Health Law Advisor

In what will create a glimmer of hope for beleaguered Medicare Advantage Organizations (MAOs) who are facing looming waves of Risk Adjustment Data Validation (RADV) audits, on September 25, 2025, a Northern District (ND) of Texas District Court invalidated the Centers for Medicare & Medicaid Services’ (CMS) 2023 RADV Final Rule, finding that the agency violated the notice-and-comment requirements of the Administrative Procedure Act (APA).

This ruling comes amidst a recently announced aggressive agenda by the current Trump administration to catch up on five payment years of RADV audits. This agenda has triggered visceral concern from MAOs, who are struggling to understand the potential breadth and impact of future extrapolated recoupments. Given the adverse residual impact to MAOs through CMS’s V28 risk adjustment (RA) model cuts, RADV audits landed at a less than opportune time for the industry. The Court’s ruling, while still subject to appeal and possible CMS rule redlining, is at least temporary good news for MAOs.  But, for those popping corks for their victory lap, it ain’t over yet.

As EBG previously reported, on March 10, 2025, Robert F. Kennedy, Jr., Secretary of the U.S. Department of Health and Human Services (“HHS”), announced that the U.S. Food and Drug Administration (the “FDA”) is exploring rulemaking to eliminate the pathway allowing entities to self-affirm that food ingredients are Generally Recognized as Safe (“GRAS”). Earlier this month, on September 4, 2025, the Trump administration’s Spring 2025 Unified Regulatory Agenda (“Agenda”) was published, providing insight into the upcoming regulatory priorities of administrative agencies, including the FDA. In keeping with Secretary Kennedy’s prior statements, the Agenda disclosed an impending Notice of Proposed Rulemaking (“NPRM”) from the FDA regarding GRAS. Unified Agenda Entry RIN 0910-AJ02, which describes the NPRM to be published in October, states that the proposed regulations would “require the mandatory submission of GRAS notices for the use of human and animal food substances that are purported to be GRAS.” This proposed rule, if it goes into effect, will amend the GRAS regulations in 21 CFR parts 170 and 570 and effectively eliminate the self-affirmation pathway – meaning that entities would now be legally obligated to notify the FDA before designating food ingredients as GRAS.

Many U.S. companies are responding to tariff pressures by rethinking supply lines. In a September 14, 2025, Wall Street Journal article, a major U.S. consumer goods manufacturer accused its competitors of dodging increased tariff costs by under-reporting the value of the goods imported into the United States. Such allegations are likely to incur scrutiny from the Department of Justice’s (DOJ’s) cross-agency Trade Fraud Task Force, which is aimed at investigating such allegations and prosecuting violations of law (see our September 5 blog post). 

In addition to consumer goods, this heightened scrutiny can also impact imported medical goods from everyday disposables to expensive imaging devices. Importers, manufacturers, and all parties involved in international supply chains, including end-users, should take notice: federal agencies and prosecutors have long used data mining to identify trends and to target investigations. Customs value data demonstrating the cost of imported goods is publicly available and can serve as an invaluable tool to help benchmark costs and conduct internal risk assessments.

This Alert explains: (a) what conduct may trigger liability; (b) how DOJ and other federal agencies use data mining to identify targets; (c) key statutes and penalties; (d) the implications of whistleblower complaints; and (e) steps companies should take to reduce risk.

On September 12, 2025, the United States Court of Appeals for the Fifth Circuit, in AbbVie v. Fitch, Case No. 24-60375, (5th Cir. 2025), affirmed a federal District Court’s denial of a preliminary injunction sought by the pharmaceutical manufacturer AbbVie. AbbVie sought to enjoin enforcement of the state of Mississippi’s 2024 law, H.B. 728, which prohibits drug manufacturers from interfering with how a 340B covered entity distributes 340B drugs to eligible patients.

The 340B Program requires drug manufacturers to give discounts to certain categories of safety-net providers under the law – known as "covered entities" – in order to have their drugs covered by Medicaid. Covered entities commonly contract with third-party pharmacies – known as “contract pharmacies” – to dispense drugs to 340B-eligible patients. In recent years, citing concerns relating to the growth of the 340B program, compliance with 340B requirements, and transparency, AbbVie and other manufacturers have implemented restrictions that limit the number of contract pharmacies with which each covered entity can contract. Covered entities counter that these policies undermine the 340B program's intent to serve low-income and uninsured patients and cause hospitals to reduce patient services. AbbVie’s policy restricted covered entities to contracting with a single contract pharmacy within 40 miles of the covered entity.

By the third quarter of 2025, the Department of Justice (DOJ) has made plain that it will continue using the False Claims Act (FCA) to advance administration priorities.

While the focus on diversity, equity, and inclusion (DEI)—addressed in our August 8 post—continues to make headlines, DOJ is not taking its eye off cybersecurity. Two settlements announced in late July, totaling approximately $11.5 million, reinforce that noncompliance with cybersecurity obligations can trigger FCA exposure.

On August 29, 2025, the U.S. Department of Justice (DOJ) announced the creation of a new Trade Fraud Task Force (“Task Force”).

DOJ touts this cross-agency initiative as being designed “to aggressively pursue enforcement actions against any parties who seek to evade tariffs and other duties”—promising “robust enforcement against importers and other parties who seek to defraud the United States.”

Created to further the administration’s “America First Trade Policy” announced on January 20, 2025, the Task Force will consist of civil and criminal components of the DOJ along with U.S. Customs and Border Protection and Homeland Security Investigations. It will focus on ensuring compliance with trade laws, including payment of all tariffs and duties (e.g., antidumping and countervailing duties, Section 301 tariffs, and other customs obligations). DOJ promises increased parallel civil and criminal actions under the False Claims Act (FCA), Tariff Act, and federal criminal statutes related to trade fraud and conspiracy.

California’s Assembly Bill 489 (“AB 489”) signals more than just a tweak to existing healthcare law—it’s a glimpse into how the next generation of regulation may shape the future of AI development and deployment in healthcare.

As large language models (LLMs) and other AI-driven health platforms accelerate in capability and adoption, lawmakers are scrutinizing where technological innovation may result in the unauthorized practice of medicine. The message is clear: the days of operating in a regulatory gray zone are numbered and the regulatory perimeter around healthcare AI is tightening such that states may begin to legislate how AI can present itself to the public, not just what it does in the background.

On July 17, 2025, the U.S. Court of Appeals for the Fourth Circuit held that a federal district court was “within bounds to order a do-over” in the case of Ron Elfenbein, a Maryland doctor who was found guilty of COVID-19-related health care fraud in 2023 in connection with upcoding and false documentation. Elfenbein was acquitted by the district court four months after his trial.

The Fourth Circuit affirmed a contingent order of the U.S. District Court for the District of Maryland granting a new trial and also reversed Elfenbein’s acquittal, rejecting the trial court’s conclusion that the jury had too little evidence to convict.

“[W]e do agree that the case was close—and we find it significant that the most damning evidence came not from the government’s witnesses but Elfenbein’s,” Judge Julius N. Richardson wrote for the appellate court.

On July 17, 2025, Oregon Governor Tina Kotek signed SB 537, which adds to Oregon’s growing set of workplace violence prevention laws relating to health care. The bill passed the state Senate with an 18-11 vote on June 23, and the House, 37-12, on June 26, during the final days of the legislative session. The new provisions add detailed requirements for health care work sites.

On July 29, 2025, Attorney General Pam Bondi issued a memorandum to all federal agencies providing guidance addressing “unlawful discrimination” on the basis of race, color, national origin, sex, religion, or other protected characteristics (the "July 29 Guidance").

According to the memorandum, the July 29 Guidance is intended to clarify “the application of federal antidiscrimination laws to programs or initiatives that may involve discriminatory practices, including those labeled [DEI] programs.”

The Expanding Enforcement Framework

Although the July 29 ...