Health Headlines: January 2025

The Supreme Court has agreed to review Becerra et al. v. Braidwood Management Inc. et al., potentially affecting the provision of preventive healthcare services under the Affordable Care Act (“ACA”). In the 2022-23 underlying case, the Texas district court held that the no-cost preventative service requirement of the ACA violated the Appointments Clause of the Constitution because the members of the United States Preventive Services Taskforce (USPSTF) were not confirmed by the Senate or report to the Sec. of Health and Human Services. Last year, the Fifth Circuit agreed but narrowed the scope of the district court’s decision, declining to apply the decision nation-wide and declining to expand the decision to other advisory boards, the Advisory Committee on Immunization Practices and the Health Resources and Services Administration. Providers and insurers should be keen to monitor the Supreme Court’s decision as the decision will impact which preventative health services, if any, must be covered under the ACA without cost-sharing. In light of the Becerra ruling, states like Michigan have codified the provision of no-cost essential healthcare services, like preventive care and emergency services, in state insurance law.

On December 27, 2024, the U.S. Court of Appeals for the Second Circuit decided U.S. ex rel. Camburn v. Novartis and adopted the “one-purpose” test in determining whether a defendant has violated the Anti-Kickback Statute (“AKS”). In the case, relator Camburn alleged that Novartis violated the False Claims Act by funding speaker programs as a scheme to provide remuneration in the form of speaker fees and lavish meals in exchange for physicians prescribing Gilenya, a multiple sclerosis drug. The AKS prohibits the “knowing and willful” payment of any remuneration to induce or reward patient referrals or the generation of any business which is reimbursable by Federal or state healthcare programs, like Medicare and Medicaid. The False Claims Act prohibits an individual from knowingly submitting a claim for reimbursement to a Federal healthcare program that is false or fraudulent. Many FCA claims are predicated on a violation of the AKS. The district court had initially dismissed the relator’s claims for failing to adequately plead an AKS violation, but the Second Circuit, while affirming most of the district court’s decision, vacated and remanded on the issue of Novartis’ speaker programs. By adopting the “one-purpose” test, the Second Circuit concluded that the relator had sufficiently plead enough facts to give rise to an inference that at least one intent behind the speaker programs was to induce referrals, even if it was not the only, or even primary, intent. The Second Circuit joins the Third, Fifth, Seventh, Nineth, and Tenth Circuits, who have previously adopted the test.

A copy of the decision can be found here.

State Attorney General Ken Paxton, on behalf of the State of Texas, filed a lawsuit against the U.S. Department of Health and Human Services (“HHS”); Xavier Becerra, Secretary of HHS; and Melanie Fontes Rainer, Director of the HHS Office for Civil Rights alleging that HHS exceeded its authority in promulgating the Standards for Privacy of Individually Identifiable Health Information (the “2000 Privacy Rule”) and HIPAA Privacy Rule to Support Reproductive Health Care Privacy (the “2024 Privacy Rule”). The State of Texas argues that aspects of both the 2000 Privacy Rule and the 2024 Privacy Rule improperly infringe upon and harm States’ law enforcement agencies’ investigative authority and should be vacated. Notably, the State of Texas argues that “reproductive health care” under the 2024 Privacy Rule is “clearly meant to encompass abortion, hormone and drug therapy for gender dysphoria, surgical procedures related to gender dysphoria, and gender experimentation (emphasis added)” – although  HHS made no reference gendering affirming or related care under its examples of reproductive health care under the 2024 Privacy Rule and has declined to-date to provide further clarification.

Vacating the 2024 Privacy Rule would roll back protections against the use of PHI related to reproductive health care for criminal, civil, and administrative investigations and proceedings purposes, and vacating the 2000 Privacy Rule would roll back decades of protection of PHI more broadly. The case is pending in the Northern District of Texas in front of Judge James Wesley Hendrix, who was initially nominated by President Obama, and later renominated and appointed by President Trump in 2019.

A copy of the complaint can be found here.

On December 12, 2024, Texas Attorney General Ken Paxton filed suit against a New York licensed physician accusing them of unlawfully providing a Texas resident with abortion-inducing drugs mifepristone and misoprostol to end an unwanted pregnancy through telehealth services. The complaint alleges that, because Dr. Carpenter is not licensed to practice medicine in the state of Texas, she is unlawfully practicing medicine in Texas by seeing patients through telehealth who are Texas residents. The complaint also alleges that Dr. Carpenter violated the Texas Health and Safety Code’s prohibition on providing abortion care services unless certain conditions are met and may not provide such services via telemedicine.

The state is seeking a temporary injunction against Carpenter, preventing her from providing telemedicine services to Texas residents and from prescribing abortion-inducing drugs to Texas residents, as well as not less than $100,000 in civil penalties, attorney’s fees, and costs.

A copy of the complaint can be found here.

On January 8, 2025, New York Attorney General Letitia James issuing cease and desist notices to 54 medical transport companies, warning them of potential financial penalties and prison sentences for fraudulent services billed to the states’ Medicaid program. The Attorney General’s office has already secured over $10 million and led to 11 criminal convictions. Four recent settlements with transportation companies for illegal billing schemes were also announced amounting to over $847,000.

Medicaid reimburses licensed transportation companies for transporting patients to medical appointments, but the Attorney General’s Medicaid Fraud Control Unit has found numerous fraudulent activities, including exploitation of vulnerable Medicaid recipients in need of substance abuse treatments to recruit passengers to use in fake billing schemes, inflating costs and extending mileage fraudulently, billing for fake trips, adding fake tolls, and using unlicensed drivers.

A copy of the Attorney General’s press release can be found here.