EnforceMintz — Don’t Forget Your Other Regulators: Consumer Protection Enforcement in Health Care Markets

When considering the health care enforcement landscape in 2024 and where it might be headed in 2025, we would be remiss if we did not address the enforcement activities of state and federal agencies beyond those typically viewed as mainstays in this space, such as the Department of Justice (DOJ) or the Office of Inspector General for the Department of Health and Human Services (OIG). Many other federal and state agencies consider health care enforcement a priority, including the Federal Trade Commission (FTC).

Of course, the FTC has a long history of antitrust and consumer protection enforcement actions in the health care space. Section 5 of the FTC Act prohibits antitrust violations of Sections 1 and 2 of the Sherman Act as well as unfair methods of competition (UMC) and unfair or deceptive acts or practices (UDAP), and each of these theories has been used to challenge conduct in health care markets. But over the last year, we have seen the FTC wield its investigative and enforcement powers in new and noteworthy ways when dealing with the health care industry. We have also seen similar activity by consumer protection branches in the offices of many state attorneys general, including through collaborative efforts with the FTC in consumer protection investigations.

Given the impending change in presidential administration, the forthcoming designation of a Republican FTC Chair , and the appointment of a third Republican FTC Commissioner to be confirmed by the Senate, it is hard to predict whether and how the FTC’s enforcement priorities may shift in 2025, especially anticipating the varied approaches of certain current and nominated Commissioners. We do, however, anticipate that some baseline priorities will remain the same, including rigorous enforcement of consumer protection laws. We also expect the agency (and its state partners) will wield their enforcement tools in new ways in 2025.

The FTC Continues to Focus on Enforcement Against Anticompetitive Behavior and Unfair Methods of Competition in Health Care

The FTC, through its Bureaus of Competition and Consumer Protection, engaged in a wide range of health care–related enforcement activities in 2024. Generally speaking, the FTC’s Bureau of Competition reviews and challenges mergers and acquisitions and investigates and initiates enforcement actions against anticompetitive conduct under the antitrust laws. It also conducts market-wide studies and issues reports on the topics covered by those studies.

A prime example of the FTC’s health care–related efforts in 2024 is the administrative complaint filed by the Health Care Division of the Bureau of Competition against several pharmacy benefit managers (PBMs) and their affiliated group purchasing organizations (GPOs). Notably, the FTC’s complaint alleged that, through their rebating practices for insulin drugs, the PBMs and GPOs engaged in “unfair methods of competition” under Section 5 of the FTC Act instead of alleging a more traditional antitrust violation. The FTC likely took this approach because previous FTC leadership believed that the agency underutilized UMC actions and that this approach was inconsistent with the FTC’s congressional mandate and mission. The suit is proceeding in the FTC’s in-house administrative court, where litigation can take years to resolve. Regardless of the outcome of the PBM litigation, the decision to pursue this case based on a UMC theory rather than a more traditional antitrust theory may signal a new approach to FTC enforcement against health care companies, particularly in the face of intense government and public scrutiny of health care costs and related factors.

In 2024, the FTC also pursued a hybrid antitrust-UMC theory in a lawsuit against a Texas anesthesia services provider and its private equity owner. The FTC alleged that the parties engaged in an anticompetitive scheme to consolidate anesthesiology practices, drive up the price of anesthesia services, and boost profits, and that these antitrust violations amounted to unfair methods of competition as well. This case also demonstrates that the FTC, like other federal agencies, is interested in the role of private equity in health care.

In addition to these UMC cases, the FTC also continued to maintain its traditional antitrust enforcement agenda in 2024. For example, the FTC challenged the sale of two North Carolina hospitals and appealed a federal judge’s denial of a preliminary injunction to halt the deal. The FTC alleged that the transaction violated Section 7 of the Clayton Act and would “threaten to substantially lessen competition for critical healthcare services” in the market at issue. The parties to the transaction later abandoned the deal when the Fourth Circuit enjoined the acquisition pending appeal.

The FTC Likewise Continues to Focus on Consumer Protection–Related Enforcement Alone and in Collaboration with State Agencies

In addition to enforcing the nation’s antitrust laws, the FTC also investigates alleged consumer protection violations, which typically are framed as unfair or deceptive acts or practices, in health care–related markets, including pharmaceuticals, pharmacies, PBMs, medical devices, hospitals, and other health care sectors. In recent years, the agency has used this authority to take action against health care entities (and others) involved in alleged consumer protection violations while using an increasingly wider array of enforcement tools to do so.

As many are aware, the Supreme Court’s 2021 decision in AMG Capital Management, LLC v. FTC eliminated the agency’s ability to seek equitable monetary relief in federal court, which historically had been one of the agency’s main enforcement tools and deterrents. After AMG, the agency has relied on other methods to punish bad actors and deter future misconduct. For example, post-AMG the agency has increasingly relied on injunctive relief in federal court to prohibit unfair and deceptive health care practices. The FTC has also found a variety of alternative ways to secure monetary relief from defendants accused of engaging in UDAP, including by undertaking administrative litigation, bringing cases with other federal agencies, dusting off previously underused tools such as the penalty offense authority,¹ and launching consumer protection rulemakings.

Before AMG, the FTC regularly collaborated with its consumer protection enforcement counterparts in state offices of attorneys general. This collaboration has only increased after AMG. For example, the FTC now often relies on state attorneys general to secure monetary relief, given that state authorities are not bound by AMG’s holding. According to the Director of the FTC’s Bureau of Consumer Protection, Samuel Levine, the FTC is also expanding its collaboration efforts with partners at the city and county level. We saw many of these tools and strategies in action against health care companies in 2024.

For example, in February 2024, the FTC secured a permanent injunction and an award of over $195 million in monetary relief under the Telemarketing Sales Rule (which continues to allow equitable relief) against Simple Health Plans LLC. The FTC had alleged that Simple Health made a series of material misrepresentations that were likely to influence consumers’ decisions to purchase sham health plans that were not compliant with the Affordable Care Act and did not deliver the coverage or benefits they promised.

In March 2024, the FTC secured monetary and injunctive relief in federal court after collaborating with the State of Georgia to bring a case under the FTC Act and the Georgia Fair Business Practice Act, alleging that several corporate and individual defendants created and published false and misleading advertisements about the efficacy and approval of stem cell therapy injection treatments for a host of medical conditions. In November, the FTC and the State of New York collaborated to secure an injunction barring several false and misleading statements regarding the performance of Prevagen, a dietary supplement claimed to improve memory and reduce problems associated with aging.

Because state attorneys general are not restricted by AMG in obtaining equitable monetary relief, they will continue to be an important tool for the FTC unless and until the FTC’s authority to seek such relief is restored. BCP Director Levine has said that the FTC “love[s] working with state partners,” and we expect that it will continue to do so for the foreseeable future.

State Attorneys General Continue to Engage in Health Care–Focused Consumer Protection Activities

In 2024 a number of state attorneys general actively used their independent consumer protection authority to bring cases under their own state analogs to the FTC Act. For example, in March 2024, the Washington Attorney General’s Office prevailed at trial against one of several medical debt collection agencies that, along with the health system that sent bills to them for collection, were accused of violating state laws requiring that patients be provided certain information about their debt and disclosures about financial assistance. The office heralded this case as “the largest charity care lawsuit in American history,” which delivered “economic justice for Washingtonians in the form of corporate reforms and more than $160 million in direct payments, debt forgiveness, and civil penalties.”

In August 2024, the state of Texas entered into a settlement with a health care company offering generative artificial intelligence technology that was supposed to summarize patient condition and treatment information for hospital staff. The settlement resolved allegations that the company made false and misleading statements about the accuracy and safety of its products based on a claimed “severe hallucination rate” that the Texas attorney general found was not supported by data.

That same month, the New York Attorney General’s Office secured a $1.5 million settlement against a digital marketing company accused of operating a network of websites that misled consumers seeking mental health services, substance abuse treatment, and senior living facilities. There have also been enforcement actions in several states where health care providers settled allegations that they made false and misleading statements in advertisements to patients about their potential financial responsibility for services rendered, in violation of those states’ consumer protection statutes.

Conclusion

In the health care space, FTC and state attorney general enforcement in antitrust and consumer protection matters are not new. And, like years before it, 2024 showed that health care enforcement is not just the province of DOJ and the OIG. The FTC and state attorneys general pursued various theories of liability against a diverse array of entities offering health care (or health care–related) services and employed numerous different enforcement tools and partnerships.

Looking ahead to 2025, it is unclear whether a Republican-led FTC will maintain the same priorities as under Commissioner Khan’s leadership in 2024. But at a minimum, the health care industry should expect continued vigorous enforcement of consumer protection laws at both the state and federal levels, as these types of enforcement matters tend to remain constant across presidential administrations. For that reason, health care companies and providers should include on their health care compliance checklist a review of their business activities for the potential implication of state and federal consumer protection laws.

  Return to EnforceMintz — Health Care Enforcement Trends and 2025 Outlook

ENDNOTES

[1] The FTC is able to obtain monetary relief and deter deceptive conduct by sending notices to potential offenders of certain types of conduct that the FTC has already determined to be a violation of the FTC Act in an administrative order. This practice is referred to as the FTC’s “penalty offense” authority, whereby the FTC can seek civil penalties if it proves that the company knew the conduct was unfair or deceptive and the FTC had already issued a written decision relevant to that conduct. 15 U.S.C. § 45(m)(1)(B). Some notices of penalty offenses affecting health care include misuse of information collected in confidential contexts, substantiation, endorsements and testimonials, and weight loss.

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