Medicaid

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Overview

The President signed H.R. 1, the One Big Beautiful Bill Act (the “Act”), into law on July 4, 2025. In Section 71113, the Act restricts the flow of Federal Medicaid funds to certain “Prohibited Entities” for the one-year period following its enactment.

Section 71113 puts forth a set of specific criteria. The prohibition applies to any entity—and its affiliates, subsidiaries, successors, and clinics—that: 

  • As of October 1, 2025:
    • Will be an “essential community provider,” as defined by 45 C.F.R. § 156.235, that is primarily engaged in family planning services, reproductive health, and related care;
    • Will be structured as a 501(c)(3) nonprofit organization; and
    • Will provide abortions (except cases involving rape or incest or if the woman’s life is endangered); and
  • Received more than $800,000 in Federal and State Medicaid payments in fiscal year 2023.

The structure of Section 71113 has created considerable uncertainty. The restriction went into effect on July 4, 2025, but requires both a forward-looking assessment of the services a provider will provide as of October 1, 2025, and a backward-looking assessment of how much a provider received in Medicaid payments in 2023. This ambiguity has led to two separate legal challenges in the weeks following the Act’s enactment. As of July 28, 2025, the U.S. Department of Health and Human Services (“HHS”), HHS Secretary Kennedy, the Centers for Medicare and Medicaid Services (“CMS”), and CMS Administrator Oz are enjoined from enforcing, retroactively enforcing, or otherwise applying the provisions of Section 71113 against all Planned Parenthood health care providers pursuant to a preliminary injunction issued by the U.S. District Court for the District of Massachusetts.[1] On July 29, 2025, twenty-one state attorneys general and the Governor of Pennsylvania also filed suit regarding the constitutionality of Section 71113 in the U.S. District Court for the District of Massachusetts.[2]

Continue Reading Legal Challenges to the One Big Beautiful Bill Act’s Restrictions on Federal Medicaid Funding

On July 2, 2025, the U.S. Department of Justice (DOJ) Civil Division and the U.S. Department of Health and Human Services (HHS) jointly announced the formation of a False Claims Act (FCA) Working Group. This new initiative underscores a coordinated federal enforcement strategy focused on identifying and addressing fraud in federally funded health care programs, particularly Medicare Advantage and Medicaid managed care. The announcement comes days after Matthew R. Galeotti, Head of DOJ’s Criminal Division, announced the results of the “largest coordinated health care fraud takedown in the history of the Department of Justice”  and the creation of a “Health Care Fraud Data Fusion Center” comprised of data specialists that will “break down information silos, using coordinated data analysis to enable our investigative teams to quickly identify and dismantle emerging fraud schemes.” Taken together, these announcements demonstrate the DOJ’s effort—in both civil and criminal divisions—to strengthen its collaboration with HHS to investigate and prosecute health care fraud.

Continue Reading DOJ and HHS Launch FCA Working Group: Heightened Enforcement Risk for Health Care Entities

Dr. John Pepe and Dr. Richard Sherman (“Relators”), acting as whistleblowers, brought a qui tam action against Fresenius Medical Care Holdings, Fresenius Vascular Care, Inc., and Dr. Gregg Miller (“Defendants”).  Relators’ complaint alleged that the Defendants engaged in fraudulent billing practices under the False Claims Act (“FCA”) and analogous state laws.  Last week, the United States District Court for the Eastern District of New York dismissed Relators’ case because they failed to plead their allegations with particularity as required by Federal Rule of Civil Procedure 9(b).

Continue Reading Stringent Requirements for Pleading Fraud Under Rule 9(b).

The United States District Court for the Northern District of Indiana recently dismissed a case involving allegations of fraudulent Medicaid claims and self-referrals.  The case, United States of America and State of Indiana ex rel. Bradley A. Stephens v. Nuclear Cardiology Associates (“NCA”), serves as a critical reminder of the stringent requirements for pleading fraud under the False Claims Act (FCA) and the Stark Law.

Continue Reading General Allegations Without Representative Examples Are Insufficient to Survive a Motion to Dismiss

In the world of False Claims Act (“FCA”) litigation, the recent case United States ex rel. Robert C. O’Laughlin, M.D. v. Radiation Therapy Services, P.S.C., et al. serves as an important reminder of the need for concrete evidence when asserting qui tam FCA claims.

Continue Reading The Anatomy of a Failed Qui Tam Case: Lessons from U.S v. Radiation Therapy Services

In January 2024, the Centers for Medicare and Medicaid Services (CMS) announced a new innovation care delivery model that seeks to bridge the gap between behavioral and physical health. The Innovation in Behavioral Health (IBH) Model aims to improve the quality of care and behavioral and physical health outcomes for adults with moderate to severe mental health conditions and substance use disorders (SUDs). The IBH Model will service beneficiaries who are enrolled in Medicare and Medicaid, including those who are dual eligible.[1] These populations experience higher than average rates of mental health conditions or SUDs, or both, highlighting the importance of a model that integrates behavioral and physical healthcare as well as addressing health-related social needs (HRSN).[2]

Continue Reading CMS Notice of Funding Opportunity for the Innovation in Behavioral Health Model Open Until September 9, 2024

On September 1, 2023, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (“CMS”) issued a much anticipated and contested proposed rule that seeks to establish minimum staffing level requirements for nursing homes.  The proposed rule represents the first time the federal government has proposed comprehensive nationwide nursing home staffing requirements, although various states have already enacted their own staffing requirements.

Continue Reading CMS Proposes Minimum Staffing Requirements and Enhanced Facility Assessments for Nursing Homes

In 2021, 1 in 10 American households experienced food insecurity, an issue exacerbated by the COVID-19 pandemic.[1] Diet-related diseases such as diabetes, heart disease, and cancer are some of the leading causes of death and disability in the U.S. Each year in the U.S. there is an estimated $52.8 billion in excess health care costs as a result of adults experiencing food insecurity.[2] Since recognizing the influence of nonmedical factors such as socioeconomic status, education, and physical education on health, there have been a growing number of initiatives to address social determinants of health (SDOH) within the health care system. Food is medicine interventions are tailored to respond to the connection between food and health in order to help prevent, manage, or reverse diet-related disease.[3] Food is medicine interventions may include medically tailored meals, produce prescriptions, and medically tailored food packages. These interventions have been associated with decreased inpatient hospital admissions, decreased overall healthcare costs, increased medication adherence, and increased diet quality.[4] The concept of using healthy foods to reduce diet-related disease in the U.S. is increasing in popularity. There is bipartisan support for food is medicine initiatives to target food insecure and medically vulnerable populations.

Continue Reading Food is Medicine: Can Policymakers Come to the Table?

Initiated in response to the COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) requires Medicaid programs to keep beneficiaries continuously enrolled through the end of the public health emergency (PHE). The PHE is expected to end on May 11, 2023. Despite FFCRA’s initial timeline, the Consolidated Appropriations Act, 2023 (CAA 2023) established the end of the continuous enrollment provision to be March 31, 2023, in effort to reduce the enhanced federal Medicaid matching funds through December 2023. Accordingly, as of April 1, 2023, states can resume Medicaid disenrollment. The unwinding of the Medicaid continuous enrollment provision has raised concerns about the number of people who will lose coverage.

Continue Reading Medicaid Redetermination & Unwinding Updates

Third Circuit Rules on Manufacturer Restrictions on Contract Pharmacies

The first of three pending appeals on whether a pharmaceutical manufacturer can limit distribution of covered 340B drugs to contract pharmacies resulted in a clear victory for pharmaceutical manufacturers.  The Third Circuit resolved conflicting decisions among district courts within the Third Circuit by ruling that the…