What's New

• Accountable Care Organizations
• Data Breach
• Emerging Tech
• EMTALA
• Food & Drug Administration
• Fraud & Abuse
• HIPAA
• Med Spas
• Medicare & Medicaid
• Price Transparency

Accountable Care Organizations

• ​The CMS Innovation Center is implementing significant updates to the ACO REACH Model financial methodology starting in 2026 to achieve cost savings while maintaining care quality. These changes respond to a preview evaluation report showing increased net spending despite positive gross savings and quality care results in the program’s first year. The modifications aim to decrease net spending for 2026 while improving patient outcomes without disrupting care delivery. Accountable Care Organizations participating in ACO REACH serve as partners who assume financial risk for patients while offering enhanced benefits like telehealth visits, post-hospital home care, co-pay assistance, and condition management support. CMS has published both the financial methodology changes and the evaluation report that necessitated these updates to ensure the model meets the Innovation Center’s statutory mandate. Source: CMS​
• ​Next Generation Accountable Care Organizations rarely used voluntary alignment systems that allow Medicare beneficiaries to self-select their healthcare providers, with only 29% of organizations attributing 1% or more of their population through this method. A mixed-methods study analyzing data from 2016 through 2021 found that beneficiaries who chose voluntary alignment were sicker and cost $5,068 more annually than those aligned through traditional claims-based methods ($16,187 vs $11,119). NGACO leaders cited implementation challenges, short administrative time frames, and limited population growth as barriers to voluntary alignment adoption, while acknowledging benefits including attribution flexibility and enhanced patient engagement. Source: The American Journal of Managed Care​
• ​Value-based care adoption continues to accelerate across healthcare organizations, with more than 60% expecting revenue increases from VBC arrangements in 2025. A survey of 168 executives and clinical leaders at 142 healthcare organizations by Innovaccer and the National Association of ACOs found that 64% anticipate a revenue shift toward VBC this year compared to 2024. Currently, 30% of organizations derive at least 25% of their revenue from VBC contracts, while 13% have surpassed the 50% mark. Organizations are investing in data analytics and AI (31.2%), care management solutions (30%), and staff training (22.6%) to accelerate their VBC transitions, though barriers remain including financial risk (87%), provider resistance (80%), and data interoperability issues (75%). The report recommends a patient-centered approach, clinician support, financial risk management, and integrated data platforms to ease VBC transitions. Source: Advisory Board​

Data Breach

• ​U.S. Dermatology Partners (Texas), a network of over 100 dermatology practices across several states, recently announced a cyberattack and data breach that occurred in June 2024. The network disruption on June 19, 2024, was indicative of a cyberattack, and subsequent investigations by third-party digital forensics experts confirmed unauthorized access and data exfiltration. By April 2, 2025, a thorough review revealed that the stolen data included personal information such as names, dates of birth, medical record numbers, health insurance information, and specific details about dermatology services received. Additionally, a limited number of individuals had their Social Security and/or driver’s license numbers compromised. Notification letters to affected individuals began mailing on May 30, 2025. USDP has offered complimentary credit monitoring and identity protection services to those whose Social Security numbers and/or driver’s license numbers were involved. This breach underscores the importance of robust cybersecurity measures to protect sensitive health information. Source: HIPAA Journal​

Emerging Tech

• ​Intelligence Amplification technology is revolutionizing healthcare compliance management through systems like Compliance Risk Analyzer that detect and mitigate billing and coding risks. Unlike artificial general intelligence that aims to replace human decision-making, IA augments human capabilities through predictive analytics, statistical modeling, and heuristic methods that identify high-risk patterns by comparing provider data to national benchmarks. The system generates provider-specific risk analysis reports, creates targeted audit action plans, and enables benchmarking against industry standards, resulting in proactive risk mitigation, increased efficiency, cost savings, and improved audit accuracy. While delivering significant benefits, Compliance Risk Analyzer functions optimally as part of a hybrid model where IA supports human auditors, recognizing that healthcare compliance requires nuanced human judgment alongside computational assistance. Source: VMG Health​

EMTALA

• ​The Trump administration rescinded Biden-era guidance requiring hospitals to perform emergency abortions under federal law. The Department of Health and Human Services issued guidance in July 2022 that required doctors to perform abortions in emergency departments under the Emergency Medical Treatment and Labor Act (EMTALA), even in states where abortion is banned, when the procedure serves as stabilizing treatment for conditions like ectopic pregnancy or preeclampsia. The guidance was part of the Biden administration’s efforts to preserve abortion access after the Supreme Court overturned Roe v. Wade. CMS announced they rescinded the guidance because it does not reflect current administration policy, though they said they will continue enforcing EMTALA for emergency medical conditions affecting pregnant women. Source: ABC News​
• ​A federal investigation found that a Texas hospital violated law by sending a woman home without treating her life-threatening ectopic pregnancy. The Centers for Medicare and Medicaid Services determined that Ascension Seton Williamson in Round Rock failed to provide proper medical screening and stabilizing treatment to Kyleigh Thurman in February 2023. Thurman returned to the hospital multiple times with bleeding before her fallopian tube ruptured, requiring surgery that removed part of her reproductive system. The hospital violated the federal Emergency Medical Treatment and Labor Act, which requires emergency rooms to provide stabilizing treatment to all patients. The Trump administration announced it would revoke Biden-era guidance that directed hospitals to provide emergency abortions for women experiencing medical emergencies. Source: PBS News​

Food & Drug Administration

• ​The Trump administration’s FY26 budget proposal for the FDA reveals significant structural changes while maintaining overall operational capacity. The $6.8 billion proposal represents a 3.9% decrease from FY25 levels, balancing reduced discretionary funding ($3.2 billion, down 11.4%) with increased user fees ($3.6 billion, up 4%). The budget prioritizes the “Make America Healthy Again” agenda with $234.6 million for food safety and chronic disease initiatives, including plans to phase out certain food dyes and modernize safety protocols. Workforce reductions continue with the budget reflecting cuts of 1,940 full-time employees and $456.6 million in support of the “Reduction of Federal Bureaucracy initiative,” while projecting $626 million in savings from streamlined agency functions. Congressional appropriations committees have begun reviewing the proposal and will continue the funding process through September 2025. Source: Akin Gump​
• ​The FDA will implement artificial intelligence across all its centers by the end of June to combat regulatory delays caused by recent layoffs. The agency completed a pilot scientific review using generative AI that will reduce non-productive busywork in the review process. The AI rollout comes as the FDA has missed target decision dates for drug approvals and faces staffing cuts from the Health and Human Services Secretary, who put 3,500 FDA jobs on the chopping block. All FDA centers must begin implementing the AI approach immediately, with plans to tailor AI models to each center’s needs. Source: BioSpace​

Fraud & Abuse

• ​Dr. Benjamin Tiongson, a pain management physician practicing in Houston, Sugar Land, and Katy, has agreed to pay $390,082 to resolve allegations of Medicare fraud. Between December 2021 and December 2022, Tiongson allegedly billed Medicare for surgical implantation of neurostimulator electrodes, procedures that typically require operating rooms and command thousands of dollars in reimbursement. Instead of performing these invasive surgeries, Tiongson reportedly provided electro-acupuncture treatments that merely involved inserting thin wires into patients’ ears and taping devices behind them, all conducted in clinic settings without surgical incisions. The settlement, reached after investigation by the U.S. Attorney’s Office and Department of Health and Human Services, resolves these allegations without determination of liability. Source: United States Department of Justice​
• ​A Frisco physician has agreed to pay $3.5 million to resolve allegations of COVID-19 billing fraud. Dr. Samad Khan, owner of SK Primary Care, allegedly submitted approximately 400,000 false claims to the COVID-19 Uninsured Program between April 2020 and October 2021 for evaluation and management services that were never performed. The United States contends that Khan’s COVID-19 testing sites were staffed by medical assistants who only performed specimen collection, yet he billed for higher-level services that required qualified healthcare professionals and often submitted two claims per patient—one for testing and another for providing results. Khan knowingly used incorrect billing codes that provided substantially higher reimbursements than the appropriate specimen collection codes, according to the settlement that resolves these allegations without a determination of liability. Source: United States Department of Justice​

HIPAA

• ​Healthcare organizations must implement comprehensive vendor management strategies to mitigate significant HIPAA compliance risks from third-party relationships. While properly executing Business Associate Agreements is crucial, experts emphasize it must be part of a broader risk-based approach that includes thorough initial vetting, continuous monitoring, and incident response planning. Organizations should implement tiered vendor assessments based on data access levels and sensitivity, with particular scrutiny for vendors handling Protected Health Information. Common compliance failures include treating BAAs as mere checkboxes, insufficient upfront diligence, inadequate ongoing monitoring, and failure to assess subcontractor relationships. Healthcare entities cannot outsource accountability and must treat vendors as extensions of their organization while maintaining clear boundaries regarding day-to-day operations to properly manage liability. Source: Relias Media​

Med Spas

• ​Texas House Bill 3749, known as “Jenifer’s Law,” has undergone complete revision from its original form that could have shuttered many IV hydration clinics to legislation that may actually reduce regulatory restrictions on the industry. The bill was prompted by the death of Jenifer Cleveland in July 2023 after receiving an IV infusion at a Wortham, Texas medical spa, where an investigation revealed an absent medical director, lack of protocols, and treatment by an unlicensed individual. The legislation passed both the House and Senate by large margins and awaits Governor Greg Abbott’s signature, with an effective date of September 1, 2025. The most significant change in the final bill is its characterization of IV therapy as “elective” rather than medically necessary treatment, shifting the focus from documenting medical necessity to ensuring safety through contraindication screening. This change may permit the return of “menu medicine” where patients can select IV treatments from a menu of options without requiring a diagnosis or proof that the treatment addresses a specific medical condition. Source: HCH Lawyers​

Medicare & Medicaid

• ​Trump directs Health and Human Services to cap Medicaid payments at Medicare rates to eliminate fraud schemes. The memorandum targets state programs that tax healthcare providers then return the money as Medicaid payments, which triggers federal matching funds and allows providers to receive nearly three times Medicare rates. State Directed Payments under this system quadrupled over four years and reached $110 billion in 2024. The directive instructs the Secretary of Health and Human Services to ensure Medicaid payment rates do not exceed Medicare levels. Trump claims the current system allows states to avoid contributing funds while enriching healthcare providers through federal matching payments. Source: The White House​
• ​CMS will audit all Medicare Advantage contracts for each payment year in newly initiated audits following an announcement on May 21, 2025. The agency plans to complete audits for payment years 2018 through 2024, as CMS is several years behind in completing Risk Adjustment Data Validation (RADV) audits that verify diagnosis codes submitted by MA plans are supported by patient medical records. The Medicare Payment Advisory Commission estimates MA plans may overbill the government $43 billion per year through risk-adjusted payments based on enrollee diagnoses. CMS Administrator Dr. Mehmet Oz stated the agency has a duty to ensure MA plans bill the government accurately, and the Trump Administration aims to complete remaining audits by early 2026. To meet this goal, CMS will increase medical coders from 40 to 2,000 people beginning in September 2025 and deploy technology to flag unsupported diagnoses. Source: King & Spalding​
• ​The Center for Medicare and Medicaid Innovation plans to expand digital health technology and artificial intelligence integration across federal health care programs. CMMI released a white paper on May 13, 2025, outlining its strategy that emphasizes virtual care expansion, mobile health applications, and AI implementation for value-based care organizations. CMS Administrator Dr. Mehmet Oz and CMMI Director Abe Sutton stated that AI can increase health care supply and announced plans to create clearer reimbursement pathways for AI technologies. The agency seeks public input on certifying health-focused mobile applications for Medicare inclusion and is requesting comments on digital health through June 16, 2025. Sutton cautioned that some AI systems may increase costs by enabling providers to capture more services, requiring targeted reforms to focus on technologies that both expand care supply and reduce expenses. Source: Jones Day​

Price Transparency

• ​CMS published guidance and a Request for Information on Hospital Price Transparency rules following President Trump’s February 25, 2025 Executive Order on healthcare pricing transparency. The guidance instructs hospitals to stop using “999999999” as a placeholder when calculating “estimated allowed amounts” and instead use actual average dollar amounts from electronic remittance advice data from the past 12 months. The Request for Information seeks public input on improving hospital compliance and enforcement processes through six questions covering data accuracy, completeness, and suggestions for enhancing the quality of machine-readable files. CMS wants feedback on defining data accuracy and completeness terms, identifying external data sources for validation, and improving compliance tools like the CMS validator. Source: King & Spalding​