavily on text messages between the operator and competitors that referenced a “mutual agreement” on wages. This landmark conviction follows the DOJ’s 2016 guidance that wage-fixing agreements among labor-market competitors are per se illegal and subject to criminal prosecution, despite previous unsuccessful attempts to secure jury convictions in similar cases. The case is a cautionary tale of the risks of communications outside normal corporate monitoring. Source: Lathrop GPM

Bioprinting

3D printing is revolutionizing healthcare by enabling a shift from mass-produced solutions to customized treatments tailored to individual patients. The technology has transformed multiple medical fields, including prosthetics that can be made affordably for children, custom implants for facial reconstruction and spine repairs, and anatomical models that allow surgeons to practice complex procedures before operations. In pharmaceuticals, 3D printing creates personalized drug dosages and delivery systems, with the FDA approving the first 3D-printed drug Spritam in 2015. While bioprinting has progressed to creating tissue structures like liver tissue, developing full functional organs remains experimental, with current research focusing on smaller tissues and improving cell viability. Despite challenges with regulations, standardization, and accessibility, the integration of artificial intelligence with 3D printing promises further advances in medical applications through optimized designs and materials. Source: Ars Technica

Data Privacy

The Department of Justice’s new Data Security Program imposes extensive restrictions on healthcare organizations handling sensitive personal data with international partners. Effective April 8, 2025, the program regulates six categories of sensitive data including health information, biometric, and genomic data, with no exemptions for anonymized or de-identified information. Healthcare organizations must implement contractual safeguards when sharing data with any foreign entity, not just those in designated “countries of concern” (China, Russia, Iran, North Korea, Cuba, and Venezuela), with violations reportable within 14 days. The rule provides limited exemptions for federally-funded research, clinical investigations, and transactions required by federal law, while requiring organizations to develop comprehensive compliance programs before full enforcement begins July 8, 2025. Source: Baker Donelson

Drug & Devices

Biotech companies are increasingly turning to collaborative deal structures to navigate FDA staffing shortages and financial constraints. With FDA retirements and layoffs extending approval timelines, biotechs facing limited cash runways are using licensing agreements and development partnerships to secure alternative financing while reducing operational costs. These collaborations typically involve upfront payments, milestone-based compensation, and royalties, as exemplified by Zealand Pharma’s recent $5.3 billion collaboration with Roche for obesity treatment technology. However, Hart-Scott-Rodino filing requirements for transactions exceeding certain thresholds (now $126.4 million in 2025) may delay deal completions, with new rules extending filing timelines from under 10 days to at least 30 days and increased scrutiny from the FTC and DOJ on pharmaceutical industry transactions. Source: JD Supra

Emerging Technology

Brain-computer interface technology is advancing rapidly with four leading companies poised to expand human trials significantly in 2025. Paradromics, Synchron, Precision Neuroscience, and Neuralink each employ different implantation approaches, from Synchron’s blood vessel-based electrodes to Neuralink’s deep brain implants that penetrate seven millimeters into brain tissue. The number of people with these interfaces will more than double in the next 12 months as companies advance their FDA-approved trials, while Apple has announced plans to make its devices compatible with these implants. Though medical experts caution against viewing this technology as a consumer product due to surgical risks, Morgan Stanley projects the brain-computer implant market will reach $1 billion annually by 2041. These interfaces already enable paralyzed patients to control computers and communicate, with potential future applications including thought-to-speech translation and prosthetic limb manipulation. Source: Wall Street Journal
Taiwan is pioneering AI healthcare integration with Nurabot, an AI-powered robot nurse that handles routine hospital tasks to address nurse burnout. Developed through collaboration between Foxconn and Kawasaki Heavy Industries, Nurabot delivers medications, patrols wards, and guides visitors, allowing human nurses to focus on critical patient care as the world faces a projected shortage of 4.5 million nurses by 2030. The technology leverages NVIDIA supercomputers and digital twins—virtual replicas of hospital wards—to simulate and optimize operations before real-world implementation. Taichung Veterans General Hospital is currently conducting field trials with Nurabot, while future iterations may communicate in multiple languages, recognize faces, and assist in lifting patients. Despite challenges like data privacy concerns, Taiwan’s approach offers potential solutions to global healthcare staffing issues through AI integration. Source: Rude Baguette
IoT technology revolutionizes healthcare billing through automation and real-time data access. The systems enable automatic recording of usage and charges without manual compilation, providing staff with precise information for error-free bills while reducing labor costs. Patients gain transparency through digital portals displaying detailed bill breakdowns, which reduces disputes and encourages timely payments. Implementation challenges include data privacy concerns (59% of patients fear misuse of medical information), regulatory compliance with laws like HIPAA, compatibility issues between vendor systems, and high upfront costs despite long-term savings. Source: IoT For All

Fraud & Abuse

Texas rheumatologist Jorge Zamora-Quezada was sentenced to 10 years in prison for a massive health care fraud scheme that generated over $118 million in false claims. The 68-year-old doctor falsely diagnosed patients with rheumatoid arthritis and administered unnecessary toxic medications to defraud Medicare, Medicaid, TRICARE, and Blue Cross Blue Shield, resulting in insurers paying over $28 million. Patients suffered severe side effects including strokes, necrosis, hair loss, and liver damage from the unneeded treatments, while former employees described a workplace culture of fear with strict procedure quotas. Following his conviction on health care fraud and obstruction charges, Zamora-Quezada was ordered to forfeit $28,245,454 in assets, including 13 real estate properties, a private jet, and a Maserati that he purchased with his ill-gotten gains. Source: United States Department of Justice
The U.S. Department of Justice launched a new Civil Rights Fraud Initiative to leverage the False Claims Act against organizations receiving federal funding. The initiative, announced on May 19, 2025, targets entities that tolerate antisemitism, permit men in women’s spaces or female athletic competitions, or implement DEI practices deemed unlawful while certifying compliance with civil rights laws. DOJ will focus on organizations that knowingly engage in what the memorandum describes as “racist preferences” through DEI programs that allocate benefits based on race, ethnicity, or national origin. The department encourages private parties to participate by filing lawsuits as qui tam relators under the FCA, with potential implications for federal contractors, educational institutions, and other federal funding recipients. Source: The FCA Insider
A jury has convicted 64-year-old Paul Njoku on all counts for orchestrating a Medicare fraud scheme through his home health care agency in Houston. Evidence showed Njoku forged signatures of doctors and nurses on medical documents, continued using a departed nurse’s signature without permission, and bribed a doctor to approve services. From 2015 to 2019, his company Opnet Health Care Services billed Medicare over $400,000 and received more than $360,000 for claims without proper documentation. Njoku now faces maximum penalties of 10 years for conspiracy to commit health care fraud, five years for false statements, and two additional years for identity theft, along with potential fines of $250,000 per count. Source: United States Department of Justice
Fresno-based Community Health System and affiliate Physician Network Advantage paid $31.5 million to settle allegations of an elaborate kickback scheme involving their Epic EHR system. According to a 2019 whistleblower lawsuit, the organizations provided physicians with extravagant incentives to adopt the Epic EHR system, including access to a $1.1 million wine and cigar lounge, luxury trips, gifts worth tens of thousands of dollars, and hiring family members of executives and physicians. The former controller who filed the lawsuit discovered approximately 1,000 bottles of wine after a fire at the organization’s offices, which sparked the investigation into the alleged scheme that included subsidies for EHR adoption in exchange for government healthcare program referrals. While Community Health System claims the lawsuit contains inaccurate information that doesn’t reflect their standards, Physician Network Advantage stated the settlement concludes the matter without admission of legal liability. Source: Becker’s Hospital Review

Gender-Affirming Care

Attorney General Pam Bondi has directed the Department of Justice to pursue extensive investigations and prosecutions against providers of gender-affirming care for transgender minors. The unverified internal memorandum outlines three primary directives: criminal investigation of what the memo terms “FGM” cases with potential 10-year prison sentences, investigation of pharmaceutical companies for alleged violations of the Food, Drug and Cosmetic Act related to puberty blockers and hormones, and pursuit of False Claims Act violations for billing federal healthcare programs for gender-affirming procedures. Bondi has also instructed the Office of Legislative Affairs to draft legislation creating a private right of action for children and parents who received such care, with long statutes of limitations and retroactive liability. The Attorney General declared these directives a “top priority,” stating, “Under my leadership, the Department of Justice will bring these practices to an end.” Source: Healthcare Law Insights
The Texas House approved a bill requiring medical records to include a field for sex assigned at birth, with penalties up to $250,000 for providers who violate its provisions. The legislation includes provisions for healthcare providers’ use of digital servers and artificial intelligence while mandating disclosure of AI use for diagnoses. Democrats opposed the measure, arguing it forces transgender patients to have a gender marker they don’t identify with displayed in their records, while proponents contend it ensures physicians have complete medical information for accurate care. The bill also grants parents unrestricted access to their minor children’s medical records unless blocked by court order. The bill requires one more House vote before heading to the Senate and potentially to Governor Abbott’s desk. Source: The Texas Tribune

Medical Malpractice

Four key states are implementing significant medical malpractice reforms that fundamentally reshape how liability cases proceed through the legal system. Texas restricts evidence to actual payments rather than billed amounts while requiring disclosure of third-party litigation funding, Georgia eliminates “anchoring” tactics by plaintiffs and imposes procedural barriers including discovery stays, Utah establishes minimum insurance requirements and reporting mechanisms to address rural provider shortages, and South Carolina narrows joint liability by requiring fault allocation across all parties. These state-level reforms demonstrate a shift away from headline-grabbing damage caps toward granular changes to legal mechanics that advantage defendants earlier in proceedings, potentially signaling a nationwide trend in malpractice litigation rules. Source: Scott Righthand

Medicare

The Centers for Medicare & Medicaid Services will implement annual audits of Medicare Advantage plans to address overpayment issues. The new measure represents a significant shift in CMS oversight of the Medicare Advantage program. This action aims to recover funds from insurers who receive payments for conditions not properly documented in patient records. Source: Modern Healthcare
The Supreme Court has significantly narrowed Disproportionate Share Hospital (DSH) reimbursement by ruling that only Medicare patients who received cash Supplemental Security Income payments during their hospitalization month can be counted in payment calculations. In a 7-2 decision in Advocate Christ Medical Center v. Kennedy, the Court rejected arguments from over 200 hospitals that sought to include all SSI-enrolled patients regardless of whether they received payment in the specific month. The Court determined that “entitled to SSI benefits” refers strictly to monthly cash payments rather than general program enrollment or non-cash benefits like continued Medicaid eligibility. This ruling aligns with the Department of Health and Human Services’ interpretation that SSI eligibility is assessed month-by-month based on income and resources. The decision will likely reduce financial support for safety-net hospitals serving economically disadvantaged Medicare patients, as they can no longer count patients enrolled in—but not actively receiving—SSI payments during their hospitalization. Source: Health Care Law Brief

Mental Health

Federal departments have suspended enforcement of the 2024 Mental Health Parity regulations until ongoing litigation concludes plus 18 months . The suspension, announced on May 15, 2025, reinstates the 2013 Final Rule and affects three key requirements: outcomes-based testing, mandatory meaningful benefits across classifications, and fiduciary certification obligations. Plan sponsors and insurers must still conduct nonquantitative treatment limitation comparative analyses and maintain compliance with statutory obligations under the Consolidated Appropriations Act. The departments indicated they will reexamine their enforcement approaches while encouraging states to adopt similar enforcement positions. Despite the suspension, health plans should continue good-faith compliance efforts with the remaining mental health parity requirements. Source: McDermott Will & Emery