RISE summarizes recent regulatory-related headlines.
DOJ: Texas doc sentenced for $70M Medicare fraud
A Texas doctor was sentenced this week to 10 years in prison and ordered to pay $26 million in restitution for his role in a scheme to defraud Medicare by prescribing durable medical equipment and cancer genetic testing without seeing, speaking to, or otherwise treating patients.
David M. Young, M.D., 61, of Fredericksburg, Texas signed thousands of medical records and prescriptions for orthotic braces and genetic tests that falsely represented that the braces and tests were medically necessary and that he diagnosed the beneficiaries, had a plan of care for them, and recommended that they receive certain additional treatment.
According to court documents, Young prescribed braces and genetic tests for more than 13,000 Medicare beneficiaries, including undercover agents posing as different Medicare beneficiaries, many of whom he did not see, speak to, or otherwise treat. Young’s false prescriptions were then used by brace supply companies and laboratories to bill Medicare more than $70 million. Young was paid approximately $475,000 in exchange for signing the fraudulent prescriptions.
A jury convicted him in May 2024 for one count of conspiracy to commit health care fraud and three counts of false statements relating to health care matters.
DOJ: False Claims Act settlements, judgments exceed $2.9B in FY2024
Settlements and judgments under the False Claims Act exceeded $2.9 billion in the fiscal year ending Sept. 30, 2024, according to statistics announced by the Department of Justice (DOJ).
The government and whistleblowers were involved in 558 settlements and judgments, the second highest total after last year’s record of 566 recoveries, and whistleblowers filed 979 qui tam lawsuits, the highest number in a single year. Settlements and judgments since 1986, when Congress strengthened the civil False Claims Act, now total more than $78 billion.
“The Department’s enforcement of the False Claims Act this past year demonstrates its continued commitment to pursuing those who seek to defraud the American taxpayers,” said Principal Deputy Associate Attorney General Mizer in the announcement. “The False Claims Act and its whistleblower provisions remain a critical tool in protecting the public fisc and ensuring that taxpayer funds serve the purposes for which they were intended.”
The report also reflects the DOJ’s focus on key enforcement priorities, including combating health care fraud, the opioid epidemic, fraud in pandemic relief programs, and violations of cybersecurity requirements in government contracts and grants. Indeed, of the more than $2.9 billion in False Claims Act settlements and judgments reported by the Justice Department this past fiscal year, over $1.67 billion were related to the health care industry, including managed care providers, hospitals and other medical facilities, pharmacies, pharmaceutical companies, laboratories, and physicians. The amounts included in the $1.67 billion reflect recoveries arising only from federal losses, but, in many of these cases, were instrumental in recovering additional amounts for state Medicaid programs.
CMS announces ACO progress and 2025 initiatives
The Centers for Medicare & Medicaid Services (CMS) said this week it has made substantial progress on its goal for all people with Traditional Medicare to be in an accountable care organization (ACO) relationship by 2030. ACOs are groups of doctors, hospitals, and other health care professionals that work together to give patients high-quality, coordinated service and health care, improve health outcomes, and manage costs.
As of January 2025, 53.4 percent of people with Traditional (fee-for-service) Medicare are in an accountable care relationship with a provider. This represents more than 14.8 million people and marks a 4.3 percentage point increase from January 2024, the largest annual increase since CMS began tracking accountable care relationships.
In addition, CMS announced participation numbers for CMS ACO initiatives for 2025:
- The Shared Savings Program has 476 ACOs with 655,725 health care providers and organizations providing care to more than 11.2 million people with Traditional Medicare, a 3.7 percent increase in individuals from the previous year. Shared Savings Program ACOs deliver care to people with Traditional Medicare in 10,455 federally qualified health centers, rural health clinics, and critical access hospitals.
- The ACO REACH Model has 103 ACOs with 161,765 health care providers and organizations providing care to an estimated 2.5 million people with Traditional Medicare. This model has 928 federally qualified health centers, rural health clinics, and critical access hospitals participating in 2025.
- The Kidney Care Choices (KCC) Model includes 78 Kidney Contracting Entities (KCEs) and 15 CMS Kidney Care First (KCF) Practices, which are accountable for the quality and care of their aligned people with Traditional Medicare. The KCC Model has 8,430 participating health care providers and organizations, serving 240,000 people with Traditional Medicare who have chronic kidney disease and End-Stage Renal Disease in 2025.
- The newly launched ACO Primary Care Flex (ACO PC Flex) Model includes 24 ACOs serving 349,000 people with Traditional Medicare. This model, which began on January 1, tests a new payment model for primary care within the Shared Savings Program. ACOs jointly participate in the model and the Shared Savings Program.
HHS report details impact of health care consolidation, private equity
The Department of Health and Human Services (HHS) released a report that highlights the impacts of increasing consolidation in U.S. health care markets and recent influx of private equity and other private investors active in the space. The report notes five themes, HHS announced:
- Provider consolidation leads to higher prices and less access for patients
- Merger and acquisitions in health care services, especially in private equity-backed transactions, results in process changes and quality reductions
- Physicians that worked with private equity firms offer mixed reviews
There is widespread desire for transparency on private equity-led transactions - People are dissatisfied with private health insurers, especially vertically integrated insurers
The report suggests policy considerations, including:
- Enhance ownership transparency, building on CMS' nursing home ownership transparency rule
- Increase disclosures of mergers and acquisitions in health care by lowering reporting thresholds, requiring review and approval, and empowering relevant authorities with data and resources needed to conduct review of health care transactions
- Pursue further enforcement actions to halt hospital mergers and industry rollups
- Continue to improve data sharing and other collaboration across agencies, Congress, and state and local authorities in an all-government approach to promoting competition
KFF poll: Americans want to increase Medicare and Medicaid spending, not cut it
A new KFF Health Tracking Poll finds that the Medicare and Medicaid programs remain broadly popular, and more people favor more spending on those programs than less spending.
About eight in 10 Americans overall view Medicare (82 percent) and Medicaid (77 percent) favorably. This includes majorities across partisans, including most Republicans (75 percent) view Medicare favorably and 63 percent view Medicaid favorably.
The poll was conducted January 7-17 and included 1,310 U.S. adults.
In an announcement about the findings, KFF said that 46 percent of those surveyed say the federal government doesn’t spend enough on Medicaid, more than twice the share (19 percent) say the government spends “too much.” The gap is even larger for Medicare, with half (51 percent) of the public saying the government doesn’t spend enough compared to 15 percent who say the government spends too much.
The Affordable Care Act (ACA) also remains popular, with nearly two thirds (64 percent) of those surveyed holding favorable views, though with more of a partisan divide. Most Democrats and independents hold favorable views of the ACA, while about three quarters of Republicans (72 percent) hold unfavorable views.
Large majorities also say they are “very” or “somewhat” worried that people covered by each of the three programs in the future won’t get the same benefits available today. This includes 81 percent who say so about Medicare, 72 percent who say so about Medicaid, and 70 percent who say so about the ACA marketplaces.
Among other health priorities:
- Medicare drug price negotiations. More than half (55 percent) of those polled say it is a top priority to expand the number of prescription drugs subject to Medicare drug price negotiations.
- Regulating insurance claim denials. Most people (55 percent) say more closely regulating insurers’ decisions to approve or deny claims for health services or prescription drugs should be a top priority. Overall, just five percent oppose this.
- Enhanced ACA subsidies. About a third (32 percent) say that extending the expanded financial assistance that helps make ACA marketplace health insurance affordable should be a top priority. Only seven percent say this shouldn’t be done.
- Chronic disease: Most said the government is not spending enough on the prevention of chronic diseases (60 percent) or prevention of infectious diseases and preparing for future pandemics (54 percent). Much smaller shares say the government spends “too much” on each of these.
- Affordability: More than half (57 percent) of the public say they expect health care to become less affordable for their families over the next few years.
FTC: PBMs charge significant markups for cancer, HIV, and other critical specialty generic drugs
The Federal Trade Commission has published a second interim staff report on the prescription drug middleman industry, which focuses on pharmacy benefit managers’ (PBMs) influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV, and a variety of other critical drugs.
The latest report found that three of the big PBMs—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc. (OptumRx)—marked up many specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent. Such significant markups allowed the three PBMs and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the drugs’ estimated acquisition costs from 2017-2022. The Big 3 PBMs netted such significant revenues all while patient, employer, and other health care plan sponsor payments for drugs steadily increased annually, according to the staff report.
FTC staff have found that the Big 3 PBMs are charging enormous markups on dozens of lifesaving drugs,” said Hannah Garden-Monheit, director of the FTC’s Office of Policy Planning, in the announcement. “We also found that this problem is growing at an alarming rate, which means there is an urgent need for policymakers to address it.”
The latest report builds on a report issued by FTC staff in July 2024, which found that pharmacies affiliated with the Big 3 PBMs received 68 percent of the dispensing revenue generated by specialty drugs in 2023, up from 54 percent in 2016. The latest report analyzes a broader set of specialty generic drugs compared to two specialty generic drugs analyzed in the July 2024 report and finds that the Big 3 PBMs impose significant markups on a wide array of specialty generic drugs.
The second interim staff report analyzed all specialty generic drugs dispensed from 2017 to 2022 for members of commercial health plans and Medicare Part D prescription drug plans managed by the Big 3 PBMs for which the FTC has relevant data. This includes an analysis of 51 specialty generic drugs comprising 882 National Drug Codes, which include the generic versions of: Ampyra (used to treat multiple sclerosis), Gleevec (used to treat leukemia), Sensipar (used to treat renal disease), and Myfortic (used by transplant recipients).
ACA, Medicaid expansion enrollment reached 44M in 2024
A new KFF analysis finds that there were 44 million people enrolled in health coverage through the Affordable Care Act’s (ACA) marketplaces and its expansion of the Medicaid program in 2024. That represents about one in every six people under age 65, or 16.4 percent.
There was significant variation in ACA enrollment across states, ranging from about one in four nonelderly people in Louisiana, Oregon, Florida, and New York to fewer than one in 10 in Tennessee, Alabama, Wyoming, Kansas, and Wisconsin, according to the analysis.
Except for Florida, the states with the largest ACA-related enrollment as a share of population had adopted the Medicaid expansion, while all five states with the lowest share of enrollment were non-expansion states. (The data includes enrollment in the Basic Health Program, an option offered by some states under the ACA to provide coverage for low-income residents who would otherwise be eligible to obtain coverage through the marketplace. There were 1.3 million people enrolled in this option in 2024.)
KFF said the new analysis helps illustrate how many people could potentially be affected by the anticipated policy debates in Congress, including whether to allow enhanced ACA marketplace subsidies to expire this year, whether to reduce the federal share of Medicaid expansion funding, or whether to enact deeper spending cuts to ACA subsidies and Medicaid to help pay for expected tax cuts.
From 2020 to 2024, total enrollment in ACA programs (Medicaid, marketplace, and Basic Health Plan) increased by nearly 60 percent, with the largest increase among marketplace enrollees, helping to drive the uninsured rate down to historic lows. The number of Marketplace enrollees increased by 10 million people nationally, almost doubling, over the period, and the number of Medicaid expansion enrollees increased by 6.2 million people. States with the largest increases in enrollment, in percentage terms, included Missouri (243 percent), Oklahoma (227 percent), Texas (212 percent), Mississippi (190 percent), North Carolina (185 percent) and Georgia (186 percent).
Analysts said growth in marketplace enrollment over the period can be attributed to the temporary enhanced subsidies that were made available in 2021, which were extended through 2025. Marketplace enrollment climbed to a new record high in 2025, with nearly 24 million people signing up for plans during the current enrollment period. Marketplace enrollment was 21.4 million in 2024.
Medicaid expansion enrollment increased due to more states implementing expansion (seven states—Idaho, Missouri, Nebraska, North Carolina, Oklahoma, South Dakota, and Utah) implemented Medicaid expansion during or after 2020) and because of the pause in disenrollments from the pandemic-era continuous enrollment provision. Medicaid expansion enrollment totaled 21.3 million people in 2024. Even with the unwinding of the continuous enrollment provision that was still in play through March 2024, overall enrollment in Medicaid expansion is higher than in 2020.