Health Law Advisor

Last month, Judge Matthew Kaszmaryk of the U.S. District Court, Northern District of Texas, in Purl v. United States Department of Health and Human Services, No. 2:24-cv-00228-Z (N.D. Tex Jun. 18, 2025) struck down nearly all of the 2024 Reproductive Health Amendment to the HIPAA Privacy Rule.

The long-awaited White House Artificial Intelligence (AI) Action Plan (“AI Action Plan”) is here, setting forth the Trump administration’s policy recommendations to achieve the goal of “global AI dominance.”

The White House released the AI Action Plan on July 23, 2025, and delivered remarks on the plan during an AI summit. The same day, the president signed three AI-related Executive Orders to further the AI Action Plan, relating to: 1) “Accelerating Federal Permitting of Data Center Infrastructure”; 2) “Promoting the Export of the American AI Technology Stack”; and 3) “Preventing Woke AI in the Federal Government.” Yet it remains to be seen whether and how successfully the AI Action Plan will unfold—particularly with respect to impacts on incongruous state regulatory action.

Likening the global AI race to the space race during the Cold War, the introduction to the 28-page AI Action Plan emphasizes the need “to innovate faster and more comprehensively than our competitors in the development and distribution of new AI technology across every field and dismantle unnecessary regulatory barriers that hinder the private sector in doing so.” 

It’s July, and the White House Artificial Intelligence (“AI”) Action Plan (“Action Plan” or “the plan”) is almost here.

In Executive Order 14179 of January 23, 2025—entitled “Removing Barriers to American Leadership in Artificial Intelligence”—President Donald Trump directed federal officials to develop an Action Plan to achieve the policies of sustaining and enhancing America’s dominance in global AI. The plan is expected to drop by July 23, to coincide with an address by the President outlining his vision for American AI.

The release of the Action Plan will follow a number of recent developments in AI at the state and federal levels that show no signs of abating. On July 15, for instance, the White House announced $90 billion in energy and data center investments in Pennsylvania, according to Reuters. Bloomberg reported the same day that President Trump is planning to sign another executive order to implement the Action Plan upon its release to push the policy forward.

The U.S. Court of Appeals for the Ninth Circuit has held that a laboratory owner’s payments to marketing intermediaries violated the Eliminating Kickbacks in Recovery Act (EKRA)—in its first interpretation of the statute since it was enacted in 2018.

In United States v. Schena, No. 23-2989, F.4th (9th Cir. July 11, 2025), the Ninth Circuit affirmed the convictions of Mark Schena—who in 2022 was found guilty by a federal district court jury of nine counts of health care and securities fraud. These included two counts of EKRA violations, based on illegal kickbacks to an intermediary who misrepresented the lab’s services. Schena was sentenced to 96 months in prison and ordered to pay more than $24 million in restitution. (The intermediary plead guilty to conspiracy to commit health care fraud and was sentenced to a shorter term, as was another co-defendant represented by Epstein Becker & Green attorneys.)

On July 2, 2025, the Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 25-07 (AO 25-07), a favorable advisory opinion involving sponsored tests.

Sponsored tests are medical diagnostic tests or laboratory services whose cost is directly or indirectly paid for, in whole or in part, by a third party (often a pharmaceutical manufacturer or medical device company or related company), rather than by the patient, their insurance, or the health care provider performing the test. Typically, companies agree to pay for sponsored tests because they are necessary for a patient to access or use the company’s therapy but pose high out of pocket costs on the patient. Sponsored tests are frequently used to help match a patient to a specific drug or therapy available from the pharmaceutical manufacturer or medical device company, including true companion diagnostics, or to monitor therapeutic efficacy or to identify dangerous side effects of a prescribed therapy.  

The OIG previously issued two opinions, AO 24-12  and AO 22-06, that approved sponsored test arrangements in which pharmaceutical manufacturers offered free genetic testing and genetic counseling services to patients suspected of having rare conditions for which the manufacturers produced approved medications. Under the facts in these opinions, the genetic test results alone did not directly determine whether the manufacturer's drug would be prescribed.

On June 30, 2025, the U.S. Department of Justice (“DOJ”), together with the U.S. Department of Health and Human Services Office of Inspector General (“HHS OIG”) and other law enforcement partners, announced the results of the 2025 National Health Care Fraud Takedown—hailed as the largest in history.

This year, DOJ’s Health Care Fraud Unit reported that 324 defendants were charged for their alleged involvement in various health care fraud schemes that involved over $14.6 billion in intended loss—more than doubling the prior record of $6 billion set in 2020 during the first Trump administration. By way of comparison, last year, the 2024 Takedown charged 193 defendants with allegedly committing more than $2.5 billion in fraud. And two years ago, the 2023 Takedown charged 78 defendants with more than $2.5 billion. To say there was a significant increase between the Biden administration and the second Trump administration would be an understatement.  

That this administration would “follow the money” should not come as a surprise. As noted, the prior record was set during President Trump’s first term in 2020. In that Takedown, DOJ and HHS OIG reported 345 defendants allegedly submitted more than $6 billion in false and fraudulent claims to federal health care programs and private payers. The bulk of that 2020 Takedown, $4.5 billion, was related to telehealth.

Since day one, a policy priority of the Administration has been to discourage and prevent gender-affirming care for children and adolescents that involves surgery or medication. Recent actions show a concerted effort across multiple federal agencies to achieve this goal.

Among the earliest actions by the Administration were two Executive Orders directed at transgender health care: EO 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” and EO 14187, “Protecting Children From Chemical and Surgical Mutilation.” These Executive Orders immediately were challenged in federal courts. Ultimately, permanent injunctions were entered in the Western District of Washington and the District of Maryland against portions of the Executive Orders. Those injunctions are on appeal in the Ninth and Fourth Circuits.

Nevertheless, the Administration has continued to pursue its policy objectives through a mix of agency actions and communications, often disclaiming reliance on the Executive Orders and referring to other legal sources as the basis for a variety of agency actions.

On June 22, 2025, Texas Governor Greg Abbott signed into the law the Texas Responsible Artificial Intelligence Governance Act (TRAIGA) or (the Act). The Act, which goes into effect January 1, 2026, “seeks to protect public safety, individual rights, and privacy while encouraging the safe advancement of AI technology in Texas.”

Formerly known as HB 149, the Act requires a government agency to disclose to consumers that they are interacting with AI—no matter how obvious this might appear—through plain language, clear and conspicuous wording requirements, and more. The same disclosure requirement also applies to providers of health care services or treatment, when the service or treatment is first provided or, in cases of emergency, as soon as reasonably possible.

The Act further prohibits the development or deployment of AI systems intended for behavioral manipulation, including AI intended to encourage people to harm themselves, harm others, or engage in criminal activity (see a post by our colleagues on Utah’s regulation of mental health chatbots).

On June 30, 2025, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services posted Advisory Opinion 25-05 (AO 25-05) to its website. AO 25-05 is a favorable opinion that allows a medical device manufacturer to reimburse purchasers of its device for actual costs up to $2,500 incurred from needle stick injuries caused by failure of the device without running afoul of the federal Anti-Kickback Statute (AKS).

According to AO 25-05, the device at issue is used to administer immunizations and other drugs to patients via injections and is more expensive than typical needles. The device has a safety mechanism to protect the user that covers the needle except when the needle penetrates patient tissue during the injection. When users experience a needle stick injury, their employers usually cover the associated costs, including retraining staff, staff absences and replacement, counseling for injured workers, and possible additional costs in the event of a lawsuit or higher insurance premiums or workers compensation premiums.

Now in its sixth month, the second Trump administration has made clear that the False Claims Act (FCA) will remain a central tool in its efforts to combat fraud, waste, and abuse across federal programs.

On July 2, 2025, the U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) jointly announced that they will be strengthening their collaboration to advance priority enforcement areas through a DOJ-HHS False Claims Act Working Group (“FCA Working Group”). Originally formed in December 2020 during President Trump’s first term, the FCA Working Group is now being reestablished with renewed vigor to address key FCA enforcement priorities.

As we report annually, FCA settlements and judgments return billions of dollars to the federal treasury, with the health care and life sciences sectors accounting for the majority of those recoveries. While health care FCA statistics dipped last year, we predicted in January a “continued focus”—particularly given that the first Trump administration saw DOJ file a record number of health care-related FCA cases in a single year.