Overview
This issue of McDermott’s Healthcare Regulatory Check-Up highlights regulatory activity for June 2025, including a new Centers for Medicare & Medicaid Services (CMS) innovation model; proposed rules with significant implications for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers and Medicare enrollment; and rescission of Biden-era Emergency Medical Treatment and Labor Act (EMTALA) guidance with respect to hospitals’ obligation to provide emergency abortion care. This month’s summary features landmark Supreme Court of the United States decisions on preventive care under the Affordable Care Act (ACA) and gender-affirming care. We also discuss enforcement actions focusing on allegations under the federal Anti-Kickback Statute (AKS), the False Claims Act (FCA), and other fraud and abuse laws. This issue examines three advisory opinions issued by the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) regarding a telehealth employee lease agreement, a proposed arrangement for a medical device company to cover the cost of exclusion checks for its customers, and a proposed arrangement under which a manufacturer would pay up to $2,500 for actual injuries caused by device failure during a warranty period. We also discuss recent US Department of Justice (DOJ) enforcement priorities.
Read below an overview of this month’s regulatory and enforcement activity roundup. For a deeper dive, subscribe to the newsletter to get our detailed analysis of all updates.
Click each heading below for a sneak peek of related content.
Notable Cases, Settlements, and Related Agency Activity
SCOTUS UPHOLDS GENDER-AFFIRMING CARE BAN UNDER RATIONAL BASIS REVIEW
On June 18, 2025, in United States v. Skrmetti, the Supreme Court upheld Tennessee Senate Bill (SB) 1, which prohibits healthcare providers from administering certain gender-affirming care to individuals under 18 for the purpose of treating gender dysphoria or related conditions or to enable a minor to identify with, or live as, an identity inconsistent with the minor’s biological sex.
SCOTUS HOLDS PREVENTIVE TASK FORCE RECOMMENDATIONS REMAIN LEGALLY BINDING MANDATES
On June 27, 2025, the Supreme Court ruled in Kennedy v. Braidwood Management that members of the US Preventive Services Task Force (Task Force) were inferior officers that do not require Senate approval.
SCOTUS REMANDS CHALLENGE TO NY REGULATION REQUIRING EMPLOYER-SPONSORED INSURANCE TO COVER ABORTIONS
In 2017, a New York state regulation required employer-sponsored health insurance plans to cover abortions but included a narrow exemption for employers whose primary purpose is the inculcation of religious values and that primarily employ and serve individuals of the same faith. The Roman Catholic Diocese of Albany and others challenged the regulation as too restrictive and as an unconstitutional violation of their First Amendment rights. On June 16, 2025, the Supreme Court remanded for consideration in light of the recently decided Catholic Charities Bureau, Inc. v. Wisconsin Labor & Industry Review Comm’n. 605 U. S. ___ (2025).
JUDGE VACATES BIDEN-ERA RULE KEEPING ENTITIES FROM DISCLOSING ABORTION, GENDER-AFFIRMING CARE PHI UNDER MAJOR-QUESTIONS DOCTRINE
On June 18, 2025, Judge Kacsmaryk of the Northern District of Texas granted summary judgment to Carmen Purl, MD, owner of a walk-in clinic (Purl and the clinic, collectively the plaintiffs), in Purl v. United States Dep’t of Health and Hum. Servs., vacating a Biden-era HHS rule aimed at protecting the privacy of patients seeking abortion and certain gender-affirming care.
GEORGIA HOSPICE PAYS $9.2 MILLION TO SETTLE ALLEGED AKS AND FCA VIOLATIONS
In Georgia, a hospice and its affiliated companies paid $9.2 million to settle claims that they had violated the AKS and FCA by submitting claims after arranging for hospice patient referrals from medical directors.
DOJ, OIG ANNOUNCE LARGEST NATIONAL HEALTHCARE FRAUD TAKEDOWN
On June 30, 2025, the DOJ and OIG announced the results of the 2025 national healthcare fraud takedown. The takedown is the culmination of interagency cooperation among CMS, OIG, DOJ, the Federal Bureau of Investigation, and state attorneys general to investigate and prosecute healthcare fraud across the industry.
CMS Regulatory Updates
WISeR MODEL WILL MONITOR FRAUD AND ABUSE, ENHANCE PRIOR AUTHORIZATIONS
On June 27, 2025, the CMS Center for Medicare and Medicaid Innovation (CMMI) announced the new Wasteful and Inappropriate Service Reduction (WISeR) Model and issued a request for participant applications.
CMS ISSUES CY 2026 HOME HEALTH PROSPECTIVE PAYMENT PROPOSED RULE
On June 30, 2025, CMS issued the CY 2026 Home Health Prospective Payment System proposed rule, which was published in the Federal Register on July 2, 2025.
CMS ISSUES CY 2026 END-STAGE RENAL DISEASE PROSPECTIVE PAYMENT SYSTEM PROPOSED RULE
On June 30, 2025, CMS issued the CY 2026 End-Stage Renal disease (ESRD) Prospective Payment System (PPS) proposed rule to update payment rates and policies for CY 2026.
CMS FINAL RULE ALLOWS ISSUERS TO REQUIRE INITIAL AND PAST DUE PREMIUM PAYMENTS, EXCLUDES DACA RECIPIENTS
On June 20, 2025, CMS issued a final rule creating new standards for Health Insurance Marketplaces and adding guardrails to the ACA access process.
CMS RESCINDS REQUIREMENT THAT HOSPITALS PROVIDE EMERGENCY ABORTIONS TO STABILIZE PREGNANT PATIENTS
On June 3, 2025, HHS and CMS rescinded Biden-era guidance that required hospitals to provide emergency abortions when necessary to stabilize pregnant patients.
OIG Updates
OIG ISSUES FAVORABLE AO FOR EMPLOYEE LEASE AND ADMINISTRATIVE SERVICES AGREEMENT
OIG issued a favorable advisory opinion (AO), 25-03, regarding an agreement between a management services organization (requestor MSO) and a physician professional corporation (requestor PC) (collectively, the requestors) to lease employees and provide certain administrative services, and with various platform MSOs and other PCs to provide telehealth and other support services.
OIG ISSUES UNFAVORABLE AO ON MEDICAL DEVICE COMPANY PROPOSAL TO PAY CUSTOMERS’ EXCLUSION SCREENING COSTS
OIG issued an unfavorable AO, 25-04, regarding a medical device company’s proposal to pay the costs that would otherwise be paid by its customers (e.g., hospitals, health systems, and ambulatory surgery centers) for a third-party vendor to screen and monitor the medical device company for exclusion from federal healthcare programs and to ensure compliance with certain other legal requirements.
OIG ISSUES FAVORABLE AO UNDER WARRANTIES SAFE HARBOR
OIG issued a favorable AO, 25-05, regarding a device manufacturer and distributor’s proposal to offer up to $2,500 to reimburse purchasers of a particular device for actual costs incurred from needle stick injuries caused by failure of the manufacturer’s device.
OIG RELEASES SPRING 2025 SEMIANNUAL REPORT TO CONGRESS
On June 2, 2025, OIG published its Spring 2025 Semiannual Report to Congress, summarizing OIG’s activities for the six-month period ending March 31, 2025.
Other Notable Developments
DOJ REVIVES FCPA ENFORCEMENT WITH NARROWER SCOPE
Following a temporary pause earlier this year, the DOJ resumed enforcement of the Foreign Corrupt Practices Act (FCPA). On June 9, 2025, Deputy Attorney General Todd Blanche issued new Guidelines for Investigations and Enforcement of the FCPA, outlining the DOJ’s updated enforcement priorities.
OREGON ENACTS EXPANSIVE CORPORATE PRACTICE OF MEDICINE BILL
On June 9, 2025, the Oregon legislature enacted SB 951, which prohibits certain ownership of, and actions related to, professional medical entities and aims to modernize Oregon’s corporate practice of medicine doctrine.
DOJ CIVIL DIVISION PUBLISHES ENFORCEMENT PRIORITIES
On June 11, 2025, the assistant attorney general for the DOJ’s Civil Division issued a memorandum directing Civil Division lawyers to prioritize investigations and enforcement actions advancing the following five priorities: combating discriminatory practices and policies, ending anti-Semitism, protecting women and children, ending sanctuary jurisdictions, and prioritizing denaturalization.
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Quinn Kopelman, a summer associate in the Chicago office, also contributed to this newsletter.
