This post is co-authored by Seth Orkand, co-chair of Robinson+Cole’s Government Enforcement + White-Collar Defense Team, and Abigail Salcedo, a 2026 Summer Associate at Robinson+Cole. Abigail is not admitted to practice law.

On June 23, 2026, the U.S. Department of Justice (DOJ) announced that it charged 11 defendants in connection with over two billion dollars in fraudulent claims for amniotic wound allografts as part of its 2026 National Health Care Fraud Takedown. Prosecutors allege that the schemes involved illegal kickbacks, medically-unnecessary allograft procedures, and exploitation of elderly Medicare beneficiaries and hospice patients.

Allografts and Rising Costs

The need for wound care is widespread. An estimated 10.5 million Medicare beneficiaries, roughly one in every six, live with chronic wounds, and skin substitutes are used to treat wounds that have failed to heal with standard care. Amniotic allografts are made from human donor tissue and treat recipients’ wounds by acting as a replacement layer of skin.

Prior to 2026, allografts were paid as “biologicals” under Medicare’s average sales price methodology, which gave each product a billing code and payment limit of the average sales price plus 6%. Allograft prices soared to $2,000 per square centimeter by 2025, driving a dramatic increase in federal spending. Between 2019 and 2025, Medicare Part B spending on allografts and other skin substitutes rose from $252 million to over $14 billion.

Wound Care Under Scrutiny

The Department of Health and Human Services’ Office of Inspector General investigated the spike in spending and attributed rising costs to an increased number of Medicare claims for allografts, potentially fraudulent reporting by manufacturers that artificially inflated average sales price data, and high rates of allografts application in hospice, home care and other settings. It also found that Medicare’s reimbursement policy incentivized providers to identify the allografts with high profit margins and bill for as many as possible.

The Centers for Medicare & Medicaid Services (CMS) addressed the provider billing incentive by restructuring how wound treatment is paid, reducing Medicare’s reimbursement to $127.14 per square centimeter effective January 1, 2026.

Anatomy of the Alleged Schemes

DOJ often concentrates its enforcement resources on areas in which there have been sharp increases in reimbursement, and medically unnecessary use of allografts and fraudulent billing has become a primary target. DOJ reported charges against individuals allegedly engaged in wound care schemes involving inflated sales prices, kickbacks to medical providers, and medically unnecessary use of allografts.

In the District of Arizona, DOJ indicted a former Vice President of Sales for an amniotic wound allograft company in connection with an alleged $1.2 billion scheme, of which approximately $614 million was paid by Medicare, TRICARE, CHAMPVA, and commercial insurers. Sales representatives and providers allegedly targeted elderly patients, many in hospice care, and billed for allografts that were not medically reasonable or necessary. The company also allegedly supplied sham invoices overstating the true sales price for its allografts and directed providers to bill Medicare using the inflated amount. The indictment came several months after the company’s owners pleaded guilty to conspiracy to commit health care fraud and wire fraud.

In another case, filed in the Southern District of Texas, a nurse practitioner (NP) who operated four mobile wound clinics in four states was indicted in connection with $906 million in claims, of which approximately $297 million was paid by Medicare and TRICARE. Prosecutors allege the defendant caused allografts to be unnecessarily applied to infected wounds without proper treatment, healed wounds, superficial wounds, and to areas exceeding the wound size, then falsified medical records to make those applications appear medically reasonable and necessary. It is also alleged in the indictment that the NP targeted certain hospice patients who died within days of application. The indictment also alleges that to “conceal and disguise the lack of medical necessity for the allografts,” she directed and emailed the falsification of documents to attempt to substantiate medical necessity. DOJ alleges the unnecessary allografts resulted in billings of more than $1 million per patient. The charges also allege that the provider facilitated kickbacks to induce patient referrals and solicited kickbacks tied to allograft purchases.

How the Government Connected the Dots

The DOJ’s Health Care Fraud Unit and Data Fusion Center detected suspicious wound care billing patterns in the spike in allograft payments. Fraud indicators included unusually high per-beneficiary billing, claims showing that the purported rendering provider was elsewhere at the time of service (such as in prison), and allograft use rates far above those of similarly situated providers. Other recurring red flags included targeting elderly Medicare beneficiaries in hospice, use of unlicensed practitioners, and suspicious relationships between skin substitute suppliers and providers.

Looking Forward

Starting with calendar year 2026, CMS modified its allograft reimbursement methodology from average sales price-based payment to incident-to supplies, which is expected to cut Medicare spending on these products by nearly 90%. CMS indicated that it plans to propose rates that group products based on relevant product characteristics consistent with their FDA regulatory status.

Implications and Action Items for Healthcare Organizations

Documentation will be central to substantiating the medical necessity of the products used. Patient records should indicate the more conservative treatments that were utilized first, particularly where DOJ’s allegations repeatedly focused on allografts applied to infected wounds, superficial wounds, healed wounds, or wounds that allegedly did not warrant the product.

CMS is likely to scrutinize other procedures where financial incentives appear to drive disproportionate growth without corresponding clinical benefits. For example, medical researchers have identified ocular amniotic membrane grafts for dry eye treatment as one area of concern, citing increased use, mixed clinical evidence, and high reimbursement rates. Although the vast majority of medical providers base treatment decisions on clinical judgment, high profit margins may improperly influence some care decisions.

Health care entities would be well-served by having a deep understanding of their customers and their sources of business, and wary of third-party intermediaries such as marketers and recruiters who may obtain patient referrals through the use of unlawful kickbacks. Healthcare organizations should review contracts with allograft manufacturers and distributors for compliance with federal and state anti-kickback statutes. In the current enforcement focused space, CMS remains focused on preventing suspicious payments before they occur by issuing payment suspensions, rather than pursuing fraud after payment.

Compliance teams should use data analytics to detect unusual billing patterns and sudden increases in high-reimbursement services, mirroring the approach taken by CMS and private insurers. Doing so will enable healthcare organizations to detect and correct suspect billing practices, ensure documentation of medical necessity, and address utilization increases that Medicare and other health insurers’ data analytics programs may flag as potentially fraudulent.

This post is co-authored by Seth Orkand, co-chair of Robinson+Cole’s Government Enforcement + White-Collar Defense Team, and Abigail Clarke, a 2026 Summer Associate at Robinson+Cole. Abigail is not admitted to practice law.

The Justice Department’s (DOJ) June 23, 2026, announcement of its annual Health Care Fraud Takedown makes clear that Medicaid and state health care programs have become central to the government’s health care enforcement strategy.

DOJ described the takedown as ushering a “new era” of enforcement, citing a record number of Medicaid fraud charges, and the largest number of participating states in its history. Among the 455 defendants charged, 295 are accused of defrauding Medicaid out of more than $518 million in alleged false claims. DOJ also emphasized the breadth of the takedown: cases were brought in 56 judicial districts and 45 states and territories, with participation from 50 of 54 state Medicaid Fraud Control Units (MFCU) the highest level of MFCU participation in DOJ history.

For health care providers, the announcement is significant because the Medicaid issues highlighted in the takedown are not limited to obviously fraudulent conduct. They reach operational areas that providers manage every day, including enrollment disclosures, documentation practices, medical necessity support, managed care billing, transportation arrangements, and relationships with vendors, marketers, and referral sources.

Medicaid Enforcement Is Often State-Specific

Medicaid’s federal-state structure makes enforcement more complex: the program is jointly funded, but each state administers its own program within federal requirements.

Given this federal-state structure, enforcement often turns on program-specific requirements, including those related to:

  • Provider type and enrollment status;
  • Medicaid managed care requirements;
  • Waiver authority and other program-specific rules;
  • Provider manuals and state agency guidance; and
  • Prior authorization and medical necessity standards.

Although the schemes included in this year’s takedown involve many of the same themes familiar from Medicare enforcement matters, including medical necessity, falsification of records, and improper recruitment of beneficiaries, the legal analysis often depends on state-specific rules. Providers should understand how applicable state Medicaid rules, managed care requirements, provider manuals, and guidance affect their enrollment, billing, documentation, medical necessity requirements, and relationships with Medicaid managed care plans. A billing practice, referral arrangement, or documentation process that may be commonplace in one state may raise legal issues under another state’s Medicaid program, particularly for providers operating across state lines or billing Medicaid managed care plans.

Medicaid Schemes Scrutinized in the Takedown

The Medicaid cases described by DOJ illustrate several recurring enforcement themes, including:

  • Medically unnecessary services;
  • Claims for services allegedly not provided;
  • Beneficiary targeting, recruitment, and kickbacks;
  • Incomplete or false enrollment disclosures;
  • Fraudulent transportation arrangements;
  • Overlapping time entries; and
  • Records that allegedly did not support the services billed.

Because Medicaid covers a broad population, including eligible low-income adults, children, pregnant women, older adults, and people with disabilities, Medicaid enforcement can reach a wide range of provider types and services. The takedown reflects that breadth, with cases involving behavioral health, home- and community-based services, personal care, social adult day care, transportation, and laboratory services.

For example, a Connecticut reference laboratory and its owner settled with the federal government to resolve allegations that they omitted material information from its Medicaid enrollment application. The lab allegedly failed to disclose its relationship with another Medicaid provider that was under payment suspension and investigation. The related laboratory was owned by the defendant’s husband, was located at the same address, and had the defendant as its chief operating officer. This matter illustrates that ownership, control, management, and operational relationships can create enforcement exposure in Medicaid enrollment and revalidation submissions.

In New York, prosecutors charged defendants in an alleged Medicaid social adult day care scheme involving claims for services not provided, services that were medically unnecessary, and kickbacks to Medicaid recipients and patient recruiters. The government alleges that the defendants submitted more than $38 million in claims to New York Medicaid for social adult day care services that were not provided or were induced by kickbacks. 

In Arizona, prosecutors charged an owner/operator of an outpatient treatment center that provided services for alcohol and drug addiction for services that were not provided, not provided as billed and were “so substandard that they failed to serve a treatment purpose,” were not used as part of an integrated treatment plan, and paid kickback and bribes.

Not all Medicaid fraud cases involve such high alleged damages. For example, in Massachusetts cases, the government alleges that personal care attendants billed for services not provided, including when the attendants were out of state, working at other jobs, incarcerated, or not at the patient’s home at the time the billed services were allegedly performed.

Other Medicaid-related cases involved personal care, home care, transportation, and similar services, where allegations often turned on personnel scheduling, timesheets, supervision of aides, the location of services provided, beneficiary eligibility, and recordkeeping.

Federal-State Coordination Remains a Key Enforcement Theme

Participation by 50 of 54 MFCUs is one of the most significant takeaways from the 2026 takedown.

Medicaid fraud investigations have long involved state enforcement authorities, but DOJ’s announcement reflects continued coordination among multiple federal and state actors, including MFCUs, federal prosecutors, state attorneys general, state Medicaid agencies, federal oversight agencies, and Medicaid managed care organizations.

The coordinated approach was aided by the government’s improved data analytics capabilities. Last year, DOJ’s Health Care Fraud Unit announced the creation of a Data Fusion Center staffed with data analytics experts from HHS-OIG, the FBI, and other agencies. This year’s takedown shows that those tools are now central to the government’s enforcement strategy. DOJ and CMS announced expanded access to CMS data infrastructure, allowing prosecutors to use additional advanced analytics and artificial intelligence tools. CMS also announced new claims-processing safeguards, including electronic attestation, identity verification, and capture of IP addresses at login, and is working to standardize data fields across Medicare, Medicaid, and managed care to strengthen its ability to detect suspicious patterns.

For providers, a Medicaid billing concern may carry consequences well beyond reimbursement adjustments, including threats to enrollment status and/or managed care participation, exclusion, civil monetary penalties, False Claims Act exposure, and criminal enforcement.

DOJ’s focus on Medicaid aligns with its broader emphasis on patient harm and the protection of public health care programs. The government framed the alleged fraud as not only financial harm to the government, but also a diversion of limited Medicaid resources. That framing is especially significant in the Medicaid context, where enforcement agencies often emphasize the protection of funds intended to support vulnerable patient populations.

Compliance Considerations for Medicaid Providers

For providers participating in Medicaid, the takedown underscores the need for Medicaid-specific compliance efforts. Providers should not assume that a compliance program focused primarily on Medicare requirements will address all Medicaid risk areas, particularly when the provider operates in multiple states or participates in Medicaid managed care.

Providers should consider several practical Medicaid compliance priorities, including:

  • Verifying that enrollment applications and revalidation submissions accurately disclose ownership, control, management, service locations, and operational relationships;
  • Ensuring that documentation supports the services billed, including the date and location of service, number of units billed, provider qualifications, beneficiary eligibility, medical necessity, and any required prior authorization;
  • Evaluating compliance with Medicaid managed care plan requirements and underlying state Medicaid rules governing coverage and payment, particularly as it relates to the managed Medicaid payor policies;
  • Reviewing relationships with marketers, referral sources, transportation vendors, billing companies, and other third parties to ensure proper compensation and referral arrangements; and
  • Auditing Medicaid-specific claims data to identify high-volume billing, unusual utilization patterns, overlapping services, repeated documentation gaps, compliance with payor policy, or claims that appear inconsistent with applicable state Medicaid requirements.

Non-compliance with utilization, documentation, and billing requirements may be visible to government enforcement agencies, managed care plans, and whistleblowers. For that reason, Medicaid compliance should be tailored to actual Medicaid operations, including the states in which the provider participates, the provider types under which it is enrolled, the managed care plans with which it contracts, the services it furnishes, and the documentation required to support those services.

Takeaway

Although Medicaid enforcement has often been viewed as following the lead of Medicare fraud enforcement, the 2026 National Health Care Fraud Takedown suggests that Medicaid will remain a central and distinct part of health care fraud enforcement. The government’s emphasis on state MFCU participation, reliance on data analytics, and use of administrative tools reflects a move toward earlier detection and faster intervention, rather than reliance only on post-payment investigations.

Medicaid enforcement risk is both state-specific and increasingly coordinated. Compliance teams should proactively review provider enrollment submissions, documentation practices, third-party relationships, Medicaid managed care billing processes, and internal monitoring capabilities before billing patterns draw external scrutiny.

Connecticut Governor Ned Lamont recently signed into law Public Act No. 26-68 (the Act), which makes targeted but significant changes to the Department of Public Health’s (DPH) enforcement authority for health care licensure and certification violations by increasing potential fines and creating criminal liability for certain unlicensed operation of health care institutions and unlicensed provision of professional health care services. These changes take effect October 1, 2026.

Expanded Penalties for Operating Without Required Licensure or Certification

The Act revises the penalty framework for a person who establishes, conducts, manages or operates a health care institution (such as a hospital, urgent care center or nursing home) without the required license or certificate. Beginning October 1, 2026, such conduct will be a class D felony, and violators may be fined up to $5,000 per day, an increase from the current maximum of $100 per day.

The Act creates a new penalty for property owners on whose property a health care institution is established, conducted, managed, or operated without the required license or certificate. These property owners may be fined up to $100 per day.

There is a narrow exception to the above penalties for any institution that applied for a license renewal within 60 days after its license lapsed.

Increased Civil Penalties

The Act adds a separate civil penalty mechanism, under which DPH may, after a hearing, impose a civil penalty of up to $25,000 per day on any person establishing, conducting, managing or operating a health care institution without the required license or certificate. Under current law, DPH may, upon the advice of the Attorney General, seek an injunction to restrain the offending institution’s operation.

The Act also authorizes DPH (or the applicable health care service licensing board or commission) to issue a temporary order to stop a person performing unlicensed activities while a formal order is pending if such activities pose an imminent risk to public health, safety or welfare. After a hearing, DPH may also impose a civil penalty of up to $25,000 for each day that a person provides professional health care services without the required DPH license or certificate.

Key Takeaways

Under the Act, DPH has much greater authority to enforce its institution and individual licensing and certification requirements. Institutions and individuals licensed or certified by DPH should review their current licenses, certificates, and renewal tracking processes before October 1, 2026.

Connecticut Governor Ned Lamont recently signed Public Act No. 26-68 (the Act), which includes changes to the state’s medical orders for life-sustaining treatment (MOLST) program. Shortly after the Act was signed into law, the Connecticut Department of Public Health (DPH) issued policies and procedures regarding the MOLST program, which will operate as regulations in the interim until DPH promulgates final regulations. The statutory changes to the MOLST program became effective May 26, 2026, and the DPH policies and procedures became effective June 8, 2026.

Background

MOLST is Connecticut’s framework for documenting medical orders concerning life-sustaining treatment for individuals who are approaching the end stage of a serious, life-limiting illness or who are in a condition of advanced chronic progressive frailty. The purpose of the program is to support patients’ preferences regarding treatment at such point in their disease progression. MOLST is implemented through medical orders that can guide treatment decisions across care settings.

Statutory Changes to the MOLST Program

The Act redefines a “medical order for life-sustaining treatment” to now mean a set of orders established by DPH and specific to the MOLST program. Previously, a MOLST was an order made by a physician, advanced practice registered nurse (APRN) or physician assistant. The Act further specifies that a MOLST will be valid only if it is completed on a form prescribed by DPH. Pursuant to this change, DPH published a form which providers must now use to effectuate patients’ wishes for life-sustaining treatment.

The Act also allows physician assistants, in addition to APRNs and physicians, to determine that a patient’s condition has progressed to the point appropriate for a MOLST.

MOLST Policies and Procedures

DPH’s policies and procedures operationalize the MOLST changes made by the Act. The policies include training-related requirements for providers who are authorized to execute a MOLST form. Each eligible provider must complete DPH-approved MOLST training, which will focus on conditions that qualify a patient for participation in the MOLST program. No provider may sign a MOLST form without first completing the required DPH-approved training.

The new DPH policies require that a provider conduct a MOLST discussion with the patient or the patient’s legally authorized representative before executing a MOLST form. During this discussion, the provider must discuss the patient’s goals for care and treatment and the benefits and risks of various methods for documenting the patient’s wishes for end-of-life treatment. The MOLST discussion must be completed again as clinically appropriate to review goals of care and treatment preferences according to disease progression, when the patient is transferred to a different care setting or level of care, or if the patient’s preferences change. The provider must document these discussions in the patient’s medical record. Once the MOLST form is executed, it must be made available for the patient to review.

The policies also address revocation, amendment and treatment requests that differ from a valid MOLST form. A patient or their legally authorized representative may request and receive treatment that differs from the patient’s valid MOLST form at any time, without revoking the MOLST form. A patient or legally authorized representative may revoke or amend a valid MOLST form at any time.

Each health care provider must follow the orders on a valid MOLST form, unless instructed otherwise by the patient or legally authorized representative. The policies also provide that valid MOLST forms must be recognized by any receiving health care provider or institution.

Key Takeaways

The Act and related DPH policies result in a more detailed and standardized operational framework for the MOLST program, and place new training requirements on providers. Health care providers involved in end-of-life care should be aware of these new changes to the MOLST program and may need to update their processes and forms to comply with the new state-mandated MOLST program requirements.

On April 16, 2026, the Massachusetts Health Policy Commission (HPC) approved amendments to its Material Change Notice (MCN) regulations at 958 CMR 7.00 (the Amended Regulations), which went into effect on May 8, 2026. As background, following the 2025 passage of health care legislation that expanded the HPC’s health care market oversight responsibilities, the HPC proposed amended MCN regulations in February 2026 for review and comment that broadened the MCN process and gave the HPC greater latitude to conduct Cost and Market Impact Reviews (CMIRs) (see our analysis here). The Amended Regulations are largely consistent with the proposed regulations, but include a few changes apparently influenced by stakeholder comments.

The Amended Regulations include the newly defined thresholds for filing MCNs, new categories of investors subject to MCN filing requirements, an expanded scope of review and authority for the HPC, and additional post-transaction review processes.

At an April 16 Public Meeting to review the proposed regulations, the HPC sought to address concerns from commenters by explaining the agency’s rationale for certain changes and making adjustments. The HPC also noted that it would promulgate sub-regulatory guidance on certain issues, including how pharmacy revenue should be counted for the purpose of Net Patient Service Revenue, as well as further describing the definition of “control” for purposes of charitable relationships. Notably, in connection with the finalization of the Amended Regulations, the HPC has already issued sub-regulatory guidance on the MCN Amended Regulations on May 21, 2026 (available here), as well as an updated MCN Form (available here) for use starting May 19, 2026.

Below, we summarize the key provisions of the Amended Regulations approved by the HPC, including in bold italics any departure from the language of the amendments as previously proposed by the HPC:

  1. New MCN definitions: The Amended Regulations add new definitions that impact MCN filing obligations, including the following definitions allowing for regular adjustment of monetary filing thresholds by the HPC and establishing the type of owners/investors now subject to the MCN filing requirement, and any exceptions thereto:
    • MCN Filing Threshold and Revenue Increase Threshold: Prior regulations applied MCN reporting requirements to providers/provider organizations with more than $25 million in Net Patient Service Revenue (NPSR) as well as to certain transactions that would result in an increase of more than $10 million in NPSR.
      • The Amended Regulations formally define these monetary thresholds, setting $25 million in NPSR as the “MCN Filing Threshold” (applicable to MCN reporting associated with clinical affiliations) and $10 million in NPSR as the “Revenue Increase Threshold” (applicable to MCN reporting associated with mergers, acquisitions, certain other affiliations, and significant capacity increases).
      • These monetary thresholds will now be subject to annual adjustment by the HPC.
    • Private Equity Company and Significant Equity Investor:
      • The Amended Regulations newly define the term “Private Equity Company” in broad terms to refer to any entity that collects capital investments, however organized, and which purchases directly or through another owned or controlled entity, a direct or indirect ownership share of a provider, provider organization, or management services organization (MSO).
      • The Amended Regulations separately define “Significant Equity Investor” as a Private Equity Company that holds—or would hold, following a proposed transaction—any financial interest in a provider, provider organization, or MSO; or any investor that holds—or would hold, following a proposed transaction—equity amounting to more than 10 percent of a provider, provider organization, or MSO.
      • Both defined terms include narrow exceptions for venture capital firms exclusively engaged in funding start-ups and early stage businesses; and Significant Equity Investors exclude individual licensed health care providers who practice medicine, dentistry or another health care profession as a full or partial owner of the provider or provider organization.
  2. MCN-triggering transactions: The Amended Regulations clarify the scope of certain transactions already subject to the MCN process, including:
    • Mergers or affiliations involving both a provider or provider organization and an insurance carrier, and acquisitions of a provider or provider organization by an insurance carrier (and vice versa).
    • Mergers with or acquisitions of hospitals or hospital systems.
      • The final Amended Regulations removed additional language here that would have also referenced mergers with or acquisitions of a provider or provider organization by a hospital or hospital system, which per the HPC was done because such transactions are already captured elsewhere as material changes.
    • Mergers, acquisitions, or affiliations (including corporate affiliations, contracting affiliations, and employment of health care professionals) where: (a) the arrangement is between providers, or involves one of the following: a provider organization, an MSO that establishes contracts with insurance carriers or third-party administrators, or an entity that represents health care providers (including out-of-state providers) in contracting with payers for health care services; and (b) such arrangement would result in an increase in one party’s NPSR equal to or greater than the Revenue Increase Threshold (defined above), or in one party gaining a dominant market share (as such term is defined in these regulations) in a given service area or region.
      • The final Amended Regulations added a carveout here for entities representing out-of-state providers to clarify that this will only require the MCN if the proposed transaction is with or on behalf of a Massachusetts provider, provider organization, or MSO.
    • Clinical affiliations between two or more providers or provider organizations that each have an NPSR greater than the MCN Filing Threshold. The Amended Regulations specify arrangements that explicitly constitute clinical affiliations covered under this requirement, as follows: co-branding, co-located services, complete or substantial staffing of an acute hospital service line, funding EHR interconnectivity, regular and ongoing provision of telemedicine services, preferred provider relationships, and discount arrangements. The Amended Regulations maintain the pre-existing exclusion for affiliations solely related to clinical trials or graduate medical education programs.
    • Any form of partnership, joint venture, accountable care organization, parent corporation, MSO, or other organizational structure created to administer contracts with insurance carriers, third party administrators, or other contractors.

The Amended Regulations also add new categories of transactions subject to MCN review, with minor changes from the regulations as proposed, as noted below:

  • Any significant increase to a provider or provider organization’s capacity, including:
    • Any increase to capacity that would trigger the Determination of Need (DoN) process due to a Substantial Capital Expenditure (as defined in the DoN regulations at 105 CMR 100.000). The Amended Regulations narrowed this requirement—as proposed, this category would also have included any other basis meeting the monetary criteria for a Substantial Capital Expenditure.
    • Any increase to capacity that would result in an increase to the provider’s NPSR equal to or greater than the Revenue Increase Threshold (set at $10 million currently) based on expected revenue from the planned capacity (e.g., any increases to operational capacity that do not meet the DoN monetary thresholds for Substantial Capital Expenditures but will result in NPSR increasing at least $10 million).
  • Any transaction involving a Significant Equity Investor, including a Private Equity Company (as each are defined above), that results in a partial or complete change of ownership or control of a provider, provider organization, or MSO that provides support for negotiating or establishing contracts with carriers or third-party administrators.
  • Any real-estate lease backs involving the sale of real property used to deliver healthcare services, as well as other significant acquisitions, sales, or transfers of assets to be specified by the HPC in forthcoming guidance. The Amended Regulations deferred to the HPC to further define this category, in response to commenters’ concerns about its broad scope as proposed.
  • Any conversion of a provider or provider organization from a non-profit entity to a for-profit entity.
  1. Additional CMIR authority: In addition to its expanded MCN scope, the HPC is authorized under the Amended Regulations to conduct a CMIR if a proposed material change is “likely to have a significant impact” on the competitive market or on the Commonwealth’s ability to meet its financial goals pursuant to the Health Care Cost Growth Benchmark, a metric for cost containment established and updated annually by the HPC. The Amended Regulations also give the HPC discretion to conduct a CMIR on any provider organization that exceeded the Health Care Cost Growth Benchmark in the previous year, as reported by CHIA. No changes were made to the amendments as proposed.
  2. Expanded review and enforcement authority relevant to the MCN and CMIR processes: Under the Amended Regulations, the HPC has expanded authority to request information from parties to a transaction and certain other market participants. While the authority to request documents and other materials is not new, the Amended Regulations add Significant Equity Investors to those parties from whom information may be requested, including information about the entity’s capital structure, general financial condition, ownership and management, and audited financial statements. HPC may also request information from payers related to a particular MCN. No changes were made to the amendments as proposed.
  3. Post-transaction review of material changes: The Amended Regulations allow the HPC to conduct post-transaction reviews of material changes for up to five years, at its discretion. Under its post-transaction review authority, the HPC would be able to require parties to a material change to submit any data and information it deems necessary to assess the post-transaction impacts, and to make referrals to the Attorney General or other state or federal agencies as appropriate. No changes were made to the amendments as proposed.
  4. MCN Filing Deadline: Where a proposed transaction or other arrangement requires the filing of an MCN and a DoN, the Amended Regulationsclarify that the MCN must be filed with the HPC no later than the date of filing of the DoN application. The Amended Regulations maintain the current requirement that all MCNs be filed not less than 60 days prior to the proposed effective date of a material change.
    • In its proposed amendments, the HPC had sought to require concurrent filing of the MCN and the DoN application.

Key Takeaways

The Amended Regulations preserve the core expansion of scope and authority proposed by the HPC in February, 2026, which entities have already been subject to in large part since the HPC’s Bulletin HPC-2025-01 guidance that went into effect on April 8, 2025. Health care organizations and investors should carefully review any upcoming organizational changes that may newly trigger MCN requirements or a CMIR process under the Amended Regulations. Of note, recent MCN filings show a significant increase in filings by significant equity investors. We will continue to monitor the HPC’s implementation of the Amended Regulations and the agency’s guidance.

Connecticut Governor Ned Lamont recently signed Public Act No. 26-68 (“the Act”), which includes the elimination of the Office of Health Strategy (OHS) and reassignment of its statutory authority over the health care delivery system in Connecticut. The Act’s repeal of OHS’s enabling statute and the transfer of its authority to other state agencies are scheduled to take effect on July 1, 2026.

The Act allocates functions related to the oversight of health care in Connecticut previously assigned to OHS among several state agencies and offices, including the Department of Public Health (DPH), the Office of Policy and Management (OPM), the Department of Social Services (DSS) and the Office of the Healthcare Advocate (OHA). The impact of the dissolution of OHS and corresponding reshuffling of authority is summarized below.

Certificates of Need

Previously, OHS oversaw the Connecticut Certificate of Need (CON) program; however, under the Act the CON program will move to DPH. We have previously written about the Act’s changes to the CON program. Please see here for our analysis of the Act’s changes to the CON process, and here for our analysis of the new process for hospitals seeking to pause or terminate service lines.

For now, it is important for CON applicants and parties to understand that from July 1, 2026, until July 1, 2027, DPH will oversee the CON program in its current state until the newly established CON processes go into effect July 1, 2027.

Functions Moving to DPH

Aside from authority over the CON process, several notable functions previously vested in OHS shift to DPH:

  • Health Systems Planning Unit – The Act re-establishes the Health Systems Planning Unit within DPH, under the direction of the Commissioner of Public Health, rather than within OHS.
  • Nonprofit hospital transactions and related health care market reporting – The Act moves several hospital and group practice transactions and other reporting functions from OHS to DPH. For nonprofit hospital sales, all authority previously conferred to the Commissioner of Health Strategy is now granted to the Commissioner of Public Health. Hospital, hospital system, and group practice reporting also shifts to DPH, including written notices after certain transactions and health care entity annual reporting.
  • Health care facility oversight and reporting – DPH will now oversee all facility fee requirements, including hospital, health system, and hospital-based facility reporting requirements, and will hold enforcement authority arising from such reporting requirements.
  • Patient billing and financial assistance provisions – Hospitals must now report charity care and reduced-cost service policies to the Health Systems Planning Unit of DPH, and hospitals must provide detailed patient bills upon request of DPH or a patient.
  • Health data functions – Short-term acute care general and children’s hospitals will need to submit patient-identifiable inpatient discharge data and emergency department data to DPH, and outpatient surgical facilities and certain hospital outpatient surgery departments must submit such data to DPH.
  • Community Health Worker Advisory Body – DPH now has jurisdiction over the Community Health Worker Advisory Body.

Functions Moving to OPM

The Act transfers key health care data reporting authorities to OPM, including:

  • Core health information technology responsibilities – OPM will now oversee implementation and revision of the statewide health information technology plan, adoption of electronic data standards, oversight of the Statewide Health Information Exchange (discussed further below), and associated legislative committee reporting.
  • Statewide Health Information Exchange – The Act gives OPM administrative authority over the Statewide Health Information Exchange, known as Connie. The Secretary of OPM is responsible for designating and posting the systems, technologies, entities, and programs that constitute the exchange. OPM also receives authority to adopt regulations and implement interim policies and procedures for Connie, including public hearing and notice requirements.
  • State Health Information Technology Advisory Council – This council, tasked with policy recommendations for health information technology and exchange efforts, is reoriented to advise the Secretary of OPM and the health information technology officer.
  • All-payer claims database – OPM becomes the successor agency for the all-payer claims database program, now overseeing the planning, implementation, and administration of the all-payer claims database program, securing data collection and storage, auditing reporting entity data, and maintaining written administrative procedures in consultation with the Health Information Technology Advisory Council.
  • Consumer health information website – The Secretary of OPM receives responsibility for posting consumer-facing health cost and quality information, making specified lists of frequent services and procedures publicly available, and issuing reports on billed and allowed amounts and out-of-pocket costs.
  • Health care cost growth and quality benchmark authority – The Act redesignates the agency responsible for establishing the health care cost growth and health care quality benchmarks every five years to OPM. The Act also confers authority in OPM for monitoring and identifying entities exceeding benchmarks or failing targets and informing the public as such.

Functions Moving to DSS

The authorities reallocated to DSS include:

  • Hospital financial health reporting – Hospitals must submit semiannual financial health reports to the Commissioner of Social Services, rather than the Commissioner of Health Strategy. DSS may require additional information if a hospital reports two consecutive quarters of 60 days or less of cash on hand, and DSS must contact a hospital to offer assistance if a report reflects two consecutive quarters of 45 days or less of cash on hand.
  • Covered Connecticut and waiver-related provisions – The Commissioner of Social Services remains responsible for seeking Section 1115 waivers, but the Act removes the requirement for prior consultation with the Insurance Commissioner and OHS from that provision. The Act also permits DSS, rather than OHS, to seek Section 1332 waivers from the federal government.

Community Benefit Program Reporting Moves to OHA

The Act reassigns hospital community benefit program reporting, which includes hospitals’ community health needs assessments, implementation strategies, and annual reports, from OHS to OHA. Hospitals must submit community benefit reporting to OHA or to a designee selected by the Healthcare Advocate.

The annual summary and analysis of community benefit program reporting is assigned to the Healthcare Advocate, who must post the summary and analysis on the OHA website and solicit stakeholder input through a public comment period. OHA uses that reporting and stakeholder input to identify additional stakeholders, determine how those stakeholders could assist in addressing community health needs, determine whether to make recommendations to DPH in developing the state health plan, and inform the statewide health care facilities and services plan.

Key Takeaways

Broadly, the above-discussed sections of the Act eliminate OHS as a statutory office and distribute its principal functions among multiple agencies. DPH becomes the key successor for the Health Systems Planning Unit, CON authority, nonprofit hospital transaction authority, and multiple health facility oversight functions. OPM becomes the key successor for statewide health information technology, the Statewide Health Information Exchange, the all-payer claims database, consumer health information tools, and benchmark programs. DSS becomes the successor for hospital financial health reporting and receives Covered Connecticut waiver authority. OHA becomes the successor for community benefit program reporting.

Despite administrative authority being distributed across multiple state agencies, the substantive reporting and administrative requirements for health care entities remain largely unchanged. Health care entities should be aware of the different agencies to which they must make reports and disclosures. We will continue to monitor implementation of these administrative changes.

Connecticut Governor Ned Lamont recently signed into law An Act Concerning Credit Cards and Health and Veterinary Care Services (PA 26-6; the Act). The Act restricts how health care providers may offer third-party financing products to patients and limits when health care providers can charge patients’ credit cards.  The Act is effective January 1, 2027.

The Act broadly applies to all Connecticut-licensed health care providers and facilities (including their employees, agents, and independent contractors) that provide health care services to patients in Connecticut. The term “health care services” is similarly broadly defined and includes hospital, medical, surgical, dental, vision, and pharmaceutical products and services.

The Act covers loans, lines of credit, and credit cards offered by third parties (“third-party financing”). Notably, third-party financing does not include lines of credit or loans offered by a health care provider where the health care provider is the creditor.

Under the Act, health care providers may not advertise, market, solicit, promote, or offer third-party financing to a patient by:

  1. Including the provider’s branding on any materials used to advertise, market, solicit, promote, offer, or extend the third-party financing;
  2. Giving patients access to software, internet addresses, hyperlinks, or QR codes maintained by a third party that offers third-party financing and includes provider branding;
  3. Offering third-party financing while the patient is under anesthesia or other sedation;
  4. Offering third-party financing while the health care provider is providing health care services to the patient or in any area of a facility that is used to provide health care services, except in limited circumstances; or
  5. Completing or submitting a third-party financing application on behalf of a patient.

Once the Act is effective, health care providers are also prohibited from receiving financial incentives in exchange for advertising, marketing, soliciting, promoting, or offering any third-party financing.

The Act includes a notable provision that prohibits a health care provider from charging a third-party financing account “for the cost of a health care service or … any portion of the cost of such service, before the date on which such service is provided to the patient,” unless the provider has already incurred costs related to the service prior to the date of service. This section appears to limit the ability of providers to charge patient credit cards in advance of a date of service, a relatively common practice in regard to self-pay patients or those receiving cosmetic or elective procedures.

The Act also prohibits health care providers charging a third-party financing account for products ancillary to a health care service, unless the patient receives a separate receipt identifying the ancillary product and separately consents in writing to the product. If a patient does purchase an ancillary product with third-party financing, health care providers must offer a 30-day return and refund option, except in limited circumstances, such as damage to the product or customization.

To the extent a health care provider decides to discuss third-party financing with patients outside of the restrictions set forth above, the provider must provide patients with a detailed disclosure as specifically set forth in Section 1(c)(1) of the Act (PA 26-6). Among other things, the disclosure explains third-party financing, that it is optional and encourages patients to carefully review the terms of the third-party financing.

Any violations of the Act will be an unfair and deceptive trade practice under Connecticut law.

Health care provider relationships with third-party financing vendors may need adjustments in order to comply with the Act, specifically related to how providers are promoting those third-party financing products, along with a review of policies and procedures related to credit card processing. Health care providers would be well served to review financing-related signage, update financing disclosure and consent documents, examine patient-facing materials, scripts, and vendor arrangements before January 1, 2027, and provide appropriate training to staff. We expect practices in violation of the Act will face increased scrutiny from Connecticut regulators given the legislature’s opposition to co-branded health care financing products.

On May 27, 2026, Connecticut Governor Ned Lamont signed “An Act Concerning Return of Health Care Provider Payments” (PA 26-56). As of January 1, 2027, PA 26-56 shortens the time period during which commercial health insurers can look to cancel, deny, or recoup certain payments to providers, and creates statutory timeframes in which health insurers must respond to provider appeals of such cancelations, denials, or recoupments.

As industry trends, federal policy changes, and financial pressures increase the frequency of disputes between health care providers and commercial health insurers (payors), PA 26-56 seeks to address areas of contention between providers and payors involving the timing and process of recoupment demands and appeals. The changes are as follows:

  • Currently, a managed care organization or preferred provider network is prohibited from canceling, denying, or demanding the return of payment for authorized covered services, due to an administrative or eligibility error, more than 18 months after receiving the clean claim, and Connecticut laws are silent as to the applicable timeline for such cancellations, denials or demands when made by other payor types issuing individual or group health insurance policies. The Act shortens that timeframe to 12 months for managed care organizations and preferred provider networks and also creates an analogous prohibition on any insurer, health care center, fraternal benefit society, hospital service corporation, medical service corporation, or other entity delivering, issuing for delivery, renewing, amending or continuing, an individual or group health insurance policy from canceling, denying, or demanding the return of payment for an authorized covered services due to an administrative or eligibility error, more than 12 months after receiving the clean claim.
  • In the event a provider appeals such a demand from a payor, current law does not specify a modality for the appeal. Under PA 26-56, a payor must establish and offer an electronic appeals process, but can also offer additional methods. This Act requires payors to respond to an appeal and issue a determination within 30 business days of receipt, and establishes that the failure to meet this deadline results in the appeal being construed in the provider’s favor.
  • PA 26-56 clarifies that the existing 30-day advanced notice of payment cancellation requirement must be sent by either certified mail return receipt requested, email to an address specifically designated by the provider, or through a secure electronic provider portal or clearing house used for claims communication.

While the changes are limited, they address an area of common contention in the negotiation of commercial health insurance reimbursement agreements and will offer both providers and payors a degree of increased certainty in the timeframes around recoupments and appeals.

On May 27, 2026, Connecticut Governor Ned Lamont signed into law Public Act 26-22, “An Act Concerning Hospital Sale-Leaseback Agreements and Attestations Concerning Lack of Private Equity Control of the Hospital and Control of or Interference with the Professional Judgment and Clinical Decisions of Certain Health Care Providers” (PA 26-22). PA 26-22 prohibits Connecticut hospitals from entering into “sale-leaseback transactions” and requires them to submit annual attestations disclaiming certain private equity interests in or authority over the hospital.

First, PA 26-22 prohibits Connecticut hospitals entering into sale-leaseback transactions, which are defined as any transaction where a “hospital enters into an agreement with a person or another entity to sell and lease back hospital-owned real property that constitutes the main campus of a hospital.” For purposes of this prohibition, PA 26-22 defines a hospital’s main campus as the “licensed premises within which the majority of inpatient beds are located.” Accordingly, PA 26-22 restricts the ability of a hospital to enter into a sale-leaseback arrangement involving its campus but does not apply to off-campus hospital-owned locations. For purposes of PA 26-22, a “private equity entity” is defined as “any entity that collects capital investments from individuals or entities and purchases, as a parent company or through another entity that the entity completely or partially owns or controls, a direct or indirect ownership share of a hospital.”

Second, PA 26-22 establishes a new attestation requirement requiring hospitals to disclaim private equity involvement in their ownership, governance, and operations. Beginning on February 15, 2027, and annually thereafter, each hospital in Connecticut must submit an attestation to the Commissioner of Public Health’s Office that no private equity entity:

  • Has a controlling interest (meaning “direct or indirect power to direct the management and policies of the main campus of a hospital, whether through ownership of voting securities, contract or other means”) in the hospital.
  • Has ultimate governance control and authority over any hospital asset or activity of the main campus of the hospital, including without limitation any clinical, operational, managerial, financial, or human resources matter.
  • Is permitted to control or direct any procedure or policy that would interfere with professional judgment or clinical decisions of authorized clinicians, including time spent with patients, number of patients seen, time spent on triage or admission evaluations, time periods for patient discharge, clinical decision making including related to observation status or palliative care, diagnostic testing, or coding determinations in the medical record.

Failure to comply with the attestation requirement will result in a civil penalty of up to $2,000 per violation. However, PA 26-22 also clarifies that it does not prohibit hospitals or their affiliates from investing in joint ventures or entering into clinical services contracts with physicians, nor is it intended to interfere with a hospital coordinating with its parent health care system.

The Act demonstrates a continued focus by Connecticut on private equity business arrangements involving hospitals in the wake of notable bankruptcy and reorganization matters involving private equity-owned health systems in Connecticut and neighboring states. It remains to be seen how the ownership/control attestation and heightened scrutiny provided for by PA 26-22 will impact private equity investment in health care in Connecticut.