January 2, 2026 • 57 mins
Judith Waltz, Partner, Foley & Lardner LLP, Faraz Siddiqui, Assistant General Counsel, Memorial Sloan Kettering Cancer Center, David Lazarus, Partner, Foley Hoag LLP, and John Hood, Associate, Akerman LLP, discuss some of the key health law developments from 2025 and what to expect in 2026. They cover a wide range of legislative, regulatory, and judicial issues, focusing on Medicare and Medicaid, public health, civil and criminal enforcement, and drug development. Waltz, Siddiqui, Lazarus, and Hood are editors of AHLA’s bestselling title, Federal Health Care Laws and Regulations.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:04):
This episode of AHLA Speaking of Health Law is
brought to you by AHLA membersand donors like you.
For more information, visitAmericanHealth Law.org.
SPEAKER_02 (00:17):
Hello, I'm Judy Waltz.
I'm a partner with Foley andLardner in San Francisco.
I actually chair Foley's healthcare practice.
I am here today with someco-editors from the HLA Federal
Health Care Law and Regulations,which I'm going to see if the
camera can pick up this year ina lovely shade of yellow.
(00:38):
We are co-editors with a fewother people, and the new
version is just out, the newyellow version, replacing the
purple version from last year.
Each of us as a co-editor takesa particular section and reviews
the various laws and regulationsthat have been enacted in the
(01:02):
past year.
Some are dotted, some are acted,some are moved, to make sure
that the book is complete andit's a good, really good desk
reference.
I know this is old school, but Iwill also make a pitch for the
hard copy of it.
It also comes in digital, whichI think comes with the
subscription.
The hard copy I use to annotate,and so I scribble on it all
(01:25):
year.
It's a little sad at the end ofthe year when I have to go with
my whole copy because all mynotes, my cross-references, and
things are gone.
But I use it pretty much on adaily basis and really um
recommend it.
So like I said, I have well,first I'll tell you my sections,
which were um Title 18, soMedicare.
(01:49):
And it sounds like John and Ihad a little bit of overlap on
Title 19 this year.
So Title 18 is Medicare, Title19 Medicaid.
Um we'll talk a little bit aboutthe topics in substance, but
first I want people just tointroduce themselves.
So Faraz, would you introduceyourself, please?
SPEAKER_03 (02:11):
Yes, absolutely.
Thank you, uh Judy, for settingit up.
I'm Faraz Sadiki.
Um for the last uh seven oreight years I've worked as uh
outside counsel um uh at uh lawfirms uh uh with a specific
focus on food and drug law.
I uh did uh uh quite a bit ofwork in uh the drug development
(02:34):
area, pre-approval um uh workand post-approval at
advertisement and promotion.
And I also uh did a fair amountof uh work in uh Medicaid,
Medicaid pricing and uhreimbursement for uh for the
AHLA uh federal uh laws andregulations.
I've been reviewing Title 21,Food and uh the Food, Drug and
(02:59):
Cosmetic uh Cosmetics Act uh forthe group, um, and we'll be
talking about that today.
Uh right now I'm uh at uhMemorial Sloan Kettering, a
cancer center, and that's uhwhere uh I've been for the past
year.
Uh and and I'll I'll try andbring some of the issues uh that
we've been facing related to theFDCA uh for today for the
(03:20):
viewers today.
SPEAKER_02 (03:22):
Thank you.
So, Dave, would you like tointroduce yourself, please?
SPEAKER_04 (03:27):
Sure.
Thanks, Judy.
Thanks uh to the HLA for havingme to speak on the podcast
today.
It's always a good uh beginningof the year to listen to this.
So I'm excited to actuallyparticipate this time.
So thanks for the invitation.
Appreciate it.
Uh so I'm Dave Lazarus.
I am a partner at Foley Hoagbased in Boston in our
white-collar practice group.
(03:48):
I was a federal prosecutor, astate prosecutor for about 17
years total in uh Florida andMassachusetts and New York.
And I focus my practice now onadvising companies and
individuals in all differentaspects of government
enforcement investigations, aswell as uh healthcare compliance
regulatory advice topharmaceutical companies, uh
(04:11):
providers, kind of run the gamutof the healthcare sector, uh,
rehab centers, clinicallaboratories, uh, DME suppliers,
um, and a lot of other relatedorganizations.
I am uh my my purview within theAHLA book is in the fraud abuse
space.
So I look at those statutes andregulations.
SPEAKER_02 (04:32):
Thank you.
And John Hood.
SPEAKER_05 (04:35):
Thanks, Judy.
Um I'm a member of uh Ackerman'sOrlando office.
I'm an associate in ourhealthcare practice group.
I focus my practice on advisinghealthcare industry clients on
transactions and regulatorycompliance matters.
Um it runs the gamut fromhospitals, health systems,
(04:55):
physician groups, uh pharmacies.
Um I've also done some work umadvising insurance uh companies
on regulatory compliancematters.
Um as uh Judy mentioned.
Um I I cover as an editor withthis publication title 42, with
the exception of uh those titlesthat that that Judy mentioned.
(05:19):
Um so so there is is some umoverlap in the in the areas that
that we're looking at.
Um but uh as as as I'm sure ouraudience knows, uh Title 42 is
uh quite a large section of theof the of the US code for um for
practitioners and makes up uh uhquite a bit of our publication.
SPEAKER_02 (05:41):
So our plan for today is do another kind of
round robin here with each ofour co-editors discussing um a
bit about what they thought wasimportant in the last year and
probably most important.
I find it hard to predict atthis point, but what will be
most important in this in thiscoming year?
And just a reminder that we areeach speaking here today on our
(06:04):
own behalf and not on behalf ofour firms or clients or anybody
else we know.
So please um uh take these asour own opinions and judgments.
So for us, uh you're gonna gofirst.
SPEAKER_03 (06:19):
Thank you, Judy.
Thank you.
Um yeah, just what you said atthe tail end over there, you
know, it has been uh quite uhquite a marathon just keeping up
with all the changes, both forpractitioners and for uh folks
like us who um who are trying topresent uh the uh uh the the the
sum of the changes uh toreaders.
(06:42):
Um in fact, uh some of the uhtopics that I'm going to cover
today were additions that wemade to the uh some new um
regulations that have alreadybeen taken out uh you know
because of how how things umhave been going.
Um okay, so from a food and drugperspective, what I wanted to do
(07:05):
today is uh give the uh give alittle bit of a flavor of how uh
a hospital like uh memorial slowand catering uh that that uh uh
participates in uh in a in a lotof clinical trials, uh cancer
clinical trials, what what whatare what have been some of the
big changes that we have felt?
(07:27):
Uh also looking at it from theuh pharmaceutical uh uh industry
and uh healthcare systems uhalso um but I wanted to give
that a little context uh becauseum you know the the I have seen
how um the work that I do withwith the uh with the volumes
(07:48):
really dovetails with uh thework that I do uh at the
hospital.
So the first big change that wesaw um uh was a uh was uh
Congress uh finally enacted abuyer secure act.
Uh this is a uh an act um thathas been in legislative limbo
(08:13):
for quite a while.
Uh it had garnered significantattention for not being uh
enacted earlier.
Um and finally it it went to uhDonald, uh President Donald
Trump to sign.
Now, what is the Bio Secure Act?
Um essentially what what thisdoes is this is a um this was
(08:36):
part of this was included in theNational Defense Authorization
Act for fiscal year 2026.
What it does is it it putsrestrictions on the federal
government from uh fromcontracting with certain
biotechnology companies ofconcern um uh when they uh use
(08:59):
biotechnology equipment orservices uh due to uh national
security risks.
Um there's a list of uhcompanies of concern that the
DOD maintains, uh, and that listis going uh that list uh feeds
into uh the um the new law.
(09:21):
Uh right now the the uh lawprohibits federal government uh
money fair uh procurements andcontracts from going to uh to
these biotechnology uh companiesof concerns, but overall the the
(09:43):
uh the the bill puts immensepressure on pharma companies in
the US to sever ties withbiotech companies, uh mostly in
China.
There are parts of this law thatuh try and put more focus on uh
on uh you know creating creatinguh local uh uh US-based uh
(10:09):
biotech companies that andsuppliers so that they can
supply the pharma companies thatare over here.
At the hospital, um we have seensome similar uh regulations uh
have been implemented, uhregulations that have come down
from uh the DOJ and the NIH.
(10:29):
Uh the NIH recently released, uhfinalized a rule that prohibits
the transfer of any biospecimensto China and some other
countries of concern.
These are uh countries thatalready have uh the US already
has export compliance uh uhrules.
So that would that be China,Russia, Venezuela, Cuba, Iran,
(10:51):
and North Korea.
There's a lot of uh uh clinicaltrials and a lot of uh data that
and and other work that moves uhbetween China and the US.
So the federal government iscoming down hard uh in a very
bipartisan way to uh to to blockuh biospecimen transfer, they uh
(11:12):
to track all uh what's calledbulk sensitive personal data.
So this is uh similar to uhprotected health information,
and it's going to the uh ourhospital and other entities that
do that work in clinical trialshave to monitor and track all
(11:32):
data, uh patient-level datathat's going to China and these
other countries.
So, so you know, there's thisthere's there's been a lot of
changes already in this space,and we will continue to see
these, but uh uh you know, uhrest assured that um the both
the pharma company and uh uhtrial sites like ours are uh
(11:52):
were were affected uh by these.
Um moving on to the second one.
Uh this is uh uh you know uhthis is in the medical device
space.
Uh and in fact, uh even even uhmore specifically, lab develop
tests.
We spoke about lab develop teststhat I think in last year's uh
(12:16):
podcast and in this year's uh uhvolumes, we added regulations
that uh came in uh uh because ofa finalized uh rule by the FDA
on increasing uh on yes,increasing its regulations on
laboratory developed tests.
Um however, there was a lot ofblowback from the industry, the
(12:38):
way that the FDA went aroundaround, uh went about doing
this.
Uh, this change uh was both insubstance and in uh the the
speed of how they were doing itwas just not something that the
industry uh could um uh couldcould uh put up with, and there
were a lot of legal challenges.
Uh finally, the uh EasternDistrict Court of Texas vacated
(13:01):
the rule, and in August, FDArescinded uh the changes it made
to the um to the lab developedtests.
Uh so you know we will see nextyear that we will be back at
square one.
FDA will have to go back to thethat you know to to to square
one and figure out what howthey're going to enforce uh this
kind of in vitro diagnostics.
(13:23):
Um I think we'll leave it atthose two.
Um, you know, these these werethe main things that I uh think
the the readers uh me and uh thereaders and our viewers would
have seen if they practice inthis space.
SPEAKER_02 (13:36):
Thank you, Fraz.
So, Dave, how about you?
What's going on in theenforcement world?
SPEAKER_04 (13:42):
Uh sure.
So that could be uh the topic ofprobably days of conversation
and it changes on a daily basis,it seems, these days.
But uh looking back at the lastyear, I'll speak briefly about
two different categories ofenforcement, although they're as
usual very closely related, bothcivil enforcement and criminal
enforcement.
Civil enforcement uh once againthis past year focused or was in
(14:06):
the form of False Claims Actinvestigations and litigation.
Most of it still whistleblowerrelator driven, although the
government continues to bringits own uh false claims act
cases in certain circumstances.
And so they remain kind of anindividual player, but also uh a
whistleblower-driven player.
(14:29):
Um, in the first circuit, therewas the long-awaited decision in
the United States versusRegeneron Pharmaceuticals False
Claims Act case that answeredthe question in the first
circuit what is required forcausation under the 2010
amendments to the anti-kickbackstatute.
So, for those of you uhfollowing along at home, in
2010, the anti-kickback statutewas amended to talk about um how
(14:53):
any claim resulting from ananti-kickback statute violation
is a false claim.
And so the question is, what isresulting from?
And that had been the topic ofgreat debate in the First
Circuit in Boston, for example,there were dueling district
court opinions that uh describedthe standard very differently.
(15:14):
Um, in the ultimately prevailingdecision, the First Circuit uh
held that the resulting fromrequires but for causation.
And so it's a much tighterstandard for the government.
The defense bar, we were happyto see that decision.
Uh, and that that joy wassomewhat short-lived as the U.S.
(15:36):
Attorney's Office, at least inBoston, immediately announced
that they could still pursue uhfalse claims at cases connected
to anti-kickback statuteviolations using the
pre-amendment uh technique ofrelying on false certification,
which essentially requiresevidence of certification that a
provider or a practice group oran institution will comply with
(15:59):
Medicare and other regulations,and then some sort of
materiality and falsity.
And under that standard, thecourts and the government have
long conflated materiality withcausation, essentially ignoring
causation.
And so the government hascontinued to argue that they can
proceed under either the buttfor causation standard or the
(16:23):
older uh false certificationstandard.
And so we'll see how that willcontinue to play out.
Cases that have been, courtshave been interpreting the
Regeneron First Circuit opinionat least once in Boston,
subsequent to that February 2025decision.
Judge Kalwani in Boston uhrefused to uh dismiss uh false
(16:44):
claims act action thatchallenged causation.
And she found in that case thatthere was sufficient allegations
to support a finding ofcausation, even if she were to
apply the butt for uh causationstandards.
So that continues to be an areathat is much watched in the
healthcare space.
(17:04):
Uh, there was also the what Iwould call the traditional uh
enforcement over the past yearin the spaces that we've seen
for the last you know manyyears.
Um, another area of legaldevelopment over the past year
that uh Judy's firm, FulaneLardner, has had a very large
(17:25):
hand in uh is the Zafarovlitigation.
And so the Zapharov case verybriefly.
There's been a lot written andspoke about it, and more will
follow.
But essentially, uh DistrictCourt in the Middle District of
Florida agreed with thedefendants in that case that the
false claims act statutes,whistleblower provisions are
unconstitutional.
(17:46):
And so it's an argument that'sbeen raised in different
contexts and differentjurisdictions, typically without
getting much traction.
But in this case, where thedistrict court did agree, then
everybody sat back and waitedand watched to see what the 11th
Circle will do on appeal.
And those arguments were heldlast week.
(18:06):
I am not a prognosticator on theoutcomes of appeals based on
oral arguments, so I'm not goingto do that.
But I will just say thearguments are available online.
And if you practice in thisspace, they're fascinating and
they're worth listening to.
And certainly we'll be talkinguh next year's Roundup, uh,
hopefully, uh, about the 11thCircuit Zafiroff decision.
(18:28):
Uh, in addition, on the civilside, uh, paycheck protection
program cases continue to happenen masse uh around the country.
These are ranging from smallresolutions under$100,000 up to
multi-million dollarresolutions.
There appear to be a number ofvery sophisticated relators who
(18:49):
are bringing bulk PPP cases, forexample, arguing that a whole
category of organizations thatare 501c4 organizations and thus
were not eligible for a PPP loanactually received PPP loans.
And so there's been a wave ofmore technical PPP False Claims
(19:10):
Act cases that are typically, atleast from what we're seeing,
prone to resolution.
It tends to be a typical uhtechnical violation, checking
the wrong box, affirmingsomething incorrectly.
The first wave of PPPinvestigations and prosecutions,
as is often the case, were themost egregious uh involving more
(19:31):
aggressive fraud.
Um, and so we're seeing the PPPcases continue.
In addition, just very briefly,the False Claims Act is being
relied on more and more by thegovernment in the tariff space,
in the cybersecurity space,dealing with government
contractors as well as in theDEI space and relating to school
investigations.
(19:51):
I won't go into those here otherthan to say the government is
aggressively using the FalseClaims Act because of its broad
investigatory powers.
And there continue to be battlesin the courts about their
ability to use CIDs to obtaincertain categories of documents
and other information.
And so politics aside, thislitigation looks likely to help
(20:14):
shape the scope of False ClaimsAct investigations far into the
future.
On the criminal side, the lastyear has been more of the same.
A lot of durable medicalequipment investigations and
prosecutions as well, clinicallabs, genetic testing in
particular, urinary testing,still to a certain extent, have
(20:36):
all seen continued significantcriminal enforcement.
What was notable about the pastyear is that in addition to the
traditional criminal enforcementthat we're used to seeing
culminating in a large annualtakedown that every year is
reported as the largest inhistory of the takedowns, and
this year was no different,according to DOJ.
But what we're seeing now is abig push from the Department of
(21:01):
Justice to identifyinternational connections in
these prosecutions.
A lot of the internationalconnections existed for years.
They just weren't highlighted orcalled out by the government.
And now, for example, if there'san overseas call center in
operation or if there's overseasinvestors, it appears that the
government is working toidentify those in its press
releases and in its theories ofprosecution, tying it very
(21:25):
closely to the currentadministration's international
uh agenda.
In addition, uh theanti-kickback statute, as well
as the eliminated kickback actstatute, ECRA, continue to be
the primary drivers ofgovernment enforcement on the
criminal side.
Uh although they they haveannounced the newly formed
(21:46):
health and safety unit withinthe fraud division in uh
Washington that is going toessentially look at it sounds
like a lot of the space whereFaraz works on the Food, Drug,
Cosmetic Act side, uh, replacingsome of the former consumer
protection enforcers uh thatwere reorganized under the
current administration withinthe department.
(22:06):
So they just announced that lastweek, and we'll wait and see
where it goes.
The final piece that I'll justnote is an overall uh messaging
from the government pointing totheir desire to increase
collaboration among theenforcement community, which has
always been on their list ofimportant action items.
So they've stood up a workinggroup, they've uh made strides
(22:31):
to talk about using Treasury'spayment data uh alongside uh the
claims data to try to do somemore sophisticated uh
enforcement investigating.
So we'll see how that plays outin the coming year.
Thanks, Jim.
SPEAKER_02 (22:46):
So, Dave, you mentioned ECRA, and just for
people in our audience who maynot have had the pleasure of
meeting ECRA before, could youjust give us a brief overview of
that?
SPEAKER_04 (22:56):
Sure.
So ECRA is a relatively recentstatute that uh passed in 2018.
It makes it a federal crime tooffer or receive payments for
patient referrals specificallyto recovery homes, clinical
labs, or treatment centers.
And what's what's interestingabout the statute is not only is
it a very powerful criminalstatute, but it also is an
(23:18):
all-payer statute.
So the anti-kickback statute,its hook, its jurisdictional
elements is a federal payer,traditionally Medicare,
Medicaid, TriCare, for example.
The ECRA statute is broad and itapplies to commercial payers as
well as government insurers.
And so it is a uh a verypowerful tool that the
(23:40):
government has now at itsdisposal.
It is really just getting goingas far as being used on a
regular basis for enforcementand for different scenarios, for
example, where there'scommercial payers uh in addition
to uh government payers.
Part of the past year with ECRAthat's been interesting in the
(24:00):
Ninth Circuit is the question ofhow far does culpability extend
to marketing companies that getinvolved in clinical lab space
in genetic testing uh in uhclinical recovery centers.
And so there was a verydefense-friendly Ninth Circuit
decision last year that thatlimited marketer culpability in
(24:21):
some ways, and also uh veryimportantly noted that paying
marketers based on volume, whichis traditionally a very scary
proposition, either in theanti-kickback statute or ECRA.
But the Ninth Circuit said,which is which is true, but it's
always nice to hear them say,that paying in that type of
(24:41):
arrangement is not a per seviolation of the statute.
And so that's an argument thatis often raised on the defense
side.
But uh, any time a court uhreaffirms that proposition uh
brings a smile to my face.
SPEAKER_02 (24:55):
And just one more point, because it is a criminal
statute, it's delegated to DOJ,whereas the anti-kickback
statute being federal payers isin Title 42, which is where John
and I come in.
Um, but they are not um entirelyconsistent in their wording in
terms of carve outs.
(25:15):
And so there's been a lot ofdiscussion that thinks it might
be okay under the anti-kickbackstatute because of the safe
harbors or or other provisionswould not be okay under ECRA.
And yet DOJ hasn't and probablywon't do regulations with their
thoughts on the topic.
(25:37):
So it is, I think, a an area ofuh um with a lot of grays in it
at the moment.
So all right, John, tell us whatwhat was big and new in uh Title
19 and your other provisions.
SPEAKER_05 (25:51):
Uh thanks, Judy.
Yes.
Um, so I I think um you know, ifwe're looking at the the year in
review, I I think we we we haveto talk about the um Trump
administration's executiveactions.
Um so a lot of those are are notgoing to be in our volumes,
right?
But we're gonna see the effectsof how the um you know laws and
(26:12):
regulations that are in ourvolumes are being implemented.
Um and uh we we also have uhsome major rules that that are
in limbo um and that that'sresulting from um how the the
the White House um has has uhlaid out its its its vision for
um this second Trumpadministration.
(26:35):
Um the what's been reported as aum flood the zone.
So I think we're we're allfamiliar with how many executive
orders and presidential memos uhcame out at the beginning of
this year.
I'm just gonna touch upon a fewof those.
We had the um regulatory freezememo and we had the um executive
(26:55):
order um unleashing prosperitythrough deregulation, which
created that the 10 to 1initiative.
So, what do those two things do?
One, the regulatory um freezepending review memo, uh which is
is typical of a newadministration, um, requires
federal agencies to immediatelywithdraw unpublished rules and
(27:17):
postpone the effective date ofpublished rules that have not
yet taken effect.
And um you you you juxtaposethat with the um unleashing
prosperity through deregulationexecutive order, which requires
federal agencies to identify umat least 10 existing regulations
to be repealed when proposing anew regulation, um, it's created
(27:40):
a uh difficult space for uh thefederal agencies to operate.
So some of the examples ofeffects that we're seeing, um,
we see the uh HIPAA um securityproposed rule, which was
published um in January 2025 inthe final days of the Biden
administration.
(28:00):
Um and so the the status of thatrule is in limbo.
Um we can follow up on that whenwe're when we're projecting
what's going to happen in 2026,but that's that's a question
mark.
Um similarly, uh DEA, Samsung,HHS um put out rules um
regarding the expansion ofbupenorphine treatments via
(28:22):
telemedicine and continuity careuh via telemedicine for VA
patients.
And those were originallyscheduled to take effect in
February.
The effective dates of thoserules have been delayed until
the end of this year.
And so what those will do isthey they create flexibility for
providers um prescribing certaincontrolled substances for opioid
(28:46):
use disorders via telemedicine.
Um, they also allow um providerscaring for VA patients more
flexibility with respect to uhtelemedicine.
Um and you know, let's hold thatthought because I want to circle
back to it when we talk aboutwhat legislation we've seen in
2025.
(29:06):
Um we we've we've also got uh inthe rulemaking standpoint, we've
got the DEA's proposed rule umregarding special registrations
for telemedicine.
That, like the um HIPAA rule,was published in January of
2025, um, the final days of theBiden administration.
(29:27):
Um that the status of that ruleis also in limbo.
So um we can see those uh youknow major rules um and the
question mark as to what willhappen with them as as effects
of that um those those executiveorders and and and presidential
actions.
Um similarly on on um in thatvein, we had the executive order
(29:50):
creating the Department ofGovernment Efficiency or Doge.
Um and and that created umwidespread workforce cuts across
the federal government, right?
The um Department of Health andHuman Services announced its uh
transformation to Make AmericaHealthy Again um initiative, uh
(30:12):
which HHS has said will resultin a total downsizing from
82,000 uh full-time employees to62,000 full-time employees.
So um, you know, one of theareas that I cover is the Public
Health Service Act.
So I'm you know trying to focusthis on a kind of public health
(30:33):
implications.
Um that's that's a significantreduction in force um across
HHS, which which includes CDC.
Um we've also seen uh numerousgrant and other funding cuts or
um uh federal fundings beingwithheld um across HHS, CDC, and
(30:53):
NIH.
Now some of that has beenlitigated.
Uh some of some of some of thosethat funding is is is flowing
again, but but there still umhave been significant cuts in
grants for HIV prevention andtreatment programs, um COVID-19
and public health funding forstate and and local health
departments, um, Title X familyplanning service grants were
(31:18):
were temporarily withheld.
Um, and uh the CDC also umordered uh across the the board
um spending cuts on contracts byby 35 percent.
So that's been a significanttheme of of the past year have
been uh you know reductions infederal workforce and and and
reductions in and federalspending uh related to public
(31:42):
health initiatives.
And uh continuing on on publichealth initiatives, we we saw
the executive order establishingthe president's Make America
Healthy Again Commission, right?
Maha.
Um this includes um uh a numberof um high-ranking members of
the Trump administration,including the HHS secretary, the
(32:02):
FDA commissioner, the NIHdirector.
Um, and and the Maha Commissionput out its Maha report, which
um, among other things, it itquestioned the number of uh
recommended vaccines on theCDC's recommended immunization
schedule for children andadolescents.
Um so um we've seen uh quite abit of action there um you know
(32:27):
within the executive branch.
We we saw the um CDC's advisorycommittee on immunization uh
practices, which is a federaladvisory committee that's
established under the PublicHealth Service Act.
Um that committee um which whichcan uh sit up to 19 members, it
makes vaccine recommendations.
(32:47):
Uh the CDC then later decideswhether to formally adopt them.
Um and that has big implicationsfor um not only uh health care
coverage, right, for for uhpatients, uh the public um uh
seeking vaccines, whether or notthat those vaccines are going to
(33:09):
be covered.
Public and and private healthinsurers are required to cover
vaccines recommended by uh theACIP.
Um, but it also has implicationsfor uh state level scope of
practice uh for pharmacists,among other things.
Um so what is you know, tryingto compress the timeline here
(33:30):
and talk about you know whatwhat happened, um the the
Secretary of HHS uh dismissedall of the um members of uh of
the of the um committee earlierthis year and reappointed new
members.
Um that reconstituted committeeum has has since um recommended
(33:54):
that the um vaccine for COVID-19be determined on an individual
decision making, right?
A shared decision-making uhprocess with individuals uh
providers rather than auniversal recommendation.
Um we've also seen therecommendation change for the um
(34:16):
combined MMRV vaccine, that'smeasle mom, cerebella, and
varicella.
Uh so that's it's no longer, uhthe ACEP is no longer
recommending um that combined uhvaccine for a first dose option
for children under four.
Instead, the recommendation isnow that children under four
(34:36):
receive a separate MMR vaccineand a separate varicella
vaccine.
Uh the committee cited anincreased risk for febrile
seizure for the for the combinedvaccine.
Um, but but the you know many umpublic health experts have have
have suggested this could umincrease vaccine hesitancy, it
(35:00):
could make things um more uh uhdifficult for the for the public
to understand the ins and outsof that.
Um and and we have seen, youknow, speaking of of public
health, we we've seen that uhacross the country uh a dramatic
increase in the um rates of uhmeasles cases, which which have
(35:22):
gone from uh very rareoccurrence uh to um I think
we're in the uh four four-digitfigure range of of uh numbers of
of cases across the country.
Um so that's that's a that's adramatic public health change.
Um we've also seen from from theACIP uh a recommendation change
(35:47):
for individual-based decisionmaking um for parents deciding
whether to give the hepatitis Bvaccine, um, including the
birthdose, uh to infants um bornto to women who test negative
for the virus.
SPEAKER_02 (36:04):
John, and in the interest of time, um I'm gonna
ask you to go into yourpredictions for next year, what
we need to uh review mostquickly, and then I'll do a
quick um recap on a couple ofTitle 18, and we'll go back to
for for Oz and to Dave for theirfinal words.
SPEAKER_05 (36:24):
Sure, absolutely.
Thanks, Judy.
Um, so for projections for for2026, um, I think the big
question is uh what will happenwith with Affordable Care Act
subsidies, right?
We had um two really within uhfor for Title 42, we we we had
two big pieces of legislation.
(36:44):
We had um no pun intended, wehad we had HR1, the One Big
Beautiful Bill Act, right?
Um, and we also had the um theuh continuing appropriations act
of of 2026, which which endedthe federal shutdown.
Um I I think Judy, uh you know,Medicaid and and and those parts
of the One Big Beautiful BillAct are are sections that that
(37:07):
you've edited.
So I I don't I won't get too farinto that.
But um, you know, some somenotable things that that were
not included in in thatlegislation were the Affordable
Care Act um enhanced premium taxcredit, which if we're trying to
look at this from a publichealth lens, those subsidies or
(37:27):
the um elimination of thosesubsidies is is likely to
dramatically increase theinsurance costs of um uh
consumers who who are purchasinghealth plans through those
Affordable Care Actmarketplaces.
Um so how does that affect umyou know, as healthcare lawyers
(37:49):
advising hospitals, healthsystems, um, practitioners, um,
there's there's likely to be anincrease in the uninsured um
patient population, right?
Which puts puts pressure on umon the bottom line for for uh
healthcare uh providers andfacilities.
(38:10):
Um so as far as in with whatwill happen in 2026, will those
affordable care subsidies beextended?
Um the the Senate uh just justthis month and in December um
failed to advance um on aprocedural vote um uh a
legislation that that would haveum extended those those enhanced
(38:34):
subsidies um which increasewhich uh essentially provide a
tax credit to um folks earningup to uh 400 percent of the
federal poverty level.
Um and uh we've we've seen in inin 2025 uh gridlock in Congress
and and a lot of um uh uhBrinksmanship type type
(38:57):
legislating, if you will, rightalong um appropriations
deadlines.
And and we have one of thosecoming as soon as the end of
January 2026.
So that would be uh you knowfrom a legislative standpoint,
uh my projection would be it'sit's it's hard to predict what
exactly will happen.
And and there is a possibilitythat that early in 2026 we could
(39:18):
see another uh federalgovernment shutdown um if if uh
a continued appropriations actor or a um longer range
appropriations act isn't isn'tenacted.
Um from a rulemaking standpoint,we we have that uh HIPAA
proposed security rule.
Um you I think we're we're shorton time to go into the ins and
(39:42):
outs of that, but that is asubstantive update on the
security rule, um, a significantmodernization and would have uh
big amplifications uh across theUS health system.
We also have the DEA proposed umrule uh for special
registration.
For telemedicine and limitedstate telemedicine
(40:03):
registrations.
Now, that proposed rule is a bigshift in how the DEA would
regulate telemedicineprescribing of controlled
substances.
It seems unlikely that that willbe finalized in the near term.
(40:25):
And just recently on the Officeof Management and Budget, which
is part of the White House thatreviews rules the DEA for the
temporary extension of theCOVID-19 telemedicine
flexibilities for theprescription of controlled
medications recently showed upon the regulatory agenda of the
(40:47):
OMB.
So it seems like we're likely tosee another extension of the
DEA's flexibilities that wereput in place initially with the
COVID-19 pandemic to allowtelemedicine prescribing of
certain controlled substancesthrough an exception to the Ryan
(41:09):
Hayde Act, which generallyrequires an in-person visit to
be able to prescribe controlledsubstances.
So we're likely, I think, from aprojection standpoint to see a
continued extension of thatwhile the industry waits to see
what happens with the DEA rule.
And I mentioned the 10 to 1initiative.
(41:30):
It may be difficult for the DEAto promulgate that new
regulation while also adheringto that executive order
requiring them to remove 10regulations at the same time.
Another item from a publichealth standpoint within the
Public Health Service Act, thereis, of course, Section 340B,
(41:54):
which is a very importantprogram for not only hospitals
and health systems, but a widerange of covered entities,
including certain federal healthcenters and lookalikes,
Ryan-Wright clinics, and othersafety net uh care facilities
(42:19):
that allows those entities topurchase uh drugs from
manufacturer drug manufacturersat a significantly discounted
price.
Um there has been uh litigationabout how those discounts are
provided, whether that themanufacturers are required to
give those discounts up front.
(42:40):
Um some manufacturers would liketo see a rebate model, which is
contemplated under the statute.
And HERSA has has recently putforward a 340B rebate model
pilot program, which would applyto 10 drugs and it would it
would um kind of flip thescript, if you will, instead of
(43:02):
the covered entities uhpurchasing those drugs at the
discounted price at the frontend, the um the entities would
would instead um seek thoserebates uh after the the drugs
have been dispensed.
So it would significantly changehow that that program works.
SPEAKER_02 (43:22):
Uh so in looking back at 2025, there was a
surprisingly small amount ofstatutory change from my
perspective.
It was like the least I've everlooked at in all of these years.
Not surprising since we all knowthat Congress was a little uh
dysfunctional last year.
Um but in looking at thephysician fee schedule, which I
(43:45):
was looking at, I was looking atmy notes from last year and this
year with the important things.
The last year we had therevision to the Medicare
overpayment refund rules for A,B, C, and D, which were very
significant changes, andparticularly on the A and B
side, um removed the obligationsthat have been set forth to dig
(44:09):
deeper and be proactive andreverted to a false claims act
standard of you know, knowledgeshould have known a reckless
disregard, which I thought was asignificant change.
There were also from last yearexpanded access provisions, so
MFTs and the like.
(44:30):
There were also social equitydiscussions and paying for the
services that go into assessingsocial equity needs.
Not so much this year in termsof what is new in the physician
fee schedule, and we'll have tosee the um big beautiful act I'm
not going to go into because Ithink everybody's heard probably
(44:51):
more than they ever want to hearabout it.
But a couple of things thatflagged my attention in this
year's physician fee schedulewere one, a focus on skin
substitutes, which Dave may haveseen and also in the enforcement
side.
The reimbursement mechanism onthis is going from a biological,
(45:12):
so paid under 1847A at a muchhigher rate.
It will now be an incident tosupply.
And this is happening not onlyin the physician office.
So incident twos you typicallythink of as a physician, a
supply incident to a service ina physician office, can also be
in a hospital outpatient clinicor department.
(45:36):
And those are also beingchanged.
So the reimbursement is going tobe cut by about 80% on those.
The other thing of most interestto me in this new physician fee
schedule, and this is the final,um, was a new ambulatory
specialty model that will bemandatory if you're picked up as
(45:58):
one of those doctors who will beparticipating.
So these are in special, um, twospecial chronic care conditions.
Um and they the the identifiedparticipants will be in uh
certain geographical areas thatare MSAs and another uh uh
(46:18):
variety there.
In those, so people who arepicked for this mandatory um
program will be assessed on avariety of criteria, and their
reimbursement may go up acertain amount, may go down a
certain amount depending ontheir scores.
And it's just a very um, veryinteresting um approach.
(46:41):
And and I think we're going tohear more about this.
So, Dave, let's go back to youand you can give us some
predictions about the world ofenforcement.
SPEAKER_04 (46:50):
Sure.
Well, I'll start where youbegan, Judy, which is skin
substitutes.
Uh, the department have signaledin conjunction with the change
in the billing framework, makingit now an incident two uh claim,
as opposed to how it had beenbilled, which was incredibly
lucrative.
Um so it appears the departmentwill now prioritize looking back
(47:11):
over the last several years ofskin substitute wound treatment
claims.
Uh, they'll have stopped thebleeding, so to speak, as far as
potential fraud into the futuregoes by making it into the two.
But now they're gonna uh nodoubt look back over the last
several years of claims, uh,which they have already begun to
do.
And the whistleblower bar, therelators have already uh been
(47:35):
out seeking uh cases of thistype to bring under the False
Claims Act.
DOJ is also looking for criminalprosecutions related to that
space.
So I expect next year, 2026,will be the year we hear a lot
about skin substitutes.
I think we're also going to heara lot more about clinical labs.
Uh, I think that next year aswell.
The the DME enforcement has beenon the decline because uh DOJ
(48:01):
would argue of the success ofsome of their larger enforcement
operations, like Operation BraceYourself, which was a very large
uh takedown several years ago.
Some of those cases, uh,amazingly after four or five
years, however long it's been,are still making their way
through the criminal courtsystem.
But uh DOJ is likely turning itsattention now to skin
substitutes and clinical labsand clinical testing.
(48:24):
That's not to say that theywon't continue to be
opportunistic in theanti-kickback space whenever
they're able, and I expect theywill.
Uh, next year is also going tocontinue to see an increased
review by DOJ of any type ofrelationship involving in an
international connection.
And that's a very broadstatement, but I but I would
expect DOJ will continue pushingwith the messaging from the top
(48:49):
that their enforcement has aninternational angle, an
international component, howeverthat may appear.
And so uh I would expectincreased use of money
laundering charges alongsidehealthcare fraud, which is
nothing new, but I think it willbe even more common in the next
year.
Uh, in addition, the other areasI spoke about, as far as
tariffs, cyber enforcement, andso on, those will also uh be big
(49:12):
in the next year.
Cases to watch, there are anumber of interesting cases
going on around the country.
Uh, I've mentioned the Zafiroffdecision.
Certainly, people are watchingthat one very closely, uh, and
there are a whole host ofothers.
And I'll leave that as a teaserto stay tuned for more great
content from AHLA on those.
SPEAKER_03 (49:30):
How about you?
Yeah, so you know, uh the thepoints that I mentioned before,
of course that they willcontinue to develop, um, and we
we want to look at that.
But for the benefit of uh uhlisteners, there are two other
items that uh started makingrumblings this year, and uh you
(49:52):
know, we we we should keep aneye out for next year.
Um both of these are in the drugdevelopment space.
So you uh uh those of ourlisteners who who work on um on
drugs and biologics will find uhinterest uh for these two
things.
Number one, priority reviewvouchers.
(50:13):
Um there's been a lot of uhconversation this year and next
year about priority reviewvouchers.
Essentially, um FDA reviews uhuh new drug applications and uh
biologic uh license applicationsuh within 10 months with a pre
(50:38):
uh under priority review, theycan uh do it at a much faster
pace.
So six months, sometimes eightmonths.
Uh they they agree to do it on afaster pace uh based on uh
several different kinds of uh uhinterests that the FDA has.
(50:59):
Uh a voucher is a uh is apriority review voucher,
basically is a uh it sounds uhit is what it sounds like.
A company that does that uh getsuh a certain type of drug or
biologic approved, uh wherethere is some national interest
(51:21):
or you know, uh we want toencourage as a community, we
want to encourage thedevelopment of something.
They receive a voucher for theiruh work.
Uh this was first created fortropical diseases.
If you get a tropical uhdisease, uh therapy for tropical
disease uh passed through,authorized through uh FDA, um,
(51:44):
you will receive a voucher forthat.
There became a secondary market,and uh companies would be able
to sell uh these vouchers toother companies for as much as
$300 million at one point.
Now the uh it's still uhreceiving around$100 million.
I I give you all this contextbecause there's been a lot of
(52:06):
changes in that.
A very important part of uh theuh vouchers was uh to encourage
the development of uh therapiesfor rare pediatric diseases.
Every two years uh the FDA woulduh uh would renew this.
There was a sunset clause onthis, and every two years, every
few years, the FDA would uhwould oh sorry, uh Congress
(52:29):
would renew uh the authorizationfor this.
Last year that did not happen.
After in September, uh Congressuh uh extended the law to
December, but for the well formost of 2025, there wasn't that
incentive.
Uh, you know, for smallcompanies, if they receive a
(52:49):
voucher of this kind, they coulduse the hundred million dollars
or more that they get to fundthe rest of their uh uh to fund
a big part of their development.
Um finally in September, uh FDA,uh sorry, Congress extended it
to next year, and we want to seenext year where that goes.
(53:10):
Hopefully, Congress gets uh theenough votes to pass it and
extend it out for uh a longertime.
Hopefully take out the sunsetclause.
There are uh it seems like thekids give a chance, give kids a
chance act that was uh approvedearlier this year.
Uh has some more priorities ofuh of uh Congress that were
(53:34):
built into uh the act, includingthe uh including the voucher.
So we'll keep an eye out on thatuh and see how that uh goes uh
goes through.
Um but in terms of priority uhreview vouchers, this wasn't the
biggest news uh uh uh this year,and uh uh because this year uh
(53:55):
the FDA announced the release ofa uh another uh different kind
of voucher uh called thenational priority vouchers.
Uh uh they first said there'd beonly five drugs, but they uh
increased it to nine drugs.
Um they will look through thethe agency will look through uh
(54:18):
through what's in their pipelineand accelerate the approval of
high uh of medicines and othertherapies that have that answer
national priorities, such as apublic health crisis, such as
onshoring drug development intothe US and strengthening supply
chain resiliency.
(54:39):
Um, already the FDA has gonethrough two cohorts of this, uh
of giving out these vouchers.
So we'll see a lot more nextyear.
We want to see where these twoland out.
Uh we want to see whether thisis only going to be done under
the Trump administration or youknow, if we see that there is a
change in Congress, whether thiswill uh this will be something
baked into uh into law.
(55:01):
So that's all on one sidepriority review vouchers.
The second main thing that I'lluh touch on is that the FDA
released a draft guidance ongene therapy, cell and gene
therapy products.
We want to see next year if uhuh the FDA finalizes that, if it
uh opens up some uh uhconversation, uh some public uh
(55:25):
uh conversations on this.
Cell and gene therapy, as uhmany of our uh listeners would
know, uh you know, sometimessome of these therapies you put
you only get one administrationof it over two weeks, and that's
a uh that has cured people of uhof genetic diseases.
(55:48):
So it's a very permanent sort ofand long-lasting effect.
And uh usually because they'reso rare and they're custom made
for people, the the uh clinicaltrials are very small, sometimes
less than 10 people.
So there isn't a lot of uh dataon the safety and efficacy of uh
(56:08):
of these uh therapies.
So this graph guidance talksabout uh it's uh it's entitled
um post-approval methods tocapture safety and efficacy data
for cell and gene therapyproducts.
So after they're they'reapproved, there's going to be uh
FDA is is starting to create theinfrastructure on how to see the
(56:28):
safety down the down the uh downthe road for these.
So I'll leave it at that.
You know, these are these areexciting new developments.
Uh of course, uh we've beenseeing that uh at the hospital
well uh in cancer drugs uh quitea bit.
And um pediatric uh cancers isis one of the areas which which
is being uh focused on on the onthe first point that I made
(56:50):
about the uh about the nationalpriority vouchers.
Um but yeah, uh lots ofinteresting things to look out
for.
SPEAKER_02 (56:57):
So thank you.
I want to thank all our speakerstoday, and we could go on all
day, but I think we uh are outof time.
So thank you very much, andwe'll regroup next year.
SPEAKER_01 (57:14):
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(57:35):
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SPEAKER_02 (00:17):
Hello, I'm Judy Waltz.
I'm a partner with Foley andLardner in San Francisco.
I actually chair Foley's healthcare practice.
I am here today with someco-editors from the HLA Federal
Health Care Law and Regulations,which I'm going to see if the
camera can pick up this year ina lovely shade of yellow.
(00:38):
We are co-editors with a fewother people, and the new
version is just out, the newyellow version, replacing the
purple version from last year.
Each of us as a co-editor takesa particular section and reviews
the various laws and regulationsthat have been enacted in the
(01:02):
past year.
Some are dotted, some are acted,some are moved, to make sure
that the book is complete andit's a good, really good desk
reference.
I know this is old school, but Iwill also make a pitch for the
hard copy of it.
It also comes in digital, whichI think comes with the
subscription.
The hard copy I use to annotate,and so I scribble on it all
(01:25):
year.
It's a little sad at the end ofthe year when I have to go with
my whole copy because all mynotes, my cross-references, and
things are gone.
But I use it pretty much on adaily basis and really um
recommend it.
So like I said, I have well,first I'll tell you my sections,
which were um Title 18, soMedicare.
(01:49):
And it sounds like John and Ihad a little bit of overlap on
Title 19 this year.
So Title 18 is Medicare, Title19 Medicaid.
Um we'll talk a little bit aboutthe topics in substance, but
first I want people just tointroduce themselves.
So Faraz, would you introduceyourself, please?
SPEAKER_03 (02:11):
Yes, absolutely.
Thank you, uh Judy, for settingit up.
I'm Faraz Sadiki.
Um for the last uh seven oreight years I've worked as uh
outside counsel um uh at uh lawfirms uh uh with a specific
focus on food and drug law.
I uh did uh uh quite a bit ofwork in uh the drug development
(02:34):
area, pre-approval um uh workand post-approval at
advertisement and promotion.
And I also uh did a fair amountof uh work in uh Medicaid,
Medicaid pricing and uhreimbursement for uh for the
AHLA uh federal uh laws andregulations.
I've been reviewing Title 21,Food and uh the Food, Drug and
(02:59):
Cosmetic uh Cosmetics Act uh forthe group, um, and we'll be
talking about that today.
Uh right now I'm uh at uhMemorial Sloan Kettering, a
cancer center, and that's uhwhere uh I've been for the past
year.
Uh and and I'll I'll try andbring some of the issues uh that
we've been facing related to theFDCA uh for today for the
(03:20):
viewers today.
SPEAKER_02 (03:22):
Thank you.
So, Dave, would you like tointroduce yourself, please?
SPEAKER_04 (03:27):
Sure.
Thanks, Judy.
Thanks uh to the HLA for havingme to speak on the podcast
today.
It's always a good uh beginningof the year to listen to this.
So I'm excited to actuallyparticipate this time.
So thanks for the invitation.
Appreciate it.
Uh so I'm Dave Lazarus.
I am a partner at Foley Hoagbased in Boston in our
white-collar practice group.
(03:48):
I was a federal prosecutor, astate prosecutor for about 17
years total in uh Florida andMassachusetts and New York.
And I focus my practice now onadvising companies and
individuals in all differentaspects of government
enforcement investigations, aswell as uh healthcare compliance
regulatory advice topharmaceutical companies, uh
(04:11):
providers, kind of run the gamutof the healthcare sector, uh,
rehab centers, clinicallaboratories, uh, DME suppliers,
um, and a lot of other relatedorganizations.
I am uh my my purview within theAHLA book is in the fraud abuse
space.
So I look at those statutes andregulations.
SPEAKER_02 (04:32):
Thank you.
And John Hood.
SPEAKER_05 (04:35):
Thanks, Judy.
Um I'm a member of uh Ackerman'sOrlando office.
I'm an associate in ourhealthcare practice group.
I focus my practice on advisinghealthcare industry clients on
transactions and regulatorycompliance matters.
Um it runs the gamut fromhospitals, health systems,
(04:55):
physician groups, uh pharmacies.
Um I've also done some work umadvising insurance uh companies
on regulatory compliancematters.
Um as uh Judy mentioned.
Um I I cover as an editor withthis publication title 42, with
the exception of uh those titlesthat that that Judy mentioned.
(05:19):
Um so so there is is some umoverlap in the in the areas that
that we're looking at.
Um but uh as as as I'm sure ouraudience knows, uh Title 42 is
uh quite a large section of theof the of the US code for um for
practitioners and makes up uh uhquite a bit of our publication.
SPEAKER_02 (05:41):
So our plan for today is do another kind of
round robin here with each ofour co-editors discussing um a
bit about what they thought wasimportant in the last year and
probably most important.
I find it hard to predict atthis point, but what will be
most important in this in thiscoming year?
And just a reminder that we areeach speaking here today on our
(06:04):
own behalf and not on behalf ofour firms or clients or anybody
else we know.
So please um uh take these asour own opinions and judgments.
So for us, uh you're gonna gofirst.
SPEAKER_03 (06:19):
Thank you, Judy.
Thank you.
Um yeah, just what you said atthe tail end over there, you
know, it has been uh quite uhquite a marathon just keeping up
with all the changes, both forpractitioners and for uh folks
like us who um who are trying topresent uh the uh uh the the the
sum of the changes uh toreaders.
(06:42):
Um in fact, uh some of the uhtopics that I'm going to cover
today were additions that wemade to the uh some new um
regulations that have alreadybeen taken out uh you know
because of how how things umhave been going.
Um okay, so from a food and drugperspective, what I wanted to do
(07:05):
today is uh give the uh give alittle bit of a flavor of how uh
a hospital like uh memorial slowand catering uh that that uh uh
participates in uh in a in a lotof clinical trials, uh cancer
clinical trials, what what whatare what have been some of the
big changes that we have felt?
(07:27):
Uh also looking at it from theuh pharmaceutical uh uh industry
and uh healthcare systems uhalso um but I wanted to give
that a little context uh becauseum you know the the I have seen
how um the work that I do withwith the uh with the volumes
(07:48):
really dovetails with uh thework that I do uh at the
hospital.
So the first big change that wesaw um uh was a uh was uh
Congress uh finally enacted abuyer secure act.
Uh this is a uh an act um thathas been in legislative limbo
(08:13):
for quite a while.
Uh it had garnered significantattention for not being uh
enacted earlier.
Um and finally it it went to uhDonald, uh President Donald
Trump to sign.
Now, what is the Bio Secure Act?
Um essentially what what thisdoes is this is a um this was
(08:36):
part of this was included in theNational Defense Authorization
Act for fiscal year 2026.
What it does is it it putsrestrictions on the federal
government from uh fromcontracting with certain
biotechnology companies ofconcern um uh when they uh use
(08:59):
biotechnology equipment orservices uh due to uh national
security risks.
Um there's a list of uhcompanies of concern that the
DOD maintains, uh, and that listis going uh that list uh feeds
into uh the um the new law.
(09:21):
Uh right now the the uh lawprohibits federal government uh
money fair uh procurements andcontracts from going to uh to
these biotechnology uh companiesof concerns, but overall the the
(09:43):
uh the the bill puts immensepressure on pharma companies in
the US to sever ties withbiotech companies, uh mostly in
China.
There are parts of this law thatuh try and put more focus on uh
on uh you know creating creatinguh local uh uh US-based uh
(10:09):
biotech companies that andsuppliers so that they can
supply the pharma companies thatare over here.
At the hospital, um we have seensome similar uh regulations uh
have been implemented, uhregulations that have come down
from uh the DOJ and the NIH.
(10:29):
Uh the NIH recently released, uhfinalized a rule that prohibits
the transfer of any biospecimensto China and some other
countries of concern.
These are uh countries thatalready have uh the US already
has export compliance uh uhrules.
So that would that be China,Russia, Venezuela, Cuba, Iran,
(10:51):
and North Korea.
There's a lot of uh uh clinicaltrials and a lot of uh data that
and and other work that moves uhbetween China and the US.
So the federal government iscoming down hard uh in a very
bipartisan way to uh to to blockuh biospecimen transfer, they uh
(11:12):
to track all uh what's calledbulk sensitive personal data.
So this is uh similar to uhprotected health information,
and it's going to the uh ourhospital and other entities that
do that work in clinical trialshave to monitor and track all
(11:32):
data, uh patient-level datathat's going to China and these
other countries.
So, so you know, there's thisthere's there's been a lot of
changes already in this space,and we will continue to see
these, but uh uh you know, uhrest assured that um the both
the pharma company and uh uhtrial sites like ours are uh
(11:52):
were were affected uh by these.
Um moving on to the second one.
Uh this is uh uh you know uhthis is in the medical device
space.
Uh and in fact, uh even even uhmore specifically, lab develop
tests.
We spoke about lab develop teststhat I think in last year's uh
(12:16):
podcast and in this year's uh uhvolumes, we added regulations
that uh came in uh uh because ofa finalized uh rule by the FDA
on increasing uh on yes,increasing its regulations on
laboratory developed tests.
Um however, there was a lot ofblowback from the industry, the
(12:38):
way that the FDA went aroundaround, uh went about doing
this.
Uh, this change uh was both insubstance and in uh the the
speed of how they were doing itwas just not something that the
industry uh could um uh couldcould uh put up with, and there
were a lot of legal challenges.
Uh finally, the uh EasternDistrict Court of Texas vacated
(13:01):
the rule, and in August, FDArescinded uh the changes it made
to the um to the lab developedtests.
Uh so you know we will see nextyear that we will be back at
square one.
FDA will have to go back to thethat you know to to to square
one and figure out what howthey're going to enforce uh this
kind of in vitro diagnostics.
(13:23):
Um I think we'll leave it atthose two.
Um, you know, these these werethe main things that I uh think
the the readers uh me and uh thereaders and our viewers would
have seen if they practice inthis space.
SPEAKER_02 (13:36):
Thank you, Fraz.
So, Dave, how about you?
What's going on in theenforcement world?
SPEAKER_04 (13:42):
Uh sure.
So that could be uh the topic ofprobably days of conversation
and it changes on a daily basis,it seems, these days.
But uh looking back at the lastyear, I'll speak briefly about
two different categories ofenforcement, although they're as
usual very closely related, bothcivil enforcement and criminal
enforcement.
Civil enforcement uh once againthis past year focused or was in
(14:06):
the form of False Claims Actinvestigations and litigation.
Most of it still whistleblowerrelator driven, although the
government continues to bringits own uh false claims act
cases in certain circumstances.
And so they remain kind of anindividual player, but also uh a
whistleblower-driven player.
(14:29):
Um, in the first circuit, therewas the long-awaited decision in
the United States versusRegeneron Pharmaceuticals False
Claims Act case that answeredthe question in the first
circuit what is required forcausation under the 2010
amendments to the anti-kickbackstatute.
So, for those of you uhfollowing along at home, in
2010, the anti-kickback statutewas amended to talk about um how
(14:53):
any claim resulting from ananti-kickback statute violation
is a false claim.
And so the question is, what isresulting from?
And that had been the topic ofgreat debate in the First
Circuit in Boston, for example,there were dueling district
court opinions that uh describedthe standard very differently.
(15:14):
Um, in the ultimately prevailingdecision, the First Circuit uh
held that the resulting fromrequires but for causation.
And so it's a much tighterstandard for the government.
The defense bar, we were happyto see that decision.
Uh, and that that joy wassomewhat short-lived as the U.S.
(15:36):
Attorney's Office, at least inBoston, immediately announced
that they could still pursue uhfalse claims at cases connected
to anti-kickback statuteviolations using the
pre-amendment uh technique ofrelying on false certification,
which essentially requiresevidence of certification that a
provider or a practice group oran institution will comply with
(15:59):
Medicare and other regulations,and then some sort of
materiality and falsity.
And under that standard, thecourts and the government have
long conflated materiality withcausation, essentially ignoring
causation.
And so the government hascontinued to argue that they can
proceed under either the buttfor causation standard or the
(16:23):
older uh false certificationstandard.
And so we'll see how that willcontinue to play out.
Cases that have been, courtshave been interpreting the
Regeneron First Circuit opinionat least once in Boston,
subsequent to that February 2025decision.
Judge Kalwani in Boston uhrefused to uh dismiss uh false
(16:44):
claims act action thatchallenged causation.
And she found in that case thatthere was sufficient allegations
to support a finding ofcausation, even if she were to
apply the butt for uh causationstandards.
So that continues to be an areathat is much watched in the
healthcare space.
(17:04):
Uh, there was also the what Iwould call the traditional uh
enforcement over the past yearin the spaces that we've seen
for the last you know manyyears.
Um, another area of legaldevelopment over the past year
that uh Judy's firm, FulaneLardner, has had a very large
(17:25):
hand in uh is the Zafarovlitigation.
And so the Zapharov case verybriefly.
There's been a lot written andspoke about it, and more will
follow.
But essentially, uh DistrictCourt in the Middle District of
Florida agreed with thedefendants in that case that the
false claims act statutes,whistleblower provisions are
unconstitutional.
(17:46):
And so it's an argument that'sbeen raised in different
contexts and differentjurisdictions, typically without
getting much traction.
But in this case, where thedistrict court did agree, then
everybody sat back and waitedand watched to see what the 11th
Circle will do on appeal.
And those arguments were heldlast week.
(18:06):
I am not a prognosticator on theoutcomes of appeals based on
oral arguments, so I'm not goingto do that.
But I will just say thearguments are available online.
And if you practice in thisspace, they're fascinating and
they're worth listening to.
And certainly we'll be talkinguh next year's Roundup, uh,
hopefully, uh, about the 11thCircuit Zafiroff decision.
(18:28):
Uh, in addition, on the civilside, uh, paycheck protection
program cases continue to happenen masse uh around the country.
These are ranging from smallresolutions under$100,000 up to
multi-million dollarresolutions.
There appear to be a number ofvery sophisticated relators who
(18:49):
are bringing bulk PPP cases, forexample, arguing that a whole
category of organizations thatare 501c4 organizations and thus
were not eligible for a PPP loanactually received PPP loans.
And so there's been a wave ofmore technical PPP False Claims
(19:10):
Act cases that are typically, atleast from what we're seeing,
prone to resolution.
It tends to be a typical uhtechnical violation, checking
the wrong box, affirmingsomething incorrectly.
The first wave of PPPinvestigations and prosecutions,
as is often the case, were themost egregious uh involving more
(19:31):
aggressive fraud.
Um, and so we're seeing the PPPcases continue.
In addition, just very briefly,the False Claims Act is being
relied on more and more by thegovernment in the tariff space,
in the cybersecurity space,dealing with government
contractors as well as in theDEI space and relating to school
investigations.
(19:51):
I won't go into those here otherthan to say the government is
aggressively using the FalseClaims Act because of its broad
investigatory powers.
And there continue to be battlesin the courts about their
ability to use CIDs to obtaincertain categories of documents
and other information.
And so politics aside, thislitigation looks likely to help
(20:14):
shape the scope of False ClaimsAct investigations far into the
future.
On the criminal side, the lastyear has been more of the same.
A lot of durable medicalequipment investigations and
prosecutions as well, clinicallabs, genetic testing in
particular, urinary testing,still to a certain extent, have
(20:36):
all seen continued significantcriminal enforcement.
What was notable about the pastyear is that in addition to the
traditional criminal enforcementthat we're used to seeing
culminating in a large annualtakedown that every year is
reported as the largest inhistory of the takedowns, and
this year was no different,according to DOJ.
But what we're seeing now is abig push from the Department of
(21:01):
Justice to identifyinternational connections in
these prosecutions.
A lot of the internationalconnections existed for years.
They just weren't highlighted orcalled out by the government.
And now, for example, if there'san overseas call center in
operation or if there's overseasinvestors, it appears that the
government is working toidentify those in its press
releases and in its theories ofprosecution, tying it very
(21:25):
closely to the currentadministration's international
uh agenda.
In addition, uh theanti-kickback statute, as well
as the eliminated kickback actstatute, ECRA, continue to be
the primary drivers ofgovernment enforcement on the
criminal side.
Uh although they they haveannounced the newly formed
(21:46):
health and safety unit withinthe fraud division in uh
Washington that is going toessentially look at it sounds
like a lot of the space whereFaraz works on the Food, Drug,
Cosmetic Act side, uh, replacingsome of the former consumer
protection enforcers uh thatwere reorganized under the
current administration withinthe department.
(22:06):
So they just announced that lastweek, and we'll wait and see
where it goes.
The final piece that I'll justnote is an overall uh messaging
from the government pointing totheir desire to increase
collaboration among theenforcement community, which has
always been on their list ofimportant action items.
So they've stood up a workinggroup, they've uh made strides
(22:31):
to talk about using Treasury'spayment data uh alongside uh the
claims data to try to do somemore sophisticated uh
enforcement investigating.
So we'll see how that plays outin the coming year.
Thanks, Jim.
SPEAKER_02 (22:46):
So, Dave, you mentioned ECRA, and just for
people in our audience who maynot have had the pleasure of
meeting ECRA before, could youjust give us a brief overview of
that?
SPEAKER_04 (22:56):
Sure.
So ECRA is a relatively recentstatute that uh passed in 2018.
It makes it a federal crime tooffer or receive payments for
patient referrals specificallyto recovery homes, clinical
labs, or treatment centers.
And what's what's interestingabout the statute is not only is
it a very powerful criminalstatute, but it also is an
(23:18):
all-payer statute.
So the anti-kickback statute,its hook, its jurisdictional
elements is a federal payer,traditionally Medicare,
Medicaid, TriCare, for example.
The ECRA statute is broad and itapplies to commercial payers as
well as government insurers.
And so it is a uh a verypowerful tool that the
(23:40):
government has now at itsdisposal.
It is really just getting goingas far as being used on a
regular basis for enforcementand for different scenarios, for
example, where there'scommercial payers uh in addition
to uh government payers.
Part of the past year with ECRAthat's been interesting in the
(24:00):
Ninth Circuit is the question ofhow far does culpability extend
to marketing companies that getinvolved in clinical lab space
in genetic testing uh in uhclinical recovery centers.
And so there was a verydefense-friendly Ninth Circuit
decision last year that thatlimited marketer culpability in
(24:21):
some ways, and also uh veryimportantly noted that paying
marketers based on volume, whichis traditionally a very scary
proposition, either in theanti-kickback statute or ECRA.
But the Ninth Circuit said,which is which is true, but it's
always nice to hear them say,that paying in that type of
(24:41):
arrangement is not a per seviolation of the statute.
And so that's an argument thatis often raised on the defense
side.
But uh, any time a court uhreaffirms that proposition uh
brings a smile to my face.
SPEAKER_02 (24:55):
And just one more point, because it is a criminal
statute, it's delegated to DOJ,whereas the anti-kickback
statute being federal payers isin Title 42, which is where John
and I come in.
Um, but they are not um entirelyconsistent in their wording in
terms of carve outs.
(25:15):
And so there's been a lot ofdiscussion that thinks it might
be okay under the anti-kickbackstatute because of the safe
harbors or or other provisionswould not be okay under ECRA.
And yet DOJ hasn't and probablywon't do regulations with their
thoughts on the topic.
(25:37):
So it is, I think, a an area ofuh um with a lot of grays in it
at the moment.
So all right, John, tell us whatwhat was big and new in uh Title
19 and your other provisions.
SPEAKER_05 (25:51):
Uh thanks, Judy.
Yes.
Um, so I I think um you know, ifwe're looking at the the year in
review, I I think we we we haveto talk about the um Trump
administration's executiveactions.
Um so a lot of those are are notgoing to be in our volumes,
right?
But we're gonna see the effectsof how the um you know laws and
(26:12):
regulations that are in ourvolumes are being implemented.
Um and uh we we also have uhsome major rules that that are
in limbo um and that that'sresulting from um how the the
the White House um has has uhlaid out its its its vision for
um this second Trumpadministration.
(26:35):
Um the what's been reported as aum flood the zone.
So I think we're we're allfamiliar with how many executive
orders and presidential memos uhcame out at the beginning of
this year.
I'm just gonna touch upon a fewof those.
We had the um regulatory freezememo and we had the um executive
(26:55):
order um unleashing prosperitythrough deregulation, which
created that the 10 to 1initiative.
So, what do those two things do?
One, the regulatory um freezepending review memo, uh which is
is typical of a newadministration, um, requires
federal agencies to immediatelywithdraw unpublished rules and
(27:17):
postpone the effective date ofpublished rules that have not
yet taken effect.
And um you you you juxtaposethat with the um unleashing
prosperity through deregulationexecutive order, which requires
federal agencies to identify umat least 10 existing regulations
to be repealed when proposing anew regulation, um, it's created
(27:40):
a uh difficult space for uh thefederal agencies to operate.
So some of the examples ofeffects that we're seeing, um,
we see the uh HIPAA um securityproposed rule, which was
published um in January 2025 inthe final days of the Biden
administration.
(28:00):
Um and so the the status of thatrule is in limbo.
Um we can follow up on that whenwe're when we're projecting
what's going to happen in 2026,but that's that's a question
mark.
Um similarly, uh DEA, Samsung,HHS um put out rules um
regarding the expansion ofbupenorphine treatments via
(28:22):
telemedicine and continuity careuh via telemedicine for VA
patients.
And those were originallyscheduled to take effect in
February.
The effective dates of thoserules have been delayed until
the end of this year.
And so what those will do isthey they create flexibility for
providers um prescribing certaincontrolled substances for opioid
(28:46):
use disorders via telemedicine.
Um, they also allow um providerscaring for VA patients more
flexibility with respect to uhtelemedicine.
Um and you know, let's hold thatthought because I want to circle
back to it when we talk aboutwhat legislation we've seen in
2025.
(29:06):
Um we we've we've also got uh inthe rulemaking standpoint, we've
got the DEA's proposed rule umregarding special registrations
for telemedicine.
That, like the um HIPAA rule,was published in January of
2025, um, the final days of theBiden administration.
(29:27):
Um that the status of that ruleis also in limbo.
So um we can see those uh youknow major rules um and the
question mark as to what willhappen with them as as effects
of that um those those executiveorders and and and presidential
actions.
Um similarly on on um in thatvein, we had the executive order
(29:50):
creating the Department ofGovernment Efficiency or Doge.
Um and and that created umwidespread workforce cuts across
the federal government, right?
The um Department of Health andHuman Services announced its uh
transformation to Make AmericaHealthy Again um initiative, uh
(30:12):
which HHS has said will resultin a total downsizing from
82,000 uh full-time employees to62,000 full-time employees.
So um, you know, one of theareas that I cover is the Public
Health Service Act.
So I'm you know trying to focusthis on a kind of public health
(30:33):
implications.
Um that's that's a significantreduction in force um across
HHS, which which includes CDC.
Um we've also seen uh numerousgrant and other funding cuts or
um uh federal fundings beingwithheld um across HHS, CDC, and
(30:53):
NIH.
Now some of that has beenlitigated.
Uh some of some of some of thosethat funding is is is flowing
again, but but there still umhave been significant cuts in
grants for HIV prevention andtreatment programs, um COVID-19
and public health funding forstate and and local health
departments, um, Title X familyplanning service grants were
(31:18):
were temporarily withheld.
Um, and uh the CDC also umordered uh across the the board
um spending cuts on contracts byby 35 percent.
So that's been a significanttheme of of the past year have
been uh you know reductions infederal workforce and and and
reductions in and federalspending uh related to public
(31:42):
health initiatives.
And uh continuing on on publichealth initiatives, we we saw
the executive order establishingthe president's Make America
Healthy Again Commission, right?
Maha.
Um this includes um uh a numberof um high-ranking members of
the Trump administration,including the HHS secretary, the
(32:02):
FDA commissioner, the NIHdirector.
Um, and and the Maha Commissionput out its Maha report, which
um, among other things, it itquestioned the number of uh
recommended vaccines on theCDC's recommended immunization
schedule for children andadolescents.
Um so um we've seen uh quite abit of action there um you know
(32:27):
within the executive branch.
We we saw the um CDC's advisorycommittee on immunization uh
practices, which is a federaladvisory committee that's
established under the PublicHealth Service Act.
Um that committee um which whichcan uh sit up to 19 members, it
makes vaccine recommendations.
(32:47):
Uh the CDC then later decideswhether to formally adopt them.
Um and that has big implicationsfor um not only uh health care
coverage, right, for for uhpatients, uh the public um uh
seeking vaccines, whether or notthat those vaccines are going to
(33:09):
be covered.
Public and and private healthinsurers are required to cover
vaccines recommended by uh theACIP.
Um, but it also has implicationsfor uh state level scope of
practice uh for pharmacists,among other things.
Um so what is you know, tryingto compress the timeline here
(33:30):
and talk about you know whatwhat happened, um the the
Secretary of HHS uh dismissedall of the um members of uh of
the of the um committee earlierthis year and reappointed new
members.
Um that reconstituted committeeum has has since um recommended
(33:54):
that the um vaccine for COVID-19be determined on an individual
decision making, right?
A shared decision-making uhprocess with individuals uh
providers rather than auniversal recommendation.
Um we've also seen therecommendation change for the um
(34:16):
combined MMRV vaccine, that'smeasle mom, cerebella, and
varicella.
Uh so that's it's no longer, uhthe ACEP is no longer
recommending um that combined uhvaccine for a first dose option
for children under four.
Instead, the recommendation isnow that children under four
(34:36):
receive a separate MMR vaccineand a separate varicella
vaccine.
Uh the committee cited anincreased risk for febrile
seizure for the for the combinedvaccine.
Um, but but the you know many umpublic health experts have have
have suggested this could umincrease vaccine hesitancy, it
(35:00):
could make things um more uh uhdifficult for the for the public
to understand the ins and outsof that.
Um and and we have seen, youknow, speaking of of public
health, we we've seen that uhacross the country uh a dramatic
increase in the um rates of uhmeasles cases, which which have
(35:22):
gone from uh very rareoccurrence uh to um I think
we're in the uh four four-digitfigure range of of uh numbers of
of cases across the country.
Um so that's that's a that's adramatic public health change.
Um we've also seen from from theACIP uh a recommendation change
(35:47):
for individual-based decisionmaking um for parents deciding
whether to give the hepatitis Bvaccine, um, including the
birthdose, uh to infants um bornto to women who test negative
for the virus.
SPEAKER_02 (36:04):
John, and in the interest of time, um I'm gonna
ask you to go into yourpredictions for next year, what
we need to uh review mostquickly, and then I'll do a
quick um recap on a couple ofTitle 18, and we'll go back to
for for Oz and to Dave for theirfinal words.
SPEAKER_05 (36:24):
Sure, absolutely.
Thanks, Judy.
Um, so for projections for for2026, um, I think the big
question is uh what will happenwith with Affordable Care Act
subsidies, right?
We had um two really within uhfor for Title 42, we we we had
two big pieces of legislation.
(36:44):
We had um no pun intended, wehad we had HR1, the One Big
Beautiful Bill Act, right?
Um, and we also had the um theuh continuing appropriations act
of of 2026, which which endedthe federal shutdown.
Um I I think Judy, uh you know,Medicaid and and and those parts
of the One Big Beautiful BillAct are are sections that that
(37:07):
you've edited.
So I I don't I won't get too farinto that.
But um, you know, some somenotable things that that were
not included in in thatlegislation were the Affordable
Care Act um enhanced premium taxcredit, which if we're trying to
look at this from a publichealth lens, those subsidies or
(37:27):
the um elimination of thosesubsidies is is likely to
dramatically increase theinsurance costs of um uh
consumers who who are purchasinghealth plans through those
Affordable Care Actmarketplaces.
Um so how does that affect umyou know, as healthcare lawyers
(37:49):
advising hospitals, healthsystems, um, practitioners, um,
there's there's likely to be anincrease in the uninsured um
patient population, right?
Which puts puts pressure on umon the bottom line for for uh
healthcare uh providers andfacilities.
(38:10):
Um so as far as in with whatwill happen in 2026, will those
affordable care subsidies beextended?
Um the the Senate uh just justthis month and in December um
failed to advance um on aprocedural vote um uh a
legislation that that would haveum extended those those enhanced
(38:34):
subsidies um which increasewhich uh essentially provide a
tax credit to um folks earningup to uh 400 percent of the
federal poverty level.
Um and uh we've we've seen in inin 2025 uh gridlock in Congress
and and a lot of um uh uhBrinksmanship type type
(38:57):
legislating, if you will, rightalong um appropriations
deadlines.
And and we have one of thosecoming as soon as the end of
January 2026.
So that would be uh you knowfrom a legislative standpoint,
uh my projection would be it'sit's it's hard to predict what
exactly will happen.
And and there is a possibilitythat that early in 2026 we could
(39:18):
see another uh federalgovernment shutdown um if if uh
a continued appropriations actor or a um longer range
appropriations act isn't isn'tenacted.
Um from a rulemaking standpoint,we we have that uh HIPAA
proposed security rule.
Um you I think we're we're shorton time to go into the ins and
(39:42):
outs of that, but that is asubstantive update on the
security rule, um, a significantmodernization and would have uh
big amplifications uh across theUS health system.
We also have the DEA proposed umrule uh for special
registration.
For telemedicine and limitedstate telemedicine
(40:03):
registrations.
Now, that proposed rule is a bigshift in how the DEA would
regulate telemedicineprescribing of controlled
substances.
It seems unlikely that that willbe finalized in the near term.
(40:25):
And just recently on the Officeof Management and Budget, which
is part of the White House thatreviews rules the DEA for the
temporary extension of theCOVID-19 telemedicine
flexibilities for theprescription of controlled
medications recently showed upon the regulatory agenda of the
(40:47):
OMB.
So it seems like we're likely tosee another extension of the
DEA's flexibilities that wereput in place initially with the
COVID-19 pandemic to allowtelemedicine prescribing of
certain controlled substancesthrough an exception to the Ryan
(41:09):
Hayde Act, which generallyrequires an in-person visit to
be able to prescribe controlledsubstances.
So we're likely, I think, from aprojection standpoint to see a
continued extension of thatwhile the industry waits to see
what happens with the DEA rule.
And I mentioned the 10 to 1initiative.
(41:30):
It may be difficult for the DEAto promulgate that new
regulation while also adheringto that executive order
requiring them to remove 10regulations at the same time.
Another item from a publichealth standpoint within the
Public Health Service Act, thereis, of course, Section 340B,
(41:54):
which is a very importantprogram for not only hospitals
and health systems, but a widerange of covered entities,
including certain federal healthcenters and lookalikes,
Ryan-Wright clinics, and othersafety net uh care facilities
(42:19):
that allows those entities topurchase uh drugs from
manufacturer drug manufacturersat a significantly discounted
price.
Um there has been uh litigationabout how those discounts are
provided, whether that themanufacturers are required to
give those discounts up front.
(42:40):
Um some manufacturers would liketo see a rebate model, which is
contemplated under the statute.
And HERSA has has recently putforward a 340B rebate model
pilot program, which would applyto 10 drugs and it would it
would um kind of flip thescript, if you will, instead of
(43:02):
the covered entities uhpurchasing those drugs at the
discounted price at the frontend, the um the entities would
would instead um seek thoserebates uh after the the drugs
have been dispensed.
So it would significantly changehow that that program works.
SPEAKER_02 (43:22):
Uh so in looking back at 2025, there was a
surprisingly small amount ofstatutory change from my
perspective.
It was like the least I've everlooked at in all of these years.
Not surprising since we all knowthat Congress was a little uh
dysfunctional last year.
Um but in looking at thephysician fee schedule, which I
(43:45):
was looking at, I was looking atmy notes from last year and this
year with the important things.
The last year we had therevision to the Medicare
overpayment refund rules for A,B, C, and D, which were very
significant changes, andparticularly on the A and B
side, um removed the obligationsthat have been set forth to dig
(44:09):
deeper and be proactive andreverted to a false claims act
standard of you know, knowledgeshould have known a reckless
disregard, which I thought was asignificant change.
There were also from last yearexpanded access provisions, so
MFTs and the like.
(44:30):
There were also social equitydiscussions and paying for the
services that go into assessingsocial equity needs.
Not so much this year in termsof what is new in the physician
fee schedule, and we'll have tosee the um big beautiful act I'm
not going to go into because Ithink everybody's heard probably
(44:51):
more than they ever want to hearabout it.
But a couple of things thatflagged my attention in this
year's physician fee schedulewere one, a focus on skin
substitutes, which Dave may haveseen and also in the enforcement
side.
The reimbursement mechanism onthis is going from a biological,
(45:12):
so paid under 1847A at a muchhigher rate.
It will now be an incident tosupply.
And this is happening not onlyin the physician office.
So incident twos you typicallythink of as a physician, a
supply incident to a service ina physician office, can also be
in a hospital outpatient clinicor department.
(45:36):
And those are also beingchanged.
So the reimbursement is going tobe cut by about 80% on those.
The other thing of most interestto me in this new physician fee
schedule, and this is the final,um, was a new ambulatory
specialty model that will bemandatory if you're picked up as
(45:58):
one of those doctors who will beparticipating.
So these are in special, um, twospecial chronic care conditions.
Um and they the the identifiedparticipants will be in uh
certain geographical areas thatare MSAs and another uh uh
(46:18):
variety there.
In those, so people who arepicked for this mandatory um
program will be assessed on avariety of criteria, and their
reimbursement may go up acertain amount, may go down a
certain amount depending ontheir scores.
And it's just a very um, veryinteresting um approach.
(46:41):
And and I think we're going tohear more about this.
So, Dave, let's go back to youand you can give us some
predictions about the world ofenforcement.
SPEAKER_04 (46:50):
Sure.
Well, I'll start where youbegan, Judy, which is skin
substitutes.
Uh, the department have signaledin conjunction with the change
in the billing framework, makingit now an incident two uh claim,
as opposed to how it had beenbilled, which was incredibly
lucrative.
Um so it appears the departmentwill now prioritize looking back
(47:11):
over the last several years ofskin substitute wound treatment
claims.
Uh, they'll have stopped thebleeding, so to speak, as far as
potential fraud into the futuregoes by making it into the two.
But now they're gonna uh nodoubt look back over the last
several years of claims, uh,which they have already begun to
do.
And the whistleblower bar, therelators have already uh been
(47:35):
out seeking uh cases of thistype to bring under the False
Claims Act.
DOJ is also looking for criminalprosecutions related to that
space.
So I expect next year, 2026,will be the year we hear a lot
about skin substitutes.
I think we're also going to heara lot more about clinical labs.
Uh, I think that next year aswell.
The the DME enforcement has beenon the decline because uh DOJ
(48:01):
would argue of the success ofsome of their larger enforcement
operations, like Operation BraceYourself, which was a very large
uh takedown several years ago.
Some of those cases, uh,amazingly after four or five
years, however long it's been,are still making their way
through the criminal courtsystem.
But uh DOJ is likely turning itsattention now to skin
substitutes and clinical labsand clinical testing.
(48:24):
That's not to say that theywon't continue to be
opportunistic in theanti-kickback space whenever
they're able, and I expect theywill.
Uh, next year is also going tocontinue to see an increased
review by DOJ of any type ofrelationship involving in an
international connection.
And that's a very broadstatement, but I but I would
expect DOJ will continue pushingwith the messaging from the top
(48:49):
that their enforcement has aninternational angle, an
international component, howeverthat may appear.
And so uh I would expectincreased use of money
laundering charges alongsidehealthcare fraud, which is
nothing new, but I think it willbe even more common in the next
year.
Uh, in addition, the other areasI spoke about, as far as
tariffs, cyber enforcement, andso on, those will also uh be big
(49:12):
in the next year.
Cases to watch, there are anumber of interesting cases
going on around the country.
Uh, I've mentioned the Zafiroffdecision.
Certainly, people are watchingthat one very closely, uh, and
there are a whole host ofothers.
And I'll leave that as a teaserto stay tuned for more great
content from AHLA on those.
SPEAKER_03 (49:30):
How about you?
Yeah, so you know, uh the thepoints that I mentioned before,
of course that they willcontinue to develop, um, and we
we want to look at that.
But for the benefit of uh uhlisteners, there are two other
items that uh started makingrumblings this year, and uh you
(49:52):
know, we we we should keep aneye out for next year.
Um both of these are in the drugdevelopment space.
So you uh uh those of ourlisteners who who work on um on
drugs and biologics will find uhinterest uh for these two
things.
Number one, priority reviewvouchers.
(50:13):
Um there's been a lot of uhconversation this year and next
year about priority reviewvouchers.
Essentially, um FDA reviews uhuh new drug applications and uh
biologic uh license applicationsuh within 10 months with a pre
(50:38):
uh under priority review, theycan uh do it at a much faster
pace.
So six months, sometimes eightmonths.
Uh they they agree to do it on afaster pace uh based on uh
several different kinds of uh uhinterests that the FDA has.
(50:59):
Uh a voucher is a uh is apriority review voucher,
basically is a uh it sounds uhit is what it sounds like.
A company that does that uh getsuh a certain type of drug or
biologic approved, uh wherethere is some national interest
(51:21):
or you know, uh we want toencourage as a community, we
want to encourage thedevelopment of something.
They receive a voucher for theiruh work.
Uh this was first created fortropical diseases.
If you get a tropical uhdisease, uh therapy for tropical
disease uh passed through,authorized through uh FDA, um,
(51:44):
you will receive a voucher forthat.
There became a secondary market,and uh companies would be able
to sell uh these vouchers toother companies for as much as
$300 million at one point.
Now the uh it's still uhreceiving around$100 million.
I I give you all this contextbecause there's been a lot of
(52:06):
changes in that.
A very important part of uh theuh vouchers was uh to encourage
the development of uh therapiesfor rare pediatric diseases.
Every two years uh the FDA woulduh uh would renew this.
There was a sunset clause onthis, and every two years, every
few years, the FDA would uhwould oh sorry, uh Congress
(52:29):
would renew uh the authorizationfor this.
Last year that did not happen.
After in September, uh Congressuh uh extended the law to
December, but for the well formost of 2025, there wasn't that
incentive.
Uh, you know, for smallcompanies, if they receive a
(52:49):
voucher of this kind, they coulduse the hundred million dollars
or more that they get to fundthe rest of their uh uh to fund
a big part of their development.
Um finally in September, uh FDA,uh sorry, Congress extended it
to next year, and we want to seenext year where that goes.
(53:10):
Hopefully, Congress gets uh theenough votes to pass it and
extend it out for uh a longertime.
Hopefully take out the sunsetclause.
There are uh it seems like thekids give a chance, give kids a
chance act that was uh approvedearlier this year.
Uh has some more priorities ofuh of uh Congress that were
(53:34):
built into uh the act, includingthe uh including the voucher.
So we'll keep an eye out on thatuh and see how that uh goes uh
goes through.
Um but in terms of priority uhreview vouchers, this wasn't the
biggest news uh uh uh this year,and uh uh because this year uh
(53:55):
the FDA announced the release ofa uh another uh different kind
of voucher uh called thenational priority vouchers.
Uh uh they first said there'd beonly five drugs, but they uh
increased it to nine drugs.
Um they will look through thethe agency will look through uh
(54:18):
through what's in their pipelineand accelerate the approval of
high uh of medicines and othertherapies that have that answer
national priorities, such as apublic health crisis, such as
onshoring drug development intothe US and strengthening supply
chain resiliency.
(54:39):
Um, already the FDA has gonethrough two cohorts of this, uh
of giving out these vouchers.
So we'll see a lot more nextyear.
We want to see where these twoland out.
Uh we want to see whether thisis only going to be done under
the Trump administration or youknow, if we see that there is a
change in Congress, whether thiswill uh this will be something
baked into uh into law.
(55:01):
So that's all on one sidepriority review vouchers.
The second main thing that I'lluh touch on is that the FDA
released a draft guidance ongene therapy, cell and gene
therapy products.
We want to see next year if uhuh the FDA finalizes that, if it
uh opens up some uh uhconversation, uh some public uh
(55:25):
uh conversations on this.
Cell and gene therapy, as uhmany of our uh listeners would
know, uh you know, sometimessome of these therapies you put
you only get one administrationof it over two weeks, and that's
a uh that has cured people of uhof genetic diseases.
(55:48):
So it's a very permanent sort ofand long-lasting effect.
And uh usually because they'reso rare and they're custom made
for people, the the uh clinicaltrials are very small, sometimes
less than 10 people.
So there isn't a lot of uh dataon the safety and efficacy of uh
(56:08):
of these uh therapies.
So this graph guidance talksabout uh it's uh it's entitled
um post-approval methods tocapture safety and efficacy data
for cell and gene therapyproducts.
So after they're they'reapproved, there's going to be uh
FDA is is starting to create theinfrastructure on how to see the
(56:28):
safety down the down the uh downthe road for these.
So I'll leave it at that.
You know, these are these areexciting new developments.
Uh of course, uh we've beenseeing that uh at the hospital
well uh in cancer drugs uh quitea bit.
And um pediatric uh cancers isis one of the areas which which
is being uh focused on on the onthe first point that I made
(56:50):
about the uh about the nationalpriority vouchers.
Um but yeah, uh lots ofinteresting things to look out
for.
SPEAKER_02 (56:57):
So thank you.
I want to thank all our speakerstoday, and we could go on all
day, but I think we uh are outof time.
So thank you very much, andwe'll regroup next year.
SPEAKER_01 (57:14):
If you enjoyed this episode, be sure to subscribe to
AHLA Speaking of Health Lawwherever you get your podcast.
For more information about AHLAand the educational resources
available to the health lawcommunity.
Visit americanhealthlaw.org andstay updated on breaking
healthcare industry news fromthe major media outlets with
AHLA's Health Law Daily Podcast,exclusively for AHLA
(57:35):
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