Welcome to the sixth issue of Health Headlines, a newsletter created by lawyers in our Healthcare practice.
DOJ-HHS Announces False Claims Act Working Group, Emphasizes Healthcare Fraud Enforcement Priorities
Changes to Birthright Citizenship and the Impact on Fertility and Assisted Reproduction Clinics
DOJ and FTC Host 'Listening Sessions' on Competition Issues in the Pharmaceutical Industry
CCPA Settlement Signals Focus on Web Tracking Health Data
Healthcare Headlines
States Sue to Block Affordable Care Act Rule
A , which this group previously wrote about, is now being challenged in the U.S. District Court for the District of Massachusetts.
On July 17, 2025, the attorneys general of 20 states sued the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services, challenging the 2025 Marketplace Integrity and Affordability Final Rule (the Final Rule), which they argue would "erect[] a series of new barriers to enrollment" in health plans through the Patient Protection and Affordable Care Act (ACA) marketplace and thereby "deprive up to 1.8 million people of health insurance."
The challenged Final Rule was issued on June 20, 2025, and is set to go into effect on August 25, 2025. The Final Rule would make numerous changes to the operations of the ACA marketplace. These changes include shortening open enrollment periods, adding additional verification procedures for eligibility, and modifying reenrollment procedures to require payment of monthly premiums until an individual confirms their eligibility.
The plaintiff states argue that the Final Rule would significantly increase their costs in providing healthcare by, among other factors, increasing their Medicaid expenditures and the costs of emergency medical care that goes unpaid. They further argue that the Final Rule violates the Administrative Procedure Act (APA). First, they argue that it would make changes to the ACA marketplace that would "reach far beyond and bear little relation to the primary harm HHS asserted as its justification: fraudulent enrollment by insurance brokers and agents." Second, they argue that the Final Rule unlawfully treats any "'sex-trait modification procedure'" as a nonessential health benefit. They further argue that HHS violated the notice and comment period statutorily required by the APA.
The plaintiff states asked the court to postpone the effective date of the challenged provisions of the Final Rule pending judicial review; declare that the Final Rule violates federal law and, specifically, the APA; preliminarily and permanently enjoin defendants from implementing or enforcing the challenged provisions of the Final Rule; and vacate the Final Rule.
Senate Republicans Plan for Healthcare Legislation
Senate republicans are developing a bipartisan healthcare package aimed at reducing drug and insurance costs, with Sen. Bill Cassidy (R-LA) leading discussions on pharmacy benefit manager (PBM) transparency and Medicare Advantage upcoding. However, democrats remain skeptical, citing past reconciliation efforts that cut Medicaid and restricted subsidies.
The proposed legislation package is still in its early stages, with no hearings scheduled, and would aim to address a number of issues, likely combining several pending bills. Some republicans, including Sen. Lisa Murkowski (R-AK), are pushing to extend expiring health insurance subsidies for marketplace plans. While democrats support extending the expanded subsidies originally broadened in 2021, the broader republican caucus has shown less urgency to do so. Without congressional action, the subsidies will expire at year-end, potentially triggering steep premium hikes. The Congressional Budget Office estimates a permanent extension would cost $335 billion over 10 years. Sen. Cassidy's bill (S 1105), cosponsored by Sen. Jeff Merkley (D-OR), which targets upcoding in Medicare Advantage, is also proposed as part of the legislation package. PBM reform is expected to be a key component of the package if it materializes. Lawmakers from both parties have criticized PBMs for driving up drug costs through opaque pricing practices. The Senate Committee on Finance has already advanced several PBM bills, including provisions to eliminate spread pricing in Medicaid and increase transparency. Although some of this language was stripped from the last reconciliation bill due to procedural rules, Sen. Chuck Grassley (R-IA) emphasized the importance of passing PBM legislation before the end of the year.
Courts Grant Injunctions, Halting Arkansas and Iowa PBM Laws
In April's newsletter, we reported on House Bill 1150, the Arkansas law that was scheduled to go into effect on January 1, 2026, and would prohibit pharmacy benefit managers (PBM) from owning or operating pharmacies within the state. And in June's newsletter, we reported on the Pharmaceutical Care Management Association's filed suit to stop the law from going into effect. The lawsuit was consolidated with similar suits brought by PBMs, including Express Scripts, Caremark, and Optum Rx.
In an order on July 28, a judge granted a preliminary injunction, halting the law from going into effect. The judge granted the injunction on two bases, finding that the law is 1) likely unconstitutional because it is violative of the Constitution's Commerce Clause and 2) preempted by federal law, specifically TRICARE (the federal program that provides health insurance to US military personnel).
On July 21, a judge partially granted a preliminary injunction, halting certain parts of Senate File 383, an Iowa law regulating PBMs, from going into effect. The court found that certain portions of the law are preempted by federal law, specifically the Employee Retirement Income Security Act, and violative of the First Amendment as prohibiting commercial speech. Broad portions of the law were included in the injunction, including those provisions related to requirements that , an Iowa law regulating PBMs, from going into effect. The court found that certain portions of the law are preempted by federal law, specifically the Employee Retirement Income Security Act (ERISA), and violative of the First Amendment as prohibiting commercial speech. Broad portions of the law were included in the injunction, including those provisions related to requirements that PBMs may not discriminate against any pharmacy or pharmacist with respect to participation and reimbursement, any-willing provider standards, and requirements on mandatory contract provisions. may not discriminate against any pharmacy or pharmacist with respect to participation and reimbursement, any-willing-provider standards, and requirements on mandatory contract provisions.
As both suits will continue to proceed, the results of these cases will impact similar legislation proposed and pending in other states.
Texas
In January's newsletter, we reported on the Texas attorney general filing a suit against a New York physician, accusing the physician of unlawfully providing a Texas resident with abortion-inducing drugs. And, in February's newsletter, we provided an update on the case, reporting on the default judgment entered for the state.
Since then, the acting county clerk in Ulster County, New York, has rejected multiple of the Texas attorney general's attempts to impose summary judgment against the physician. On March 27, 2025, the clerk wrote that he had informed the Texas attorney general that his office would "not be filing a summary judgment against" the physician, invoking New York's Shield Law (Senate Bill S9077A). He wrote that he had refused the filing and would refuse any similar filings.
On July 14, 2025, the clerk made good on that promise. The Texas attorney general sought to compel the clerk to reconsider the March decision. In response, the clerk wrote, "The rejection stands. Resubmitting the same materials does not alter the outcome." The clerk further added, "While I'm not entirely sure how things work in Texas, here in New York, a rejection means the matter is closed."
According to the Ulster County Clerk's Office, this marks the first time a clerk in New York has invoked the New York Shield Law, which provides legal protections for reproductive healthcare providers.
Wisconsin
On July 2, 2025, the Wisconsin Supreme Court overturned Wis. Stat. § 940.04(1), a state statute from 1849 that criminalized abortion. In a 4–3 decision, the court held that the last 50 years of legislation regulating abortion "so thoroughly covers the entire subject of abortion that it was meant as a substitute for the 19th century near-total ban on abortion," thus impliedly repealing the 1849 statute.
The decision referenced myriad state laws instructing how and when abortions can be performed, stating that "this comprehensive legislation would serve no purpose" if the 1849 statute criminalized all abortions save for those necessary to save the life of the pregnant person. For example, the court referenced state laws providing that state, county, and municipal funds may be used to pay for abortion services in certain instances, writing that "if abortion is simply illegal except when it is necessary to save the life of the mother, then numerous statutes specifically authorize the state, counties, or municipalities to subsidize a crime."
West Virginia
On July 15, 2025, a panel of the U.S. Court of Appeals for the Fourth Circuit rejected a challenge to a West Virginia law banning medication abortions with only limited exceptions. The action was brought by GenBioPro, the manufacturer of generic mifepristone (the first of a two-drug medication abortion regimen), and challenged the state's Unborn Child Protection Act.
Following the Supreme Court's decision in Dobbs v. Jackson in 2022, West Virginia enacted the Unborn Child Protection Act, which banned abortions in most circumstances. GenBioPro challenged the law in January 2023, seeking an injunction prohibiting state officials from enforcing the ban. GenBioPro argued that the law was preempted by the Food and Drug Administration Amendments Act (FDAAA), which grants the FDA post-market authority over certain drugs, including allowing the FDA to deem when it is required for a drug manufacturer to implement a Risk Evaluation and Mitigation Strategy (REMS) "'to ensure that the benefits of the drug outweigh the risks.'"
Mifepristone is subject to a REMS, and GenBioPro argued that the FDAAA "established a comprehensive scheme for regulating the narrow field of REMS drugs with safe-use elements that left no room for complementary state regulation." The U.S. District Court for the Southern District of West Virginia rejected the preemption argument, finding that "'health and safety is a field that States have traditionally occupied" and "'Congress has not expressed an intent to occupy the field of drugs subject to a REMS in a manner which would preempt West Virginia's abortion restrictions.'"
The Fourth Circuit upheld the lower court's decision, finding "no indication" that "Congress intended to guarantee nationwide access to mifepristone when it enacted the FDAAA." The Fourth Circuit stated that their decision was narrow, and that they "take no position on the wisdom or folly of West Virginia's abortion law," as, following Dobbs, that decision "belongs with the people and their elected representatives."
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