Health Care

On May 14, 2025, Fresno Community Hospital and Medical Center d/b/a Community Health System (CHS) and its technology partner, Physicians Network Advantage, Inc. (PNA), agreed to pay $31.5 million and enter into a Corporate Integrity Agreement to settle allegations of violating the federal anti-kickback statute (AKS) and physician self-referral law (Stark Law) under the False Claims Act (FCA). The alleged conduct at issue revolved around CHS’s plan beginning in 2013 to assist local area physicians in their adoption of the electronic health records (EHR) platform used by CHS and its establishment of PNA to support that goal. For decades, the government has strongly promoted the adoption of interoperable EHR platforms by physician practices (e.g., Meaningful Use payments), given that EHR systems allow for better care coordination, increased efficiency, and improved patient experience. Moreover, as described in more detail below, the Department of Health and Human Services (HHS) adopted an AKS safe harbor and Stark Law exception that allowed certain entities, including hospitals, to donate EHR technology and services to physicians if certain conditions are satisfied. However, CHS’s and PNA’s alleged conduct exceeds what is permissible under the relevant safe harbor and exception.

The pharmaceutical and medical device industries have long utilized speaker programs, which typically involve retaining health care professionals to speak or present on the companies’ products to educate their peers. Speaker programs continue to be relatively common in the industry and can play an important role in educating health care professionals on the appropriate uses of companies’ products and on emerging research or development programs. However, two recent enforcement actions by the U.S. Department of Justice (DOJ) highlight the government's ongoing scrutiny of these programs for potential violations of the federal Anti-Kickback Statute (AKS). 

Nineteen states plus the District of Columbia filed a federal Complaint in U.S. District Court for the District of Rhode Island on May 5, 2025 alleging that the Trump Administration’s recent activities to downsize and restructure the Department of Health and Human Services (HHS) are unlawful under both the U.S. Constitution and the Administrative Procedure Act (APA). The coalition of states, led by New York, is asking the judicial branch for declaratory and injunctive relief “to prevent the unconstitutional and illegal dismantling of the Department.” In addition to New York and the District of Columbia, states joining the lawsuit comprise Arizona, California, Colorado, Connecticut, Delaware, Hawai'i, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Wisconsin (together, the Plaintiff States). This is but one among multiple legal challenges to the ongoing programmatic and research cuts within HHS and its sub-agencies, such as the National Institutes of Health, Food and Drug Administration, and Centers for Medicare and Medicaid Services. 

After significant fanfare and anticipation, President Trump issued his “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” Executive Order (Executive Order) this week.  The Executive Order seeks to reduce the price of drugs by requiring manufacturers to offer the United States most-favored-nation pricing, or in other words, the lowest price offered to any “comparably developed” foreign country that pays for the same drugs. 

A federal appellate court has handed down the first appellate-level decision addressing the merits of drug manufacturers’ challenges to the IRA’s Drug Negotiation Program.

The Final Rule provides our first insight into how the new Administration may approach Medicare Advantage (MA) and Part D policies. We have summarized key provisions adopted in the Final Rule and those the Trump administration expressly declined to adopt.

Arkansas Governor signed Act 624 on April 16, 2025, banning PBMs from acquiring or holding a direct or indirect interest in a pharmacy. This state-led move may inspire similar laws elsewhere.

Over the past few weeks, we have been closely following the Trump Administration’s restructuring of the Department of Health and Human Services (HHS), the major reduction in the department’s workforce (RIF), and its broader deregulation strategy. A recently leaked Office of Management and Budget (OMB) Budget “passback” memorandum to HHS, which outlines proposed amounts for the President’s HHS budget request for fiscal year 2026 (the “Leaked Budget”) as well as departmental restructuring plans, provides additional insights into the Administration’s priorities for HHS and the agencies under its purview. In addition, on May 2, 2025, the Administration submitted to the Senate Committee on Appropriations the President’s “skinny” FY 2026 budget request (the “Skinny Budget”), which will be followed in the coming weeks by a more complete FY 2026 federal budget request. 

On April 15, 2025, President Trump issued an Executive Order instructing federal agencies to implement a variety of drug pricing reforms. The Executive Order addresses drug pricing from several different angles, including pharmacy benefit manager (“PBM”) competition and transparency, Medicare and Medicaid drug pricing, international importation, and drug manufacturer competition (the “Executive Order”).

The Executive Order, which is the first significant action taken by the current Administration to address drug prices, echoes initiatives and policy statements announced during the first Trump Administration. However, most of the drug pricing reforms announced during the first Administration were never fully implemented. It is unclear how many of the proposals in this Executive Order will ultimately be implemented, but it does provide the clearest outline yet of the Administration’s policy priorities regarding drug prices.

It’s no secret that President Trump, his Cabinet, and other executive branch leaders are prioritizing deregulatory activities over more historical federal governance approaches. Indeed, one of President Trump’s earliest executive orders – issued on January 31, 2025 – is entitled “Unleashing Prosperity Through Deregulation” and states that for each new regulation issued, at least ten prior regulations must be identified for repeal (and it defines the term “regulation” broadly to include memoranda, guidance documents, and policy statements, among others). In addition to this new 10-for-1 directive, on February 19, 2025, President Trump issued executive order 14219, “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative” (EO 14219). The president’s order directs all executive agency heads, in coordination with the Director of the Office of Management and Budget (OMB) and its Department of Government Efficiency (DOGE) Team Lead, to review all existing regulations for “consistency with law and Administration policy” and, within 60 days, to identify regulations that fall under certain categories.

Host Bridgette Keller is joined by Members Deb Daccord and Dan Cody to discuses the evolving legislative and regulatory landscape impacting healthcare transactions, particularly for private equities and hedge funds.

The Office of Inspector General for the Department of Health and Human Services (OIG) recently issued a favorable Advisory Opinion on a proposed arrangement by a community health center (Health Center) designated under Section 330 of the Public Health Service Act (PHSA). The Health Center provides certain social services to individuals (e.g., providing diapers and baby gear to indigent families; assisting crime victims with replacing locks) and proposes to identify individuals in need of primary care services while providing them social services, inform them of available primary care services, and schedule appointments for them to receive such primary care services from the Health Center or a local provider. Noting that the social services would qualify as remuneration that could induce individuals to self-refer to the Health Center, the OIG addressed whether this plan would trigger sanctions under the federal Anti-Kickback Statute (AKS) and the Beneficiary Inducements CMP. Ultimately, the OIG approved the proposal based on the Health Center’s inclusion of several safeguards, including the use of an objective criterion for identifying individuals and the inclusion of multiple providers in the referral list.

As spring arrived in the mid-Atlantic region, the Department of Health and Human Services (HHS) under Robert F. Kennedy, Jr. followed through with a previously announced Reduction in Force (RIF) that reduced the department’s workforce by a reported 10,000 employees and started the process of restructuring the organization as a whole. Now that the dust is starting to settle, we are beginning to analyze the RIFs and how they could impact key health care stakeholders, including Medicare Advantage Plans, providers, and biopharmaceutical and medical device manufacturers. This post provides a brief overview of the restructuring to date, HHS’s reduction in workforce, and their potential impacts. We will continue to monitor these developments and provide future updates to Mintz clients and friends.

The obvious result of the legal shootout between the U.S. Food & Drug Administration (FDA) and clinical laboratory trade associations, the American Clinical Laboratory Association and the Association for Molecular Pathology, in the Eastern District of Texas to determine whether the Federal Food, Drug, and Cosmetic Act (FD&C Act) permits the agency to regulate laboratory developed tests (LDTs) is a complete victory for clinical laboratories. The U.S. district judge’s decision, issued on March 31, 2025, vacated the May 2024 final rule through which FDA sought to specify that LDTs are agency-regulated in vitro diagnostic products (IVDs) and to describe a plan for phasing-in enforcement of existing medical device regulations for such products over four years (see our previous posts on the LDT final rule here and here). In adopting the plaintiffs’ arguments wholesale, however, the judge created some incongruities in the relevant regulatory frameworks, as well as several quandaries for FDA and the clinical laboratory industry going forward. These inconsistencies could have greater consequences down the road if the Trump administration decides not to appeal the ruling.

The first quarter of 2025 has been eventful for New York’s Disclosure of Material Transactions Law. As discussed in our recent blog post, the proposed Fiscal Year 2026 New York State Executive Budget (FY 26 Executive Budget) contains an amendment that would alter reporting parties’ notice requirements, extend waiting periods, and increase oversight of material health care transactions by the New York State Department of Health (DOH). Now, nearly a year and a half after the Disclosure of Material Transactions Law took effect, DOH has published Public Health Law Article 54-A, Material Transactions Frequently Asked Questions (FAQs) on its website. The law currently requires “health care entities” engaged in a “material transaction” to provide written notice of the transaction to DOH at least 30 days before the transaction closing as well as notice to DOH upon the transaction closing. With the FAQs, DOH seeks to “provide responses to common questions the Department has received to date” and clarify health care entities’ obligations under the Disclosure of Material Transactions Law. The FAQs expand on the statute’s language, providing guidance on what “health care entities” are subject to the law, what constitutes a “material transaction,” how a transaction’s impact will be assessed, and the ability to comment on a proposed transaction.

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released its 2025 Marketplace Integrity and Affordability Proposed Rule (Proposed Rule), proposing a number of enrollment and eligibility policies impacting both Federal and State Exchanges. While CMS frames these policies as necessary to combat fraud and abuse, the impact will be a reduction in enrollment in the ACA Marketplace – with the Proposed Rule estimating that between 750,000 and 2 million fewer individuals enroll in health insurance plans on the Exchanges in 2026. 

This blog outlines the major provisions of the Proposed Rule, followed by a discussion of their potential impact on plans participating in the ACA Marketplace.

On March 12, 2025, in one of the Trump Administration’s first actions with respect to the Center for Medicare and Medicaid Innovation (CMMI), CMMI announced that it would prematurely terminate four alternative payment model (APM) demonstration models by December 31, 2025. CMMI’s decision was not entirely unexpected. In response to a 2021 report from a Congressional advisory committee recommending that CMMI “streamline” its portfolio of demonstrations, the Biden Administration initiated a 10-year “strategic refresh” of CMMI. Similarly, a critical report from the Congressional Budget Office (CBO) about the net cost initiated a wave of criticism from Republicans. Combined with the Trump Administration’s hyperfocus on reducing government spending (based on CMMI’s estimation, terminating the demonstrations early will save the federal government $750 million), it is not particularly surprising that CMMI was targeted for some cuts.

We have written at length about the U.S. Food and Drug Administration’s (FDA’s) actions to promulgate regulations specifying the agency’s authority to regulate laboratory developed tests (LDTs) as medical devices and to phase out the agency’s historical approach of enforcement discretion towards such tests (see here, here, here, and here). However, one infrequently considered regulatory compliance issue for LDTs is their reliance on separate specimen collection devices or convenience kits. All LDTs require the use of some form of biological specimen, such as blood or saliva, which may be collected by health care professionals in a clinical setting or by consumers in their homes before being submitted to a laboratory for testing. 

Host Bridgette Keller discusses the new Massachusetts Health Care Market Review Law and what this means for health care providers, investors, and other key stakeholders. She is joined by Member Deb Daccord, Of Counsel Cassie Paolillo, and Of Counsel Kate Stewart, who share their insights on the law’s far-reaching implications.