Healthcare Regulatory Check-Up Newsletter | January 2026 Recap

This issue of McDermott Will & Schulte's Healthcare Regulatory Check-Up highlights regulatory activity for January 2026. The US Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued two advisory opinions and a special bulletin analyzing direct-to-consumer prescription drug platforms, including TrumpRx. The US Department of Justice (DOJ) issued two reports discussing enforcement activity in 2025. The Centers for Medicare & Medicaid Services (CMS) withdrew local coverage determinations for skin substitutes, released the Outpatient Prospective Payment System drug acquisition cost survey, introduced a new Innovation Center model, and published the advance notice of changes to calendar year (CY) 2027 Medicare Advantage (MA) and Part D rates. Several notable settlements also occurred in January, resulting from qui tam False Claims Act (FCA) investigations and civil cases.

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.

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OIG updates

OIG issues unfavorable advisory opinion on home care attendant sign-on bonuses

OIG issued Advisory Opinion 25-12, analyzing a proposal by a home care agency to advertise sign-on bonuses as a mechanism to recruit home care attendants.

OIG issues favorable advisory opinion on clinical laboratory's waiver of cost-sharing obligations

OIG issued Advisory Opinion 26-01, concluding that a clinical laboratory's proposal to waive cost-sharing obligations for certain commercially insured patients receiving a US Food and Drug Administration (FDA)-approved colorectal cancer screening test would not pose significant fraud and abuse concerns under the federal AKS or the beneficiary inducements CMP.

OIG issues special advisory bulletin on TrumpRx

The Trump administration recently launched TrumpRx, a platform to connect cash-paying patients seeking lower-cost prescription drugs with direct-to-consumer (DTC) programs offered by manufacturers and other private companies. On January 27, 2026, OIG issued a Special Advisory Bulletin to address the application of the AKS to a pharmaceutical manufacturer's offer and sale of lower-cost prescription through a DTC program to cash-paying patients, including federal healthcare program enrollees.

OIG issues Fall 2025 Semiannual Report to Congress

On January 21, 2026, OIG released its Fall 2025 Semiannual Report to Congress, which highlights OIG's fraud detection and enforcement activities from April 2025 to September 2025.

DOJ updates

DOJ releases 2025 report on FCA settlements

The DOJ issued a press release announcing that settlements and judgments under the FCA exceeded $6.8 billion in the fiscal year ending September 30, 2025, representing the highest amount in a single year in the history of the FCA.

DOJ issues 2025 year-in-review report

The DOJ Criminal Division Fraud Section published a year-in-review report summarizing notable accomplishments and developments in 2025.

CMS regulatory updates

CMS withdraws local coverage determinations for skin substitutes

Medicare Administrative Contractors withdrew Local Coverage Determinations (LCDs) for skin substitute grafts and cellular and tissue-based products for the treatment of diabetic foot ulcers and venous leg ulcers.

CMS releases OPPS Drug Acquisition Cost Survey

The Outpatient Prospective Payment System (OPPS) Drug Acquisition Cost Survey is available for submission until March 31, 2026. CMS implemented this survey in November 2025 when it published the CY 2026 Hospital OPPS and Ambulatory Surgical Center Payment System final rule.

CMS introduces WISeR model to improve claim review process

CMS created the Wasteful and Inappropriate Service Reduction (WISeR) model to expedite the claims review process for services that are susceptible to fraud and abuse.

CMS releases advance notice of changes to CY 2027 MA and Part D rates

CMS announced proposed changes to the CY 2027 MA and Medicare Part D capitation rates. The net payment increase is projected to be 2.54%.

Notable cases, settlements, and related agency activity

Health plans sue pharmaceutical manufacturer over alleged anticompetitive practices

After health plans filed an amended complaint, a federal judge in Illinois allowed a class action to proceed against a pharmaceutical manufacturer.

DOJ, lab settle allegations of inflated bills

A Seattle-based medical testing laboratory resolved allegations that it improperly billed Medicare when it requested permission to bill a series of urinary tract infection tests as a panel, had its request denied, and then billed the tests under multiple billing codes instead of a single code.

Home health company will pay $34M to resolve FCA liability

A home healthcare company agreed to pay $34 million to resolve allegations under the FCA that it billed medically unnecessary home health claims to Medicare and provided financial benefits to physicians in exchange for referrals.

Lab owner pleads guilty to $52M fraud scheme involving genetic tests

A Florida man pleaded guilty for his role in a scheme to defraud Medicare by submitting more than $52 million in false and fraudulent claims for medically unnecessary genetic testing ordered for Medicare beneficiaries based on prescriptions purchased through illegal kickbacks and bribes.

Lab agrees to pay at least $6.8M to settle kickback allegations

A South Carolina laboratory company and its founder and CEO agreed to pay at least $6.8 million to resolve FCA allegations involving payment of illegal kickbacks to physicians.

Other notable developments

HHS announces 2026 Federal Civil Penalties adjustments

Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, on January 28, 2026, HHS updated its regulations to reflect required annual inflation-related increases to the CMP amounts in its statutes and regulations.

Department of Labor proposes PBM fee disclosure rule

The US Department of Labor proposed disclosure requirements for PBMs to fiduciaries of employer-sponsored self-insured health plans.

FDA releases 2026 priority deliverables for Human Foods Program

On January 23, 2026, the FDA announced its 2026 priority deliverables for the Human Foods Program (HFP) in furtherance of the Trump administration and HHS Secretary Robert F. Kennedy, Jr.'s Make America Healthy Again initiative.

Trump Administration releases "Great Healthcare Plan"

On January 15, 2026, US President Donald Trump unveiled the "Great Healthcare Plan," a policy framework intended to lower prices and maximize transparency.

Executive Order calls for initiatives to address addiction crisis

On January 29, 2026, President Trump issued an executive order to create the White House Great American Recovery Initiative to address the US addiction crisis.

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