Insights

Digital health companies, investors, and other healthcare organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation. On a quarterly basis, we provide relevant legislative and regulatory updates on artificial intelligence (AI) and digital health policy developments. This update outlines major health policy developments that occurred at the end of 2024 through the first three months of 2025.

In its first healthcare proposed regulation, the Trump Administration, through the Centers for Medicare & Medicaid Services (CMS), displayed on March 10, 2025, a proposed rule titled, “2025 Marketplace Integrity and Affordability Proposed Rule” (the Proposed Rule), which proposes policy changes for the Health Insurance Marketplaces that impact health plans and insurers offering Affordable Care Act (ACA) coverage to consumers. Specifically, the Proposed Rule shortens the Annual Open Enrollment Period (OEP) for all individual market coverage; proposes standards related to income verification for Health Insurance Marketplaces (Marketplaces); modifies eligibility redetermination procedures; and eliminates eligibility for “Deferred Action for Childhood Arrivals” (DACA) recipients, among other provisions.  

On February 18, President Trump issued an Executive Order titled “Ensuring Accountability for All Agencies” that directs independent agencies (as well as Cabinet Departments and their sub-agencies) to route all “proposed and final significant regulatory” and budgetary actions through the White House and the Office of Management and Budget. If implemented to its full extent, this action will significantly strengthen the authority of the White House by weakening the political autonomy of these independent agencies. As an assertion of the President’s inherent powers under Article II of the U.S. Constitution, it also stands to weaken congressional influence over these independent agencies, both through the appropriations and confirmation processes.

Federal policy efforts to advance health data exchange and interoperability are continuing to change rapidly. The latest changes are the publication of two final rules by the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (ASTP/ONC) finalizing parts of the of the Health Data, Technology, and Interoperability (HTI-2) Proposed Rule. These rules adopt requirements regarding the Trusted Exchange Framework and Common Agreement (TEFCA) (HTI-2 Final Rule), and create a new Information Blocking exception under Protecting Care Access (HTI-3 Final Rule), on December 16thand 17th, respectively.

Digital health companies, investors, and other healthcare organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation. On a quarterly basis, we provide relevant legislative and regulatory updates on artificial intelligence (AI) and digital health policy developments.

On Monday, July 15, New Jersey Attorney General Matthew J. Platkin and the New Jersey Division of Consumer Affairs released proposed rules (the “Proposed Rules”) which require certain New Jersey healthcare providers (i.e., physician assistants, physicians, nurses, and midwives) who provide perinatal treatment and care to pregnant persons to undergo bias training. The training is designed to root out prejudices and stereotypes that may negatively impact the quality of care delivered by these providers to patients during pregnancy, labor, delivery, postpartum, and neonatal periods.  The Proposed Rules were promulgated in an effort “to address pronounced racial disparities in maternal and infant health outcomes in New Jersey.”

Digital health companies, investors, and other healthcare organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation. On a quarterly basis, we provide relevant legislative and regulatory updates on artificial intelligence (AI) and digital health policy developments.

On May 10, 2024, the Centers for Medicare & Medicaid Services (“CMS”) published a Final Rule that, for the first time, imposes national minimum nurse staffing requirements for nursing homes. Specifically, the standard adopted by CMS requires minimum staffing of 3.48 hours per resident day (“HPRD”), as discussed in more detail below. CMS estimates that the new requirements will cost facilities $43 billion over the next 10 years, which is more than the $40.6 billion cost that CMS estimated for Proposed Rule of 3.0 HPRD. Some industry sources estimate that less than 25% of nursing facilities across the country currently meet the full scope of staffing standards laid out in CMS’ Final Rule due to a myriad of factors including labor shortages and increasing wage pressures. Indeed, the impact and cost of these staffing requirements will vary significantly by state. For example, CMS reported that at least one state will need to increase certain staff by nearly 96% to meet the minimum standards, while other states already meet the requirements.

Digital health companies, investors, and other healthcare organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation.

Digital health companies, investors, and other healthcare organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation.

On January 17, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the Interoperability and Prior Authorization Final Rule (Final Rule), which establishes requirements applicable to certain impacted payers which are intended to improve the electronic exchange of health information and prior authorization processes. The application programming interface (API) requirements will take effect January 1, 2027, while the operational provisions will take effect January 1, 2026. CMS has issued a helpful slide deck summarizing the Final Rule.

On December 13, 2023, the U.S. Department of Health and Human Services' (HHS) Office of the National Coordinator for Health Information Technology (ONC) released the Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing (HTI-1) Final Rule. The effective date of the HTI-1 Final Rule is updated and is now March 11, 2024.

Digital health companies, investors, and other health care organizations should follow policy developments with a strategic lens towards their market opportunities for key potential growth and risk mitigation.

On November 1, 2023, the Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC) at the Department of Health and Human Services (HHS) issued the “21st Century Cures Act: Establishment of Disincentives for Health Care Providers That Have Committed Information Blocking” proposed rule (Proposed Rule). Comments are due by January 2, 2024.

On November 2, 2023, the Centers for Medicare & Medicaid Services (“CMS”) released the calendar year (“CY”) 2024 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Final Rule (“CY 2024 OPPS/ASC Final Rule”). The final rule with comment period finalizes payment rates and policy changes affecting Medicare services furnished in hospital outpatient and ambulatory surgical center (“ASC”) settings for CY 2024.

On October 30, President Joe Biden signed an Executive Order (“EO”) 14110 entitled, “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which establishes a policy framework to manage the risks of artificial intelligence (“AI”), to direct agency action to regulate the use of health AI systems and tools, and to guide AI innovation across all sectors, including in the health and human services sectors. OMB simultaneously released a draft memorandum that would specifically direct department and agency action by establishing new agency requirements in AI governance, innovation, and risk management and adopting specific minimum risk management practices for uses of AI. OMB is seeking public comment on the memorandum by December 5, 2023, which includes a list of questions requesting feedback on specific issues.

On April 11, 2023, the U.S. Department of Health and Human Services' (“HHS”) Office of the National Coordinator for Health Information Technology (“ONC”) released the Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing Proposed Rule (“HTI-1 Proposed Rule”) to implement key provisions in the 21st Century Cures Act (“Cures Act”) governing health information technology (“health IT”) certification and information blocking, and other issues, as set forth further below.

On December 29, President Joe Biden signed into law the Consolidated Appropriations Act, 2023 (P.L. 117-164) (the “Act”)—an approximately $1.7 trillion spending package, which consists of all 12 fiscal year (FY) 2023 appropriations bills and funds the federal government through September 30, 2023, provides additional assistance to Ukraine, and makes numerous health care policy changes.  

On January 4, in its most recent effort to expand federal support for addressing health-related social needs (HRSNs), the Centers for Medicare & Medicaid Services (CMS) issued guidance to clarify an existing option for states to address HRSNs through the use of “in lieu of” services and settings policies in Medicaid managed care. This option is designed to help states offer alternative benefits that take aim at a range of unmet HRSNs, such as housing instability and food insecurity, and to help enrollees maintain their coverage and improve health outcomes.