Healthcare providers are currently facing yet another termination of Medicare telehealth flexibilities at the end of the day on January 30, 2026, unless Congress acts on proposals to further extend the COVID-era flexibilities for telehealth. If no legislative action is taken before January 30, 2026, the providers and Medicare patients who have depended on expanded telehealth options will encounter substantial limitations in access beginning January 31, 2026.  

As a reminder, in October-November 2025, in connection with the government shutdown, federal COVID-era telehealth flexibilities for Medicare beneficiaries expired, which led to significant billing challenges and restrictions in access for patients (which we previously discussed here). Those flexibilities were retroactively extended as part of the government funding bill passed in November 2025, through January 30, 2026. Health care providers, and their patients, are now in the same position of looking to Congress to act to further extend those flexibilities to protect continued access to telehealth services.

It remains to be seen whether Congress will be able to pass another extension and, if so, how long the extension may be. There has been at least one proposal passed in the House of Representatives that would extend the telehealth flexibilities through December 31, 2027, but it remains to be seen if that will be taken up by the Senate.

A summary of the existing telehealth waivers and their newly proposed expiration dates is included below.

Key Telehealth Provisions Proposed to be Extended

  • Geographic and Originating Site Flexibility:
    • Without another extension, beginning January 31, 2026, Medicare beneficiaries may only receive telehealth services in approved health care facilities in rural locations (outside of metropolitan statistical areas);
    • Note that the Social Security Act contains exceptions that would permit telehealth services at home (or other locations) for patients in specific circumstances approved by law or regulation, including patients being treated for: (1) symptoms of acute stroke; (2) substance use disorder; or (3) patients with mental health disorder; and (4) patients on home dialysis;
  • Expanded Practitioner Eligibility:
    • If the “cliff” is averted: Medicare patients would be allowed to receive care from approved Medicare-enrolled providers, which under the prior COVID-era waiver includes occupational therapists, physical therapists, speech-language pathologists, and audiologists;
    • If the “cliff” is not averted:  Medicare beneficiaries will lose access to telehealth services provided by PTs, Ots, SLPs, and audiologists, all of whom play a key role in rehabilitation;
  • Telehealth for FQHCs and RHCs:
    • If the “cliff” is averted: Federally qualified health centers (FQHCs) and rural health clinics (RHCs) would be allowed to continue providing telehealth services to patients in other locations;
  • Audio-Only Telehealth:
    • If the “cliff” is averted: Telehealth services could continue to be provided via audio-only communications systems;
    • If the “cliff” is not averted: Substantial limitation on coverage for audio-only services and providers must be technically capable of using audio-video technology;
  • In-Person Requirement for Mental Health Visits:
    • If the “cliff” is averted: Medicare patients may continue to receive mental health services from FQHCs and RHCs via telehealth;
    • If the “cliff” is averted: Medicare patients receiving services for the diagnosis, evaluation, or treatment of a mental health disorder may continue to do so without receiving in-person care;
      • If the “cliff” is not averted:  providers are required to furnish a Medicare-covered item to the beneficiary in-person at least six months prior to furnishing telehealth services. Additionally, the provider must furnish a Medicare-covered item in person at least once a year following each subsequent telehealth service. Note that the annual in-person follow-up requirement may be waived if the provider and beneficiary agree that the risks of receiving an in-person service outweigh the benefits; and
  • Telehealth for the Recertification of Hospice Care:
    • If the “cliff” is averted: Hospice physicians or nurse practitioners may continue having face-to-face encounters to recertify a patient’s eligibility to remain on hospice via telehealth.

With the expiration date for the existing telehealth waivers looming, health care organizations should prepare to comply with additional telehealth restrictions beginning on January 31, 2026, similar to the situation faced in October 2025. We will continue to closely monitor this issue and will provide additional updates as soon as they become available.

On January 14, 2026, Massachusetts Governor Maura Healey announced that the Division of Insurance (DOI) will be promulgating updates to its regulations with the intent of streamlining prior authorization practices for health insurance claims. According to the Governor, the DOI regulations “will reduce unnecessary delays and cut administrative burdens to make it easier, cheaper and faster for people to get the medications and care they need,” including by elimination of prior authorization requirements for routine and essential services.

The forthcoming regulations are likely to be issued by the DOI in the coming weeks and are expected to include:

  • Elimination of prior authorization requirements for routine and essential services, including for patients with diabetes related to any services, devices or drugs related to the chronic disease;
  • A 24-hour response timeframe for urgent prior authorization requests;
  • Continuity of care requirements for patients switching health plans, including honoring previously existing authorizations when a patient switches insurers;
  • Initiatives to increase transparency and reduce provider burden when determining if a prior authorization is necessary.

The announcement also included the establishment of a Health Care Affordability Working Group, composed of industry stakeholders, which will focus on identifying drivers of health care costs and issuing proposals to make health care more affordable in the commonwealth. These DOI regulations are just one of the anticipated legislative and regulatory initiatives in Massachusetts to address health care costs as the “health care industry spent $1.3 billion on administrative costs related to prior authorizations in 2023,” according to the Governor, citing a Council for Affordable Quality Healthcare report.

The forthcoming DOI regulations will be important to health care providers that participate in commercial or state administered health plans in Massachusetts and may lead to changes in existing prior authorization processes, including requiring updates to existing provider participation agreements. We will issue an update when the DOI regulations are released.  

The recent litigation concerning the government’s 340B Rebate Model Pilot Program (the Rebate Program), as further described below, took an unexpected turn as the federal government recently signaled that it intended to revise its approach to the Rebate Program. This change in strategy was previewed by the government in a letter filed with the Court on January 12, 2026—the deadline for briefing regarding the preliminary injunction—stating that the government was considering “returning the approvals challenged [in the lawsuit] to [the Health Resources and Services Administration] for reconsideration,” and that the parties “plan to dismiss the appeal in short order.” The government formally moved to dismiss its appeal on January 16, 2026, and the First Circuit dismissed the appeal on January 20, 2026.

By way of background, just three days before the Rebate Program was set to go into effect, a U.S. District Court issued a preliminary injunction blocking its implementation, which we previously wrote about here. The government swiftly appealed the preliminary injunction to the First Circuit, requesting an administrative stay of the District Court’s decision while the First Circuit deliberated on the preliminary injunction. The First Circuit declined to issue an administrative stay, finding that the federal government had “not carried its burden to justify a stay”—noting specifically that the government did not make a strong showing that it is likely to success on the merits and did not demonstrate that it would suffer irreparable injury should the Court decline to grant the stay. The Court agreed with the District Court’s findings that “the administrative record . . . is devoid of evidence that the federal government considered the hospitals’ significant reliance interests — a critical factor in the analysis of an arbitrary-and-capricious claim.” Absent the stay, the First Circuit requested further briefing on the appeal of the preliminary injunction.

As of this writing, the case will continue to move forward at the District Court level, as the parties have not yet submitted any filings to indicate otherwise, and the District Court’s preliminary injunction prohibiting implementation of the Rebate Program will remain in effect until that litigation is resolved. As discussed in our original post, under the 340B statute, the government can decide to use rebates, but may not bypass APA requirements when modifying the 340B program to implement those rebates. In issuing the preliminary injunction, the District Court indicated that, among other things, the government failed to provide a reasonable explanation for the costs and benefits of the program and the deviation from decades of industry reliance on upfront discounts. Therefore, if the government elects not to pursue reconsideration of the injunction in the First Circuit, the Rebate Pilot Program, as currently contemplated by the government, may not proceed until litigation at the District Court level concludes.

As noted by the District Court, the government would need to satisfy APA requirements to implement a rebate program under the 340B statute, including developing a full administrative record addressing the costs and benefits to the parties. However, it is unclear to what extent the government would incorporate commenters’ suggestions for managing 340B Covered Entities’ implementation costs, which include, for example, delaying the program’s start date to better equip Covered Entities to handle the increased administrative burden, implementing a dispute resolution mechanism that better protects 340B Covered Entities in the event that manufacturers fail to provide timely rebates, and limiting the scope of a future pilot program (as designed, the Rebate Program would apply to all 340B Covered Entities).

We will continue to monitor this litigation and developments concerning the Rebate Program.

On December 31, 2025, the federal Drug Enforcement Administration (DEA) extended current regulatory flexibilities related to tele-prescribing of controlled substances for another year. The DEA issued a fourth temporary extension (2026 Extension) of its pandemic-era telehealth flexibilities, which are now scheduled to end on December 31, 2026. The DEA explained that another extension was necessary “to prevent disruption of care and other problems” likely to arise if it ended the flexibilities before finalizing new tele-prescribing rules intended to appropriately “balance access to care with the necessary safeguards against diversion.”

A third temporary extension of the telehealth flexibilities related to tele-prescribing of controlled substances had been scheduled to expire on December 31, 2025 (see our analysis of that extension, and the previous rulemaking on this issue, here, here, and here). The DEA acknowledged the need to “prevent what has commonly been referred to as the “telemedicine cliff” that could jeopardize access to care, the “potential harms” of which have been emphasized by stakeholders to DEA.

Interestingly, the DEA also cited the recent “abrupt cessation of Medicare’s telemedicine flexibilities” as having a “negative impact” on patient access to care, in support of its decision to extend the tele-prescribing flexibilities once more.

The 2026 Extension temporary rule does not make any substantive changes to the tele-prescribing flexibilities, other than to extend their expiration date until December 31, 2026. As a reminder, the COVID-era tele-prescribing flexibilities, among other things, allow practitioners and patients to form new relationships involving the prescription of controlled substances via telemedicine (i.e., without an in-person medical evaluation), but continue to require that all such prescriptions be issued for a legitimate medical purpose by a DEA-registered practitioner acting in the usual course of professional practice, and be issued pursuant to an interactive audio-video telecommunications system (or audio-only for certain mental health and buprenorphine prescribing if the patient does not consent to video).

We will continue to monitor DEA rulemaking and guidance on tele-prescribing, and health care organizations would be well-advised to review their current telehealth and tele-prescribing practices in light of the extension to ensure continued compliant activities.

A clinical lab in Anderson, South Carolina, and its founder and CEO have agreed to pay a minimum of $6.8 million to settle a federal qui tam case based on allegations for paying illegal kickbacks to physicians in exchange for referrals of laboratory tests. Under the settlement agreement, this figure may increase to approximately $10.1 million if certain financial contingencies are triggered.

The Government alleged that from March 2018 to November 2021, the laboratory and its CEO offered inducements aimed at directing referrals for clinical lab services. As part of the investigation and settlement, the DOJ identified and alleged five distinct types of illegal kickbacks:

  1. Fraudulent Contracts: Payments disguised as office rental, phlebotomy services, or toxicology services and allegedly falsified payments, square footage and hours in certification forms;
  2. Hand-Delivered Money Orders: The CEO personally delivered money orders to referring physicians to mask their intent;
  3. Inflated Equipment Sale: Inflated payment was made to a physician practice for used lab equipment in late 2016 to generate referrals; and
  4. Free Services and Supplies: A pain management practice was provided with free drug-screening services and supplies, securing consistent test referrals.

The government focused on these kickbacks because the government claims it corrupted the impartiality of medical decision-making and improperly induced referrals, thereby violating the False Claims Act.

As we start 2026, this case is another demonstration of the DOJ’s ongoing focus on laboratories and other healthcare providers and executives. It also highlights the importance of thoroughly vetting and asking questions around any arrangements, particularly those related to office rental space and phlebotomists and whether one purpose is to induce referrals. With references to documentation in the case of “certifications” of compliance, this highlights the focus on the “commercial reasonableness” prong of the safe harbor and highlights that purported documentation alone is not sufficient. Overall, this enforcement action underscores the legal and financial risks of non‑compliant referral arrangements. It serves as a strong reminder for laboratories and healthcare organizations to carefully audit and document all arrangements to ensure they are commercially reasonable, properly disclosed, and compliant with federal regulations—both to protect patients and avoid significant penalties.

For a full overview, see the DOJ press release here.

On December 29, 2025—just three days before the 340B Rebate Model Pilot Program (the Rebate Program) was set to begin—the U.S. District Court for the District of Maine issued an order granting a preliminary injunction to block the government’s implementation of the Rebate Program on January 1, 2026, after determining that the Health Resources and Services Administration (HRSA) likely violated the Administrative Procedure Act (APA) during the Rebate Program’s rollout.

Background

Under the 340B Program, drug manufacturers are required to offer their products for sale to certain safety-net health care providers at a discounted price. Since the 340B Program was established, HRSA has required that the discounts be offered to providers as “upfront” price concessions. Safety-net providers often rely on savings achieved from the upfront discounts to support programs to ensure access for the vulnerable patient populations they serve. On July 31, 2025, HRSA announced the Rebate Program, which would permit an approved group of drug manufacturers to offer 340B drug price reductions in rebate form rather than as an upfront discount. The Rebate Program would require safety-net providers to pay the full market cost of the drug and then claim a rebate to realize the discount. HRSA in part contends that the Rebate Program is intended to “de-duplicate” price concessions that certain safety-net providers may obtain via the 340B Program and the Inflation Reduction Act’s Drug Price Negotiation Program. Although only nine drug manufacturers were approved to participate in the Rebate Program, and the Rebate Program covers ten drugs, those manufacturers would be permitted under the Rebate Program to implement the rebate model with respect to all 340B safety-net providers—meaning, all 340B safety-net providers would be required to pay full price and implement the rebate model with respect to the ten drugs. Importantly, the announcement of the Rebate Program appeared to be a reversal of the 340B Program’s prior use of upfront discounts since the 340B Program’s inception in 1992. In fact, late in 2024, HRSA sent violation letters regarding proposed rebate models to some of the very same drug manufacturers who were subsequently approved for participation in the Rebate Program.

Complaint

On December 1, 2025, the American Hospital Association (AHA), the Maine Hospital Association (MHA), and four safety-net providers (collectively, the Plaintiffs) sued the federal government, alleging in their complaint that the rollout of the Rebate Program bypassed the requirements of the APA. The Plaintiffs claimed that HRSA did not address the issues raised by affected stakeholders during the statutorily required comment period, instead going ahead with the implementation of the Rebate Program as planned. On that same day, the Plaintiffs urged the court to temporarily block the January 1 start date for the Rebate Program, citing the potential for “hundreds of millions of dollars in costs” to 340B Program participants as a result of the Rebate Program, as well as “inevitable disruptions to patient care.”

On December 10, 2025, several drug manufacturers, including AbbVie, AstraZeneca, Boehringer Ingelheim, Novo Nordisk, and the trade group Pharmaceutical Research and Manufacturers of America (PhRMA), moved to intervene in the suit as a matter of right, claiming the government could not adequately represent their interests in the case—namely, the potential for financial losses from duplicative discounts, as well as the government’s contrary position regarding 340B rebate models in other ongoing litigation. The Court, however, rejected the drug manufacturers’ bid to intervene in the case, noting that because the case (which consists of five alleged violations of the APA) “turns entirely” on the administrative record, the drug manufacturers would not feasibly be able to illuminate that record better than the government. Additionally, the Court stated that although the government does not itself face the financial implications alleged by the drug manufacturers, this does not inherently mean that the government cannot adequately represent the drug manufacturers’ interests.

Court’s Decision

In its decision to grant the preliminary injunction, the Court examined whether HRSA adhered to the APA’s arbitrary and capricious standard in its rollout of the Rebate Program. The Court explained that when a federal agency introduces new programs or policies impacting the rights and privileges of the public, those actions must be “reasonable and reasonably explained” in order to satisfy the arbitrary and capricious standard.

The Court noted that the Rebate Program represented a “departure from [HRSA’s] decades-long practice of requiring upfront discounts on 340B eligible drugs” and that the administrative record—which is central to the issue of whether HRSA violated the APA—was “rather threadbare.” The decision went on to conclude that the government “failed to follow the APA’s basic blueprint in assembling” the Rebate Program, thereby warranting a preliminary injunction to prevent its implementation nationwide.

The Court’s analysis centered on the following factors:

  1. Substantial Likelihood of Success on the Merits. The Court noted that there was a paucity of information in the administrative record. In reviewing what information was produced, the Court indicated that HRSA must stand by its reasoning at the time it decided to establish the Rebate Program rather than relying on post-hoc rationalizations or documentation from manufacturers—i.e., they must “do their own homework” vis-a-vis building an administrative record demonstrating the thought process behind the Rebate Program. The Court also found that HRSA failed to provide a reasonable explanation regarding the design of the Rebate Program, and that there was no evidence that HRSA weighed the Plaintiffs’ decades of industry reliance on the upfront discount model against the stated goals of the Rebate Program and approach favored by manufacturers, or evaluated Plaintiffs’ costs to float the full cost of the drugs until receiving the 340B rebate. Further, the Court found “fatal” the HRSA’s failure to consider the costs and benefits of the Rebate Program, as it was only now reviewing administrative costs of the Rebate Program.
  2. High Likelihood of Irreparable Harm. The Court concluded that Plaintiffs demonstrated irreparable harm if the Rebate Program were to be implemented, even without relying on “speculative concerns” about delays and denials of rebates for claims involving 340B drugs. Instead, the Court relied on Plaintiffs’ “estimate[d] $400 million in compliance costs, the downstream effect causing them to cut back services and suspend partnerships with drug distributors.”
  3. Balance of Equities/Public Interest. The Court found that there was strong public interest in preserving the status quo and the reach of 340B covered entities to provide critical medical services, particularly in light of the Court’s conclusion that Plaintiffs would likely succeed on the merits of their APA claims.

Implications and Next Steps

Importantly, the Rebate Program is not impermissible under this Order, and in fact, the government has discretion under the 340B Program to opt for 340B rebates. However, any Rebate Program imposed on the public as a final agency action must withstand the requirements of the APA. In this regard, the decision indicates a more fulsome administrative record would need to be established addressing the basis for the Rebate Program compared to the prior policy, its design, and how it weighed Plaintiffs’ reliance interests and administrative costs of compliance. Although the Court declined to weigh in on policy arguments related to what would be less costly alternatives, dispute resolution mechanisms for rebate models, and the use of the rebate database, these questions will also likely need to be addressed in any future iteration of the Rebate Program. Finally, the Court was clear that the preliminary injunction is not limited to the Plaintiffs, and that the Court was authorized to preliminarily enjoin the whole agency action on a national level.

The federal government immediately appealed the order to the First Circuit seeking an emergency stay of the preliminary injunction, and it remains to be seen whether that appeal will prove successful on such a short timeline, as the Rebate Program was to begin January 1, 2026. The drug companies have separately appealed the denials of their motions to intervene, the resolutions of which may impact the suit’s timeline and progression. We will continue to monitor the Rebate Program litigation and implications for 340B compliance.

On November 21, 2025, the Centers for Medicare & Medicaid Services (CMS) published the CY 2026 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Final Rule (the Rule), which includes several significant changes to hospital price transparency regulations. The changes follow from Executive Order 14221, entitled “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information,” which directs the Department of Health & Human Services (HHS) to take steps to require more uniform, accurate pricing information from hospitals. Key provisions of the Rule’s new requirements are summarized below. Although these new requirements become effective on January 1, 2026, CMS is delaying enforcement until April 1, 2026.

New MRF Data Reporting Requirements

Allowed Amounts

Currently, where a hospital’s standard charge is based on an algorithm or percentage, CMS requires hospitals to report an “estimated allowed amount” in their machine-readable file (MRF). The Rule removes this requirement and instead requires hospitals to report the following four elements:

  1. Median allowed amount (which replaces estimated allowed amount);
  2. The 10th percentile allowed amount;
  3. The 90th percentile allowed amount; and
  4. The number of allowed amounts used to calculate the prior three amounts.

The median allowed amount and the 10th– and 90th-percentile allowed amounts must be calculated based on amounts the hospital has historically received from a third-party payer (less certain contractual adjustments) over the 12 to 15 months prior to posting the MRF. If an allowed amount falls between two amounts, hospitals are required to report the higher amount. To calculate these data points, hospitals must use electronic data interchange (EDI) 835 electronic remittance advice (ERA), or an equivalent, alternative source of remittance data.

Hospital NPI

The Rule also adds a requirement that hospitals encode in their MRF their organizational (i.e., Type 2) National Provider Identifier or NPI.

Modification of MRF Attestation Statement

Current regulations require each hospital to attest to the accuracy and completeness of the information encoded in its MRF. Beginning January 1, 2026, the Rule replaces the existing affirmation statement with a new, strengthened requirement at 45 C.F.R. § 180.50(a)(3)(iii) (reproduced below).

To the best of its knowledge and belief, this hospital has included all applicable standard charge information in accordance with the requirements of 45 CFR 180.50, and the information encoded is true, accurate, and complete as of the date in the file. This hospital has included all payer-specific negotiated charges in dollars that can be expressed as a dollar amount. For payer-specific negotiated charges that cannot be expressed as a dollar amount in the machine-readable file or not knowable in advance, the hospital attests that the payer-specific negotiated charge is based on a contractual algorithm, percentage or formula that precludes the provision of a dollar amount and has provided all necessary information available to the hospital for the public to be able to derive the dollar amount, including, but not limited to, the specific fee schedule or components referenced in such percentage, algorithm or formula.

The Rule also adds a requirement that hospitals include with the attestation statement the name of the hospital’s CEO, president, or senior official designated to oversee the data encoding process for the MRF.

Changes to Civil Monetary Penalties

Finally, the Rule makes available a 35% reduction to Civil Monetary Penalties (CMP) imposed for certain violations of hospital price transparency requirements, which hospitals can request in exchange for the hospital waiving its right to an administrative hearing. However, the 35% reduction will not apply if the CMP is imposed due to the hospital failing to make its MRF or any shoppable services public.

Conclusion

Hospitals would be well advised to proactively assess their price transparency practices and update their processes and disclosures to align with the enhanced requirements of the new Rule.

The recent government shutdown caused multiple Medicare statutory payment provisions to lapse on October 1, 2025, due to the absence of Congressional action. With the passage of the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Pub. L. 119-37), (discussed here), Congress has retroactively restored many of these provisions. The looming question at the time of the passage was whether there would be retroactive payments. 

On November 21, 2025, Centers for Medicare and Medicaid Services (CMS) issued a Special Edition to clarify retroactive processing of claims.

Telehealth and Acute Hospital Care at Home Claims

  • On November 6, 2025, CMS instructed Medicare Administrative Contractors (MACs) to return certain telehealth claims submitted on or before November 10, 2025, that were previously non-payable after the lapse of statutory provisions. These claims are now payable if they meet all Medicare requirements.
  • Practitioners should resubmit returned claims and any held telehealth claims. Refund any beneficiary payments for services now retroactively covered. The prior instructions to append the “GY “modifier are rescinded.
  • Similarly, beginning November 10, 2025, MACs returned claims for the Acute Hospital Care at Home initiative for dates of service on or after October 1, 2025. Hospitals may resubmit these claims.

Next Steps for Providers
Facilities, practitioners, and suppliers should expect a return to normal processing operations soon.

This post is co-authored with Paul Palma, legal intern at Robinson+Cole. Paul is not admitted to practice law.

On July 2, 2025, the Department of Health and Human Services Office of Inspector General (OIG) published Advisory Opinion 25-07, which concluded that a pharmaceutical manufacturer’s proposed arrangement to sponsor a free, FDA-approved companion diagnostic test for eligible patients would not implicate the Federal Anti-Kickback Statute (AKS) or the Beneficiary Inducements civil monetary penalties (CMP).

Background

The requestor (a pharmaceutical manufacturer) produces an FDA-approved enzyme inhibitor. Treatment with the inhibitor is only appropriate with specific genetic deficiencies. A clinical laboratory developed an FDA-approved companion diagnostic test which is required to determine patient eligibility for the inhibitor. The two wished to work together.

The Arrangement

Under the parties’ proposed arrangement, the requestor pays the lab a fixed fee for each test performed on an eligible patient, and prohibits the lab from billing any patients, or payors other than the requestor for the testing. The test is offered to patients who: (i) have a prior negative result for a related genetic mutation; (ii) have previously collected tumor samples available for testing; (iii) have not previously received the test; and, in addition, (iv) the test must be used in accordance with FDA labeling. According to the requestor, this arrangement is designed to better identify patients whose deficiency has gone undetected and to determine whether use of the inhibitor would be appropriate.

The requestor certified that the lab is contractually prohibited from: (i) referencing any of the lab’s other products on their “provider facing webpage;” (ii) promoting any of the lab’s or requestor’s other products in any “lab developed communications” to ordering providers or patients; and (iii) communicating with patients regarding the Arrangement unless required by law.

 Additionally, the requestor certified that it would only receive “limited aggregated de-identified date” relating to the test through monthly reports. According to the requestor the reports would include: (i) the number of tests performed under the arrangement; (ii) the cumulative results of all tests performed under the arrangement, and (iii) digital awareness results including the source and number of visits to the the parties’ dedicated website and the clicks on the QR code in pamphlets that were left behind at the provider’s office . The requestor further certified that this data will only be used to: (i) better understand the number of patients with the condition which was missed by  standard testing; (ii)verify the amount invoiced the requestor; and (iii) ensure that the parties’ arrangement is “being conducted in accordance with the terms of the agreement between the lab and the requestor.”

OIG Analysis

Anti-Kickback Statute

The OIG acknowledged that the arrangement could implicate the AKS by offering remuneration (i.e., the free test) that may induce referrals for federally reimbursable items or services and the safe harbor would not apply in this situation. However, OIG concluded that it would not impose sanctions for several reasons:

  • The arrangement presents little risk of overutilization or skewing clinical decision making. The test determines whether the inhibitor would be an appropriate method of treatment for patients and would only be appropriate for patients presenting with the deficiency. The test may also show the drug is not indicated in approximately half the cases.
  • Providers do not receive any remuneration from the requestor for prescribing the drug. Additionally, the requestor’s field personnel are prohibited from discussing the drug in relation to the arrangement.
  • The requestor will only receive de-identified data which it certifies will not be used for sales or marketing purposes including sales targeting or incentives.
  • The agreement prohibits the lab from promoting the arrangement to patients and providers and the requestor certified that it will not provide information about the arrangement to patients or providers directly.
  • There are various safeguards in place to prevent this being used as a marketing or sales tool to steer providers to order any items or services from requestor or the lab, including the drug.

Beneficiary Inducements CMP

OIG also concluded that the parties’ arrangement does not violate the Beneficiary Inducements CMP. Although providing a free test constitutes remuneration, OIG found that the arrangement meets the statutory exception for promoting access to care with a low risk of harm. Specifically, the arrangement:

  • May improve a beneficiary’s ability “to obtain items and services payable by Medicare or Medicaid” in instances when the inhibitor is covered by those programs.
  • Is unlikely to interfere with clinical decision making because the test only confirms whether the inhibitor can be prescribed for a particular patient which a provider may already be considering.
  • Does not raise quality of care or patient safety concerns because it is used to determine whether the inhibitor would be an effective treatment for a specific patient.
  • Is unlikely to increase costs to federal health care programs because the inhibitor may be a life-extending treatment that is already under consideration by the provider. Additionally, the test will determine the appropriateness of prescribing the inhibitor and nearly 50% of patients will be ineligible for the inhibitor after testing. Finally, the arrangement does not incentivize providers to prescribe the inhibitor in any way.

As is standard, OIG cautioned that its advisory opinion is limited to the proposed arrangement only and does not cover any other arrangements. OIG further cautioned that the opinion does not provide any opinion on liability in relation to the False Claims Act and, finally, that the opinion is only binding on the Department of Health and Human Services but no other government agencies.

Takeaways

The advisory opinion provides valuable insight into how OIG evaluates pharmaceutical manufacturer sponsored diagnostic testing programs under the AKS and CMP. By imposing certain structural safeguards including clear eligibility criteria, de-identified data sharing, and marketing restrictions manufacturers may be able to establish programs that increase access to care without implicating the AKS or CMP. The advisory opinion may provide a potential model for other labs and pharmaceutical manufacturers to enter into agreements where the manufacturer would sponsor companion laboratory tests. We will continue to monitor for additional guidance that OIG may issue on this and related topics.

This was was authored by Edward J. Heath, co-chair of Robinson+Cole’s Enforcement, Investigations + Litigation in Health Care team.

Since January, there have been almost daily media reports about federal government agents conducting operations intended to sweep up individuals who are in the U.S. illegally. The primary agency responsible for these activities is Immigration and Customs Enforcement (ICE). “ICE raids,” as they have come to be called, have caused a great deal of confusion and anxiety for health care entities, including clinical laboratories, who struggle to balance cooperation with law enforcement on the one hand, and respecting the right of their employees and patients on the other.

Historically, the concept of a law enforcement “raid” has arisen in the context of search warrants. Search warrants are judge-signed orders that allow agents to enter a particularly designated place to search for and seize a particularly identified thing or things. In the prototypical example of a search warrant raid, multiple dark vans or SUVs pull up in front of the laboratory site, numerous agents in bulletproof vests and jackets emblazoned with “FBI” pour out of those vehicles and rush into the building, causing panic as they charge into offices and storage rooms, grabbing technology and paper. If federal agents appear with a valid warrant, laboratory personnel cannot physically stand in their way. Any obstruction is likely to result in criminal charges.  

As a result of policy changes by the new presidential administration, however, the “raid” concept that now comes to mind are “ICE raids.” ICE was created in 2003 in a merging of the investigative and interior enforcement elements of the former U.S. Customs Service and the Immigration and Naturalization Services.  ICE is now a division of the U.S. Department of Homeland Security, and it has a budget of approximately $8 billion and workforce of roughly 20,000 personnel. Its scope of operations includes enforcement of the laws governing immigration, border control, customs, and trade. ICE Within ICE, the unit or “directorate” responsible for the recent “raids” is known as Enforcement and Removal Operations.

It is important to understand that ICE agents are essentially federal police officers. They are not the military operating unrestricted in a war zone. Like FBI agents, their powers are limited by the U.S. Constitution and federal law more generally. ICE agents usually appear with an administrative warrant signed by an immigration judge; these warrants do not grant agents the broad powers of a search warrant. Absent a valid search warrant signed by a United States District Court judge, ICE agents appearing with an administrative warrant or subpoena still generally need the consent of the laboratory to enter into private places to search for and take documents or property—or to seize individual persons. This raises some key questions about circumstances where there is no search warrant involved:

Do we have to let them come into our facilities?  ICE agents have the right to enter into any part of a lab’s facility, like a waiting room, that is open to the general public. ICE agents are not, however, authorized to enter into any non-public areas within the facility without permission. Importantly, permission to enter private areas can be expressly given or even implied from circumstances, so it is important that lab personnel understand clearly which areas of the facility are public and which are private. It is critical that personnel know precisely what to say to explicitly decline an ICE agent’s demand to access a non-public area.  

Do we have to answer their questions?  Although ICE agents are free to ask questions about the lab’s operations, employees, and patients, there is no obligation to answer those questions. Additionally, protected health information (PHI) is protected from disclosure under HIPAA and a number of state laws, just as is personnel information about any of the lab’s employees. Again, it is important that personnel have been instructed how to respectfully decline to answer questions from agents.

Do we have to show them records or give them copies?  As with questions seeking information, there is no obligation to produce documents for ICE’s review or seizure. Moreover, documentation with PHI and personnel information should not be made available to government agents without a subpoena or search warrant. Beyond that, when agents on are site, employees should take care not to have electronic or paper document in plain sight where they may be viewed by agents.

Should we physically stop ICE agents who are attempting, without our consent, to enter into a private area in the lab or to take documents or property?  No.  Any physical interference, particularly physical contact, with an ICE agent is likely to be met with an arrest and ensuing federal criminal charges.

The appearance of federal agents will be a stressful situation for almost all lab personnel. The stakes are high, so it is important to seek guidance from legal counsel in these situations.  Nonetheless, it is also worthwhile to consider working with legal counsel to develop in advance a straightforward written policy for employees to reference at the moment ICE arrives on site.  Such a policy would be designed to minimize anxiety while ensuring legally appropriate outcomes.