Health Care

HHS OCR launches civil enforcement of the Part 2 Final Rule. Learn key compliance updates for SUD records, HIPAA alignment, consents, notices, and breaches.

The Federal Bar Association’s 2026 Qui Tam Conference featured two sets of remarks from Deputy Assistant Attorney General of the U.S. Department of Justice’s (DOJ) Commercial Litigation Branch, Brenna Jenny (DAAG Jenny).  In her keynote address, DAAG Jenny offered insights into the current administration’s False Claims Act (FCA) enforcement philosophy and priorities. DAAG Jenny also addressed “Illegal DEI” FCA enforcement during a panel discussion and offered the Trump administration’s view of discrimination as a basis for potential FCA liability. Various other current and former DOJ officials offered insights on wide-ranging topics.  Below, we summarize the top 10 highlights from the Qui Tam Conference.

Legal battle over Prevagen heads to the Second Circuit as FTC and NYAG dispute nationwide injunction, state authority, and standards for dietary supplement claims.

On January 30, 2026, the Department of Labor released a proposed rule (Proposed Rule) that would end long‑running confusion about how ERISA disclosure obligations apply to PBMs under the Consolidated Appropriations Act, 2021, and give fiduciaries of ERISA‑covered self‑insured group health plans significantly expanded visibility into PBM services and compensation. The proposal pairs broad compensation transparency with comprehensive audit rights covering PBMs and their affiliates, agents, and subcontractors, including PBM‑affiliated brokers and consultants.

The Proposed Rule and the Consolidated Appropriations Act, 2026, both of which were announced last week, will materially impact the PBM industry, particularly PBM’s arrangements with their plan clients. Below we provide an initial summary of the Proposed Rule’s key provisions and discuss its anticipated impact on PBMs, self-insured group health plans, and other stakeholders. 

On February 3, 2026, Congress passed – and the President signed – the Consolidated Appropriations Act, 2026 (2026 CAA). The legislation includes a long‑anticipated and far‑reaching package of PBM reforms. These reforms draw from the PBM Reform Act of 2025 and other legislative proposals and will significantly reshape PBM operations across the commercial market and Medicare Part D beginning in 2028–2029.

On January 22, 2026, the Department of Justice (DOJ or the Department) Criminal Fraud Section issued its 2025 Year in Review summary (YIR Summary). Our more detailed analysis of the full YIR Summary can be found here. DOJ’s Health Care Fraud Unit (the HCF Unit) is focused on “prosecuting complex health care fraud matters and cases involving the illegal prescription, distribution, and diversion of controlled substances.” To carry out its mission, in 2025, the HCF Unit operated 8 Health Care Fraud Strike Forces in 26 federal judicial districts across the nation. The HCF Unit’s reported average return on investment is $106.76 per $1 spent. 

As the telehealth industry is acutely aware, Medicare’s telehealth flexibilities and the Acute Hospital Care at Home Program, both of which have been in place since 2020, expired on January 31, 2026. While on that day the Senate passed a bipartisan minibus legislative package funding several federal agencies including the Department of Health and Human Services, the House was unable to immediately pass the legislation. As such, there has been a partial government shutdown – until now.

The Department of Justice's (DOJ or the Department) Criminal Fraud Section has undergone its most significant reorganization in years, according to its recently released 2025 Year in Review. Those changes and the current climate of enforcement uncertainty require more vigilance, not less, from corporate compliance and law departments.

The Office of Inspector General (OIG) for the Department of Health and Human Services’ most recent unfavorable Advisory Opinion is a stern reminder to healthcare organizations to consider the fraud and abuse risks of offering sign-on bonuses and other financial incentives to employees. Typically, sign-on bonuses and other forms of compensation to employees pose little fraud and abuse risk because the federal Anti-Kickback Statute (AKS) has a broad employment safe harbor that applies to any remuneration paid to employees, regardless of the compensation methodology. However, in this Advisory Opinion, the sign-on bonuses operated as advertisements for new patients and not just as a way to entice potential employees to join the organization. The OIG determined that sign-on bonuses structured in this manner do not satisfies the safe harbor and, if the requisite intent was present, would violate the AKS).

In September 2025, the New York State Assembly introduced Assembly Bill A9042, which would require veterinary clinics to provide notice and undergo Attorney General review for certain “material change” transactions, such as mergers or significant asset transfers. Momentum is building in 2026, with the bill recently referred to the Agriculture Committee for review on January 7th. This initiative builds on New York’s 2023 action to regulate healthcare transactions by requiring notice to the Department of Health for similar changes, but it goes further by extending oversight to the veterinary sector. Unlike most states, which primarily regulate ownership through bans on the corporate practice of veterinary medicine, the law would require formal notice and Attorney General review of certain transactions in the veterinary industry. As private equity investment continues to reshape veterinary care, this proposal could signal a broader trend toward increased regulation in 2026, potentially making New York the first state to set this precedent and raising the question of whether others will follow. This post will examine the bill’s key provisions and explore how current state laws govern veterinary practice ownership across the United States.

The end of 2025 saw several notable developments for the telehealth industry with early 2026 poised to potentially challenge the industry with the impending expiration of the short-term extension of the Medicare telehealth flexibilities. Below we highlight activity from late 2025 and provide an outlook for 2026.

On December 23, 2025, the Centers for Medicare & Medicaid Services (CMS) announced the Better Approaches to Lifestyles and Nutrition for Comprehensive hEalth (BALANCE) Model, a voluntary, alternative payment model (APM), designed to expand access to GLP-1 medications.  At its core, the BALANCE Model intends to promote the use of both GLP-1 medications and lifestyle interventions to help prevent chronic conditions and combat obesity, while also managing the costs of such medications for Medicare and Medicaid beneficiaries and taxpayers. 

The Trump administration closes 2025 with nine major drug pricing deals, securing discounts on key medications and boosting U.S. pharmaceutical manufacturing investments.

CMS proposes two pilot programs: GUARD and GLOBE, to curb Medicare drug costs by tying rebates to international pricing benchmarks. Public comments open until Feb. 23, 2026.

Last week, the Centers for Medicare & Medicaid Services (CMS) released its proposed Contract Year 2027 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program (Proposed 2027 Rules).

As is common for the annual proposed rules, the Proposed 2027 Rules cover a broad range of topics. In the last few years, the agency has lost multiple legal cases challenging the validity of its rules and/or how it implements its rules – it has lost cases relating to Star Ratings, its updated marketing and communications rules that were adopted for 2025, and most recently, the risk adjustment extrapolation rule. The Proposed 2027 Rules broadly touch on all of these regulatory areas. In its very brief summary of the Proposed 2027 Rules, CMS also highlights changes to Part D drug coverage, the enrollment process, and special needs plans. The Proposed 2027 Rules also include multiple Requests for Information (RFI). Below are some initial takeaways.

Since May, the Trump administration has used tariffs and Most Favored Nation (MFN) drug pricing threats as a means to pressure pharmaceutical manufacturers to lower drug prices in the U.S. This pressure culminated in a first-of-its-kind deal with Pfizer.

Since our last update, four other manufacturers have struck deals with the Trump administration aimed at expanding drug access and improving affordability, particularly targeting the GLP-1 and fertility pharmaceutical markets. These agreements reflect the growing consumer demand for GLP-1 drugs and IVF treatments while aligning industry leaders with the federal agenda on health care affordability. In this blog post, we’ll explore the key developments that have followed the Pfizer deal, including how other pharmaceutical companies are responding.

On November 5, 2025, CMS published the CY 2026 Physician Fee Schedule Final Rule (Final Rule), which includes changes to how drug manufacturers must treat Bona Fide Service Fees (BFSFs) in the context of Average Sales Price (ASP) submissions. In the Final Rule, CMS opted not to finalize its proposal to modify the BFSF definition to require fair market value (FMV) methodology standards, FMV reassessments, and independent third-party valuations. This is a notable departure from the proposed rule, which we covered in a prior blog post. However, CMS is moving forward with several important provisions that impact how manufacturers and other stakeholders document and report BFSFs when calculating ASP for Medicare Part B drugs. This update highlights the finalized requirements that stakeholders should now prepare to implement effective January 1, 2026.

Known for its aesthetics and wellness culture, California continues to be a leading destination for new wellness and medical aesthetics practices (collectively, medical spas). Yet, unlike other states previously discussed in this series, California does not currently have any laws or regulations specifically intended to govern medical spas. Depending upon the level of clinical care provided, medical spas in California may be subject to less-restrictive cosmetology laws and regulations, or the stricter laws and enforcement mechanisms applicable to traditional medical practices, including a robust set of rules regulating ownership, supervision, scope of practice, and advertising. 

Understanding whether a medical spa is subject to medical practice laws is a critical analysis that owners and operators in California should determine prior to providing any services in the state. This post explores the fine line between medical spas subject to purely cosmetology requirements versus medical practice laws, highlighting the legal risks and compliance obligations faced by medical spas operating under the purview of traditional medical provider laws and regulations.