https://telecareaware.com/

FDA warns 30 telehealths on compounding GLP-1s, while Hims & Hers cuts deal with Novo Nordisk, buys Australia’s Eucalyptus for $1.1B

March 12, 2026 | by Donna Cusano

Wasn’t this GLP-1 compounding tussle supposed to be over by now? FDA has sent warning letters to 30 telehealth companies warning them about their continued sale of compounded GLP-1 drugs. The warning letters centered on the companies promoting false and misleading claims regarding compounded GLP-1 products offered on their websites and are sent from FDA’s Center for Drug Evaluation and Research (CDER). According to FDA’s release, “primary violations identified in the letters included making claims implying sameness with FDA-approved products and obscuring product sourcing by advertising drug products branded with the telehealth firm’s name or trademark without qualification, implying they are the compounder.” The letters were sent out since September when the agency cracked down on misleading DTC pharmaceutical claims.

Companies with letters listed on FDA’s warning letter page (search on GLP-1) with false and misleading claims on GLP-1 drugs as the subject include LeanRx/SkinnyRx, GoodGirl Rx, Kin Labs, Better Health/Measured, Zeuss, Eli Lilly (3 letters!), Novo Nordisk (!), . A compounder, Boothwyn Pharmacy, LLC, Darmerica, and Chengdu Brilliant Biopharmaceutical received letters for adulterated drug products.

More than misleading claims, many of the letters warn more seriously of the “unlawful sale of unapproved and misbranded drugs to United States Consumers over the Internet”. These companies dating back to 2024 include Hims & Hers, the HCG Institute, GenLabMeds, Villas Health, FitRx/Zealthy, FWD Care, Elevate Your Wellness/Elevated, Sprout Health, Mane & Steel, Lumimeds, GLP-1 Solution, Body Good Studio, www.buynetmeds.com, USApeptide.com, Xcel Research, Summit Research Peptides, Veronvy, Prime Peptides, Swisschems, Nomida.biz, Bioverse, Synthetix Inc./Helix Chemical Supply, US Chem Labs, www.semaspace.com, and www.gorillahealing.com.

A clinical investigator/sponsor, Ralph A. DeFronzo, MD, also received a warning letter.

Compounded drugs are not FDA-approved. GLP-1 drugs were approved in 2024-2025 for compounding because there was an extreme shortage, driven by demand, of approved GLP-1 drugs. FDA also permits a custom, compounded version of a drug if the branded drug is in some way inappropriate for the patient requiring a customized version, e.g. with adjusted dosage, method of dosing, or added/deleted ingredients. With both injectable and pill versions of GLP-1 drugs widely available, the compounding approval was withdrawn in February 2025. [TTA 25 Feb 2025]

FDA Commissioner Marty Makary, MD, MPH was quoted in the release as stating “It’s a new era. We are paying close attention to misleading claims being made by telehealth and pharma companies across all media platforms—and taking swift action. Compounded drugs can be important for overcoming shortages or meeting unique patient needs—but compounders should not try to compound drugs in a way that circumvents FDA’s approval process.” EMJ, The Hill, Advisory

Hims & Hers not only received an FDA warning letter, plus a referral to DOJ, but also was sued by Novo Nordisk over patent infringement in February. Novo charged that Hims infringed on its semaglutide patents and introduced an unauthorized compounded GLP-1 pill right after Novo introduced its FDA-approved Wegovy pill. The lawsuit was filed on 9 February in the US District Court for the District of Delaware. Release Hims pulled the compounded drug within days. In addition, Health and Human Services (HHS) had referred Hims to the Department of Justice (DOJ) for potential criminal violations. Sometimes it doesn’t pay to be the showiest horse in the ring.

But…a month later, on Monday, Novo and Hims arrived at an agreement that permits Hims to sell Novo’s Wegovy and Ozempic, in both pill and injectable versions, while Hims no longer markets compounded GLP-1 drugs. Novo dropped the lawsuit but reserved the right to resume it if there were further violations. Patients will be transitioned from present compounded drugs to “FDA-approved alternatives when clinically appropriate in consultation with a healthcare professional”. CNBC, Novo Nordisk release

Hims stock also staged a remarkable recovery, rising on Monday from $15 to $23, closing today at nearly $26, a nearly 10% rise.

In the interim, Hims didn’t stand still. It announced the acquisition of Eucalyptus, an Australian telehealth provider, on 19 February. Eucalyptus is Australia’s largest telehealth company and operates several virtual clinics and brands, including weight loss platform Juniper, men’s health program Pilot and fertility and reproductive care platform Kin. It also accelerates Hims’ international growth and push into APAC markets, since Eucalyptus markets in Japan as well as UK, Germany, and Canada.

According to the release, Hims is paying “up to US$1.15 billion, subject to customary purchase price adjustments. Approximately US$240 million will be payable in cash upon closing of the acquisition. The remaining consideration consists of guaranteed deferred payments over the 18 months following closing, and additional earnout payments tied to the attainment of specified financial targets through early 2029.Hims & Hers has the option to settle the majority of deferred and earnout payments in cash or stock, at its election. The company is currently prepared to finance most of the transaction with existing cash on hand and future operating cash flows from its U.S. operations.” The transaction is subject to closing and regulatory approvals. MedCityNews

News roundup: Walgreens’ $350M opioid settlement, only 30% of healthcare AI pilots reach production, Medicare RPM usage up 10-fold despite benefit limitations

April 24, 2025 | by Donna Cusano

Walgreens continues to clean up on Aisle 9 before it goes private. Walgreens settled the Federal allegations around illegally filling invalid prescriptions for opioids and seeking payment from Federal programs for $300 million. There’s an additional $50 million tagged onto it if the company is sold, merged, or transferred prior to fiscal year 2032. Since Walgreens has ‘done the deal’ with Sycamore Partners, the settlement amount will be the full $350 million. According to the Department of Justice’s press release, the settlement was based on Walgreens’ ability to pay. There was no statement on when the $350 million will be due.

This settles the complaint filed on 16 January (amended 18 April) in the US District Court for the Northern District of Illinois by the Department of Justice (DOJ), the Drug Enforcement Administration (DEA), and the Department of Health and Human Services Office of Inspector General (HHS-OIG). In the suit, Walgreens faced civil penalties of up to $80,850 for each unlawful prescription filled in violation of the Controlled Substances Act (CSA), plus treble damages and applicable penalties for each prescription paid by Federal programs in violation of the False Claims Act (FCA) for over 10 years–approximately August 2012 through March 1, 2023 The red flags included prescriptions for the ‘trinity’ of an opioid, a benzodiazepine and a muscle relaxant. If Walgreens had been found guilty, the penalty could have been billions.

Given the numbers that in January presented a large impediment to a sale, settling rather than fighting makes sense. The projected Sycamore Partners closing is only two quarters away (Q4, TTA 11 Mar). The 35-day ‘go shop’ period has closed with no other offers. The DOJ has moved to dismiss its complaint in Illinois, while Walgreens will also move to dismiss a related declaratory judgment action filed in the District Court for the Eastern District of Texas. In addition to Illinois, the District of Maryland, the Eastern District of New York, the Middle District of Florida, and the Eastern District of Virginia participated in the complaint.

In addition to the settlement, Walgreens’ pharmacy operations are now under Federal scrutiny, based on multiple agreements with DEA and HHS-OIG attached to the settlement, addressing what they and the DOJ saw as compliance violations in dispensing controlled substances. From the release:

Walgreens and DEA entered into a memorandum of agreement that requires the company to implement and maintain certain compliance measures for the next seven years.
Walgreens must maintain policies and procedures requiring pharmacists to confirm the validity of controlled substance prescriptions prior to dispensing controlled substances, provide annual training to pharmacy employees regarding their legal obligations relating to controlled substances, verify that pharmacy staffing is sufficient to enable pharmacy employees to comply with those legal obligations, and maintain a system for blocking prescriptions from prescribers whom Walgreens becomes aware are writing illegitimate controlled substance prescriptions.
Walgreens has also entered into a five-year Corporate Integrity Agreement with HHS-OIG, which further requires Walgreens to establish and maintain an extensive compliance and training program

Crain’s Chicago Business, Healthcare Finance, Settlement Agreement

Healthcare AI continues to be more show than go. A report by Bessemer Venture Partners surveying payers, pharma, and providers states that 95% of respondents said GenAI will be transformative, with 85% of provider and 83% of payer leaders expecting it to reshape clinical decision-making within three to five years. Yet only 30% of AI pilots — what the report calls “internally and externally developed GenAI proof of concept (POC) projects” make it to production.

Generative AI applications are being developed by the organizations’ IT teams, building their own tools by partnering with horizontal AI labs (i.e., Anthropic), Big Tech companies, or going to current and new vendors. The impediments they face are cybersecurity, data readiness, integration costs, and limited in-house expertise. Procurement is shifting toward co-development; 64% of execs are open to co-developing with early-stage partners. A contradiction is that only 32% of executives believe GenAI solutions from startups are superior to those from large tech incumbents. yet 48% prefer working with startups over established players.

Yet with these “aspirations and expectations” in the 80-90th percentile, only half of the surveyed organizations surveyed have a clear AI strategy with 57% having an AI governance committee, with payers in the lead. Those in it are putting real money behind it and seeing some meaningful ROI (54%), however.

Among the three surveyed segments, Bessemer identified 59 jobs-to-be-done. Yet 45% of these jobs are still in the ideation or POC phase, with far fewer actually in production. These jobs clustered as follows: 22 for payers (claims, network, member, pricing), 19 for pharma (preclinical, clinical, marketing, sales), and 18 for providers (care delivery, revenue cycle management). The survey was performed by Bessemer with Amazon Web Services and Bain & Company, across 400 leaders in the three segments.

Remote patient monitoring (RPM) Medicare usage growing steadily, despite limitations on clinical effectiveness. This new report from the Peterson Center on Healthcare tracks how RPM usage has grown among Medicare (traditional, Medicare Advantage) and Medicaid beneficiaries since 2019, when CMS enabled Medicare codes for reimbursement. For Medicare, despite only 1% of beneficiaries using RPM, it grew exponentially–10-fold for traditional Medicare between 2019-2023 and 14-fold for MA between 2019 and 2022.

Top chronic conditions are hypertension (57%) with diabetes far behind at 13%. Also growing but much smaller is remote therapeutic monitoring (RTM), dominated by musculoskeletal (MSK) disorders.
Traditional Medicare spent $194.5 million on RPM and $10.4 million on RTM in 2023.
Clinical effectiveness tends to be short-term. In hypertension, RPM is most valuable within the first six months, when blood pressure medications are actively monitored. For diabetes, the prime target is likely patients with the highest starting HbA1c levels and those
who are at critical transition points in their care plan, such as starting insulin. For RTM, the most effective gains occur in 2-4 months.
Yet utilization is increasing. The duration of continuous RPM in traditional Medicare in 2023 was 5.2 months, with 22% over nine months. For hypertension, the average is 6.6 months. For MSK RTM, the average was below effectiveness-only 1.7 months.

The Peterson Center’s policy conclusions advocate a reset:

Coverage and reimbursement need to be better aligned to actual clinical value
Adoption of high-impact remote monitoring services and minimizing or eliminating the use of poorly performing digital applications
Improved data collection for remote monitoring services for evidence-based coverage and reimbursement decisions

Evolving Remote Monitoring

News roundup: 9 additional VA centers named for Oracle 2026 EHR rollout; ATA Action acquiring, expanding with DTA; Dr. Oz to lead CMS while HHS cuts; DOJ seeks death penalty for Mangione

April 4, 2025 | by Donna Cusano

VA moving forward with the 2026 Oracle Cerner rollout of (lucky?) 13 centers. In March, the Department of Veterans Affairs (VA) announced that the EHR Modernization (EHRM) for 2026 would be expanded to a total of 13 sites, adding nine to the four in Michigan announced in December. True to form, ‘later this year’ was less than one month later, yesterday. The additional nine are in Ohio (4), Indiana (3), Kentucky (1), and Alaska (1):

Cincinnati VAMC-Fort Thomas (Fort Thomas, KY)
Chillicothe VAMC (Chillicothe, OH)
Cincinnati VAMC (Cincinnati, OH)
Dayton VAMC (Dayton, OH)
Louis Stokes Cleveland VAMC (Cleveland, OH)
Fort Wayne VAMC (Fort Wayne, IN)
Marion VAMC (Marion, IN)
Richard L. Roudebush VAMC (Indianapolis, IN)
Alaska VA Healthcare System (Anchorage, AK)

The four locations in Michigan are VA Battle Creek Medical Center, VA Detroit Healthcare System, VA Ann Arbor Healthcare System, and VA Saginaw Healthcare System. This is almost two years after all installations replacing the venerable VistA were halted in April 2023, with the priority to fix the five troubled current deployments and the 2024 MHS joint installation at Lovell FHCC. This series is termed ‘market based’ with the locations relatively close to each other for greater efficiency, versus the earlier far-flung centers. In addition, “VA will adopt a standard baseline of products, workflows and integrations aligned with subject-matter-expert recommendations.” VA release, HealthcareDive

ATA Action acquires Digital Therapeutics Alliance (DTA), launches Advancing Digital Health Coalition. The advocacy arm of the American Telemedicine Association (ATA) will be combining with the DTA, a 501(c)(6) non-profit trade association with a mission of advancing digital therapeutics globally. The new organization will continue to take policy roles in advancing telehealth, ATA Action’s focus, but expanding into policies governing digital health tools in diagnostics, remote patient monitoring, and AI, leveraging DTA’s established relationships at the FDA and international regulatory agencies. Kyle Zebley will remain executive director of ATA Action. Andy Molnar, CEO of DTA, will transition to head of digital health at ATA Action. ATA Action is also launching the Advancing Digital Health Coalition, a membership non-profit which will extend the work of the DTA into advocacy for innovative digital health technologies transforming patient care, including digital therapeutics, prescription drug use related software (PDURS), and remote monitoring devices. Timeframe was not disclosed. ATA-DTA release, Advancing Digital Health Coalition release, FierceHealthcare, Healthcare IT News

Over at the Feds, Dr. Mehmet Oz was confirmed today (Thursday) by the US Senate to head the Centers for Medicare and Medicaid Services (CMS). The vote was 53 to 43. Former TV personality and PA Senate candidate Dr. Oz, a cardiac surgeon, graduated from the University of Pennsylvania, earning both an MD and an MBA from Wharton. He became a professor at the Columbia University – Vagelos College until 2022. The now-whitehaired Dr. Oz will be CMS Administrator over a downsizing organization, which will be 300 staff lighter and with a Congress that needs to find billions in savings. Within Health and Human Services (HHS), Secretary Robert F. Kennedy Jr. has presided over 10,000 in packaged out layoffs, with another 10,000 laid off this week for an ultimate 25% downsizing across all agencies to 62,000. Reports indicate confusion, which is sadly typical of mass layoffs for organizations of size. HealthcareDive, MedTech Dive 27 Mar, MedTechDive 3 April, HealthcareITNews

The US Department of Justice (DOJ) will seek the death penalty against Luigi Mangione. The Federal murder charges brought in December have been increased by Attorney General Pam Bondi. She has directed Acting US Attorney for the Southern District of New York, Matthew Podolsky, to seek the death penalty for this murder as an act of political violence, premeditated and threatening the public. Currently, the Federal government has a moratorium on executions which she has committed to reviving. The accused murderer of Brian Thompson, CEO of UnitedHealthcare, is currently incarcerated at Brooklyn’s Metropolitan Detention Center, facing first-degree murder as an act of terrorism charges brought by New York State. He and his attorney are requesting that Mangione have access to a laptop for reviewing case documents, an unprecedented privilege. Mangione also faces charges in Pennsylvania on gun and false identification charges from his flight from NYC. The DOJ will be waiting some time for Mangione, as the New York charges have precedence. New York has not yet set a trial date, which is certain to be a circus given his fan girls. DOJ release, FierceHealthcare, NY Post

This Just In: Walgreens settles PWNHealth/Everly Health arbitration award for $595 million, reduced from $1 billion

February 26, 2025 | by Donna Cusano

A golden bird in the hand for PWN/Everly–and presaging something else for Walgreens? Walgreens has decided to settle with PWN/Everly the latter’s recently upheld near-$1 billion arbitration award for $595 million, about 60%. This amount is payable to Everly in a breathtaking two business days.

The arbitration between PWN/Everly and Walgreens charged Walgreens with breach of contract on their Covid-19 testing services agreement, adding in additional violations of the Latham Act on trademarks and more. The arbitrator’s award of $987 million last March was affirmed by the US District Court for the District of Delaware on 11 February. Walgreens declared it would appeal but stated in their SEC filing that any resolution might take up to two years. More details: TTA 12 Feb

Was this a ‘Deal Deal’ as a prelude to a more significant endgame for Walgreens? For this Editor strictly speculating, Walgreens not appealing but settling this quickly, agreeing to pay a reduced amount in record time, may point to something larger. If coupled with the speculated revival of the Sycamore Partners buyout deal [TTA 19 Feb], if Walgreens is actively in sale mode, they want to be as attractive as possible. That means taking off the table ongoing lawsuits and pending settlements that are future obligations–presenting the cleanest picture possible of and reducing their Mound of Misery. Where they can, like with Everly, it’s settling for less now, versus dragging out an appeal for two years that will be more costly to litigate, for example in legal fees and award interest, if almost certainly upheld again. These become future obligations for a buyer and make for more unattractiveness. It also follows on VillageMD/CityMD’s recent settlements with New York State and the Department of Justice [TTA 12 Feb] and state-level opioid settlements, though in January the DOJ filed a civil lawsuit against Walgreens on opioids and other meds violating the Controlled Substances Act [TTA 24 Jan] . Reuters, Crain’s Chicago Business

News roundup: DOJ investigating UHG on Medicare Advantage billing upcoding; Teladoc’s BetterHelp therapists using AI?–a short seller alleges; Hims whacked by FDA ending compounded GLP-1s (updated); some fired FDA staffers in CDRH reinstated

February 25, 2025 | by Donna Cusano

UHG’s annus horribilis gets more horribilis. News broke on Friday 21 February via the Wall Street Journal (paywalled) that UnitedHealth Group is reportedly under investigation by the US Department of Justice–again. The DOJ is looking at UHG’s billing practices for members covered by UnitedHealthcare Medicare Advantage (MA) plans on diagnoses that were made to generate extra payments, a practice known in the industry as upcoding. This also involves the many practices that UHG owns or has relationships through Optum, about 10% of primary care practices. These practices are receiving visits from DOJ investigators, certainly something that would strike some fear into any doctor’s or practice manager’s heart.

The WSJ reported that two providers cited in their article provided documentation, while another person said that the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) is involved in the probe.

It’s a real Mound of Misery for UHG.

MA plans and their set rates for additional benefits not covered under original Medicare have been under HHS/CMS scrutiny in the past year, and health plans have been running higher costs than anticipated as covered patients have returned back to care.
UHG’s OptumRx unit last year was reported as under investigation on antitrust grounds.
Optum’s Change Healthcare (contested by DOJ but approved) is still recovering from an unprecedented hacking and ransomwaring, with the huge expense of restoring systems plus notification and providing a reported 100 million with free credit monitoring services.
The proposed $3.3 billion deal with Amedisys for home care continues to be delayed by the DOJ antitrust suit.
Their UnitedHealthcare president was assassinated in New York, and his (alleged) killer is starting his trial here, a spectacle which will go into the summer. But the issue that supposedly tipped off the murder–claim denials and denials of care due to policies and the use of AI, isn’t going away–jumping in the fray is megainvestor Bill Ackman.

While Federal involvement with health plans comes with the territory, the adversarial relationship with DOJ far exceeds the norm. The share price reflects it, having cracked 26% in the past six months. Those accepting the 30,000 buyouts on offer may be grateful if they take them. CNBC, FierceHealthcare

Another backwash from the use of AI? Teladoc is receiving some bad publicity it can ill afford. There are allegations of their therapists using AI-drafted responses with patients–and this apparently is becoming more frequent. It’s been percolating on social media boards such as Reddit (see example here) for some time. The latest is a report from a short seller* of Teladoc, Blue Orca Capital, that alleges that BetterHelp therapists not only use ChatGPT for text responses outside of live sessions (messaging), but also during live chat sessions. This goes against Teladoc’s own stated policy against AI therapy as ‘dehumanizing’ in a lengthy blog post ranging from social media to job loss as a result as AI. Blue Orca includes first hand information from two BetterHelp patients, an allegation from a competitor that BetterHelp doesn’t care, and that therapists are actually incentivized on the word length of responses they give to a patient, overloading their schedule, and being available 24/7 to patients paying a reported $400/month. Given BetterHelp’s prominence in Teladoc’s earnings–according to them “accounting for 40% of the Company’s revenues and adjusted EBITDA since FY21”, adding in their other financial factors, their dim view is jarring if you like or own TDOC. Developing. Hat tip to HIStalk 2/24/25

*Editor’s note: Blue Orca Capital, as a short seller, profits when a stock goes down. Blue Orca has a short position in TDOC. So our Readers should take their position into account. Short sellers are also prohibited by securities law from spreading false information about a stock for the purposes of profiting from its decline (Rule 10b-5 under the Securities Exchange Act of 1934.)

The Feds giveth and taketh away Hims’ weight loss business. Updated information. Friday’s good news was that FDA has reclassified the shortage of semaglutide, the active ingredient in GLP-1 drugs, as ‘resolved’, meaning It’s Over and it’s easier to get your Wegovy, Ozempic, Zepbound, etc. prescription. The bad news is that online prescribers that were authorized by FDA to use less expensive compounding to approximate or customize the branded versions of these drugs for weight loss, are now prohibited from doing so. They have till April or May to transition to branded injectable versions. This affects the bottom line of all these telemedicine prescribers such as Ro, Weight Watchers, Future Health (a heavy local radio advertiser), 23andMe, and Hims & Hers. Hims, the showiest in class, took a breathtaking 25% hit on their stock between Friday and Monday.

It is not only cost of branded drugs but also that so many competitors have jumped into the field, creating another shortage of the branded drugs, that looms. Suppliers of compounded drugs, the high volume compounding pharmacies (not your corner pharmacy that does compounding based on Rx), may be reluctant to continue supplying telemedicine prescribers in reasonable fear of FDA action or pharma lawsuits that could put them out of business.

Hims also publicly took the hardest line against the pharma companies, implying in their now infamous Super Bowl commercial that their obesity drugs are priced “for profits, not patients”, unlike Hims’, of course. Novo Nordisk, the Ozempic and Wegovy manufacturer, in turn has taken a hard stance against the compounders pointing out that a compounded version isn’t standardized nor FDA-approved for safety and efficacy.

A custom, compounded version of a drug can only be sold when there is a shortage or if the branded drug is in some way inappropriate for the patient requiring a customized version, e.g. with adjusted dosage, method of dosing, or added/deleted ingredients. Look for Hims and other telemedicine prescribers to start pushing this POV. FierceHealthcare, MedCity News

Some FDA reviewers reinstated after DOGE cuts. The ~230 probationary and other employees who were let go with severance then partially reinstated are reported to be reviewers in the CDRH (Center for Devices and Radiological Health). The 183 reinstated reviewers are actually funded by the industry through the Medical Device User Fee Amendment (MDUFA) agreements to help speed the review and approval process. There is considerable confusion about this because phone calls went out over the weekend but as of today (Monday) there is no written confirmation from HR or the Office of Personnel Management (OPM). It remains murky as do layoffs in the rest of HHS. FierceHealthcare, Endpoints

Walgreens’ misery level rises some more: Federal court affirms $987M award to PWNHealth/Everly Health. Plus selling $295M in Cencora shares, drawing down to 6%.

February 12, 2025 | by Donna Cusano

Walgreens’ Mound of Misery grows ever higher in two more ways. The US District Court for the District of Delaware ruled yesterday that last year’s arbitration award of $987 million to PWNHealth stands.

Walgreens originally contracted exclusively with PWNHealth’s Everly Health Solutions’ telehealth physician network in April 2020 to order Covid-19 tests that consumers requested through the Walgreens website. PWN/Everly had, with its network, the ability to administer nationwide Covid-19 testing including labs and follow-up. However, Walgreens in 2021 started to divert tests to their own pharmacists, while continuing to use the Everly trademarked logo and displaying that testing would be done by PWN/Everly’s network. This breached the exclusive Master Services Agreement (MSA) with PWN/Everly. Walgreens terminated the MSA effective 1 June 2022. PWN/Everly on 10 June 2022 then initiated the arbitration with the American Arbitration Association alleging breach of contract, a violation of the Latham Act on trademarks, plus additional breaches and violations. In March 2024, the arbitrator awarded PWN/Everly $987 million. This was 12 times the contractually specified $79 million in damages. Arbitration text and decision in Jus Mundi

Immediately after the arbitration, Walgreens filed suit in Delaware to vacate the ruling on the grounds that it contravened the contract’s cap on damages and that the arbitrator’s decision was “egregious and improper”.

The Federal judge in yesterday’s decision upheld the arbitration decision, finding that the arbitrator had the authority to interpret the contractual language and determine damages. The judge found no evidence that the arbitrator exceeded his authority or showed bias. Walgreens is, of course, appealing the decision in the US Court of Appeals for the Third Circuit. In its Securities and Exchange Commission (SEC) filing, Walgreens stated that it disagrees with the court ruling but that the appeal may take another two years. “There can be no assurances as to the outcome”. PWNHealth, of course, is “pleased with the court’s well-reasoned decision confirming the arbitration award.” Reuters, Crain’s Chicago Business, FierceHealthcare

Walgreens needs some fast cash. One investment that they have been gradually cashing out is their interest in Cencora, a drug distributor originally called Amerisource Bergen. Last Thursday’s drawdown involved Cencora repurchasing about $50 million worth of its stock from Walgreens, with Walgreens selling about $265 million worth of additional shares. Deducting $20 million in early settlement fees, the net proceeds were $295 million. Walgreens (WBA) states that it will be used primarily for debt paydown and general corporate purposes. WBA’s stake in Cencora has been reduced to 6% from the earlier 10%. Walgreens has been steadily cashing out its Cencora interest with three sales in 2024 totaling 5% of shares [TTA 7 July 2024]. Release, Healthcare Dive, Crain’s Chicago Business

Given January’s Department of Justice (DOJ) civil suit over improper dispensing of opioids and and other unlawful medications over more than a decade, with possible penalties in the billions, Walgreens’ Mound of Misery is approaching Chicago’s Willis Tower (the former Sears Tower) heights.

Updates: ATA on telehealth policy priorities, UHG investor group demands denied care report, DOJ sues Walgreens on illegal Rx dispensing, VA nominee supports Oracle EHR deployment, RFK Jr. HHS nomination hits Senate

January 24, 2025 | by Donna Cusano

ATA urges nine telehealth priorities for the Trump Administration’s consideration. Acknowledging that HHS expanded Medicare telehealth flexibilities at the start of the pandemic in 2020 in the previous Trump Administration, the American Telemedicine Association’s list is long and detailed.

#1 was to withdraw last week’s Drug Enforcement Administration’s (DEA) proposed rule, “Special Registration for Telemedicine and Limited State Telemedicine Registrations”. This would create a framework for the remote prescribing of controlled substances that in ATA’s view, would create “untenable restrictions and significant barriers to care”.

The remaining eight include flexibilities that were part of the 2020 rules.

Permanently Allow for the Remote Prescribing of Controlled Substances
Work with Congress to Make Permanent the Medicare Telehealth Flexibilities
Ensure Affordable Telehealth Services for the Commercially Insured
Ensure Affordable Telehealth Coverage for Part-Time, Contracted Workers Who Don’t Qualify for Health Care Coverage
Ensure All Provider Home Addresses Remain Confidential
Expand the Medicare Diabetes Prevention Program
Reinstate Virtual Cardiopulmonary Rehabilitation Programs
Release Updated Regulatory Guidance on Medicare Telehealth Flexibilities

Additional details are in the ATA Action letter to President Trump and Vice-President Vance and the ATA release.

An institutional investor interest group demands a report on delayed and denied care from UnitedHealth Group. This takes the form of a proposal for the 2025 proxy that the UHG board of directors prepare a report on these practices that create increased costs and ‘macroeconomic risks’. The proxy is usually filed in April for a meeting that is typically in June. UHG will respond at that time it files the proxy.

The group proposing the report is the Interfaith Center on Corporate Responsibility (ICCR). ICCR represents 300 faith-based institutional investors, such as asset managers, pension funds, and foundations, with over $4 trillion in invested capital. This institutional shareholder action is in the aftermath of the Brian Thompson assassination, which revealed widespread consumer anger about UnitedHealthcare’s practices in high rates of claims denials, including their use of AI in the review process, and prior authorizations to restrict utilization. UHG ignores this at its peril. By the time proxies are released and the shareholder meeting occurs in June, the trial of the assassin may be underway, putting this issue back in top news. ICCR release, Healthcare Dive

Walgreens’ Mound of Misery gained a few hundred cubic yards with a lawsuit filed 16 January by the Department of Justice (DOJ) over improper dispensing of opioids and and other unlawful medications over more than a decade. The civil lawsuit filed in the US District Court for the Northern District of Illinois alleges that Walgreens and subsidiaries dispensed millions of unlawful prescriptions, violating the Controlled Substances Act (CSA). Since Walgreens then sought reimbursement from Federal healthcare programs, they violated the False Claims Act (FCA). The time frame is from August 2012 to the present. Specific allegations include that Walgreens pressured pharmacists to fill prescriptions despite clear ‘red flags’, in excessive quantities, and lacking a legitimate medical purpose and that they ignored the pharmacists and their own internal data. One of the red flags were prescriptions for the ‘trinity’ of an opioid, a benzodiazepine and a muscle relaxant. There are also four different whistleblower actions against Walgreens under the qui tam (on behalf of the government) provisions of the FCA that have been consolidated. If successful, Walgreens could face civil penalties of up to $80,850 for each unlawful prescription filled in violation of the CSA, plus treble damages and applicable penalties for each prescription paid by Federal programs in violation of the FCA. Timing and Walgreens’ response are not yet available. This lawsuit could be a massive stumbling block to the rumored Walgreens/WBA sale. DOJ release, Healthcare Finance

The VA Secretary nominee recommits to resuming the 2026 rollout of the Oracle Cerner EHR. Former House Representative for Georgia Doug Collins told members of the Senate Veterans’ Affairs Committee at his nomination hearing Tuesday that he would look at the Oracle Cerner EHR deployment with ‘fresh eyes’ and that “there’s no reason in the world we cannot get this done.” On 20 December, the VA formally stated that they were starting planning now for deployment in four Michigan facilities — Ann Arbor, Battle Creek, Detroit, and Saginaw–for implementation by mid-2016. He was critical of what has transpired to date in the limited deployment as ‘not acceptable’ and pointing out that VA facilities needed modernization of their computer systems. But perhaps a little overoptimistically, he’d like to see a faster implementation in 2016, though it should be done properly and not rushed. NextGov/FCW, Healthcare IT News

And in the Warp Speed World that is now DC, Robert F. Kennedy Jr. is scheduled to testify next Wednesday (29 January) before the Senate Finance Committee on his nomination as Health and Human Services Secretary. At HHS, he would supervise the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH). He has promised major reforms including food safety and chemical additives, as well as the relationships between FDA and pharmaceutical companies. Healthcare Dive Meanwhile, during the transition, HHS froze external communications or work-related appearances by staff. This is fairly standard procedure until review procedures are set up, but apparently no one planned for this in advance. This has derailed two conferences (AFCEA HIT Summit and the HHS Industry Summit) that were scheduled for this month and February. Exceptions to this are ‘mission critical’ and emergency communications. NextGov/FCW

Masimo update: SEC announces investigation of RTW Investments and role in proxy war voting

December 6, 2024 | by Donna Cusano

The Securities and Exchange Commission comes knocking on RTW Investments’ door…and they have no sense of humor. Though the proxy war is over now for two months and Politan Capital Management is firmly in control, with losing founder Joe Kiani departing in a classic ‘you’re fired/I quit’ scenario that’s dissolved in a flurry of lawsuits from New York to California [TTA 15 Nov], the next shoe dropping can land Kiani and his ally Roderick Wong of RTW into some extremely hot soup, to strain two metaphors.

The SEC is now investigating the “empty voting” scheme apparently used by Kiani’s side in the proxy war. Masimo had already sued Kiani and RTW in the US District Court for the Southern District of New York charging that they used empty voting to manipulate the shareholder vote in favor of Kiani. Masimo is claiming that this action rigged 19% of the vote under Kiani’s and allies’ control. As noted in our November article, empty voting is done through put options or by selling the shares after the record date but before the shareholder meeting. It’s a way for an investor to build up share control and sway the outcome of a shareholder vote at little cost.

Strata-gee yesterday (5 Dec) reported that Bloomberg News (paywalled), during last week’s pre-Thanksgiving ‘news black hole’, broke that the SEC is probing RTW, a $6.5 billion hedge fund. Its head Roderick Wong is cooperating with the probe. He characterized it to his investors as a ‘fact-finding investigation’ and accurately characterized it as “the existence of a probe doesn’t mean laws were broken” in a message on Monday 25 November. A SEC probe is not necessarily safe as milk–see the last part of this article.

However, as Strata-gee reports, empty voting is not necessarily illegal. It is Masimo’s stating that it has evidence that Kiani and RTW conspired to form an insider group–and insider groups always ring bells for the SEC especially during a proxy fight. And where there’s the SEC, there is the Department of Justice. Witness the interest in insider trading in the form of stock sales by executives at UnitedHealth Group while a DOJ probe was happening but not public–and the resurgence of interest in UHG’s legal difficulties as part of the shocking recent events–which have caused industry executives to scrub their profiles from corporate websites. Healthcare Dive.

Why this matters to us in healthcare tech. Masimo makes consumer and professional medical devices, including smartwatches, that measure vital signs including pulse oximetry where they have a brace of patents. Their global revenue in 2023 was over $2 billion. Medical Design and Outsourcing Last year at this time, Masimo was the David wrestling Goliath Apple to the mats with ITC (International Trade Commission) bans on the new Apple Watch 9 and Ultra 2 last Christmas season, forcing Apple to pull them from sale and disable the feature violating the Masimo patents. Masimo continues to challenge Apple patents in court with mixed results, most recently reported in mid-October. Since the new Masimo is actively selling or spinning off its audio brands, what remains is their healthcare technology business.

A cautionary tale. This Editor, as a subscriber to Strata-gee (an audio business specialist website) after finding Editor Ted Green’s talented writing there in following the Masimo Mess, wanted to share from today’s subscriber email his description of a SEC probe at a former employer. Basically, the SEC doesn’t launch investigations unless they have good reason to do so, and they turn your company’s life upside down doing it. Mr. Wong will be holding court for a group of guests for awhile. Editor Ted has a reminiscence of when it happened at the well-known audio brand Onkyo, which was treated as a suspect in the legendary Crazy Eddie (“his prices are insaaaaane!”) retail electronics chain fraud.

Have I ever told you the story about the day, many years ago, when about 20 agents of the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI) came storming through the main entrance of Onkyo USA, marched into the President’s office (who was in a meeting that was hastily dismissed) and delivered a Search Warrant? (This is not a joke!) I learned a few things that day about the men and women of the SEC: 1) Most of them were armed with weapons that could deliver deadly force; 2) They were as serious as a heart attack; and 3) They would take office space in our facility and stay for weeks, as they forensically examined everything about our business. It turned out that this was part of an investigation into Crazy Eddie, a New York dealer that they suspected had engaged in illegal activities. As one of their top suppliers, Onkyo was considered a potential co-conspirator until we proved we weren’t…which, thankfully, we did – and they came to see us as one of the victims of Eddie Antar’s scheme and NOT a partner.

No apologies rendered, I’d guess. Or payback for the sandwiches and coffee.

Breaking: Federal agents seize Steward Health’s CEO, international head’s mobile phones in widening US fraud investigations

November 26, 2024 | by Donna Cusano

This fowl is coming home to roost, and it’s not going to be much of a Thanksgiving at Steward’s former CEO Ralph de la Torre and international CEO Armin Ernst’s tables as a result. Last week, reports emerged that Federal agents served search warrants and seized mobile phones belonging to both Steward executives, though neither has been formally charged with crimes in the US. Since July, rumors have prevailed that the US Attorney’s office based in Boston had opened an investigation, citing fraud and violations of the Foreign Corrupt Practices Act about its business dealings in Malta between 2018 and 2023–and perhaps more [TTA 25 July]. These rumors were confirmed when a former US Senator, John Boehner, a Steward board director, testified on 14 November to a Federal grand jury in Boston. Boehner had access to financial information that could have revealed potential fraud and corruption within the operations of Steward Health, which collapsed into bankruptcy in May. Prosecutors were reportedly zeroing in on financial transactions that could have personally benefited de la Torre and their top executives. The former senator was best known of late for his lobbying and advocacy of marijuana legalization, which makes his board appointment even more interesting. Other former Steward executives have also been questioned by Federal investigators, according to the Boston Globe‘s (paywalled) reports. Becker’s and Becker’s, both 25 November. Also Times of Malta 26 Nov

In the US, federal search warrants are not issued lightly. Credible evidence must be presented by a federal law enforcement officer or a US attorney to a magistrate judge with authority in any district where the crimes may have occurred. There must be probable cause to search for and seize a person or property. That includes electronic storage media such as servers, computers, and phones.

The Boston Federal investigation is separate from the outgoing Congress’ Health, Education, Labor and Pensions (HELP) Committee’s subpoena and criminal/civil contempt charges referred in September to the Department of Justice [TTA 1 Oct and prior], complete with de la Torre’s immediate countersuit, nor the Malta Government’s ongoing actions against Steward (as Vitals Global) in the privatization of three hospitals in that island nation. Times of Malta 26 Nov Steward’s business in Malta included a loony, gaudy spy operation against their critics there and elsewhere. That reported cost was $7 million, diverting much-needed funds while Steward defaulted on its bills and payrolls. [TTA 2 July] The Malta investigations have also been stymied by the non-appearance of both de la Torre and Ernst, on the grounds of facing US charges and an ill wife, respectively. Former Malta prime minister Joseph Muscat, under investigation, previously had his phone seized but refused to give the password, which may take a year to crack. Times of Malta 21 Nov

An extensive critique of Steward’s board of directors by the Globe’s reporters from October is available here courtesy of the Weinberg Center for Corporate Governance. It is a worthwhile dive into how Steward’s “unusual” business practices were facilitated by its tight-knit and inexpert board, drawing parallels with Theranos. Board members also enjoyed de la Torre’s considerable largesse, unlike Theranos.

Investigations by the Boston Globe’s reporters also reported that additional Steward funds were diverted to de la Torre’s personal pursuits, such as a private jet for friends, a donation to his children’s school, and a Madrid apartment. The last is interesting to this Editor as Spanish courts do not extradite easily for crimes not committed or charged in Spain, requiring review and approval of all requests by the National Court. de la Torre also has reported residences in Costa Rica where extradition via a bilateral treaty is easier.

This Editor’s extra-legal advice to de la Torre remains that he should go on his $40 million oceangoing yacht for a trip into international waters and not even try to brazen this through. (And if anyone believes that the corporate phone hasn’t been tossed overboard or any phones seized hadn’t been thoroughly cleansed, I have a bridge over the Hudson River to sell you!)

Bad News Roundup updates: UHG/Optum defends Amedisys buy fast via a website, digging deeper into Forward’s fast demise, former Masimo CEO Kiani booted–and sued (updated)

November 15, 2024 | by Donna Cusano

The other shoe drops, as UnitedHealth Group/Optum take their defense public a day later. This unorthodox approach to defending an acquisition against a Department of Justice lawsuit [TTA 13 Nov] is visible on a specially set up Optum page. ImprovingHomeCare.com predictably highlights the benefits of an Amedisys merger along with the divestitures to VitalCaring Group. The gauntlet thrown is unadorned: “The Amedisys combination with Optum would be pro-competitive and further innovation, leading to improved patient outcomes and greater access to quality care. We will vigorously defend against the Department of Justice’s overreaching interpretation of the antitrust laws.”

Setup is around present and future demand–and that providers have to be capable of investing and scaling to meet it. “70% of adults 65 or older will likely need some form of long-term care during their lives.” and 3 million Americans received home health services in 2020 (Editor’s note–in a pandemic year when visits were certainly curtailed).
Home health is highly fragmented both nationally and locally, thus the acquisition isn’t anti-competitive. “In metropolitan areas with approximately 500,000 residents, there are an average of 26 agencies serving the metro area. The combination of Optum and Amedisys would be a fraction of both home health and hospice–and there would be strong competition in both metro and rural areas.
The divestiture to VitalCaring would further preserve competition, and that VitalCaring is a quality competitor. The DOJ release made much of VitalCaring’s inadequacies, such as their lower quality scores, financial difficulties, and leadership. VitalCaring, headquartered in Austin, Texas, currently operates in six states with 58 locations with plans to expand. Their CEO April Anthony is cited as building multiple home health companies ‘from scratch’ such as Encompass Care.
Additional proof points stress streamlining of care across Optum’s areas of expertise, integrating technology, and improving value-based care coordination.

FierceHealthcare

Forward’s shut down continues to reverberate in a classic tale of overreach and misdirection. Their bet on kiosks, plus a ‘forward-tech’ approach to a concierge-on-the-cheap, no- insurance-accepted model of primary care over eight years, apparently led to what pilots call a death spiral–it begins wide and imperceptible until it tightens and accelerates fatally in a final dive. Business Insider, true to its name, spoke with 11 anonymous and now former employees who attributed the failure to putting all their chips on 3,200 CarePods installed in one year. Their CEO, Adrian Aoun, was obsessed with technology to the point where he wanted to replace his offices and doctors with CarePods and started to strip the clinics of services, despite only two CarePods installed.

Most advanced, yet unacceptable*. Patients didn’t try out or use the CarePods, finding them less than inviting. Logistical challenges delayed placements in large markets like New York and Chicago. Then technical problems mounted: automated blood draws failed, lab tests were withdrawn. The coup de grace–patients kept getting trapped in the CarePods. They were insanely expensive–the first two CarePods cost over $1 million each. Then the huge units were unattractive to landlords who didn’t want to fight local building codes nor saw a profit in them. By the end of the summer, there were only two CarePods in place at a mall in Sacramento and in Chandler, Arizona, both gathering dust. (*Shout out to Raymond Loewy, Never Leave Well Enough Alone)

In the increasingly empty Forward clinic offices, the futuristic tech and breadth of services touted in social media adverts weren’t quite as advertised. The whole-body scanner glitched requiring manual checks. Their lab tests became limited to those that could be done in-house, eliminating genetic testing via 23andMe along with services such as simple dermatology removals.

Christina Farr in Second Opinion has a set of takeaways worth noting, with this Editor’s comments (in parentheses):

Subscription-based, out-of-pocket healthcare is possible–but hard. (WAY hard when basics are up 25%+! And insurance is almost a given, even if taken in part.)
Brick-and-mortar clinics make only limited sense–and space must be used economically, not easy to do in health tech. (Retail and in-person are perhaps anathema in the concepts of those in health tech.)
We’re not focusing on those who really need care (But they’re not sexy, wealthy, or relatable to the creators of said tech. Many of them are also on Medicare and Medicaid–truly not sexy.)
Primary care is a tough starting point for subscription care (Except the very highest, most exclusive end as she notes!) Specialties may be more amenable to this model. (But volume?) And different age groups want different relationships within this type of care.
Timing is everything. Perhaps if Forward had started its clinics today it would have had a far better chance of success? (Then look at bullets 1-4 and see how truly daunting a tech-first clinic setup can be for the tech mindset untempered by research and UX-minded marketing.)

Forward is yet another sad and expensive example of 1) a founder hyperfocusing on whiz-bang technology, 2) losing touch with the customers using it, 3) not improving delivery based on customer needs, and 4) forgetting where he ostensibly started–the mission of improving healthcare. This Editor is sure that his 30-odd investors, especially Vinod Khosla, will have something to say to him about running through $100 million in one year–and over $300 million over eight years.

Masimo’s now-former CEO booted from his company and sued–to boot! (updated) The new management formally terminated founder Joe Kiani on 24 October, as noted in an October SEC filing. In a classic ‘you’re fired..no, I quit!’ situation, after he lost the proxy fight for control of the company, he resigned on 19 September. Kiani immediately filed a lawsuit against Masimo in California state court to obtain a $400 million payout per his employment contract. It is reported to be a declaratory relief suit that hinges on a ‘resignation for good reason’. This is usually specified in the contract. An example is that the executive ceases to be part of senior management, along with others.

The new board of directors has now turned the tables. Masimo is now suing Kiani and RTW Investments in the US District Court for the Southern District of New York. The complaint alleges collusion to violate Federal securities laws by secretly manipulating the shareholder vote through an ’empty voting’ scheme. Empty voting is done through put options or by selling the shares after the record date but before the shareholder meeting. It’s a way for an investor to build up share control and sway the outcome of a shareholder vote at little cost. The suit proposes that Kiani and RTW did precisely that, rigging the vote by acquiring control of over 19% of shares. Evidently, the BOD has proof. The lawsuit and more details are in Strata-gee.

(Editor’s opinion: this is a bare-knucks attempt to claw back Kiani’s contract payout by the new controlling company, Politan Capital Management. And both lawsuits could be true. Pass the popcorn.)

Insult upon injury for Joe Kiani is that shareholders now have some hope that management can save the company by concentrating on healthcare tech. Shares are up. Masimo’s Q3 results reported on 5 November were strong though net income declined. Sound United, the main anchor dragging down the company, is now termed ‘a discontinued operation’. Exhaustive detail on their results is in Strata-gee here.

Bad News roundup: DOJ drops the hammer on UHG-Amedisys, 23andMe lays off 40% and closes therapeutics, Lyra Health lays off 2% in restructuring, Forward primary care + kiosks shuts down abruptly

November 14, 2024 | by Donna Cusano

Shoe drop! The long-anticipated Department of Justice (DOJ) lawsuit against UnitedHealth Group and Optum to prevent the acquisition of home health and hospice operator Amedisys was filed yesterday (12 November) in the District of Maryland. UHG’s offer to acquire Amedisys was made in June 2023 for $3.3 billion in an all-cash deal, but approval was held up in DOJ review ever since. Even with location divestitures proposed in July to VitalCaring Group to reduce anti-trust concerns with Optum’s home health operations (acquired with LHC Group), UHG remained a DOJ target. The civil lawsuit was filed by DOJ together with the Attorneys General of Maryland, Illinois, New Jersey, and New York. No timeline is provided in the release.

The rationale cited is of course anti-trust and elimination of competition between Amedisys and UHG’s Optum. “We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” said Attorney General Merrick B. Garland. The fact that the US Attorney General was quoted first in their release indicates the importance of the case to the DOJ. It’s also a race to the finish as come 20 January 2025, there will be a new president appointing a new AG immediately.

The DOJ states that both companies are “fierce competitors” and that the divestiture is insufficient. “The proposed divestiture does not alleviate harm in over 100 home health, hospice, and labor markets, which generate at least a billion dollars in revenue annually, serve at least 200,000 patients, and employ at least 4,000 nurses.” Their case is well-built in this Editor’s view. From the release:

UnitedHealth’s market share after the transaction would make the merger presumptively illegal in:

- Hundreds of local home health care markets, with an annual volume of commerce exceeding $1.6 billion annually, in 23 states and the District of Columbia;
- Dozens of local hospice markets, with an annual volume of commerce exceeding $300 million annually, in 8 states; and
- Hundreds of local markets for home health and hospice nurse labor, employing at least 8,000 nurses, in 24 states.

The lawsuit also seeks civil penalties against Amedisys for falsely certifying compliance with its obligations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) by failing to produce millions of documents or disclosing the deletion of other documents. For each day that Amedisys was in violation of the HSR, DOJ is seeking a fine of up to $51,744 daily. Amedisys was originally set to be acquired by OptionCare, which does not directly compete in home health, but UHG won a bidding war.

As this Editor said at the time of the Change Healthcare acquisition win against DOJ in Federal court (and we know how that turned out long term), “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing.” FierceHealthcare

23andMe continues their long jump down to…who knows where? CEO Anne Wojcicki is minusing out 200+ employees or 40% of its remaining workforce, and fully shuttering its therapeutics development unit. The latter is running two clinical trials which will be wound down ‘as quickly as practical.’ These cuts will save $35 million annually but incur $12 million in one-time severance and termination-related costs. The much-touted therapeutics discovery unit was shut in late summer [TTA 14 August].

What’s left? Not much–the Lemonaid remote prescribing unit, with an entree into GLP-1 prescribing, some published studies, a new AI chatbot called “DaNA”, and a longevity service dubbed Total Health. During their Q2 FY2025 earnings call and release, revenue sank to $44 million versus prior year’s $50 million (-12%)–slightly from Q1’s $40 million–operating expenses reduced 17% to $84 million versus prior year’s $101 million, but the company remained firmly in the red with a GAAP loss of $59 million, 21% less than last year’s $75 million and reduced versus Q1’s $69 million loss. The board, as previously noted, now consists of three financial non-healthcare people, replacing the seven who resigned. Meanwhile, customers wonder about the security and use of their genetic and personal information [TTA 8 Nov]. Release, AP, Healthcare Dive

Another telemental health unicorn, Lyra Health, laid off 2% of staff in a restructuring. 77 people on non-clinical operational teams were released. Some may receive severance for 12 weeks with health benefits, according to one of the anonymous released. Noted in the FierceHealthcare article are reported changes at Lyra, including larger provider caseloads demanded and deletion of seven core values that put clients and clinicians first. Lyra’s last raise was a $235 million Series F in January 2022 for a total of over $910 million (Crunchbase). That high valuation of $5.6 billion has been tough to maintain in the current funding environment–and to not take a down round that affects valuation.

Health kiosk/primary care practice Forward goes backward, shuts immediately. Nearly on the first anniversary of a $100 million Series E raise from Khosla Ventures and four other investors to deploy self-serve kiosks (left) in major cities [TTA 17 Nov 23], tech-driven primary care practice Forward announced its sudden closure today, effective immediately. What remains on their website is a goodbye-and-good-luck note to patients canceling appointments and zeroing out its app. Patients can email clinicians for care support until 19 December. There is no information available on accessing records nor transferring to new providers, leaving patients in the lurch. 200 employees will lose their jobs immediately as well.

Forward had primary care practices in 14 markets such as New York, San Francisco, and others. Last year it claimed 100+ primary clinicians at 19 locations, with patients paying $150/monthly (no insurance accepted) for unlimited visits to Forward’s primary clinics. (Refunds, anyone?) The CarePods self-serve kiosks were designed to be self-contained units placed in malls, offices, and gyms. Inside, subscribing patients could access AI-powered health apps for disease detection, biometric body scans, blood testing in disease areas, including diabetes, hypertension, weight management, and mental health (depression and anxiety). They were scheduled last year to be deployed in the San Francisco Bay Area, New York, Chicago, and Philadelphia. Nice idea, but like the earlier HealthSpot Station of 2012-2016, they are equally defunct.

In its eight-year life, Forward had raised $325 million (Crunchbase), which also reported last year’s Series E as only $75 million. At the time of their Series D, Forward was valued at over $1 billion and had a roster of flashy investors such as music’s The Weeknd, Salesforce’s founder Marc Benioff, actor Matthew McConaughey, Eric Schmidt, and Softbank. What’s stunning? Reports indicated that it only generated under $100 million in total revenue since its founding. There has to be more to this, like lawsuits…. FierceHealthcare, Endpoints News

FTC drops the hammer on premerger notification requirements–what will be M&A and investment effects?

October 15, 2024 | by Donna Cusano

Premerger Notification just got a lot tougher. As the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division promised us back in June 2023, FTC has now finalized their changes on the Premerger Notification rules. Changes were pared back after public review and comments, notably by the American Hospital Association (AHA) but thousands of others. The Final Rule will take effect 90 days after publishing in the Federal Register.

Premerger Notification applies to mergers and acquisitions that fall under the 48-year-old Hart-Scott-Rodino Act (HSR). Companies larger than the threshold (previously $111.4 million) must submit information based on standard forms in advance of filing the merger or acquisition. Both agencies then have 30 days to determine whether or not the M&A is legal or not especially around antitrust and restricting competition. Either agency can request additional information from the companies, extending the process through a Second Request. The purpose is to deny M&A in advance that may violate primarily antitrust law–an approach that has had mixed results in the past decade or so.

This is the first time in just under 50 years that there have been other than minor changes to the Premerger Notification Form. The new rules considerably tighten requirements–and increase paperwork. The Final Rule changes from the FTC press release were clearly highlights and not a full list:

Additional transaction documents from the supervisor of each merging party’s deal team as well as a small set of high-level business plans related to competition.
A description of the business lines of each filer to reveal existing areas of competition between the merging firms (including for products or services that are in development) and supply relationships
Disclosure of investors in the buyer, including those with management rights. According to Healthcare Dive’s analysis, this will also include minority stakeholders and investors. FTC has recently focused on the rise of private equity investments across all M&A, which have increased to over 40% of transactions (2022), but less in healthcare varying by sector (e.g. 8% hospital, up to 11% of nursing homes).

The Healthcare Dive analysis, unlike the FTC release, confirmed that both acquirer and acquiree have to detail their prior acquisitions within a five-year window. FTC is going after “roll-ups,” the small, under-the-HSR-wire serial acquisitions that private equity groups and some companies utilize. Previously, only the acquirer had to disclose this information. Roll-ups have become popular in healthcare and health tech as startup companies with similar or complementary technologies attempt to grow and in some cases survive market evolutions.

The FTC’s Premerger Notification Office (PNO) will provide future compliance guidance in advance of the final rule’s effective date on the PNO’s website. The FTC estimates that the additional information required will increase the time required to complete the form to 105 hours from the current 37 hour average. In June, the proposed rule changes were estimated to require 144 hours.

The AHA’s objections centered around the extensive Federal disclosures hospitals already make in the course of business and transactions and the additional time taken administratively away from care.

Another online wrinkle to M&A: FTC’s new online portal for M&A commenters. FTC will collect comments on any and all proposed transactions submitted for premarket notification review. This will enable a long list of parties–consumers, workers, suppliers, rivals, business partners, advocacy organizations, professional and trade associations, local, state, and federal elected officials, academics, and others–itemized in the release to say their piece to the FTC about how the proposed M&A will affect competition. FTC can then point to the ‘public uproar’.

What will be the effect on M&A?

Possible end of year rush to complete any deals before the Final Rule takes effect
Rollups or complementary transactions will take place at earlier stages, under the HSR limits, but companies will limit them until they determine what is permissible and not if down the road they are acquired.
Longer term, it may overall further depress healthcare M&A from small to large, and investor exits–already barely recovering.
It may also affect large-scale funding for growth beyond Series A and B. Beyond that point, investors get larger, get on the FTC radar, and ultimately look to Other People’s Money to exit–if not an IPO, then to be acquired.

One wonders what creative solutions VCs, PEs, and Mr. Market will concoct.

US telehealth controlled substances prescribing waiver may expire at year’s end; DEA may further restrict

September 13, 2024 | by Donna Cusano

Current waivers end 31 December without DEA, Congressional action. The Drug Enforcement Administration (DEA) apparently through inaction, will allow the current virtual prescribing flexibilities impacting Schedule II and higher drugs to expire at the end of year. These waivers which removed the in-person examination requirement under the Ryan-Haight Act were instituted during the Covid pandemic and extended twice [TTA 11 Oct 23, 11 May 23] with a final expiration of 31 December 2024.

Reportedly, the DEA is not only wishing to reinstate the status quo ante, but also reportedly wants to institute additional restrictions. However, any draft rule that would reimpose or changes restrictions has not been put out for the public comment period, review, and final rule implementation which typically takes anywhere from 60 to 120 days, well past year’s end. Last year, when a draft rule was released for comment, nearly 40,000 comments were received.

At the time of the 2023 extension that kicked this particular can down the road into the end of a presidential election year, DEA had stated that they would use 2024 to finalize telemedicine prescribing rules, but no action has been taken. Since then, the Department of Justice has filed multiple charges of Medicare and Medicaid fraud and illegal distribution of controlled substances against seven Done Global employees [TTA 3 July and prior], with investigations pending on practices by provider Cerebral and pharmacy Truepill.

Under the aegis of the American Telemedicine Association (ATA), a coalition of 330+ organizations have again written as of Tuesday 10 September to the current administration and both houses of Congress to 1) extend the waivers for two years, as part of the end of the Federal fiscal year (starting 1 Oct) package, and 2) use the time for DEA to “to fulfill its congressional mandate to establish a special registration pathway that balances access to medically necessary care with appropriate enforcement.” The rationale centers on the lack of time, but strongly around the availability of psychiatrists throughout most of the US–there are none in half of US counties especially in rural areas. (The average MD psychiatrist is well over 50, nearing retirement, and not well reimbursed for his or her time–which is why med school grads in heavy debt don’t gravitate to the specialty.) What is not stated is that many if not most telepsychiatry providers do not have models that will support in-person evaluations as required without waivers.

There are no public actions or responses either by Congress or by the DEA as of today (13 September).

ATA press release, Biden Administration letter, House letter, Senate Leadership letter, Healthcare Dive

ATA Action, ATA’s trade organization and advocacy arm, has also formed a political action committee (PAC), ATA Action PAC. Its stated purpose is to support incumbent Federal candidates including Congressmembers who support their goals in virtual care policy. Candidates on the Federal or state levels will not receive support. Release

First half digital health investment — a true rebound or a ‘dead cat bounce’? A Gimlety look at Rock Health’s H1 report.

July 30, 2024 | by Donna Cusano

First, your Editor assures our Readers that no felines were harmed or poorly thought of. It’s just words expressing concepts!

In ever-dapper Mr. Market’s picturesque and blunt language of finance, a ‘dead cat bounce’ is a temporary improvement, a short-term recovery that does not reverse the reality of the long-term downward trend, which resumes shortly thereafter the pick-me-up. It’s applied to assets, stock prices, market sectors, and even political polling.

So…let’s debate the point. Is digital health investment in the US recovering, or taking a few lungfuls of air at the surface before sinking again?

Rock Health’s first half (H1) report. It is, like most of theirs, heavy on the optimistic ‘glass half full’ view. Its headline ‘Resilience Leads to Brilliance’ is certainly a catchy rhyme or meme, but in this Editor’s Gimlety View, an overstatement. It does look like the logjam in funding and M&A has broken, but where’s the brilliance?

Let’s take a cold look at the Rock Health findings for the first half (H1) of 2024. Rock Health only looks at US digital health fundings above $2 million and includes some companies those of us in the professional field do not consider ‘digital health’. FTR:

US digital health startups raised $5.7B across 266 deals. Average deal size: $21.4 million.
The action was in Series A and B raises, which were roughly comparable to prior years. Series C and D were anemic, with Series C especially lagging even anemic 2023.
40% of H1 2024’s fundraises (107 deals) were unlabeled; by quarter, Q1 47% and Q2 33%. This is only slightly down from the 44% for full year (FY) 2023.
The top ‘value propositions’ for fundraising companies were disease treatment (including food as medicine), non-clinical workflow, R&D, clinical workflow, on demand healthcare and precision medicine. The first two are no change from FY 2023. The biggest shifts up from FY2023? Clinical workflow, on-demand healthcare, and precision medicine. These categories are not defined by Rock Health.
The top ‘clinical indications’ are mental health, cardiovascular, oncology, weight management, reproductive/maternal health, and neurology. Again, the first three are basically little changed from FY 2023. The big upward shift was funding for reproductive health.
“AI momentum underpinned deals in categories next on the list, including nonclinical workflow ($896M), R&D for pharma and medical devices ($737M), and clinical workflow ($639M).”
Until Q2 2024, there had not been any into the public markets for 21 months. Starting in May and June, there were three: fetal monitoring Nuvo (public exit via SPAC (!!) in May) and two in June: revenue cycle management company Waystar and precision diagnostics Tempus AI.
There were only 66 acquisition deals made in H1, about half between digital health companies. Private equity acquired 10 companies and 12 in “other”.

In nearly every metric above, H1’s trends are comparable to 2023 extrapolated to a full year, as well as in line in numbers to pre-inflationary 2019–the investments in absolute terms are worth less.

But overall, it is as if the boom of 2020-2022 never happened except in the wreckage of overfunded/foolish funded companies. And 2023 was marked by four tech bank lender bankruptcies and many high profile bankruptcies such as Babylon Health, Quil Health, and Pear Therapeutics. 2024 should look better than 2023, by that logic.

But let’s factor in the following for 2024 H2:

The raises are there and they’re fairly steady–but with only a few exceptions, usually AI related, they are far less than in the past, again using 2019-2020 as a baseline.
At the same time, layoffs are also prevalent and substantial at all levels, indicative of retrenching. And there is little real hiring versus resume collection.
This is an election year like no other in the US, UK, and France, as well as political and terror turmoil worldwide.
Two active wars in Ukraine and Israel, possibly a third on the horizon with major impact (Taiwan)
Drying up of now unwanted Chinese capital that fed into Sand Road VCs
The very underdiscussed FTC/DOJ pre-merger notification and Merger Guidelines–and a hostile FTC

Socially and physically, there’s little respite, from the fool’s spectacle of the opening Olympic ceremony to increased volcanic activity worldwide seen from Yellowstone to Italy. Natural disasters add to nervousness.

As usual, there are two metrics missing from Rock Health’s analysis: companies in deep trouble or bankrupt. Capital destruction matters. Granted, Rock’s report is about digital health investment, but considering what and why it fails is part of the investment picture. What comes after all those rounds and exits?

Bankruptcies: Cue Health, Cano Health, Invitae, SmileDirectClub (late Dec 2023)
On the way: 23andme, NeueHealth (probably 2025), Amwell (which avoided delisting by a reverse stock split)

There is also the shutdown of Walmart Health’s telehealth / remote health unit, formerly MeMD, acquired by Fabric. There is also the Veradigm mystery–delisted and as of May, up for sale, despite having positive revenue. Added context: the failure of melding retail health with clinic operations–Walgreens’ VillageMD, CVS scaling back Oak Street, Amazon folding Clinic into One Medical.

AI is also proving to be ‘not all that’. Health systems are using them to automate procedures and some interfaces with patients. But the investment/payout equation is still tilted heavily to the former.

Conclusion: this Editor is leaning towards ‘dead cat bounce’ through this year unless something drastically changes, as in improves.

Agree? Disagree? Comment below!

Referenced: Rock Health FY 2023 report, Rock Health Q1 2024 ‘flat spin’ report, Mobihealthnews

What the DOJ and FTC Merger Guidelines mean for healthcare M&A–review of the Epstein Becker Green podcast

April 23, 2024 | by Donna Cusano

Are you in the (mostly) lucky group of companies seeking to buy or be bought? This podcast is a ‘must hear’ as likely you’ll be affected. Healthcare law firm Epstein Becker Green’s roundtable podcast in the ‘Diagnosing Health Care’ series is their half-hour condensed view on the new Federal Merger Guidelines that the Department of Justice (DOJ) and the Federal Trade Commission (FTC) finalized last 18 December. Their view on how it will affect healthcare organizations is not too different from your Editor’s lengthy review of the DOJ/FTC document published on 20 December. The DOJ/FTC end-of-year drop perhaps (ahem) was timed to bury the bad news, drowning it in a punch bowl of good cheer or in holiday busy-ness.

This Editor (note: not a lawyer nor do I play one on TV or YouTube) took the view that it was that it was a whole scuttle of coal for healthcare holiday stockings (right) and that it would discourage much of 2024’s healthcare M&A until companies figured what mergers would likely past muster, among other predictions. The EBG folks mostly agree. They also point out that the final Guidelines’ language is “more aggressive” than the draft that many healthcare organizations took issue with–what the article referred to as “substantially more restrictive language and interpretation”. There are some wins from the draft, but much of the language, especially on vertical mergers, simply moved into one or another of the 11 Guidelines.

The EBG team on the podcast (available for play on the web page and download) are Trish Wagner, John Steren, and Jeremy Morris, moderated by Dan Fahey. Below are some key points made by the team on the podcast. Your Editor recommends that you pull up our 20 December article as a reference to the specific Guideline references they make.

Background: Horizontal merger Guidelines were last updated in 2010. Vertical merger Guidelines were issued in 2020 but later rescinded. These new Guidelines apply to both horizontal and vertical mergers and acquisitions. US antitrust is based on three acts passed by Congress: The Sherman Antitrust Act (1890), the Clayton Act (1914), and the Federal Trade Commission Act of 1914, now in US Code Title 15. The Guidelines since then are based on them as well as case law. (From the wrapup) Courts tend to be very deferential to the Guidelines.
The wording of Guideline #8, When a Merger is Part of a Series of Multiple Acquisitions, the Agencies May Examine the Whole Series, is both interesting and aggressive in that it will be considered and opens up a pattern of acquisitions. This can be by private equity (PE) or other owners.
Guidelines #1, Mergers Raise a Presumption of Illegality When They Significantly Increase Concentration in a Highly Concentrated Market, and 2, Mergers Can Violate the Law When They Eliminate Substantial Competition Between Firms, impact hospital mergers. Prior merger guidelines focused on highly concentrated markets using a point system (HHI, the Herfindahl-Hirschman Index, is a common measure of market concentration). This measure sets a lower bar.
- To trigger #1, a market share above 30% and an HHI over 100 can trigger it even in unconcentrated markets.
- On #2, elimination of direct competition is maybe in and of itself harmful
Guideline #6, Mergers Can Violate the Law When They Entrench or Extend a Dominant Position: for horizontal mergers, ‘entrench’ is in practice the operative term, whereas ‘extend’ applies mainly to vertical mergers. Companies will have to demonstrate that the beneficial competitive effects outweigh the anticompetitive, especially when involving consumers. And they will have to demonstrate why the merger is necessary.
Wrapping up:
- Ms. Wagner: the Guidelines don’t have the force of law, but they do have impact because they are about the process on how mergers are evaluated. Courts have been very deferential to the Guidelines.
- Mr. Morris: hospital leaders will have to contemplate this “huge change in a moment” which he questioned. He emphasized that organizations involve their antitrust counsel now even earlier than previously.
- Mr. Steren: “healthcare has a bullseye on its back”. It is immediately more restrictive. It fits right in with what current enforcers do in trying to bring “persuasive authority” to bring new, novel, cases into court. He seconded Mr. Morris’ last remark.

This Editor, as the Canary in the Coal Mine, will assume that UnitedHealth Group and others have already anticipated that they will have difficulty now making new acquisitions, obtaining approvals for ones that haven’t been finalized, or making quick sales of units they no longer want (Walgreens). Hospitals will find that divestiture and regional mergers will be discouraged. Acquirers who’ve been concentrating on filling out their platforms with vertical acquisitions may find that these Guidelines are also written to trip them up–and once tripped, each Guideline knocks on another. (For other predicted consequences, see the 20 December article.)

News roundup: VillageMD sued on Meta Pixel trackers; Cerebral pays $7.1M FTC fine on data sharing, cancellation policy; VA may resume Oracle Cerner implementation during FY2025; Epic-Particle Health dispute on PHI sharing

April 16, 2024 | by Donna Cusano

It’s all about personal health data–sharing, bad sharing, and bad transfers in this roundup.

VillageMD takes another hit, this time on Meta Pixel ad tracker issues. A class-action lawsuit filed on 10 April charges VillageMD (formally Village Practice Management Company), via its Village Medical website, of using the Meta Pixel ad tracker for disclosing user-protected health information (PHI) and other identifiable information generally classified as PII. This included visitors to their website villagemedical.com seeking information and patient users of Village Medical’s web-based tools for scheduling and the patient portal. The lawsuit by a “John Doe”, a patient since January 2023 resident in Quincy, Massachusetts but brought by three Midwest law firms in the US District Court for the Northern District of Illinois, states that VillageMD used trackers that transferred this personal information to Meta Networks’ Facebook and Instagram, as well as other third parties like Google, for use in targeted advertising, in violation of HIPAA and other regulations. The lawsuit seeks 1) an injunction stopping Village Medical from using ad trackers and 2) monetary redress via damages–actual, compensatory, statutory, and punitive for the entire affected class. The suit also alleges that VillageMD violated its own internal procedures. Crain’s Health Pulse, Healthcare Dive

Readers will recall that in June 2022, STAT and The Markup published a study and follow-ups on Meta Pixel and ad tracker use by healthcare organizations. Ostensibly, the ad trackers were there to better track website performance and to tailor information for the patient [TTA 17 June, 21 June 2022], but they sent information to third parties that violated HIPAA and privacy guidelines. Ad trackers were also monetized. Meta blamed the health systems [TTA 16 May 2023] for misuse though they used the data for ad serving. Congressional hearings, FTC, and DOJ followed later in 2022 and 2023. Multiple class action lawsuits against providers large and small have ensued. Providers have pushed back on FTC and HHS rules on ad trackers, stating the restrictions hamper their ability to build better websites based on customer usage and to serve individuals with useful information.

Another ‘oversharing’ company, troubled telemental Cerebral, whacked with $7.1 million FTC fine on disclosing consumer information via ad trackers plus ‘negative option’ cancellation policy. The proposed order for a permanent injunction filed by the Department of Justice (DOJ) and docketed on 15 April has to be approved by the Federal District Court for the Southern District of Florida. The fine for the company only penalized the following:

Cerebral released 3.2 million consumers’ information to third parties such as practices, LinkedIn, and TikTok. This included PHI and PII such as names, medical histories, addresses, IP addresses, payment methods including insurance, sexual orientation, and more. Even more outrageously, they also used the mail for postcards that had sensitive information such as diagnosis printed on them. The insult on injury was that Cerebral failed to disclose or buried information on data sharing to consumers signing up for their ‘safe, secure, and discreet’ services. Cerebral now has to restrict nearly all information to third parties.
Cerebral also set up their service cancellation as a ‘negative option’ cancellation policy, which in reality meant that it was renewed indefinitely unless the customer took action to cancel. It was not adequately disclosed in violation of the federal Restore Online Shoppers’ Confidence Act (ROSCA). Then Cerebral made it extremely difficult to cancel by instituting a complex procedure that required multiple steps and often took several days to execute. They even eliminated a one-step cancel button at their then-CEO Kyle Robertson’s direction. The order requires this to be corrected including deleting the negative option.
Former employees were not blocked from accessing patient medical records from May to December 2021. It also failed to ensure that providers were only able to access their patients’ records.

Cerebral’s settlement with the FTC and DOJ breaks down to $5.1 million to provide partial refunds to consumers impacted by their deceptive cancellation practices. They also levied a civil penalty of $10 million, reduced to $2 million as Cerebral was unable to pay the full amount. The decision and fine do not cover charges to be decided by the court against the former Cerebral CEO Robertson due to his extensive personal involvement in these practices. Those have not been settled and apparently were severed from the company as a separate action (FTC case information). Since 2022, Mr. Robertson has consistently blamed company management and investors for pushing for bad practices such as prescribing restricted stimulant drugs. Cerebral countersued him for defaulting on a $49.8 million loan taken in January 2022 to buy 1.06 million shares of Cerebral common stock. More to come, as the order also does not address other Federal violations under investigation, such as those under the Controlled Substances Act. FTC release, FierceHealthcare

VA to possibly resume Oracle Cerner EHR implementation at VA sites before the end of FY 2025, even if not in budget. During House Veterans’ Affairs Committee hearings on FY 2025 and 2026 budgets, VA Secretary Denis McDonough last Thursday (11 April) said that the VA intends to resume deploying the Oracle Cerner EHR as part of VA’s Electronic Health Records Modernization (EHRM) before the end of FY 2025. As Federal years go from October to September, FY 2025 starts October 2024 and ends September 2025. When asked if VA plans to maintain the “program reset” as they termed it in April 2023 for all of FY25, Secy. McDonough said that “we do not.”However, there is no budget allocated for additional implementations in either FY. The plan is to use carryover funding.

Oracle Cerner’s Millenium EHR was implemented at five VA locations before suspending in April 2023 for a massive re-evaluation which involved reworking systems such as the Health Data Repository which created critical scheduling and pharmacy problems detailed by the Office of Inspector General (OIG) [TTA 28 Mar]. The joint VA and MHS/Genesis Lovell FHCC implementation, which went live in March, is not included. NextGov/FCW, Healthcare Dive

And in another dispute about data sharing, leading EHR Epic cut off requests made by some Particle Health customers, expressing concern about privacy risks. Particle Health is a health data exchange API platform for developers. Both Epic and Particle are part of Carequality, a large scale data exchange group that connects 600,000 care providers, 50,000 clinics, and 4,200 hospitals to facilitate the exchange of patient medical records On 21 March, Epic filed a dispute with Carequality that some of Particle’s users “might be inaccurately representing the purpose associated with their record retrievals.” and stopped responding to some Particle Health customer queries. This has now degenerated into a ‘who said what‘ dispute, with Particle and their CEO alleging that Epic implied that it completely disconnected Particle Health and its customers from Epic’s data, while Epic has said that after a review by its 15-member Care Everywhere Governing Council, they flagged three companies who were using Particle’s Carequality connection to access data not related to patient care or treatment. There’s also a larger concern being brought up by providers on the use of these mass data exchanges for fraudulent extraction of data or use that would violate HIPAA guidelines. FierceHealthcare, CNBC, Becker’s, Morningstar

FDA warns 30 telehealths on compounding GLP-1s, while Hims & Hers cuts deal with Novo Nordisk, buys Australia’s Eucalyptus for $1.1B

News roundup: Walgreens’ $350M opioid settlement, only 30% of healthcare AI pilots reach production, Medicare RPM usage up 10-fold despite benefit limitations

News roundup: 9 additional VA centers named for Oracle 2026 EHR rollout; ATA Action acquiring, expanding with DTA; Dr. Oz to lead CMS while HHS cuts; DOJ seeks death penalty for Mangione

This Just In: Walgreens settles PWNHealth/Everly Health arbitration award for $595 million, reduced from $1 billion

News roundup: DOJ investigating UHG on Medicare Advantage billing upcoding; Teladoc’s BetterHelp therapists using AI?–a short seller alleges; Hims whacked by FDA ending compounded GLP-1s (updated); some fired FDA staffers in CDRH reinstated

Walgreens’ misery level rises some more: Federal court affirms $987M award to PWNHealth/Everly Health. Plus selling $295M in Cencora shares, drawing down to 6%.

Updates: ATA on telehealth policy priorities, UHG investor group demands denied care report, DOJ sues Walgreens on illegal Rx dispensing, VA nominee supports Oracle EHR deployment, RFK Jr. HHS nomination hits Senate

Masimo update: SEC announces investigation of RTW Investments and role in proxy war voting

Breaking: Federal agents seize Steward Health’s CEO, international head’s mobile phones in widening US fraud investigations

Bad News Roundup updates: UHG/Optum defends Amedisys buy fast via a website, digging deeper into Forward’s fast demise, former Masimo CEO Kiani booted–and sued (updated)

Bad News roundup: DOJ drops the hammer on UHG-Amedisys, 23andMe lays off 40% and closes therapeutics, Lyra Health lays off 2% in restructuring, Forward primary care + kiosks shuts down abruptly

FTC drops the hammer on premerger notification requirements–what will be M&A and investment effects?

US telehealth controlled substances prescribing waiver may expire at year’s end; DEA may further restrict

First half digital health investment — a true rebound or a ‘dead cat bounce’? A Gimlety look at Rock Health’s H1 report.

What the DOJ and FTC Merger Guidelines mean for healthcare M&A–review of the Epstein Becker Green podcast

News roundup: VillageMD sued on Meta Pixel trackers; Cerebral pays $7.1M FTC fine on data sharing, cancellation policy; VA may resume Oracle Cerner implementation during FY2025; Epic-Particle Health dispute on PHI sharing

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Chutes & Ladders: Click Therapeutics raises $50M, lays off 27%; India’s IKS Health in talks to buy TruBridge for over $600M; TELCOR buys Sample for RCM expansion

VA’s Oracle EHR resumes go-lives at four Michigan systems–finally

Two weekend ‘must reads’: the New Yorker’s Sam Altman/OpenAI exposé–and comments; a further deep dive into Carbon Health’s implosion

Perspectives: Exploring the Telehealth Extension: Building Infrastructures for Better Access

Funding/deal roundup: WHOOP’s $575M Giant raise, Anthropic buys med AI startup for $400M, early stage fundings for Jimini, Insight Health; Noom buys compounder; Mount Sinai NY to embed OpenEvidence

NY Times’ highly questionable but glowing–and viral–portrait of AI-created GLP-1 e-prescriber and marketer Medvi