Lawyers Eye CMS’ New Power To Freeze Medicaid Funds (Law360)

Amid headlines about the decision by President Donald Trump’s administration to withhold $1 billion in Medicaid funds from California and Minnesota over fraud concerns, healthcare attorneys are watching what could be a far more consequential development. In a largely overlooked move, Health and Human Services Secretary Robert F. Kennedy Jr. announced he had expanded a key prerogative to the Centers for Medicare & Medicaid Services. The power in question, called exclusion authority, has long been in the hands of the HHS Office of Inspector General, a powerful division charged with targeting fraud and abuse across more than 100 agency programs, including Medicare and Medicaid. Greg Demske, a partner in Goodwin’s Litigation and Healthcare practices and former chief counsel at HHS OIG for around a decade, pointed out that, over recent decades, CMS has increased its focus on program integrity as it has been provided more resources and tools to do so. This exclusion authority expansion feels like a “natural evolution” of that larger trend, he said. But at this point, without more clarity around exactly how this is going to be implemented, there could be some real confusion and ambiguity. “The question now is: OIG has basically been your one-stop shop for the HHS [enforcement] issues, and is that still true going forward?” he said to Law360.