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Virginia Bell Flynn

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Virginia is a partner in the firm’s Consumer Financial Services practice and specifically within the Financial Services Litigation practice. She represents clients in federal and state court, both at the trial and appellate level in the areas of complex litigation and business disputes, health care litigation, including ERISA and out-of-network issues, and consumer litigation in over 21 states nationwide. As a result of new legal developments, she increasingly counsels clients to ensure they comply with the myriad of growing laws in the consumer law with a particular emphasis on the intersection of TCPA and HIPAA.

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In our January 14 blog, we explained that Chief Judge Lance Walker of the U.S. District Court for the District of Maine had entered a nationwide preliminary injunction in American Hospital Association v. Kennedy, blocking the Health Resources and Services Administration’s (HRSA) 340B Rebate Model Pilot Program under the Administrative Procedure Act (APA). We also noted that both the district court and the First Circuit denied the government’s requests for a stay, and that the U.S. Department of Justice (DOJ) told the First Circuit the parties planned to dismiss the appeal and consider sending the approvals back to HRSA.

In an unpublished memorandum decision, the Ninth Circuit in R.R. v. California Physicians’ Service d/b/a Blue Shield of California, affirmed the insurer and administrator’s denial of benefits for a dependent’s residential mental health treatment under an ERISA‑governed plan. The court applied abuse‑of‑discretion review and concluded that the denial was supported by the plan’s medical‑necessity criteria and the administrative record. The dissent, however, argued that the majority failed to meaningfully account for a structural conflict of interest and for the administrator’s handling of treating‑provider evidence and prior failed lower levels of care.

On January 26, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year 2027 Advance Notice of Methodological Changes for Medicare Advantage (MA) capitation rates and Medicare Part D payment policies. CMS projects a net average year‑over‑year MA payment change of just 0.09% — roughly a flat environment once medical trend, utilization, and other pressures are considered. CMS frames the proposal as improving “payment accuracy and sustainability,” with a focus on aligning payments more closely with actual beneficiary risk and care rather than documentation intensity.

On January 7, the U.S. Court of Appeals for the First Circuit denied the federal government’s request for a stay of the nationwide preliminary injunction barring implementation of the Health Resources and Services Administration’s (HRSA) 340B Rebate Model Pilot Program. Five days later, on January 12, the Department of Justice advised the court that the parties are discussing returning the challenged approvals to HRSA for reconsideration and that they “plan to dismiss the appeal in short order,” signaling that the current version of the pilot is unlikely to move forward on appeal.

On January 12, the U.S. Supreme Court denied the petition for writ of certiorari in Guardian Flight, leaving in place the Fifth Circuit’s June 2025 decision that we covered in our prior post (available here). As a result, within the Fifth Circuit, providers cannot rely on the No Surprises Act (NSA) itself to enforce Independent Dispute Resolution (IDR) awards in court and face a heightened standing bar for ERISA-based claims where patients are insulated from financial harm. And the persuasive effect of the Fifth Circuit’s holding is bolstered nationwide.

On December 29, 2025, Chief Judge Lance Walker of the U.S. District Court for the District of Maine granted the plaintiffs’ motion for a preliminary injunction in American Hospital Association v. Kennedy. The court enjoined implementation of HRSA’s 340B Rebate Model Pilot Program “pending further order,” blocking the program from going into effect on January 1, 2026 (and April 1, 2026 for one manufacturer).

On January 6, the Federal Communication Commission’s (FCC) Consumer and Governmental Affairs Bureau issued an order further extending the effective date of the Telephone Consumer Protection Act (TCPA) “revoke-all” requirement in 47 C.F.R. § 64.1200(a)(10) to January 31, 2027. That provision would require callers to treat a revocation of consent made in response to one type of informational call or text message as applying to all future calls and text messages from that caller on unrelated matters. The Bureau found good cause to continue the waiver while the FCC reviews comments filed in response to its 2025 Further Notice of Proposed Rulemaking, which specifically asks whether the revoke-all rule should be modified or replaced to give consumers more tailored control over unwanted calls. The FCC also noted that requiring companies to implement costly, enterprise-wide changes now could result in unnecessary compliance expenditures if the rule is later revised.

Colorado House Bill 25-1002, effective January 1, 2026, amends Colorado Revised Statutes § 10-16-104(5.5) to require health benefit plans to use nationally recognized, not-for-profit clinical criteria when making coverage and utilization review determinations for behavioral health, mental health, and substance use disorder treatment. The statute establishes a uniform approach to coverage and utilization review and tightens state-level expectations for compliance with the federal Mental Health Parity and Addiction Equity Act (MHPAEA).

A coalition of hospital associations and individual safety‑net providers recently filed suit in the U.S. District Court for the District of Maine challenging the Health Resources and Services Administration’s (HRSA) newly announced 340B Rebate Model Pilot Program, alleging violations of the Administrative Procedure Act (APA). As framed in the complaint, the program would replace the 30‑year‑old practice of offering 340B discounts at the point of sale with a post‑dispense rebate for a set of high‑volume drugs, compelling covered entities to pay wholesale acquisition cost (WAC) upfront and then pursue reimbursement from manufacturers. The plaintiffs contend the shift will impose hundreds of millions of dollars in administrative and cash‑flow costs on safety‑net hospitals, jeopardize care in rural and underserved communities, and reflect a sudden, unexplained reversal of HRSA’s longstanding position that upfront discounts are the most effective and efficient way to administer the program.

Private equity’s footprint in health care has expanded rapidly over the past decade, and in response states have begun to retool long‑standing doctrines and create new guardrails that target ownership, control, and transparency. The result is an emerging patchwork of laws and review processes that remake the corporate practice of medicine landscape, constrain common “friendly PC” structures, and require far more visibility into transactions involving private equity, hedge funds, real estate investment trusts (REITs), and management services organizations (MSOs).