Health Headlines: March 2025

In late 2020, the first Trump administration finalized regulations which require hospitals and health care plans to disclose treatment prices and cost-sharing information online. In February 2025, the second Trump administration signed an executive order that directs Cabinet secretaries overseeing the Departments of Health and Human Services (HHS), Treasury, and Labor to ensure that these regulations are enforced.

Specifically, the executive order: (1) gives HHS 60 days to propose a regulation to require hospitals to publicly post standard charge information, (2) gives all three agencies 90 days to issue advance notice of proposed rulemaking regarding requiring healthcare providers, health insurance issuers, and self-insured groups health plans to post the same information, and (3) gives HHS 180 days to issue a report describing the manner in which the federal government or the private sector are impeding healthcare price and quality transparency for patients, and providing recommendations for eliminating these impediments.

Concerns are rising that these transparency rules could result in forced disclosure of commercially sensitive information or collusion on drug prices. These concerns are weighed against the tacit benefits of transparency for consumers in the healthcare sector.

As a means of subsidizing proposed tax cuts, the United States Congress is currently debating whether to cut federal funding for Medicaid expansion, a program created under the Affordable Care Act and adopted by 40 U.S. states and Washington D.C. Medicaid expansion allows states to extend Medicaid coverage to individuals up to 138% of the federal poverty level using mostly federal funds.

Under the current model, the federal government pays for 90% of costs for Medicaid expansion enrollees. This 90% coverage is referred to as the federal match rate, or “FMAP.” If the budget cuts reduce the FMAP to align with the lower percentages under traditional Medicaid, states may attempt to pick up the cost differential to maintain these programs, but many states are likely to abandon their Medicaid expansion programs altogether, resulting in a drastic change in enrollment.

The Kaiser Family Foundation estimates that eliminating the enhanced FMAP could reduce Medicaid spending by nearly one-fifth, amounting to $1.9 trillion, over a 10-year period, and that up to a quarter of all Medicaid enrollees (20 million people) could lose coverage. Loss of coverage to such a degree is likely to have a ripple effect that ultimately requires healthcare providers to foot the bill for decreased services and uncompensated care. Estimates suggest that hospitals would be most adversely affected, particularly those in rural areas whose surrounding populations rely heavily on Medicaid expansion for coverage. Projections also suggest a massive decrease in prescription drug spending. 

The CMS Innovation Center has announced that it will terminate four Medicare payment models by December 31, 2025, to save nearly $750 million in taxpayers' money. The Medicare payment models set for early termination are: Maryland Total Cost of Care (originally scheduled to run through 2026), Primary Care First (2021-2026), End-Stage Renal Disease Treatment Choices (2021-2027; which will require rulemaking for termination), and Making Care Primary (2024-2034). CMS states that these changes are to “better align with the CMS Innovation Center’s statutory mandate and to protect taxpayers.” At least for the Maryland Total Cost of Care Model, and subject to discussions with State authorities, there will be a transition to the AHEAD model, beginning its implementation period in January 2026.

In addition to terminating the above models, the CMS Innovation Center also announced that it will no longer pursue two previously announced (but not yet implemented) models, namely the Medicare Two Dollar Drug List Model and “Accelerating Clinical Evidence” models, in view of the flexibility provided by President Trump’s rescission of Executive Order 14087 on January 20, 2025.

On March 17, 2025, the U.S. Department of Health and Human Services (HHS) filed a cross motion for summary judgment against three drug manufacturers – Eli Lilly, Bristol Myers Squibb, and Novartis – defending a Biden-era position that the manufacturers’ proposed rebate models are unlawful under the 340B drug pricing program. In its filing, HHS argues its decision to reject the manufacturers’ rebate proposals was “within its statutory authority” in part because the proposals would have “upended” the way the 340B program has operated for more than 30 years. HHS’s motion indicates a continuation by the current administration of the agency’s position against the proposed rebate models. A copy of the motion can be found here.

Congress created the 340B program to allow certain safety-net healthcare providers (e.g., certain hospitals, community health centers, and other federally funded providers) serving low-income patients to purchase outpatient drugs at a reduced cost. To implement the program, HHS enters into a Pharmaceutical Pricing Agreement with participating manufacturers requiring the manufacturer to offer its pharmaceutical products to those providers at or below the statuory ceiling price. Drug manufacturers are required to participate in the 340B program in order to have access to Medicaid and Medicare Part B benefits. Accordingly, manufacturers may opt out of the program at the expense of losing access to the drug coverage provided under such federal healthcare programs.

Last year, Eli Lilly, Bristol Myers Squibb, and Novartis each separately announced plans to end the upfront discounts currently offered to effectuate the reduced 340B drug pricing in favor of new rebate processes. In response, the U.S. Health Resources and Services Administration of HHS, the agency tasked with administering the 340B program, warned the manufacturers that their proposed rebate models are unlawful under the 340B program and threatened both the imposition of civil monetary penalties and removal from Medicaid and Medicare Part B programs should the manufacturers proceed with implementation of such models. In November, the manufacturers each filed lawsuits against the federal government over such denials.

HHS’ cross motion for summary judgment is the latest development in the dispute over manufacturers’ effectuation of 340B drug pricing, and indicates the dispute will continue under the current administration.

The Centers for Medicare and Medicaid Services (CMS) released data on Self-Referral Disclosure Protocol (SRDP) settlements for 2024, which reflected a third consecutive year of sharp increases in the number and value of settlements. The number of settlements (314) and the aggregate amount of the settlements ($24.7 million) are both nearly twice as high as the same figures from 2023 (176 settlements totaling $12.6 million). The increases likely reflect increasing awareness of the SRDP program and CMS’s stated commitment to quicker resolution of disclosed violations.

The Affordable Care Act (ACA) created the SRDP program in 2010, by authorizing the Secretary of Health and Human Services to reduce penalties for voluntarily disclosed violations of the physician self-referral law (commonly referred to as the “Stark Law”). The Stark Law imposes strict civil liability on physicians who refer patients for certain Medicare-payable designated health services (such as hospital, clinical laboratory, and imaging services, durable medical equipment, and outpatient prescription drugs) to entities with which the physicians have financial relationships, unless specific exceptions are met. The SRDP program allows providers to avoid the harshest penalties under the Stark Law by voluntarily disclosing what are sometimes technical or unknowing violations. To make a voluntary disclosure, providers must generally submit to CMS a completed SRDP Disclosure Form, the applicable provider information form, a financial analysis worksheet, and a certification of accuracy by an authorized person.

On March 10, 2025, the Centers for Medicare & Medicaid Services (CMS) issued the “Marketplace Integrity and Affordability Proposed Rule.” The stated goals of the Proposed Rule are to propose “standards for the Health Insurance Marketplaces” and “health insurance issuers, brokers, and agents who connect millions of consumers to Affordable Care Act (ACA) coverage,” to “protect consumers from improper enrollments and changes to their health care coverage,” and to “establish standards to ensure the integrity of the Marketplaces.” The effect of the Rule, however, would be to make it significantly harder for consumers to enroll in ACA plans, and CMS estimates that between 750,000 and 2 million people will lose ACA coverage in 2026 if the regulation is implemented as proposed. Some of the barriers to coverage that this Rule would implement include: heightening the information and documentation burden needed to verify an individual’s income for coverage eligibility; modifying re-enrollment procedures to require payment of monthly premiums until an individual confirms their eligibility; shortening the ACA open enrollment period; and eliminating special enrollment periods for certain individuals. Notably, the rule would also make individuals present in the United States under Deferred Action for Childhood Arrivals (DACA) ineligible for enrollment in ACA marketplace and basic health program coverage, and prohibit ACA plans from covering certain gender affirming care options as essential health benefits.

A summary of the Proposed Rule can be found here, and the Rule can be found in its entirety here. The Rule is currently open for public comment, and comments can be submitted here.

On March 11, 2025, the U.S. Department of Health and Human Services Office of the Inspector General (OIG) issued its Medicaid Fraud Control Units Annual Report: Fiscal Year 2024 (the Report). The Report presents annual data on case outcomes related to Medicaid provider fraud and patient abuse or neglect, which are investigated and prosecuted by Medicaid Fraud Control Units (MFCUs). OIG provides oversight of MFCUs, including review of each MFCU’s application for recertification required to receive federal funding. In this process, OIG collects and publishes certain statistical data of MFCUs.

The Report includes MFCU case outcomes which resulted in (i) criminal convictions and (ii) civil settlements and judgments, including recoveries therefrom. The data comes from MFCUs operating in all 50 U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

Criminal convictions: MFCU investigations resulted in 1,151 criminal convictions, including 334 for patient abuse or neglect and 817 for fraud. Such convictions resulted in OIG excluding 1,042 individuals and entities from federally funded healthcare programs. MFCUs reported $961 million of criminal recoveries in fiscal year 2024, up from $272 million in fiscal year 2023, in large part due to $513 million in criminal recoveries by the California MFCU.

Civil convictions: MFCU investigations resulted in 493 civil settlements and judgments, an increase from 436 civil settlements and judgements in fiscal year 2023. However, civil recoveries were $407 million, an over 50% decrease from fiscal year 2023.

In total, MFCUs recovered approximately $1.4 billion as compared to approximately $396 million spent on operations, or $3.46 for every $1.00 spent.

A copy of the full report can be found here.

In the March edition of the American Journal of Roentgenology, Brown University researchers analyzed whether private-equity acquisition of U.S. radiology practices from 2013 to 2023 yielded substantial consolidation of PE-employed radiologists in specific geographic markets. Assistant Professor Yashaswini Singh, known for her research of the effects of private-equity acquisition on physician practice patterns, and MD candidate Mihir Kunte led in this study.  Their analysis revealed significant concentrations in a few markets.

Private equity employed 12% of radiologists across the U.S. in 2023.  Radiology Partners emerged as the dominant PE firm employing – by far – the most radiologists nationally (70%).  Nevada topped the list.   Approximately 47% of radiologists in the state were employed by private equity in 2023.  Arizona, Alaska, Texas and Florida (in decreasing order) rounded out the top five markets.  For those interested in other markets, they shared data stratified by state in their manuscript (link below).

Singh and Kunte posited that higher consolidation might allow participating PE firms to negotiate higher reimbursements and to increase imaging utilization in the market, potentially driving profitability. They emphasized the need for further research on the impact of consolidation on the healthcare delivery, patient access and welfare, and workforce turnover.  All of which contribute to or detract from the bottom line.  Additionally, they suggested secondary buyout trends in consolidated markets is another research-worthy topic.

The final peer-reviewed manuscript is found here: Private Equity Acquisitions of Radiology Practices From 2013 to 2023: National-and State-Level Analyses | AJR.

CVS has been ordered to provide additional documents to the Federal Trade Commission (FTC) in connection with a December 2023 civil investigative demand (CID). The FTC is investigating CVS and its pharmacy benefits manager, Caremark Rx, for possible Section 5 violations for unfair or deceptive business practices under the FTC Act. In the initial CID, the FTC asked CVS to produce documents from January 1, 2017 through 30 days before the final document submission. In August 2024 the parties agreed that CVS would substantially complete production by February 28, 2025. Under the new production schedule, CVS refused to turn over documents created after April 1, 2024, in violation of the CID, citing an undue burden. CVS has also refused to produce any documents, regardless of their creation date, as of September 2024 citing multiple ongoing FTC investigations.

The FTC filed a petition to enforce the CID in January 2025, seeking all documents created prior to December 31, 2023 to be produced by the February 28 deadline and all documents produced in 2024 to be provided within 30 days of the initial deadline. CVS responded that they intended to comply with the February 28 deadline for documents created prior to December 31, 2023 and that producing documents from 2024 would create an “undue burden” on the company.

Judge Bates of the U.S. District Court for the District of Columbia held that the CID should be enforced for all documents created prior to December 31, 2024. The court found that the CID should be enforced as “the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant.” (citing FTC v. Texaco, Inc., 555 F.2d 862, 872 (D.C. Cir. 1977)). The court also supported the FTC’s request to include documents produced in 2024, stating that CVS did not meet the high burden of demonstrating that the request was unreasonable, ordering that the documents be produced by the end of April.

A copy of the order can be found here. The petition to enforce the CID can be found here.

In January, CMS selected Ozempic, Rybelsus, Wegovy, Trelegy Ellipta, Xtandi, Pomalyst, Ibrance, Ofev, Linzess, Calquence, Austedo, Breo Ellipta, Tradjenta, Xifaxan, Vraylar, Janumet, and Otezla to be included in a second round of negotiations with drug manufacturers as part of HHS’s Drug Price Negotiation Program aimed at negotiating maximum fair drug prices for Medicare beneficiaries. On March 14, CMS reported that it had signed agreements with the relevant drug manufacturers to participate in meetings and roundtables throughout 2025 and expects final agreements by November 1. Negotiated prices for these drugs will then take effect some time in 2027. According to CMS, the selected drugs accounted for approximately $41 billion in total spending under Medicare Part D between November 2023 and October 2024, equating to about 14% of Medicare Part D’s prescription drug costs.

Goodwin’s Big Molecule Watch blog previously reported on the first year of this Drug Price Negotiation Program, where negotiations concerning 10 drugs – 3 biologics and 7 small molecules – achieved price reductions ranging from 38 to 79 percent of their 2023 listed prices, set to take effect starting January 1, 2026.

A midwife was recently arrested in Texas and charged with illegally performing an abortion, a second-degree felony, as well as practicing medicine without a license. This marks the first criminal charges brought in Texas under the laws enacted by S.B. 8, a near-total abortion ban, since it was enacted in 2021. Texas Attorney General Ken Paxton is also seeking a temporary restraining order to shut down the abortion clinics the midwife operates.

Texas Law S.B. 8, also known as the Texas Heartbeat Act and the Texas Human Life Protection Act, bans abortions after a fetal heartbeat is detected, which is approximately six weeks after conception. Under S.B. 8, a physician “may not knowingly perform or induce an abortion on a pregnant woman unless the physician has determined, in accordance with this section, whether the woman ’s unborn child has a detectable fetal heartbeat.” Tex. Health & Safety Code § 171.204. The law has a narrow exception for medical emergencies, allowing abortive care where the physician believes “that a medical emergency necessitated the abortion.” Tex. Health & Safety Code § 171.205.

The full text of S.B. 8, as enrolled, is available here.