The Health Record - Healthcare Law Insights, V 2, Issue 6, June 2025

Hikmat Al-Chami, James Bailey, Jennifer Baker, H. Dill Battle III, Matthew Georgitis, Timothy Lovett, Brienne Marco, Joseph Unger
Spilman Thomas & Battle, PLLC
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Volume 2, Issue 6, 2025

Welcome

Welcome to our sixth issue of 2025 of The Health Record -- our healthcare law insights e-newsletter.

In this edition, we look at the impact of supply chain and tariff issues on the industry, the veto of Florida's malpractice bill, the Medicare Advantage Reform Act, CMS TEAM payments and hospices, the Talkspace and Amazon Pharmacy deal, telehealth post COVID-19, data security and patient portals, what happened to price transparency efforts, hacking and ransomeware's effects on the industry, and where medical debt stands with credit ratings. Spilman attorney James Bailey also addresses where the certificate of need issue stands in West Virginia with the Governor and Legislature.

We hope you enjoy this issue and will let us know if you have any questions or suggestions.

Health Care Sector Braces for Supply Chain Uncertainty with Changing Tariff Policies

“One recent industry survey found that 45% of U.S. health care organizations have formed crisis teams to respond to current economic uncertainty and, for many of them, plans include renegotiating vendor contracts to mitigate potential impacts of new tariffs on medical supply chains.”

Why this is important: COVID-19 laid bare the weaknesses within the American health system that were being overlooked by the industry as a whole. The early shortages of medical products to meet the overwhelming demand of the public made it abundantly clear to all health care leaders that the system was far too vulnerable and needed to be reformed. To that end, the National Academies of Sciences, Engineering, and Medicine (NASEM) formed a committee to address the weaknesses in the U.S. healthcare supply chain.

The NASEM committee published a report on their findings in 2022 titled “Building Resilience into the Nation’s Medical Product Supply Chains.” The report addressed the weaknesses within the current healthcare supply chain and suggested a few key recommendations to buttress the stability of the system. Namely, the report recommended that the U.S.: modernize the nation’s stockpiling to better respond to shortages; negotiate a multinational treaty to ensure needed medical components; award contracts to companies that demonstrate reliability (no matter the cost); and, increase transparency from pharmaceutical and medical device manufacturers about where they source products from and any potential vulnerabilities that supply chain has. Despite the thorough recommendations of the report, three years after its release, not much has changed.

In addition to the slow pace of change threatening the nation’s fragile healthcare supply chain, there now appears to be an additional threat to the system: tariffs. The newly implemented tariff policy has caused concern among many healthcare leaders that it will further weaken an already fragile system. While it has not increased prices yet, mainly due to current carve-outs for the industry, the sweeping package of tariffs and larger trade threats could eventually cause a price increase in the everyday medical products the nation relies on, and even more troubling, could lead to critical shortages of those products.

To that end, the American Hospital Association and Association of American Medical Colleges have asked the government for continued exceptions to the tariffs for medical products, citing the incredible vulnerability the supply chain currently has (seemingly without much success). While it may be beneficial to bring back some of the medical supply chain to the U.S., and many pharmaceutical companies (such as Eli Lilly and Roche) have committed to reshoring much of their production, this process will take time. Even still, a completely autarkic medical product supply chain is impossible for the U.S. (or any other nation) to achieve, and an attempt to create one would hurt the nation far more than an appropriate level of international trade. --- Jonathan E. Gharib, Summer Associate 

DeSantis Vetoes Malpractice Bill in Fort Myers, Says Measure would Harm Patients, Doctors

“The bill had passed with overwhelming support in both the House and Senate.”

Why this is important: In the long-running battle between patients’ rights and those of the medical industry, Florida Governor Ron DeSantis has given a win to the medical industry. Governor DeSantis has vetoed a bill that was overwhelmingly passed by the Florida Legislature that would have allowed adult children of those who died as a result of medical negligence to recover non-economic damages. With this veto, Governor DeSantis has preserved that restriction on noneconomic damages for adult children, meaning that medical providers cannot be sued for those types of damages in Florida. This clearly is a win for the medical industry and will hopefully lead to lower malpractice premiums for providers. --- Matthew W. Georgitis 

Inside the Medicare Advantage Reform Act

“A key provision of the bill is a proposed requirement that MA plans pay for hospice care.”

Why this is important: Rep. David Schweikert (R-Ariz.) has introduced the Medicare Advantage Reform Act (H.R. 3467), which would make wholesale changes to the Medicare Advantage (MA) program that currently serves millions of Americans. The bill's most controversial provision would require MA plans to pay for hospice care, ending the current "carve-out" system where hospice services are handled separately from Medicare Advantage coverage.

The proposed legislation would mandate that all payments from MA plans be capitated as of January 1, 2028, with only two exceptions: special needs plans and MA plans that were made available in a particular region during the previous plan year. This shift to capitated payments would fundamentally alter how providers are reimbursed under Medicare Advantage, moving away from fee-for-service models toward fixed per-patient payments regardless of actual care costs.

The integration of hospice care into Medicare Advantage plans has drawn particularly strong opposition from healthcare advocates who warn it could restrict access to end-of-life services. Under the current system, hospice care operates independently of Medicare Advantage, allowing patients and families greater flexibility in choosing providers and care approaches. The proposed changes could subject hospice decisions to managed care restrictions and prior authorization requirements, potentially limiting patient choice during critical end-of-life periods. --- Hikmat N. Al-Chami 

CMS’ TEAM Payment Model: What Hospices Need to Know

“A forthcoming alternative payment model for hospitals focuses on discharge planning and ensuring effective post-acute care, including hospice and palliative care when appropriate.”

Why this is important: Hospices and patients seeking hospice care will only benefit from the new CMS payment model for hospitals focused on discharge planning for post-acute care if appropriate patients are provided advanced care planning to include hospice services and palliative care. Only a handful of institutions were selected for the CMS payment model, and it will benefit hospice and palliative care organizations nationwide if CMS deployment is more comprehensive to force behavior changes for post-acute care across the country. --- H. Dill Battle III 

Talkspace Strikes Deal with Amazon Pharmacy, Expanding Medication Access

“The arrangement with Amazon (Nasdaq: AMZN) will simplify medication management for Talkspace providers, allowing them to send prescriptions directly to Amazon Pharmacy in one click.”

Why this is important: Blending therapy and psychiatry – that’s the goal, and the blend of those two things means better access and better care. Talkspace’s new deal with Amazon Pharmacy does just that: it expands medication access and therefore expands care. Talkspace has now become the first behavioral health provider to link up with Amazon’s Pharmacy, and the arrangement will allow Talkspace providers to send prescriptions with just one click.

What is one thing that we all know Amazon is very good at? Delivery, and even better, fast delivery. Getting things delivered right to your door not only makes things easier but also makes things more accessible. It makes it more likely for individuals to: (1) be prescribed needed medication, (2) actually get their prescription, and (3) consistently take the prescription as prescribed. This new integration between Talkspace and Amazon Pharmacy is intended to improve medication adherence, which now sits around 45 percent.

Will this rise in access and care lead to other “virtual” behavioral health providers seeking similar alliances? Will other retail giants begin to stroll into the online pharmacy world? Will greater and easier access to medications lead to an increase in reliance or abuse of prescriptions? Will Amazon’s Pharmacy lead to the decline of the traditional pharmacy?

These questions remain unknown. All there is to know right now is that big companies are making big moves in the behavioral health world. There are obvious pros that come along with these moves, including better access and better care, but there may also be cons that are yet to be seen. With possible downsides, the most individuals can do at this time is appreciate the positives and encourage people to seek help if/when needed. Remember the goal – blending therapy and psychiatry to create better access and better care, and perhaps Talkspace’s new deal with Amazon’s Pharmacy is the first step towards that goal. --- Addelyn C. Slyh, Summer Associate 

Study: 19% of Home Care Providers Discontinued Telehealth Post-Pandemic, Citing Limited Reimbursement

“Many reported that even during the pandemic, the Centers for Medicare & Medicaid Services failed to reimburse patient care conducted through virtual care at rates comparable to in-person services.”

Why this is important: According to a recent study published by Health Services Research, since its adoption in response to the COVID-19 pandemic, the use of telehealth services by many home healthcare companies has ceased. The study found that roughly 19 percent of home health providers stopped using telemedicine after the peak of the pandemic due to, in part, a lack of federal reimbursement from Centers for Medicare & Medicaid Services (CMS). Many of the study participants reported that a significant makeup of their patient population was individuals of advanced age with significant cognitive impairment, including such conditions as dementia, who would greatly benefit from access to remote care. Another significant contributing factor reported by home healthcare companies in the drop in patient access to remote care was a lack of technological literacy, resulting in a lack of demand. Some home healthcare companies were just blatantly against giving virtual care in a home health setting, arguing it should only be provided as in-person care. In assessing the efficacy of telehealth services, the authors of the study urge more research to determine if telehealth could play a role in improving patient outcomes, especially if performed at a reduced cost. --- Jennifer A. Baker 

Data Security Concerns Hamper Patient Portal Uptake: Survey

“Seventeen percent of respondents who don’t use online portals said they haven’t adopted them due to security concerns.”

Why this is important: The introduction of patient portals to healthcare has made healthcare more accessible to patients. From messaging the provider, requesting prescription refills, and reviewing test results, to paying bills and scheduling appointments, patient portals offer numerous conveniences to patients. However, in a recent survey commissioned by LexisNexis Risk Solutions, 16 percent of the respondents said they had never accessed a patient portal. Patients who have not used a patient portal reported numerous reasons for not doing so: 36 percent said they preferred to talk to a human, 27 percent were not aware of their portal or how to access it, and 17 percent expressed security concerns. --- Brienne T. Marco 

Trump Administration Updates Price Transparency Guidance for Hospitals and Payers

“The Trump administration is seeking public feedback on how to improve price transparency around prescription drugs and boost hospital compliance and enforcement.”

Why this is important: According to watchdog group Patient Rights Advocate, just 21.1 percent of hospitals achieved full compliance with federal price transparency rules in November 2024. The main compliance-related issue appears to be the posting of accurate and complete pricing data, specifically a “standard charge dollar amount” for services whenever possible. CMS has issued a public Request for Information to identify challenges and improve compliance and enforcement processes related to the transparency of pricing data by hospitals. Given the Trump administration’s increased focus on the enforcement of the reporting rule, hospitals should consider submitting comments and working with CMS on crafting language to ensure streamlined and effective compliance. --- Joseph C. Unger 

Hacking, Ransomware Driving More Healthcare Data Breaches: Study

“Hacking and IT incidents accounted for 88% of patient records exposed from 2010 to 2024, while ransomware made up nearly 40%, according to the research published in JAMA Network Open.”

Why this is important: A new study confirms that healthcare data breaches are on the rise. The study, published by the JAMA Network Open on May 14, 2025, has found that the number of healthcare data breaches more than doubled between 2010 and 2024. In particular, hacking and IT incidents have risen as a cause for breaches from 4 percent in 2010 to 81 percent in 2024, and as a cause for unauthorized release of patient records from 2 percent in 2010 to 91 percent in 2024. While down from its peak in 2021, ransomware attacks have increased from 0 cases in 2010 to 11 percent of all healthcare data breach cases in 2024. The good news: breaches due to theft, unauthorized access, and improper disposal or loss have decreased in the same time span. Hospitals, health plans, and other healthcare organizations continue to be particularly vulnerable to ransomware attacks owing to their limited cybersecurity resources and the potential consequences of delays to patient care. The JAMA Network Open researchers suggest certain mitigation strategies, including mandatory ransomware fields in OCR reporting, revised security classifications, and monitoring cryptocurrency. If you need assistance with preparing to thwart a cyberattack or to review your contracts with vendors to ensure that you are protected in the event that they become the victim of a cyberattack, please contact a member of Spilman’s Health Care Practice Group for assistance. --- Timothy J. Lovett 

Providers could Lose $770B in Revenue if GOP Megabill Passes

“And that’s not counting an almost $200 billion projected increase in uncompensated care, according to a new report.

Why this is important: While the Senate is currently reviewing President Donald Trump's newly proposed bill which prioritizes major cuts to the Medicaid program, potentially impacting 80 million Americans, the GOP's budget reconciliation bill could strip healthcare providers of more than $770 billion in revenue over the next decade, with hospitals bearing the brunt of these losses at $306 billion.

The legislation would achieve approximately $700 million in federal Medicaid savings through new work requirements for beneficiaries, mandating that recipients log hours in employment, volunteering, or education activities. Congressional Budget Office estimates suggest that 8 million people would lose Medicaid coverage, while another 4 million would lose ACA marketplace coverage due to enrollment restrictions. Republicans argue these reforms are necessary to eliminate fraud and waste while directing subsidized insurance toward the neediest populations.

The coverage losses would disproportionately affect rural healthcare systems, where 700 hospitals—one-third of all rural facilities—already face closure risks due to financial pressures. The resulting increase in uncompensated care, projected at $198 billion over the next decade, could push vulnerable providers over the edge. Hospitals are required to provide emergency medical services regardless of patients' ability to pay, making them particularly susceptible to revenue losses from increased uninsured populations.

The bill's passage through the Senate remains uncertain, with some Republican lawmakers expressing concerns about the proposed Medicaid cuts. The situation could worsen if enhanced ACA premium subsidies expire at year's end, potentially increasing provider revenue losses to over $1 trillion and leaving nearly 16 million Americans uninsured. --- Hikmat N. Al-Chami 

The CFPB Wanted Medical Debt to be Left Off Credit Reports. That's Changed Under Trump

“In a motion filed at the end of April, CFPB, the defendant, joined the plaintiffs, the Consumer Data Industry Association and the Cornerstone Credit Union League, to ‘request that the Court enter a final judgment holding unlawful and vacating the Medical Debt Rule because it exceeds the Bureau's statutory authority.’"

Why this is important: A change in the Presidency has also brought a change in support of the Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information (Medical Debt Rule) by the Consumer Financial Protection Bureau (CFPB), which was finalized in January 2025 under the Biden administration. The rule disallows the reporting of medical debt from credit reports and was set to go into effect in March, but the CFPB, now under new leadership appointed by President Trump, no longer supports the rule and has joined forces with credit industry groups to try to block it from taking effect. In a lawsuit filed by Cornerstone Credit Union League and Consumer Data Industry Association against CFPB and Russell Vought as Acting Director of CFPB, these credit industry groups argue that the Medical Debt Rule is unlawful because it exceeds CFPB’s statutory authority and that only Congress can determine whether medical debt should be on credit reports. CFPB now supports this position. Presiding over the case is Judge Sean Jordan, a federal district court judge from the Eastern District of Texas, who has already twice ordered a stay delaying the start of the Medical Debt Rule, which currently stands at July 28, 2025. There are, of course, consumer advocates for the rule intervening in the lawsuit in an attempt to have the rule take effect. One such advocate, National Consumer Law Center (NCLC), argues that this lawsuit by these credit industry groups, which are now supported by CFPB, completely undermines the thoughtful and deliberate formal rulemaking process that occurred to put this rule in place which has been supported by the American Hospital Association, the American Medical Association and the American Cancer Society. NCLC argues that removing medical debt from credit reports will enable tens of thousands of consumers each year to establish higher credit scores and would allow them to qualify for affordable mortgages. Furthermore, NCLC argues that the Medical Debt Rule was properly established under the Administrative Procedures Act. The article mentions that the big three credit reporting bureaus, Experian, TransUnion, and Equifax, have already voluntarily changed medical debt reporting practices, removing medical collection items from credit reports. In addition, California, New York, and Colorado have already banned most medical debt from being included in credit reports. The Medical Debt Rule would establish an even playing field for consumers in all 50 states, and not just consumers in the few states that have voluntarily addressed this issue. Judge Sean Jordan is expected to decide by June 11, 2025 whether or not the Medical Debt Rule will go into effect or be vacated. --- Jennifer A. Baker

 

Featured Attorney Question & Answer

This is our Featured Attorney Q&A to introduce you to our large healthcare law team. To help you get to know our team a little better, we are highlighting attorneys in each issue by asking them a healthcare-related question. We hope their responses will be insightful for you.

James M. Bailey

Q: Certificate of Need (CON) emerged as a central issue during West Virginia's recent legislative session, with substantial efforts to eliminate the system ultimately falling short. Drawing from your experience in government service and current role as co-chair of Spilman's Government Relations Practice Group, how do you assess the political dynamics surrounding these reform efforts, and what developments should we anticipate?

A: The CON reform has been a longstanding policy debate in West Virginia, but it’s one that has gained unprecedented momentum over the last year. Throughout my various roles – from Commerce Secretary to Senior Counsel under Governor Justice to legislative work – I have witnessed the cyclical nature of CON reform discussions. However, this year marked a significant shift in the political landscape.

For the first time in recent history, the repeal of CON became an explicit gubernatorial priority. Governor Patrick Morrisey elevated the issue to a cornerstone of his legislative agenda, generating broad legislative support for elimination efforts. This executive-driven effort represented a notable departure from previous reform attempts that lacked such high-level backing.

The legislative focus centered on House Bill 2007, introduced at the Governor's request. This comprehensive measure would have dissolved the West Virginia Health Care Authority, the regulatory body responsible for administering the CON program through capital expenditure approvals for covered healthcare services. The bill was narrowly defeated in the House Health and Human Resources Committee, falling by a single vote at 13-12. This defeat and the surrounding debate highlighted both the growing momentum for reform and the strong continued support that remains.

Despite the failure of H.B. 2007 and other legislative vehicles, Governor Morrisey has publicly committed to continuing his reform efforts, ensuring the issue remains politically active beyond the regular session.

In another unprecedented aspect of this policy debate, the issue’s relevance now extends beyond legislative chambers into administrative action. Rather than allowing the issue to remain dormant until next year’s legislative session, Governor Morrisey has taken executive action on the issue. The Governor has overhauled the leadership of the Health Care Authority. The appointment of Gordon Lane as acting Executive Director, who previously served as the Authority's general counsel since October 2024, signals a shift toward internal reform.

More significantly, the Governor has appointed three new members of the five-member Authority. These new members include:

  • Heather Glasko-Tully – A former House of Delegates member and Vice Chair of the House Health and Human Resources Committee, Tully contributes extensive clinical experience as a Family Nurse Practitioner with FQHC background, and 13 years of ICU nursing experience.
  • Doug McKinney – A retired physician with 10 years as Chief of Urology at Clarksburg VAMC, national policy experience through the American Urological Association's Health Policy Committee, and organizational leadership as former President of both the West Virginia State Medical Association and WVU Medical School Alumni Association.
  • Robert Cheren – An attorney currently serving as Senior Counsel at Empower Oversight, with previous service as Special Assistant to the West Virginia Attorney General.

This strategic reconstitution of the Authority suggests that CON reform efforts will continue through administrative channels. The new leadership composition positions the Authority to potentially reinterpret its regulatory approach. Stakeholders in West Virginia's healthcare system should recognize that the Health Care Authority retains substantial regulatory influence over the CON framework. The political dynamics have shifted from purely legislative reform to a dual-track approach combining continued legislative pressure with administrative restructuring. Effective engagement will require direct communication with both the reconstituted Authority and the Governor's Office, as this new leadership team redefines the state entity's operational priorities and regulatory philosophy.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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