The Regulator

A Los Angeles court permanently shut down the last operators of a fake health insurance scheme that took in payments from more than 14,000 Californians while keeping most of the money for itself. The Los Angeles Superior Court approved a settlement July 9, 2026 resolving California Attorney General Rob Bonta’s case against Shelley Steele, Timothy “Tim” Moses, Chase Moses, and First Call Telemedicine, LLC, the remaining defendants in a scheme that sold Trinity HealthShare memberships as a legitimate nonprofit health cost-sharing ministry while retaining approximately 84 percent of consumer contributions rather than paying medical claims. After Trinity’s parent company, the Aliera Companies, collapsed, Steele kept selling unauthorized health plans through First Call. The four defendants must pay more than 5.1 million dollars in civil penalties, with portions suspended pending proof of financial compliance. Steele, Tim Moses, and First Call are permanently barred from doing business in California, and Chase Moses faces a 10-year business restriction plus a permanent ban from operating any health cost-sharing ministry in the state. Confidence: High. Source: Attorney General Bonta Secures Settlement with Remaining Defendants in Sham Health Coverage Case, California Department of Justice.

A Jersey City medical office manager admitted this week to taking cash kickbacks to funnel patients into a 20.6 million dollar Medicare and Medicaid prescription fraud scheme. Janet Tadros, 59, of Union City, New Jersey, pleaded guilty July 7, 2026 to conspiring to commit health care fraud and to violate the Anti-Kickback Statute, admitting she took roughly 3,000 dollars a week in cash from pharmacy owner Sherif Elmasri between December 2023 and November 2025 in exchange for sending his pharmacies prescriptions for patients who were never evaluated and never authorized the medications. Tadros is the fifth of six defendants to plead guilty in the case. Pharmacy owner Elmasri and emergency medicine doctor Boris Veysman, who at times issued prescriptions without examining patients, both pleaded guilty in June 2025, and prosecutors say the scheme caused a total loss of approximately 20,684,264 dollars to Medicare and Medicaid. Confidence: High. Source: Six Individuals, Including a Pharmacist and Doctor, Charged in Connection with $20 Million Healthcare Fraud and Kickback Scheme, U.S. Attorney’s Office for the District of New Jersey.

The 26 states suing CMS over its Medicaid work-requirement rule have asked a federal judge to rule by July 31 on whether to block it before it takes effect. In Commonwealth of Massachusetts et al. v. Oz et al., filed in the U.S. District Court for the District of Massachusetts (docket 1:26-cv-12962, Judge Richard G. Stearns), 25 states and the District of Columbia argue that CMS’s interim final rule defines “medically frail,” the exemption from the new 80-hour-a-month work requirement, so narrowly that beneficiaries must prove not just a qualifying condition but that it makes them too sick to work. The states’ motion for preliminary injunction asks the court to block enforcement of that provision and push back the January 1, 2027 implementation date while the case proceeds. Pennsylvania alone estimates 310,000 of its residents could lose Medicaid and become uninsured under the rule as written. Confidence: High on the filing and the July 31 ruling request; Medium on the ultimate outcome, since no hearing date has been set. Sources: Commonwealth of Massachusetts et al. v. Oz et al., complaint via Massachusetts Attorney General’s Office, Medicaid Work Reporting Requirements: States Ask a Federal Court to Protect Medically Frail Individuals from CMS Overreach, Georgetown University Center for Children and Families.

More than 450,000 New Yorkers lost their Essential Plan health coverage on July 1, and they have until August 30 to find a new plan without a coverage gap. The cutoff hit enrollees in the “200-250” income tier, households between 200 and 250 percent of the federal poverty level, after the One Big Beautiful Bill Act eliminated premium tax credit eligibility for most lawfully present immigrants, the funding base that had let New York offer that expanded, no-premium Essential Plan tier. Affected New Yorkers can enroll in a Qualified Health Plan through NY State of Health through August 30, 2026 and request retroactive coverage back to July 1 to avoid a gap, though Qualified Health Plans carry premiums and higher cost-sharing that the Essential Plan did not. Confidence: High. Source: Essential Plan Information, NY State of Health.

CMS proposed raising what Medicare pays hospital outpatient departments and ambulatory surgical centers by 2.4 percent for 2027, an estimated 9.5 billion dollar increase, with comments due August 31. The Calendar Year 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center proposed rule, published July 2, 2026, would raise total OPPS payments to roughly 110.9 billion dollars and ASC payments to roughly 9.9 billion dollars, an increase built on a 3.2 percent hospital market basket update reduced by a 0.8 percentage point productivity adjustment. Confidence: High. Source: Calendar Year 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule, CMS.

The DEA’s hearing on whether to reschedule marijuana nationwide is entering its final stretch, with no deadline in sight for an actual ruling. Chief Administrative Law Judge Derek C. Julius has heard testimony since June 29, 2026 at DEA headquarters in Arlington, Virginia on whether to move marijuana from Schedule I to Schedule III of the Controlled Substances Act. All seven parties selected to testify oppose rescheduling, including the Tennessee Bureau of Investigation this week and pharmacist and state witnesses from Nebraska, Idaho, Indiana, and Louisiana through July 14. The hearing is expected to conclude no later than July 15, 2026, but Judge Julius faces no deadline to rule afterward, and the proceeding only addresses the broader Schedule I to Schedule III move; an April 23, 2026 order already shifted FDA-approved marijuana products and state-licensed medical marijuana to Schedule III. Confidence: High on the hearing schedule; Low on timing of any ruling. Source: DEA Hearing on Proposed Marijuana Rescheduling Begins June 29, Drug Enforcement Administration.