Health Headlines: February 2025

On Feb. 12, 2025, California state legislators introduced Senate Bill 351 to codify restrictions on corporate practice of medicine to limit the influence of private equity groups and hedge funds in physician and dental practices. The proposed bill is substantially the same as a portion of Assembly Bill 3129, which was vetoed by Gov. Gavin Newsom last year. Our reporting of Assembly Bill 3129 can be found here. The proposed bill would restrict private equity groups and hedge funds from interfering with the clinical judgment or care delivery of physicians and dentists, including by determining what diagnostic tests are appropriate, determining the need for referrals, or by establishing hours or patient visit requirements for such providers. The bill would also restrict entities controlled by private equity or hedge funds from owning medical records, making certain employment decisions regarding clinical personnel, controlling contracting with providers and third-party payers, and making coding and billing decisions. Such restrictions are consistent with California’s prohibition on the corporate practice of medicine. Finally, the bill would prohibit contractual provisions imposing noncompete and nondisparagement restrictions on providers who no longer work for a provider managed by a management services organization.

A copy of the proposed legislation can be found here.

Representatives of the Department of Government Efficiency (DOGE) gained access to the Centers for Medicare & Medicaid Services (CMS), raising concerns about potential exposure of sensitive medical information. CMS, which oversees Medicare, Medicaid, and the Children’s Health Insurance Program and spent more than $1.5 trillion in 2024, is collaborating with DOGE to ensure appropriate access to its systems. Some CMS officials seem open to finding “opportunities for more effective and efficient use of resources” in line with President Trump’s goals of cutting spending and limiting fraud and abuse. CMS programs account for 22% of federal spending, and previous efforts to address fraud and abuse in CMS programs have encountered strong political backlash. Political battle lines are being drawn between Republicans, who are supportive of DOGE’s efforts, and Democrats, who have raised concerns about potential exposure of sensitive medical information. President Trump has nominated Mehmet Oz to lead CMS and focus on reducing waste and fraud, but Oz has not yet been confirmed.

In mid-January, the bill “An Act establishing Medicare for All in Massachusetts” was introduced in the Massachusetts Senate and House of Representatives (HD.1228/SD.2341). This proposed legislation would create the Massachusetts Health Care Trust, which would fund a single-payer healthcare financing system that provides access to healthcare services for all Massachusetts residents.

If the legislation is enacted, the Massachusetts Health Care Trust would cover dental care, vision care, behavioral health care, substance abuse services, reproductive health care (which explicitly includes abortion care), home health care, nursing home care, prescription drugs, and more medically necessary services for all Massachusetts residents without any form of patient cost sharing. The proposed legislation includes provisions for funding capital improvements at healthcare facilities, professional training, and research. The Massachusetts Health Care Trust would be funded largely by existing federal funds paid to the commonwealth for healthcare services, new dedicated healthcare taxes, and funds from the Commonwealth’s General Fund.

The bill was presented in the Massachusetts Senate by Sen. James B. Eldridge and in the Massachusetts House by Reps. Lindsay N. Sabadosa and Margaret R. Scarsdale.

The proposed legislation can be found here.

In our January newsletter, we reported on the Texas attorney general’s suit against a New York physician that accused the physician of unlawfully providing a Texas resident with abortion-inducing drugs. On Feb. 13, 2025, the state of Texas obtained a default judgment in its lawsuit against Margaret Daley Carpenter, a New York physician. The lawsuit alleged that Dr. Carpenter unlawfully provided abortion-inducing drugs through telehealth services to a Texas resident to end an unwanted pregnancy. The complaint can be found here. The default judgment was entered after Dr. Carpenter failed to file an answer or any responsive pleading to the complaint.

In entering the default judgment, the court found that Dr. Carpenter unlawfully practiced medicine without a license in Texas and violated the state’s prohibition on providing abortion care services unless certain conditions are met. The court entered a $100,000 civil penalty against Dr. Carpenter, plus costs and fees, and entered a permanent injunction barring Dr. Carpenter from prescribing abortion-inducing drugs to Texas residents and practicing medicine in the state of Texas without a Texas medical license and registration. The default judgment can be found here.

A separate criminal case is pending against Dr. Carpenter in Louisiana state court. On Jan. 31, 2025, a Louisiana grand jury indicted Dr. Carpenter for allegedly prescribing abortion-inducing medication to a Louisiana resident through telehealth services. On Feb. 11, 2025, Louisiana Governor Jeff Landry signed an extradition warrant for Dr. Carpenter.

New York Governor Kathy Hochul has stated she will not cooperate with the extradition warrant, in accordance with New York’s June 2022 shield law (Senate Bill S9077A), which provides legal protections for reproductive healthcare providers. These protections include a prohibition against New York state and local law enforcement agencies cooperating with out-of-state investigations into lawful abortions provided in New York, including through telehealth services. On Feb. 3, 2025, Governor Hochul signed additional protections into law that strengthen New York’s telehealth shield law (Senate Bill S36A) to further protect doctors prescribing abortion medication. The new law allows providers prescribing abortion medication to request that a dispensing pharmacy print their practice’s name on the prescription bottle label instead of their name.