Overview
This issue of McDermott Will & Schulte’s Healthcare Regulatory Check-Up highlights regulatory activity for September 2025, including an update on the Centers for Medicare & Medicaid Services (CMS) Rural Health Transformation (RHT) Program and a new prior authorization demonstration for certain cosmetic services provided in ambulatory surgical centers (ASCs). We review enforcement actions focusing on allegations under the federal Anti-Kickback Statute (AKS) and False Claims Act (FCA), and examine the latest advisory opinion (AO) and reports from the US Department of Health and Human Services (HHS) Office of Inspector General (OIG). We also discuss HHS’s enforcement crackdown on information blocking, the Make American Healthy Again (MAHA) Commission’s recent “Make Our Children Healthy Again” strategy document, the upcoming US Food and Drug Administration (FDA) Digital Health Advisory Committee meeting on artificial intelligence (AI)-enabled mental health devices, and more.
Read below for 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
Device manufacturer, distributor pay nearly $37M to resolve FCA allegations
A device manufacturer agreed to pay $29.75 million, and its former distributor agreed to pay $7.2 million, to resolve allegations that they violated the FCA by causing the submission of false claims to Medicare for photoplethysmography tests performed using its devices in connection with the diagnosis of peripheral arterial disease.
Lab CEO, marketers, physicians settle allegations of MSO and testing kickbacks for $6M+
A laboratory CEO agreed to pay $4.25 million to resolve allegations of illegal payments to doctors for laboratory referrals in violation of the AKS. Two physicians and seven marketers agreed to pay an additional $1.8 million to settle kickback allegations.
CMS regulatory updates
CMS launches $50B Rural Health Transformation Program
The One Big Beautiful Bill Act created a $50 billion RHT Program to strengthen healthcare across the rural United States.
CMS announces prior authorization demonstration for certain ASC services
CMS announced that it will start a five-year prior authorization demonstration for certain cosmetic services provided in ASCs in California, Florida, Texas, Arizona, Ohio, Tennessee, Pennsylvania, Maryland, Georgia, and New York.
OIG updates
OIG issues favorable AO on financial contributions to a related charitable foundation
OIG published a favorable AO on September 11, 2025, stating that a healthcare provider’s contributions to a related charitable foundation would not be grounds for civil monetary penalties or exclusion from federal healthcare programs under the Beneficiary Inducement Statute or the AKS.
OIG flags fraud, abuse concerns raised by skin substitutes
OIG issued a report highlighting the significant growth of Medicare payments for skin substitutes and calling for action to address fraud, waste, and abuse in skin substitute billing.
OIG issues report on provider relief fund balance billing requirements
OIG published a report summarizing its audit of hospitals that received Provider Relief Fund distributions during the COVID-19 public health emergency and their compliance with the balance billing requirement.
OIG adds MA enrollment manipulations schemes to workplan
OIG updated its work plan to include a review of MA enrollment manipulation schemes. OIG noted that the MA program is vulnerable to schemes designed to increase MA organization profits by improperly influencing enrollment.
Other notable developments
HHS announces enforcement crackdown on information blocking
HHS recently announced that it will be increasing resources dedicated to “curbing the harmful practice” of information blocking.
MAHA Commission unveils sweeping “Make Our Children Healthy Again” strategy
The MAHA Commission released the “Make Our Children Healthy Again” strategy document, which outlines nearly 130 recommendations, calling for a wide range of executive actions and policy reforms to improve children’s health and tackle rising chronic disease.
FDA digital health advisory committee will examine AI-enabled mental health medical devices
The FDA Digital Health Advisory Committee will meet on November 6, 2025, to discuss and make recommendations on generative-AI-enabled digital mental health medical devices.
HHS, FDA announce crackdown on deceptive drug advertising
US President Donald Trump signed a presidential memorandum on September 9, 2025, directing HHS to ensure transparency and accuracy in direct-to-consumer (DTC) prescription drug advertisements, and directing FDA to take action to enforce existing prescription drug advertising laws to ensure that DTC ads are truthful and not misleading.
HHS, CMS send drug pricing pilot to White House for review
On September 25, 2025, HHS and CMS sent a proposed drug pricing policy, the Global Benchmark for Efficient Drug Pricing Model, to the White House.
FTC Chairman warns healthcare employers, staffing companies about noncompetes
Federal Trade Commission (FTC) Chairman Andrew N. Ferguson issued letters to large healthcare employers warning that the FTC will take action against overly broad or unjustifiably restrictive noncompetes that limit worker mobility or patient choice.
Interested in reading the full newsletter? Sign up today and get a copy of the September 2025 Recap issue immediately.