The Regulator

2 p.m.: that is when a federal judge in Boston is scheduled to hear arguments today on whether the Trump administration illegally narrowed who counts as too medically frail to have to prove they are working to keep Medicaid. Judge Richard G. Stearns of the U.S. District Court for the District of Massachusetts is set to hold a hearing this afternoon on a motion for preliminary injunction in Commonwealth of Massachusetts et al. v. Oz et al., filed June 29, 2026 by 25 states and the District of Columbia against the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The states argue a June 3, 2026 interim final rule unlawfully adds a “significant impairment” standard to the medically frail exemption Congress wrote into this year’s Medicaid work-requirements law and excludes people in stable substance-use-disorder recovery of five years or more; the underlying work requirements take effect January 1, 2027, so however today’s hearing and the case that follows resolve, states are already building compliance systems around the outcome. Confidence: High on the hearing’s schedule and the case posture, since the court docket and multiple independent trackers confirm them directly; no rating on an outcome, since none has been issued as of this issue’s publication. Sources: Commonwealth of Massachusetts et al. v. Mehmet Oz, M.D. et al., complaint, Office of the New York Attorney General, Medicaid Work Reporting Requirements: States Ask a Federal Court to Protect Medically Frail Individuals from CMS Overreach, Georgetown University Center for Children and Families.

2.2 million dollars: that is how much four Minneapolis-area men admitted stealing from a Minnesota Medicaid program for people with disabilities, using fake records they generated with artificial intelligence to cover their tracks. Moktar Hassan Aden, Mustafa Dayib Ali, Khalid Ahmed Dayib and Abdifitah Mohamud Mohamed each pleaded guilty to one count of wire fraud in federal court in Minnesota, admitting they used their company, Brilliant Minds Services LLC, to enroll roughly 350 people with disabilities in Medicaid’s Housing Stabilization Services program from April 2022 through April 2025 and bill for services they never provided; when investigators sought documentation, prosecutors say the men used artificial intelligence chatbots to fabricate the records. The pleas were entered in separate hearings this month, the U.S. Attorney’s Office for the District of Minnesota and the HHS Office of Inspector General’s Health Care Fraud Strike Force announced, and each defendant faces up to 20 years in prison at sentencing. Confidence: dropped, since the Department of Justice’s own press release returned an access block for this issue and this account rests on KTTC and Washington Times reporting that quotes the department’s announcement directly. Sources: Four men plead guilty in $2.2M Minnesota Medicaid housing fraud scheme, KTTC, Four Minnesota men plead guilty in $2.2 million Medicaid fraud scheme, The Washington Times.

812,881 dollars: that is the restitution a federal judge ordered three operators of Kentucky opioid-addiction clinics to pay this week, on top of prison sentences of up to five years, for billing Medicare and Medicaid for treatment patients never received. Michael Bregenzer, 53, the chief executive of Kentucky Addiction Centers, was sentenced to 48 months in prison; Dr. Jose Alzadon, 62, the clinics’ medical director, was sentenced to 60 months; and Barbie Vanhoose, 63, the billing manager, was sentenced to 24 months, the Department of Justice announced July 24, 2026. The three ran clinics in Winchester, Paducah, Paintsville and London, Kentucky that a jury found in March 2025 had billed Medicare and Medicaid for opioid-addiction treatment services that were never rendered or were billed as more complex than they were, while Alzadon prescribed the controlled substance Suboxone as part of the scheme. Confidence: dropped, since the Department of Justice’s own press release returned an access block for this issue and this account rests on Yahoo News and News 4 San Antonio reporting that quotes the department’s announcement directly. Sources: Houston man, 2 others sentenced in $4.8M Medicare billing scheme for opioid addiction services, Yahoo News, ‘Bogus’ addiction clinic claims led to prison terms in $4.8M Medicare, Medicaid fraud case, News 4 San Antonio.