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CLIENT ALERT: Medicare Trust Fund to Run Out of Funding Beginning in 2026, Likely to See an Increase in Audits, Overpayment Demands and Extrapolations

Client Alert

Pursuant to a Medicare Trustee Report released on June 5, 2018, the Medicare trust fund will run out of funding beginning in 2026, which is three years earlier than previously expected.  Although the Trustee’s report requests that Congress and the President act with urgency to remedy this problem, in the short term, we expect to see an increase in government payer audits, overpayment demands, and extrapolations.

 

If implemented in full strength, these overpayment demands and extrapolations can result in payers recovering millions of dollars from providers, which may be returned to the trust fund.  In the alternative, payers and their contractors may allege overpayments so that providers agree to a settlement requesting the provider to accept pennies on the dollar for the true amount owed to the provider.

 

Either way, it is now more crucial than ever before that providers take action when government payers and their contractors seek to conduct pre- and post-payment audits and otherwise seek the refund of overpayments.

 

BMD’s Healthcare Department can meet with you to discuss your options if your practice is facing pre- and/or post-payment audits and denials.  If you are subjected to an overpayment, including an extrapolation, our experienced team can strategize your appeal and arguments for success in challenging the overpayment allegations.

 

If you have any questions concerning payer audits, appeals, overpayments, and extrapolations, or the administrative appeal process in general, please contact  Amanda L. Waesch, Esq. (alwaesch@bmdllc.com) or Bryan E. Meek, Esq. (bmeek@bmdllc.com), attorneys in Brennan, Manna & Diamond’s Provider Relations, Audits, Appeals, and Negotiations Unit, a division of BMD’s Healthcare Department.

 


Quiet Hours Texts and TCPA Claims: Consent Remains King as Courts Divide on Text Messages

Businesses face increasing TCPA lawsuits over off-hours marketing texts, but recent court decisions highlight strong defenses. Clear consumer consent and updated terms and conditions can defeat many claims, while a growing number of courts are finding that text messages are not “telephone calls” under the statute. Proactive compliance measures, including clickwrap agreements and forum-selection clauses, are critical to reducing risk.

New Ohio Reporting Requirements for Non-Residential Contractors

Ohio’s E-Verify Workforce Integrity Act, effective March 19, 2026, requires all nonresidential construction companies, subcontractors, and labor brokers to use E-Verify to confirm employee work eligibility on projects across the state. The law applies regardless of company size and carries financial penalties and potential restrictions on future state contracts for noncompliance. Some uncertainty remains around requirements for existing employees, making early compliance planning important.

DOT Non-Domiciled CDL Rule

A new rule from the Federal Motor Carrier Safety Administration (FMCSA) will significantly narrow eligibility for non-domiciled Commercial Driver’s Licenses (CDLs) beginning March 16, 2026. The rule limits eligibility to holders of H-2A, H-2B, and E-2 visas and eliminates Employment Authorization Documents (EADs) as qualifying proof of work authorization. As a result, many lawfully present and work-authorized immigrants, including refugees, asylees, DACA recipients, and Temporary Protected Status holders, will no longer be able to obtain or renew a non-domiciled CDL. The change is expected to affect roughly 194,000 drivers nationwide and has prompted multiple legal challenges, including a pending emergency stay request before the United States Court of Appeals for the District of Columbia Circuit.

FinCEN Residential Real Estate Reporting Rule Now in Effect

FinCEN’s new Residential Real Estate Reporting Rule, effective March 1, 2026, requires certain real estate transfers to be reported to combat financial crimes. Transfers of residential property to entities or trusts without financing may require a Real Estate Report.

Department of Education Proposes Redefinition of “Professional Degree,” Excluding Nursing and Limiting Graduate Loan Borrowing

The U.S. Department of Education has issued a Notice of Proposed Rulemaking that would redefine “professional degree” programs under the One Big Beautiful Bill Act. The proposal excludes nursing from the recognized list and would impose new borrowing limits for graduate students while eliminating the Grad PLUS program. Public comments are due by March 2, 2026.