TrustWorks On Call: Law and Order MFCU

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. CMS asks every state to audit Medicaid providers.

Last Tuesday, Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz sent letters to the governors of all 50 states calling for “a swift revalidation of Medicaid providers” within their state deemed to be at high risk of fraud.
The letters to governors were paired with instructions to all State Medicaid Directors that their Medicaid agencies must submit within 30 days “a comprehensive two-year provider revalidation (PR) strategy” that focuses on high-risk providers and those operating without a national provider identifier (NPI).
Earlier this year, CMS delivered notices to Florida, New York, California, Maine, and Minnesota requesting more information as to how the states were combatting Medicaid fraud; in Minnesota’s case, the federal government froze $260M in Medicaid funding as part of its probe.

TrustWorks Take: Medicaid fraud exists, but not on a scale to justify this urgency. Last year, Medicaid Fraud Control Units obtained about 850 fraud convictions and about $1.3B in criminal fraud recoveries (half of which came from a single $650M case in Virginia). Although 2025 represented a slight uptick, Medicaid fraud convictions are far less common now than they were from 2015 to 2019. The administration has put a target on providers without NPIs because personal care service attendants, who help Medicaid enrollees with daily living and often lack NPIs, are by far the category of provider involved in the most criminal convictions; however, this has been a consistent problem for years that amounts to a fraction of a percent of Medicaid’s $900B annual budget.

Instead, this administration likes to use a “patina of fraud” to justify deep cuts to social spending. Should Congress pursue further Medicaid cuts this summer, its members can point to ongoing CMS investigations of fraud as a rationale. Unnecessary audits also functionally serve as cuts themselves. Much like with work requirements, states must devote precious resources to the implementation of these provider re-verification programs, leaving less money and fewer labor hours for benefit administration. Additional paperwork increases the administrative costs of compliance, and it is not clear that the potential benefits of further reducing already low rates of Medicaid fraud will generate much return on investment.

2. Amazon One Medical launches GLP-1 program.

Amazon announced last week the launch of its GLP-1 weight management program that combines One Medical’s primary care capabilities and Amazon’s pharmacy delivery services.
Any US adult, not just Amazon One Medical members, can receive Novo Nordisk’s Wegovy pill or Eli Lilly’s Foundayo pill for $149 per month outside insurance, or as little as $25 per month through insurance; injectable formulations of GLP-1s are also available at higher prices.

TrustWorks Take: Any American interested in obtaining a GLP-1 prescription for weight loss via telehealth can now choose between Amazon, Walmart, Weight Watchers, Hims & Hers, Ro, GoodRx, Teladoc, Eli Lilly’s LillyDirect, Novo Nordisk’s NovoCare, and a dozen or more companies with less name recognition. When GLP-1s were in shortage, platforms like Hims & Hers and Ro distinguished themselves by offering compounded GLP-1s at significant discounts, but these unregulated copycat drugs have largely been phased out after the Food and Drug Administration (FDA) declared the shortage over in late 2024 and gradually ramped up enforcement.

Now, these platforms all offer essentially the same brand-name product for about the same cash-pay price (the cheapest branded pills are $149 per month no matter where you go). Instead of competing on product or price, the winners of the GLP-1 gold rush will be the companies with the best customer experience as measured by degree of convenience, integration with insurance, and wraparound support services. Amazon has earned its reputation for offering an unbeatable customer experience, but it is still trying to stake that claim successfully in healthcare (e.g. Amazon Pharmacy’s market share is estimated at around two percent). Compared to past ventures, this one seems to be more in Amazon’s wheelhouse.

3. DOJ deschedules medical marijuana.

The Department of Justice announced last Thursday that state-licensed medical marijuana and FDA-approved marijuana-derived products have been reclassified from Schedule I drugs, which have high potential for abuse and no established medical use (e.g. heroin), to Schedule III drugs, which are lower risk and have some accepted medical uses (e.g. Tylenol with Codeine).
The order, signed by Acting Attorney General Todd Blanche, allows medical marijuana producers and distributors to register with the Drug Enforcement Agency (DEA), lessens restrictions on cannabis research, and offers a tax break for marijuana companies by allowing them to deduct business expenses on their federal taxes.
Recreational marijuana remains a Schedule I drug, but Blanche said the DEA will hold a hearing in late June to consider further changes to marijuana’s regulatory classification.

TrustWorks Take: 40 states have sanctioned medical marijuana systems, 24 have authorized recreational use, and only two states, Idaho and Kansas, ban all forms of marijuana outright. The federal government's official policy to look the other way from state marijuana laws has allowed a patchwork system to flourish with significant regulatory shortcomings. Under Schedule I, researchers faced strict limits on studying cannabis, pharmaceutical companies had no incentive to develop products around it, and while doctors in some states would write prescriptions for it, no pharmacies could dispense it and no could insurers cover it.

The “medical” marijuana system was always more of a regulatory workaround than a meaningful part of our healthcare system, but reclassifying the drug could start to change that. There are two most-likely futures for marijuana: either it lands as a Schedule III drug, like Tylenol with Codeine or ketamine, for which medical use is promoted and recreational use is tolerated; or it is liberalized to something like the level of alcohol, an accepted and popular vice that the state regulates and taxes heavily.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

The Mixed Effects of AI on Revenue and Employment
An NBER working paper published earlier this year uses the framework of “AI exposure” versus “AI adaptivity” to show the different ways AI could impact healthcare productivity and employment. A job that is “exposed” to AI is one where many of its tasks can be performed by AI. A job that is “adaptive” to AI is one where the skills required will be in more demand as AI proliferates. This produces a two-by-two grid.

The jobs most likely to get automated and eliminated are the “high exposure, low adaptivity” roles, like medical scribes and administrative assistants. “High exposure, high adaptivity” jobs, which includes most clinicians, could be greatly transformed by AI, but for every job or task that is automated away, another one should be created that is a better use of their time. “Low exposure, high adaptivity” jobs, such as lower-license nursing roles, are less likely to be transformed by AI, but could see a productivity boost by automating away certain routine tasks. Finally, “low exposure, low adaptivity” jobs should see little impact from AI, for better or for worse. These jobs tend to involve manual labor and do not need much training. The throughline is that AI’s productivity impact comes from increasing revenue and decreasing labor costs, but not all jobs will do both. Different jobs will be cut to save money, transformed to make more money, or almost entirely unaffected. Provider organizations looking to make the most of AI should be sensitive to which is which.

Dialing In

Sharing insights from our work with clients

Infusion Alone No Longer Enough
Infusion-based business models, the bread and butter of many rheumatology and oncology practices, have historically enjoyed a rare alignment of clinical necessity and financial viability. Unfortunately, their economic engine, which is delivering high-acuity care in a controlled setting with predictable reimbursement and margin, now feels under threat. Drug acquisition has become more complex, reimbursement is less predictable, and site-neutral payment reform could upend their facility-based economics. At the same time, biosimilar adoption is accelerating, eroding drug spread that historically underpinned infusion margins.

Practices that cannot maintain competitive infusion economics will face hard choices. Do you refer out, partner, or exit? Once infusion leaves the practice, it rarely returns. With it goes not just revenue, but patient stickiness and clinical control. Some groups are already adapting by expanding into non-core infusion therapies, renegotiating payer contracts, investing in operational efficiency and drug management, or exploring MSO and joint-venture structures to regain scale. Others are doubling down on care model redesign, such as integrating infusion more tightly into longitudinal disease management rather than treating it as a standalone service. The remaining few are the practices at highest risk, who instead of confronting these market shifts are relying on their legacy economics despite all contrary indications.

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Law and Order: MFCU