The Cost of Waiting – Why You Need a Life Care Plan Now
Long-term care planning is something many families put off—until a crisis hits. Without a Life Care Plan, seniors and their families may face rushed decisions, financial hardship, and fewer care options when the need for care arises.
A Life Care Plan is a proactive strategy that helps seniors stay independent, protect their assets, and ensure they receive the care they need before an emergency forces their hand. The reality is that waiting too long to put a Life Care Plan in place can lead to higher costs, reduced choices, and unnecessary stress for loved ones.
The Rising Costs of Long-Term Care and Why a Life Care Plan Matters
Without a Life Care Plan, many families are shocked by the cost of care when a loved one suddenly requires assistance. According to Genworth’s 2024 Cost of Care Survey, the average national costs are:
In-home care (40 hours/week): ~$6,500/month
Assisted living facility: $4,500–$6,500/month
Nursing home (private room): $9,000–$12,000/month
Total dedicated costs for any of these can range from $70,000 to $130,000 depending on the location, the type of care, and the services offered.
In New Jersey, New York, and Pennsylvania, costs can be substantially higher. Seniors without a Life Care Plan risk spending their entire life savings on care, leaving their spouse or loved ones financially vulnerable. Proper Life Care Planning helps avoid this risk by incorporating Medicaid planning, asset protection, and long-term care strategies.
What Happens If You Wait Too Long to Create a Life Care Plan?
1. You May Lose the Option to Age in Place
A Life Care Plan prioritizes aging in place, helping seniors stay in their homes safely for as long as possible. However, without a Life Care Plan, staying at home may not be an option due to lack of resources and planning.
Home modifications like ramps, stairlifts, or bathroom upgrades require planning.
Many seniors assume Medicaid will cover in-home care, but Medicaid has strict eligibility requirements that must be planned for in advance.
Without a Life Care Plan, families may be forced to place a loved one in a nursing home or assisted living facility sooner than expected.
A well-structured Life Care Plan ensures seniors have the financial means and support systems in place to remain at home longer.
2. Lack of a Life Care Plan Could Lead to Financial Hardship
If you don’t put a Life Care Plan in place before you need care, you could be forced to pay for care out of pocket, depleting your assets much faster than anticipated. Some information to keep in mind:
Medicaid eligibility has strict financial rules. Without a Life Care Plan, seniors may be required to spend down their savings before qualifying.
Medicaid has a 5-year lookback period, meaning any asset transfers made within 5 years of applying could trigger penalties.
Nursing home care can cost over $200,000 per year—without a Life Care Plan, families often scramble to cover these costs at the last minute.
A Life Care Plan includes Medicaid planning, asset protection strategies, and trusts to legally preserve assets while ensuring affordable care options.
3. Without a Life Care Plan, Families Are Forced to Make Rushed Decisions
When families don’t have a Life Care Plan in place, they often find themselves in crisis mode when a loved one experiences a sudden health decline.
Without a Life Care Plan, families are left scrambling to find available care facilities which may not be the preferred choice.
Many nursing homes require a period of private pay before Medicaid kicks in, forcing families to spend down further if no planning has been done.
Families without a Life Care Plan may make costly mistakes, such as transferring assets or missing Medicaid eligibility requirements, leading to delayed care or financial penalties.
A Life Care Plan eliminates the stress of last-minute decision-making by mapping out care options, funding strategies, and legal protections ahead of time.
How a Life Care Plan Protects Your Future
A Life Care Plan is more than just a plan—it’s a roadmap to quality care, financial security, and peace of mind. By putting a Life Care Plan in place now, seniors can:
Remain independent longer – Planning allows for in-home care and modifications that support aging in place.
Avoid unnecessary financial loss – A Life Care Plan includes asset protection strategies to prevent Medicaid spend-downs.
Ensure loved ones aren’t burdened with decision-making – A Life Care Plan provides clear advice regarding legal, medical, and financial needs.
Qualify for Medicaid and VA benefits while protecting assets – Proper Life Care Planning ensures eligibility for government benefits without sacrificing financial security.
The Best Time to Create a Life Care Plan Is NOW
If you wait until a crisis occurs, your care choices will be limited, your expenses will be higher, and your family will be under unnecessary stress. The sooner you put a Life Care Plan in place, the more control you have over your care, your finances, and your future.
FDA Announces Phase-Out of What it Referred to as “Petroleum-Based Synthetic Food Dyes”
Yesterday, FDA and HHS announced a series of actions intended to phase out the use of petroleum-based synthetic food dyes. The news release can be found here and a video of the press conference here. Specifically, the agency announced that it would:
Establish a national standard and timeline to transition from petroleum-based dyes to natural alternatives.
Initiate the process to revoke authorizations for Citrus Red No. 2 (21 CFR 74.302) and Orange B (21 CFR 74.250).
Work with the industry to eliminate the remaining six synthetic dyes – Green No. 3, Red No. 40, Yellow No. 5, Yellow No. 6, Blue No. 1, and Blue No. 2 – from the food supply by the end of the year.
Authorize four new natural color additives – calcium phosphate, Galdieria extract blue, gardenia blue, and buttery fly pea flower extract (expanded uses) –in the coming weeks and accelerate the review and approval of others.
Partner with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children’s health and development.
Request that companies remove Red No. 3 sooner than the previously required 2027-2028 deadline.
Speakers at the press conference included HHS Secretary Robert F. Kennedy Jr. and FDA Commissioner Marty Makary. Sweeping claims about the harms of the dyes, in particular to children, were made. Although the health effects of many of the dyes have been brought into question, there is little scientific consensus on the subject. See e.g., CA Department of Public Health Rejection of Synthetic Dye Warnings. FDA has not released any document providing an explanation for the agency’s change in position or providing a risk assessment to support its position. The speakers also discussed variations of state additive bans and the market harms of patchwork state regulation.
Neither the press release nor the news conference referenced any formal process to revoke the authorizations for the synthetic food dyes that are not Citrus Red No. 2 and Orange B, and FDA will likely rely on voluntary phase out by industry and state additive bans to implement its plans.
FDA Suspends Food Safety Quality Checks Amid Staff Cuts
The U.S. Food and Drug Administration (FDA) has recently suspended its food safety quality checks due to significant staff cuts at the Department of Health and Human Services (HHS). FDA had been drawing up plans in anticipation of the staff cuts, and outsourcing oversight to state and local authorities. This decision has raised concerns about the potential impact on public health and food safety standards.
FDA’s proficiency testing program, part of the Food Emergency Response Network (FERN), is designed to ensure consistency and accuracy in food testing laboratories. The network comprises approximately 170 labs that test food for pathogens and contaminants to prevent foodborne illness.
The suspension of this program follows the firing and departure of up to 20,000 HHS employees, including key personnel such as quality assurance officers, analytical chemists, and microbiologists. The program will be suspended at least through September 30, 2025.
The staff cuts have also impacted FDA’s work in other areas such as its bird flu response and drug reviews. FDA had already suspended efforts to improve testing for bird flu in milk, cheese, and pet food earlier in April due to staffing issues.
Drug Pricing and Payment Executive Order Shows Trump Administration’s Cards
On April 15, 2025, President Trump signed the Lowering Drug Prices by Once Again Putting Americans First Executive Order (Executive Order). The Executive Order revives and expands several pharmaceutical pricing and payment reforms from President Trump’s first term, with a goal of curbing drug costs to patients. This offers a highly anticipated glimpse into the Administration’s position on drug manufacturers, Pharmacy Benefit Managers (PBMs) and providers.
Notably, the Executive Order endorses reforms to the Inflation Reduction Act (IRA), including the Medicare Prescription Drug Negotiation Program and the so-called “pill penalty.” The Executive Order also looks to expand on reimbursement reductions for hospitals that are critical participants in the drug supply chain. Below is an analysis of the Executive Order’s key components, including potential impacts and 340B Drug Pricing Program (340B Program) considerations.
1. Reforming Medicare Drug Price Negotiations under the IRA
The IRA, signed into law in 2022, included several provisions aimed at lowering prescription drug prices. One of the primary provisions in the IRA was the expansion of Medicare’s ability to negotiate prices for certain drugs covered under Medicare Parts B and D directly with pharmaceutical companies (Negotiation Program).1 Under President Biden, the Centers for Medicare & Medicaid Services (CMS) negotiated 2026 pricing for a list of 10 drugs. CMS projects roughly $6 billion in Medicare Part D savings ($1.5B for patients) attributed to the 2026 list. Unless Congress changes the IRA or the Trump Administration unwinds the CY 2026 pricing, those prices will go into effect on January 1, 2026. In early 2025, CMS identified a list of 15 additional products to negotiate for 2027—those price negotiations were originally set to occur in 2025.
The IRA restricts which drugs Medicare can select for price negotiations. A small-molecule drug product must be at least seven years past its FDA approval date to qualify for price negotiations and nine years past its FDA approval date before the negotiated price can take effect. A biologic drug must be at least 11 years past its FDA approval date to qualify for price negotiations, and 13 years past its FDA approval date before the negotiated price can take effect. Some in the industry have termed the four-year difference between when small-molecule drugs and biologics qualify for price negotiations as a “pill penalty,” a reference to the fact that small-molecule drugs are often marketed as orally available pills (i.e., tablets or capsules) whereas biologics are generally only available via parenteral routes of administration (i.e., via injection).
The Executive Order addresses these points, explaining that the Negotiation Program “has the commendable goal of reducing the drug prices Medicare and its beneficiaries pay,” but claims that “its administratively complex and expensive regime has thus far produced much lower savings than projected.” The Executive Order also discusses “the ‘pill penalty’” and says that it “threatens to distort innovation by pushing investment towards expensive biological products, which are often indicated to treat rarer diseases, and away from small molecule prescription drugs, which are generally cheaper and treat larger patient populations.”
The Executive Order includes directives aimed at improving the IRA, including that the Secretary of Health and Human Services (HHS) (the Secretary) “shall work with the Congress to modify the Negotiation Program to align the treatment of small molecule prescription drugs with that of biological products, ending the distortion that undermines relative investment in small molecule prescription drugs, coupled with other reforms to prevent any increase in overall costs to Medicare and its beneficiaries.” The Executive Order also directs the Secretary to “propose and seek comment on guidance for the Medicare Drug Price Negotiation Program for initial price applicability year 2028 and manufacturer effectuation of maximum fair price under such program in 2026, 2027 and 2028” by June 14, 2025. And the order directs Director of the Office of Management and Budget, the Secretary, and various policy advisors to “provide recommendations to the President on how best to stabilize and reduce Medicare Part D premiums” within 180 days of the order.
Finally, in a related initiative, the Administration directs the Secretary to use the Center for Medicare and Medicaid Innovation to develop “a payment model to improve the ability of the Medicare program to obtain better value for high-cost prescription drugs and biological products covered by Medicare, including those not subject to the Medicare Drug Price Negotiation Program” within one year of the Executive Order.
While the Executive Order didn’t formally eliminate prior price negotiation efforts, it will likely delay the government’s ability to negotiate lower prices for several of the most expensive prescribed drugs on the market as guidance is developed. 340B Covered Entities should track these developments as the required guidance could include more direction on implementation of the maximum fair price (MFP) and how CMS intends to address manufacturer and 340B Covered Entity concerns regarding the interplay between the MFP and 340B Program purchases.
2. Survey to Identify Hospital Drug Acquisition Costs and Develop Updated Drug Pricing Policies
Following years of litigation regarding a controversial 2018 CMS payment reduction for 340B drugs, a victory for 340B Covered Entities at the Supreme Court in June 2022, and lump sum payments as a remedy to 340B Covered Entities, the 340B Program rollercoaster continues for these safety net entities. The Executive Order requires the Secretary to publish a plan to conduct a hospital acquisition cost survey for covered outpatient drugs pursuant to Section 1833(t)(14)(D)(I) of the Social Security Act (the Act). Under Section 1833(t)(14), HHS may vary drug payment by hospital group if an acquisition cost survey is available. HHS lost its battle with 340B Covered Entities when it failed to demonstrate that it conducted a survey as required by the Act. It appears that the Executive Order is intending to address that deficiency so CMS can attempt to change drug payment rates.
While this is a developing issue, it appears the Trump Administration is trying to address this prior loss head on and revisit drug payment rates. Hospitals, particularly 340B Covered Entities, need to be prepared to address any survey method deficiencies (e.g., 340B pricing is confidential), and they need to be ready to respond to very challenging written survey requests. This is reminiscent of CMS’s survey attempt in April 2020 that was released on the heels of the COVID-19 pandemic. We are also monitoring the rumored shift of 340B Program oversight from the Health Resources and Services Administration (HRSA) to CMS, as that could play a significant role in this survey process and other 340B Program oversight functions.
3. Insulin and Epinephrine Discounts via Federally Qualified Health Centers (FQHCs)
The Executive Order instructs HHS to reinstitute a mandate that applies to insulin and injectable epinephrine acquired by FQHCs. The mandate would require FQHCs to provide these products to low-income patients (to be defined) at or below the 340B Program price, plus a minimal administration fee.
Many FQHCs already provide access to these products at heavily discounted pricing per their sliding fee scale policies developed pursuant to HRSA grant guidance. For many FQHCs, this policy may present operational challenges for products dispensed via contract pharmacies. Likewise, the Executive Order does not address situations where FQHCs are unable to obtain the dispensed products at 340B Program pricing, including due to shortages or manufacturers refusing to sell products at discounted prices. This policy may reignite tension between manufacturers and 340B Covered Entities, as drugmakers continue to restrict 340B pricing access on certain products. Because these operational and acquisition challenges could lead to significant losses, FQHCs need to remain involved in advocacy as any resulting policies are developed by HHS.
4. Site Neutral Payment Policy for Drug Administration Fees
The Executive Order directs the Secretary to evaluate and propose regulations to remove payment policies that incentivize providers to direct drug administration volume away from physician practices to hospital outpatient departments. While the Executive Order didn’t elaborate further, it’s likely that this directive is intended to target existing payment differences for drug administration codes when billed by provider-based hospital outpatient departments versus freestanding physician offices.
Hospitals, including 340B Covered Entities, should closely monitor this development. There is a history of bipartisan support for various site neutral policy proposals, and the directive may be a sign of more policies to come that may impact payment to and/or oversight of provider-based departments. Decreasing payment for drug administration services while also adjusting payments for the underlying drugs based on acquisition cost survey data discussed above could result in a substantial hospital payment reduction that could severely impact budgets. Such policy decisions would frustrate the intent of the 340B Drug Pricing Program.
5. Initiatives Impacting Manufacturers and PBMs
The Executive Order also includes initiatives that could impact drug manufacturers and PBMs and may require significant changes to their operations. These initiatives include:
Streamlining and improving the importation of prescription drugs from Canada under section 804 of the Federal Food, Drug, and Cosmetic Act;
Holding public listening sessions and issuing a report with recommendations to reduce anti-competitive behavior by pharmaceutical manufacturers;
Ensuring accuracy of Medicaid drug rebates consistent with Section 1927 of the Act;
Coordinating with FDA to develop recommended administrative and legislative changes to accelerate approval of generics, biosimilars and over-the-counter medications;
Providing recommendations on how to promote more competition, efficiency, transparency and value in the supply chain. The section title suggests that PBMs will remain in the spotlight; and
Proposing regulations consistent with the Employee Retirement Income Security Act of 1974 to improve PBM direct and indirect compensation transparency.
Key Takeaways:
Many of these directives and policy proposals will require legislation from Congress, as the Executive Order acknowledges. For example, the Executive Order has endorsed changes to the IRA—most notably it calls on Congress to pass legislation that would end the so-called “pill penalty,” which could restrict or delay Medicare’s ability to negotiate prices for small-molecule drugs if the time thresholds for small-molecule drugs are extended to match the timelines for negotiation of biologics.
Other directives and policy proposals in the Executive Order, however, may be enacted without the need for legislation from Congress. As a practical matter, implementing several of these proposals may be challenging in light of the reductions in force and structural changes implemented at HHS. As one example, and as noted above, the Executive Order aims to accelerate competition for high-cost prescription drugs and calls for “a report providing administrative and legislative recommendations to” accelerate approvals of generics, biosimilars and over-the-counter medications. However, accelerating approvals of generic and biosimilar products could be more difficult due to the elimination of the Division of Policy Development in the FDA’s Office of Generic Drug Policy.
This Executive Order marks the second major action taken by the current administration this month involving pharmaceuticals. We previously reported on new Section 232 Trade Investigations into the imports of pharmaceutical and pharmaceutical ingredients, and derivative products of those items, which could lead to trade actions related to imported pharmaceuticals.
The landscape in the pharmaceutical supply chain is changing at a breakneck pace. Actions taken pursuant to the Executive Order could result in significant changes to a number of policy issues related to the pharmaceutical and reimbursement spaces in the coming months and years. And it’s possible that many of these changes could lead to litigation.
[1] Under the IRA, the negotiated prices for the selected drugs that are covered under Medicare Part D will take effect in 2026, while negotiated prices for drugs covered under Medicare Part B are set to take effect in 2028.
Diagnosing Health Care: Breaking Down the Shifting Vaccine Policy Landscape [Podcast]
How have vaccine exemptions posed a significant risk to populations across the country? What are the long-lasting effects of the new administration’s federal health agency funding cuts?
On this episode, Epstein Becker Green attorneys Richard Hughes, Spreeha Choudhury, and Will Walters, as well as Anna Larson of EBG Advisors, discuss vaccine-related topics ranging from the measles outbreak and the reduction of the federal workforce to decreased government funding of public health programs.
OCR Reaches Settlements with Northeast Radiology and Guam Memorial Hospital Over HIPAA Security Rule Violations
The Department of Health and Human Services’ Office for Civil Rights (“OCR”) recently announced two HIPAA enforcement actions involving failures to safeguard electronic protected health information (“ePHI”) in violation of the HIPAA Security Rule. Both cases stem from investigations into incidents that exposed sensitive health data, underscoring ongoing federal scrutiny of entities that fail to implement core compliance measures such as HIPAA risk analyses, system activity reviews and workforce access controls, into their security programs.
Northeast Radiology, P.C. (“NERAD”) agreed to a $350,000 settlement after OCR launched an investigation into the company’s use of a medical imaging storage system (“PACS”) that lacked proper access controls. The investigation stemmed from a March 2020 breach report in which NERAD disclosed that, between April 2019 and January 2020, unauthorized individuals had accessed radiology images stored on its PACS server containing unsecured ePHI, gaining access to the ePHI of nearly 300,000 individuals. OCR found that NERAD had not conducted a comprehensive HIPAA risk analysis, failed to implement procedures to monitor access to ePHI, and lacked adequate policies to safeguard sensitive data.
In addition to the monetary settlement, NERAD agreed to a two-year corrective action plan that requires it to conduct a thorough HIPAA risk analysis to assess potential threats to the confidentiality, integrity, and availability of ePHI; implement a risk management plan to address identified security vulnerabilities; establish a process for regularly reviewing system activity, including audit logs and access reports; maintain and update written HIPAA policies and procedures; and enhance its HIPAA and security training program for all workforce members with access to PHI.
Guam Memorial Hospital Authority (“GMHA”) reached a $25,000 settlement following OCR’s investigation into two separate security incidents: a ransomware attack in December 2019 and a 2023 breach involving hackers who retained access to ePHI. Through its investigation, OCR determined that GMHA had failed to conduct an accurate and thorough HIPAA risk analysis to determine the potential risks and vulnerabilities to ePHI held in its systems.
As part of a three-year corrective action plan, GMHA is required to conduct a comprehensive HIPAA risk analysis to identify risks to the confidentiality, integrity and availability of its ePHI; implement a risk management plan to mitigate those risks; develop a process for regularly reviewing system activity, such as audit logs and access reports; and adopt written policies and procedures to comply with the HIPAA Privacy, Security and Breach Notification Rules. GMHA also must strengthen its HIPAA training program, review and manage access credentials to ePHI, and conduct breach risk assessments, and provide supporting documentation to OCR.
Together, these enforcement actions reinforce OCR’s expectation that covered entities and business associates adopt and maintain robust, enterprise-wide security programs capable of preventing, detecting and responding to threats that compromise ePHI.
OIG Issues Another Favorable Advisory Opinion on Patient Recruitment Efforts by Community Health Centers
The Office of Inspector General for the Department of Health and Human Services (OIG) recently issued a favorable Advisory Opinion on a proposed arrangement by a community health center (Health Center) designated under Section 330 of the Public Health Service Act (PHSA). The Health Center provides certain social services to individuals (e.g., providing diapers and baby gear to indigent families; assisting crime victims with replacing locks) and proposes to identify individuals in need of primary care services while providing them social services, inform them of available primary care services, and schedule appointments for them to receive such primary care services from the Health Center or a local provider. Noting that the social services would qualify as remuneration that could induce individuals to self-refer to the Health Center, the OIG addressed whether this plan would trigger sanctions under the federal Anti-Kickback Statute (AKS) and the Beneficiary Inducements CMP. Ultimately, the OIG approved the proposal based on the Health Center’s inclusion of several safeguards, including the use of an objective criterion for identifying individuals and the inclusion of multiple providers in the referral list.
The Proposed Arrangement
The Health Center provides both medical and non-medical social services to underserved populations, including childcare, food banks, employment counseling, and legal services, all designed to improve health outcomes and access to healthcare. The Health Center’s scope of project, approved by the Health Resources and Services Administration (HRSA), includes these additional non-medical social services. Under the proposed arrangement, the Health Center would aim to identify individuals in need of primary care during the provision of these social services, inform them about available primary care services, and schedule appointments at the Health Center or refer the individuals to local providers.
OIG’s Conclusion
Despite the arrangement potentially generating prohibited remuneration, the OIG concluded that it would not impose administrative sanctions under the AKS or the Beneficiary Inducements CMP based on the following safeguards that reduce the risk of steering patients to the Health Center:
Objective Criterion for Identifying Individuals. The Health Center uses an objective criterion – whether the individual has seen a primary care provider within the last year –to identify individuals in need of primary care services. This approach does not promote the Health Center and reduces the risk of steering patients.
Non-Promotional Referral List. The list of primary care providers given to individuals is organized in alphabetical order and drafted without promoting the Health Center (e.g., no bold font, underlining, or other emphasis). Additionally, the Health Center implements an “any willing provider” standard, ensuring that any community provider can be included on the list.
Alignment with Health Center’s Mission. The Health Center provides primary care services to underserved populations, regardless of their ability to pay. The proposed arrangement aligns with its designation as a Health Center under Section 330 of the PHSA, which requires activities focused on recruiting and retaining patients from the service area and promoting optimal use of primary care services.
Conclusion
The OIG has issued multiple favorable OIG advisory opinions involving designated community health centers offering some form of remuneration to individuals to improve patient engagement and access to healthcare. In 2020, the OIG approved a health center’s proposal to offer $20 gift cards from “big-box” retailers to incentivize pediatric patients who had previously missed two or more preventive and early intervention care appointments to attend such appointments. In 2012, the OIG issued a favorable advisory opinion on a health center’s proposal to offer $20 grocery store gift cards as an incentive to visit the health center for a screening or clinical service.
Other types of health care organizations, like health systems and hospitals, providers vertically integrated with plans, and providers at financial risk, may find value in offering similar incentives and social services to enhance patient engagement and improve health outcomes. They should consider the factors highlighted in this advisory opinion as ways to reduce risk, but they should exercise caution before proceeding. Advisory opinions are binding only with respect to the requesting party, and designated health centers under Section 330 of the PHSA are unique in that they are statutorily required to conduct a broad range of activities focused on recruiting and retaining patients from the service area and promoting and facilitating use of primary care services.
Attention SNFs: Enhanced 855A Disclosure Requirement Deadline Extended to August 1, 2025
On April 17, 2025, the Centers for Medicare and Medicaid Services (“CMS”) extended the revalidation deadline for its 855A skilled nursing facility (“SNF”) attachment to August 1, 2025 (previously May 1, 2025), giving SNFs more runway to comply with the new ownership, managerial, and related party information disclosure requirements.
Additionally, on April 9, 2025, CMS updated its published guidance, Guidance for SNF Attachment on Form CMS-855A (April 9, 2025), clarifying which entities CMS classifies as an additional disclosable party (“ADP”). An updated question in the “FAQ” section addresses a scenario where “Company X [is] an indirect owner of the SNF and Company Y [is] an owner of ADP Z.” The updated guidance states that Companies X and Y, in that scenario, are not ADPs purely by virtue of their organizational relationships. Accordingly, indirect owners of SNFs and owners of ADPs, without more, do not need to be disclosed on the SNF Attachment as ADPs. Instead, CMS clarifies that Companies “X and Y would have to fall within one of the ADP categories … e.g., administrative services, financial control, etc. – to qualify as an ADP.”
The updated guidance also states that companies that furnish physical therapy, occupational therapy, speech-language therapy, or other rehabilitation services to the SNF’s patients are considered ADPs within the “administrative services” category. Finally, companies that contract with SNFs to provide services such as dietary services, housekeeping, or laundry services to the SNFs are not classified as ADPs under the new guidance.
Although the additional guidance is helpful, CMS has previously indicated that it will be unable to address all conceivable factual scenarios to identify every potential disclosable party. The guidance reiterates that the Final Rule should be “construed towards disclosure and, if in doubt about whether additional information should be released, SNFs should disclose it.”
This article is an update to a December 2024 client alert.
Navigating the Evolving Pharmacy Landscape in 2025: Challenges, Opportunities and Innovations
As we stride further into 2025, the pharmacy industry faces a landscape teeming with challenges and opportunities. From tackling drug price transparency to juggling implementation of artificial intelligence, the industry is being transformed before our eyes. The journey ahead is anything but straightforward, with solutions ranging from bold, large-scale changes to more nuanced, focused innovations. Let’s delve into the high-level, dynamic trends shaping the pharmacy world today.
Medication Accessibility Challenges
Imagine living in a community where accessing essential medications has become a Herculean task. Increasingly, this is the reality for patients who live in areas hit hard by the closure of pharmacies. A study in Health Affairs found that more than 29% of the nearly 89,000 retail U.S. pharmacies that operated between 2010 and 2020 had closed by 2021, with the rate of closures increasing between 2018 and 2021 (during which time the number of pharmacies declined in 41 states).[1] That amounts to more than 26,000 store closures.[2] According to one of the study’s authors, Dima Qato, a University of Southern California pharmacy professor, closures are occurring at a higher rate at pharmacies that serve a greater percentage of Medicaid and Medicare patients.[3]
Closures have impacted stores owned by large chains as well as independent pharmacies. Store closures make it more difficult for patients to access to medications and to adhere to medication regimes, which puts patients at a greater risk, deepening health disparities. But there is hope. There are opportunities to enhance reliability for a mail-order pharmacy model and user-friendliness for remote pharmacy services. These have the potential to bridge existing gaps in healthcare access, ensuring patients conveniently and timely receive medications and expert guidance from pharmacists.
Shoring Up Supply Chains
At the same time as the number of pharmacies has decreased, pharmacies have faced challenges accessing product through the pharmaceutical supply chain. Drug shortages in the U.S. healthcare system are driven by several systemic and operational factors, including a vulnerable supply chain that relies heavily on foreign manufacturing of active pharmaceutical ingredients from countries like China and India.[4] This reliance exposes the supply chain to disruptions from geopolitical tensions, pandemics, and natural disasters.[5]
However, these challenges have highlighted opportunities for improvement and growth. Solving drug shortages will require policy innovation, strategic investments, and professional advocacy. Strengthening domestic production of active pharmaceutical ingredients can reduce reliance on foreign suppliers and enhance resilience. Legislative efforts, such as California’s CalRx initiative, focus on drug affordability by producing and distributing generic medications at low costs with transparent pricing, targeting markets lacking competition,[6] while federal proposals like the Affordable Drug Manufacturing Act advocate for government-backed production of essential generics.[7] Pharmacist advocacy is crucial, as they can engage with policymakers to highlight operational challenges and push for reforms like improved communication and streamlined FDA processes during shortages, creating a sustainable framework for drug manufacturing and encouraging fair pricing and access.[8]
Drug Price Transparency Reform
Drug price transparency is under renewed focus, with reforms aiming to increase clarity and reduce the control exerted by pharmacy benefit managers. President Trump’s Executive Order, issued on February 25, 2025, mandates agencies to enhance enforcement of existing health plan transparency regulations and to propose new guidelines for further standardizing and comparing pricing data.[9] The order provides a 90-day timeline for agencies to publish new policies, leaving the extent of change uncertain.[10] Despite this uncertainty, pharmacies have a significant role to play in driving these reforms. By emphasizing transparency in negotiated drug prices, pharmacies can foster more competitive dynamics and potentially improve rebate terms.[11]
Artificial Intelligence Caution
Artificial intelligence (AI) has the potential to revolutionize pharmacy by enhancing medication management, patient care, and healthcare efficiency. It can assist pharmacists in selecting drugs and dosages, identifying interactions, and reducing errors, while allowing personalized treatment plans based on patient data, which can improve outcomes and minimize adverse events.[12] AI also has the potential to streamline workflows by automating tasks like dispensing and inventory management, allowing pharmacists to focus on patient care, and can enhance communication through pharmacy applications offering 24/7 support.[13]
Despite its benefits, AI integration in pharmacy faces challenges such as high implementation costs, potential lack of empathy and personal touch that human pharmacists provide, and dependence on the quality of data inputs; incorrect or biased data can lead to flawed outcomes.[14] Ethical concerns like data privacy and informed consent are significant, as AI systems handle sensitive patient information.[15] Moreover, the need for substantial computing resources and technical expertise poses hurdles, particularly for smaller pharmacies.[16]
The pharmacy industry has opportunities to address these risks by investing in training to build trust and proficiency, collaborating with developers to ensure accuracy and to construct error protection measures, and to prioritize data privacy and ethical considerations.[17] By using AI to augment human expertise rather than replace it, pharmacies can maintain personal patient interactions while leveraging AI’s capabilities to enhance care.[18] Through collaborative efforts and innovative solutions, the pharmacy industry has possibilities to enhance health outcomes and access to care for all communities, paving the way for a healthier future.
FOOTNOTES
[1] Jenny S. Guadamuz et al., More US Pharmacies Closed Than Opened In 2018–21; Independent Pharmacies, Those In Black, Latinx Communities Most At Risk, 43 Health Affairs 1703 (2024); see Tom Murphy, Nearly 30% of US Drugstores Closed in One Decade, Study Shows, The Associated Press (Dec. 3, 2024, at 5:10 PM CDT), https://apnews.com/article/drugstore-closings-cvs-walgreens-independent-pharmacies-6b54d4bd1564b2bff7a55a624da61c19.
[2] See Murphy, supra note 1.
[3] See Guadamuz et al., supra note 1; Decline in Number of Pharmacies in Most States Since 2018, U.S. Pharmacist (Dec. 5, 2024), https://www.uspharmacist.com/article/decline-in-number-of-pharmacies-in-most-states-since-2018.
[4] See Joseph L. Fink & Kelli A. Boyden, Addressing Drug Shortages: A Call to Action for Pharmacists and Policymakers, 91 Pharmacy Times 38 (2025).
[5] Id.
[6] Fact Sheet: Making Prescription Drugs More Affordable For Californians, The State of California (updated Mar. 17, 2023), https://calrx.ca.gov/uploads/2023/03/CalRx-Fact-Sheet.pdf.
[7] Fink & Boyden, supra note 4.
[8] Id.
[9] Donald J. Trump, Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information, The White House (Feb. 25, 2025), https://www.whitehouse.gov/presidential-actions/2025/02/making-america-healthy-again-by-empowering-patients-with-clear-accurate-and-actionable-healthcare-pricing-information/.
[10] Id.
[11] See Ed Schoonveld, US Drug Price Negotiations and Transparency, Pharmaceutical Commerce, Pharmaceutical Commerce (Apr. 9, 2025), https://www.pharmaceuticalcommerce.com/view/us-drug-price-negotiations-and-transparency.
[12] See Rayn Oswalt, The Role of Artificial Intelligence in Pharmacy Practice, Pharmacy Times (Sept. 5, 2023), https://www.pharmacytimes.com/view/the-role-of-artificial-intelligence-in-pharmacy-practice; Osama Khan et al., The Future of Pharmacy: How AI is Revolutionizing the Industry, 1 Intelligent Pharmacy 32-40 (2023).
[13] Id.
[14] Id.
[15] Id.
[16] Id.
[17] Id.
[18] Id.
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State Antitrust Enforcement Roundup: New Laws; New Potential Legislation; and New (and Broader) Areas of Focus
The number of U.S. states implementing or considering new antitrust laws (or supplementing existing laws) targeting proposed transactions continues to grow. As detailed in our healthcare merger matrix, many states have focused their attention on the healthcare industry, and that continues to be the case, for example, in New York, where a broad range of proposed transactions involving health care entities could be subject to filing requirements and suspensory rules before they can close.
Moreover, and as detailed below, recently adopted laws and legislation under consideration in certain states are not limited to transactions involving healthcare providers or payors, nor are such developments limited to “blue” (politically more liberal) states, with Arkansas, Texas, Utah, and West Virginia, among others, undergoing or considering substantial expansions of their respective antitrust laws.
Arkansas Adopts Law Banning Pharmacy Benefit Managers from Owning Pharmacies
On April 16, 2025, Governor Sarah Huckabee Sanders signed HB 1150 into law, which will prohibit pharmacy benefit managers (“PBMs”) from owning pharmacies. This Arkansas law is the first of its kind and provides that a pharmacy benefits manager shall not acquire a direct or indirect interest in, or otherwise hold, directly or indirectly, a permit for the retail sale of drugs or medicines as of January 1, 2026.
California Considers Expansive New Antitrust Laws
In 2022, the California Law Review Commission (CLRC) was asked by the California Legislature to consider and recommend revisions to the state’s competition laws, i.e., the Cartwright Act. As a result of its review, the CLRC has recommended substantial revisions to the state’s antitrust regime.
The CLRC’s recommended changes cover the antitrust enforcement waterfront, from single firm conduct (monopolization and attempted monopolization) to concerted action. With respect to mergers, the CLRC found that California should adopt its own, independent merger control regime (today the state may only challenge deals under the federal Clayton Act). Most notably, the CLRC proposed that California become more aggressive when it comes to challenging proposed transactions by adopting a lesser standard to challenge deals than the federal standard, which requires the FTC or DOJ to provide that it is more likely than not that a deal would substantially lessen competition.
Washington State Enacts First-in-the-Nation General Premerger Notification Law; Colorado, D.C., Hawaii, Nevada, Utah, and West Virginia Considering Similar Legislation
The state of Washington became the first state to enact a state-level general premerger requirement. While many states have industry-specific notification laws (e.g., for health care mergers), this is the first general premerger notification requirement for a state. The law is modeled on the Uniform Antitrust Premerger Notification Act. Similar legislation is under consideration in California, Colorado, the District of Columbia, Hawaii, Nevada, Utah and West Virginia.
Starting July 27, 2025, any person that files a federal Hart-Scott-Rodino (“HSR”) filing must also submit contemporaneously a copy of the HSR form to the state if the person meets one of three criteria:
the person’s “principle place of business” is in Washington; or
the person (or a person it controls directly or indirectly) has annual net sales in Washington for the goods or services involved in the proposed transaction that are at least 20% of the Federal HSR size of transaction filing threshold (at present, 20% is $25,280,000); or
the person is a healthcare provider or provider organization in Washington (filing already required under Washington’s existing healthcare transaction law).
All required Washington filers must submit a copy of their federal HSR form to the state. Filers whose principle place of business is in Washington must also file the additional documentary material filed with an HSR form. Notably, the state may, upon request, require any filer to submit the additional documentary material, even if their principle place of business is not in Washington. There is no filing fee for the state filing and it does not trigger a suspensory waiting period. However, failure to file may result in a civil penalty of up to $10,000 per day of noncompliance.
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We can now definitively say that the growing state-level interest in becoming active participants in the review process for transactions that impact their state is part of a long-term secular trend. Regardless of political bent, many states are no longer content to sit passively by while the FTC or DOJ make enforcement decisions that can have dramatic impacts at the state level. In the months and years that follow, we expect that more states will enact antitrust or antitrust adjacent laws that are independent of and potentially even more stringent than, the federal antitrust regime. These state regimes, once more of an afterthought, will require the full attention of parties considering transactions that may be captured by these new laws.
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This Week in 340B: April 15 – 21, 2025
Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.
Issues at Stake: Rebate Model; Contract Pharmacy; Other
In six cases against HRSA related to rebate models:
In five cases, defendants filed a reply in further support of their motion for summary judgment.
In one case, the plaintiff filed a reply in support of its motion for summary judgment and in opposition to the government’s cross-motion for summary judgment.
In a case against Health Resources and Services Administration (HRSA) challenging its certification of a group of entities as 340B-eligible, defendants filed a memorandum of points and authorities in support of their partial motion to dismiss.
A trade association representing drug manufacturers filed a complaint to challenge a Utah state law restricting contract pharmacy arrangements.
In two appealed cases challenging a Louisiana law governing contract pharmacy arrangements, a group of amici filed amicus briefs.
Nadine Tejadilla contributed to this article.
OMB Solicits Public Comment on Eliminating Regulations: A Bold New Frontier for OSHA May Await
Every safety professional has an Occupational Safety and Health Administration (OSHA) regulation he or she cannot stand, believes is a waste of time, energy, and/or money, or considers outdated and antiquated.
Even the average person on the street probably thinks there is some silly OSHA regulation that should be done away with. Now the aggrieved (even only the mildly annoyed) safety professional and individual has a chance to have that regulation eliminated, but only if they act soon.
Quick Hits
OMB is seeking the public’s input on deregulation, including public comment on and recommendations for potentially outdated or burdensome OSHA regulations, with a submission deadline of May 12, 2025.
Safety professionals and the public now have the opportunity to suggest the elimination or revision of specific OSHA regulations.
Potential targets for deregulation pursuant to OMB’s request for information include OSHA’s “walkaround rule,” electronic recordkeeping regulations, and the proposed heat injury and illness prevention program.
On April 11, 2025, the Office of Management and Budget (OMB) published a notice, titled, “Request for Information: Deregulation,” soliciting the public’s comments and deregulatory recommendations with respect to rescinding or replacing agency regulations, including OSHA rules. This request for information (RFI) is in keeping with the Trump administration’s regulatory freeze issued at the outset of the president’s term of office.
On its face, the request for information (RFI) states that “OMB solicits ideas for deregulation from across the country. Commenters should identify rules to be rescinded and provide detailed reasons for their rescission. OMB invites comments about any and all regulations currently in effect.” The RFI continues and states the following:
OMB seeks proposals to rescind or replace regulations that stifle American businesses and American ingenuity. We seek comment from the public on regulations that are unnecessary, unlawful, unduly burdensome, or unsound. Comments should address the background of the rule and the reasons for the proposed rescission, with particular attention to regulations that are inconsistent with statutory text or the Constitution, where costs exceed benefits, where the regulation is outdated or unnecessary, or where regulation is burdening American businesses in unforeseen ways.
Without any parameters or limitations on RFI submissions, it is possible that someone might recommend that all OSHA regulations be eliminated, that the construction standards (29 C.F.R. 1926) be eliminated, or that the recordkeeping requirements be eliminated. It is unlikely that any of these would take place, as the Occupational Safety and Health (OSH) Act requires the agency to issue regulations and collect data concerning workplace injuries and illnesses.
Section 2 of the OSH Act states:
(b) The Congress declares it to be its purpose and policy, through the exercise of its powers to regulate commerce among the several States and with foreign nations and to provide for the general welfare, to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources —
…
(3) by authorizing the Secretary of Labor to set mandatory occupational safety and health standards applicable to businesses affecting interstate commerce, and by creating an Occupational Safety and Health Review Commission for carrying out adjudicatory functions under the Act[.]
Section 24 of the OSH Act states:
(a) In order to further the purposes of this Act, the Secretary, in consultation with the Secretary of Health and Human Services, shall develop and maintain an effective program of collection, compilation, and analysis of occupational safety and health statistics. Such program may cover all employments whether or not subject to any other provisions of this Act but shall not cover employments excluded by section 4 of the Act. The Secretary shall compile accurate statistics on work injuries and illnesses which shall include all disabling, serious, or significant injuries and illnesses, whether or not involving loss of time from work, other than minor injuries requiring only first aid treatment and which do not involve medical treatment, loss of consciousness, restriction of work or motion, or transfer to another job.
Consequently, OSHA is effectively obligated by the OSH Act to issue occupational safety and health standards to “assure so far as possible every working man and woman in the Nation [a] safe and healthful” workplace and to collect data concerning workplace safety and health matters. Seeking to eliminate all OSHA standards or recordkeeping rules would require revising the OSH Act.
Which OSHA regulations are probable targets of these efforts? The so-called “walkaround rule” related to who can accompany an OSHA compliance officer during an inspection seems a very likely candidate. Similarly, the electronic recordkeeping regulations may be subject to deletion or elimination. To the extent that OSHA is seeking to implement a heat injury and illness prevention program, it, too, could fall prey to this RFI.
There is no limit on the agency, regulation, or topic that may be submitted pursuant to the RFI. Undoubtedly, there will be an enormous number of suggestions related to OSHA and other agencies—from the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives, to the U.S. Department of the Interior’s Bureau of Indian Affairs, to the U.S. Food and Drug Administration (a federal agency of the U.S. Department of Health and Human Services)—to name but a few. Many suggestions will likely be dismissed out of hand, but there will also likely be well-reasoned, thoughtful submissions that do receive at least some attention. The deadline for submissions in response to the RFI is May 12, 2025, and submissions may be made through the website Regulations.gov.