Category: Blog

Next Generation Physicians are Using Augmented Intelligence: Is the Law Ready? 

What if a physician working alone at night in a rural hospital could summon a tireless “Dr. House” with every difficult case; a trained medical diagnostician that is always awake, ever ready, and rarely hallucinates?

Interactive artificial intelligence (AI) diagnostic models are rapidly evolving beyond ChatGPT and traditional “black box” systems that opaquely analyze radiology scans or lab values to higher-order transparent language models capable of intelligent explanation and diagnosis of complex illnesses. Researchers at Harvard Medical School recently developed an AI system named “Dr. CaBot” that will eventually function as a digital peer capable of generating differential diagnoses and detailed reasoning processes. As medical schools from Harvard to the University of Miami train tomorrow’s physicians to problem solve using science, clinical judgment, pattern recognition, and logic, educators are embracing a novel resource to strengthen their students’ skills. The American Medical Association (AMA) uses the phrase “augmented intelligence” as a way to conceptualize AI’s assistive role, emphasizing the way the tools enhance human intelligence rather than replace it. 

Technology and medicine are moving quickly, and the legal field has yet to catch up; innovation, in many cases, has spread faster than stare decisis. While attorneys await new rules, advancements in AI and machine learning pose greater risks and rewards for the healthcare sector than many other applications, rivaled only by risks incurred by the defense industry. 

Evolving Liability Frameworks 

As patients navigate an increasingly automated health care ecosystem where many insurance determinations are made by algorithms and 66% of clinicians integrate Artificial Intelligence/Machine Learning (AI/ML) tools—new questions around liability and standards of care will emerge. When harm occurs as a result, does the law look to the software developer who wrote the code, the healthcare system that deployed it, or the physician who ultimately incorporated the technology into their clinical decision making? Is the use of assistive-AI any different than orthostatic vital signs in the hands of a skilled practitioner who interpreted the readings correctly vs. incorrectly?

The incorporation of advanced AI diagnostics into patient care has created a patchwork of legal and regulatory challenges across the nation. Currently, the FDA classifies AI/ML technologies in healthcare settings under “Software as a Medical Device (SaMD)” guidance in an attempt to bring AI tools under medical device and products liability regulations. However, a framework intended for the development of a static medical device that may suffer manufacturing, design, or warning defects was not created for a quickly moving target such as an AI tool which can learn and evolve over time. 

The SaMD classification gives AI/ML diagnostic tools a form of FDA preemption that complicates malpractice and products liability claims under state law. For example, when a legacy device, such as an insulin pump or glucometer for a diabetic patient, receives FDA clearance under the 21 U.S.C. § 360k, the manufacturer may introduce a new product to the market, subject to certain risk-mitigation measures. In Dickson v. Dexcom, for example, a “Class II: De Novo” authorization shielded the manufacturer from tort liability when a continuous glucose monitor failed to warn a patient of hypoglycemia, which led to a motor vehicle accident. Many AI diagnostic tools are entering the market under this same “device” classification, making it critical for doctors and administrators to understand the regulatory landscape and potential exposure before deployment.

Duty to Disclose in Clinical Practice 

In addition to understanding state and federal liability frameworks, there is growing discussion around disclosure and transparency related to the use of AI in diagnostic processes. Because the use of AI/ML is closely associated with protected health information (PHI) and broader risks, California, Colorado, and Utah, have created laws that mandate disclosure in clinical treatment. For providers, and the attorneys who represent them, this is often a state-specific discussion: Texas laws require providers to disclose AI use in clinical care, whereas Nevada prohibits providers from utilizing AI systems in behavioral health contexts. 

Where state law is silent on the issue, physicians should remain vigilant around efforts to obtain valid informed consent regarding use of AI in clinical settings, as state medical boards ultimately hold physicians accountable for disclosures and outcomes related to the integration of novel tools into diagnosis and treatment plans.

Regardless of jurisdiction, research shows that patients value connection with physicians, and when visiting a healthcare practice, they expect to consult with a doctor. Few people expect their provider to sidebar with ChatGPT or even a purpose-built OpenAI language model that can rule out hundreds of mystery illnesses sans implicit bias—although Augmented Intelligence may ultimately solve the problem. Similarly, when harm occurs, current medical malpractice remedies were built around the assumption of human negligence instead of errors arising from machine learning misinformation.

Moving Forward

Legal scholars stand at the nexus of healthcare liability and AI/ML diagnostics where case law is yet to be written. Can plaintiffs’ attorneys establish vicarious or joint and several liability when claims involve an AI developer and a health system? What remedy exists when a physician outsources clinical judgment to a trained language model or fails to scrutinize results? As a net benefit, will the predictive powers of AI diagnostic models decrease both primary care-to-specialist patient wait times, and the risk of human error?

It appears that emerging physicians have embraced the next “possibility model” in medicine—and the health law community must respond by establishing guidance to address outstanding questions related to liability, reliability, governance, consent, and privacy. Perhaps tomorrow’s attorneys can ask AI for guidance.

Authors Note: Some healthcare providers and policymakers now prefer the term “misinformation” over “AI hallucination” in an effort to avoid stigmatizing mental health conditions.

340b Rebate: Essential for Under-Resourced Hospitals or a Hinderance to Pharmaceutical Companies?

Earlier this month, the United States Court of Appeals for the First Circuit issued a Rule 42 motion to voluntarily dismiss a case filed by the American Hospital Association (AHA) against Robert F. Kennedy Jr. and the Health Resources and Services Agency (HRSA) regarding the implementation of a new pilot 340b rebate program. The 340B program provides substantial discounts on outpatient drugs to covered entities fitting into six categories: disproportionate share hospitals, children’s hospitals and cancer hospitals exempt from the Medicare prospective payment system, sole community hospitals, rural referral centers, and critical access hospitals. These entities, after being deemed eligible for the program, receive significant discounts on a substantial amount of outpatient medications. This program has enabled under-resourced hospitals serving vulnerable populations to provide comprehensive outpatient medication options without imposing a significant financial burden on providers or patients. The 340b program has expanded significantly from approximately 389 covered entities at its inception in 1992 to 5,085 in 2022. 

The usefulness of the 340b drug pricing program has long been debated between healthcare providers and drug manufacturers. Covered entities have argued that these discounted drug prices are essential for poorly resourced healthcare centers to provide adequate care to vulnerable Americans. Drug manufacturers have raised concerns about duplicate discounts, in which discounts are provided through 340b and Medicaid, as well as issues with oversight and transparency regarding who truly saves money through the 340b program.

The proposed pilot sought to address some of the concerns held by drug companies and it would have required 340b providers to assume the full cost of 10 common-use drugs, primarily used to treat diabetes and chronic heart conditions, and later submit claims data to the drug manufacturers for potential 340b pricing. This pilot program was met with resistance from several providers, resulting in legal action from the American Hospital Association. 

In American Hospital Association et al. v. Kennedy et al. the AHA and multiple covered entities filed suit against Secretary Kennedy and HRSA in the United States District Court for the District of Maine, alleging that the proposed pilot program violates the Administrative Procedure Act and would impose unnecessary administrative and financial burdens on already under-resourced hospitals and healthcare providers. The Plaintiff’s complaint alleged that the over 1,000 comments submitted during the mandatory comment period for this proposed pilot were largely ignored by Secretary Kennedy and HRSA, thereby violating the Administrative Procedure Act’s public comment requirements

Several pharmaceutical companies submitted motions to intervene in support of HRSA’s efforts, citing issues with duplicate discounts for Medicaid and 340b, as well as concerns about program integrity and transparency. Secretary Kennedy and HRSA, in their response to AHA’s complaint, alleged that the pilot program and its comment period proceedings were not in violation of the Administrative Procedure Act precedent and that the plaintiffs had failed to show any irreparable harm. The District Court of Maine granted the plaintiff’s motion for a preliminary injunction, which the defendants appealed to the United States Court of Appeals for the First Circuit. The case was ultimately dismissed, and the Department of Health and Human Services withdrew the proposed pilot, indicating that they may restart the administrative process for a similar program in the future. 

340b reform remains an important topic of conversation as the program continues to expand across the nation. While this most recent attempt at reform ultimately did not come to fruition, it seems likely that more attempts for 340b reform may be on the horizon, indicating potential changes in the program forthcoming. 

Conversion Therapy on Trial: What Chiles v. Salazar Means for Medical Regulation and LGBTQ+ Protections

The Supreme Court heard arguments on October 7, 2025 to lift Colorado’s ban on “conversion therapy,” a discredited practice which targets LGBTQ+ youth to change their sexual orientation or gender identity. In Chiles v. Salazar, Kaley Chiles, a Colorado-licensed professional counselor, challenged a Colorado state regulation which prohibits providers from engaging in “conversion therapy” with anyone under 18. The practice can include anything from talk therapy to electric shock or pharmaceutical interventions. The Court heard arguments about what therapists may say to their patients—specifically, whether talk counseling is “conduct” or “speech,” and whether it is protected under the First Amendment and the Free Exercise Clause.

There is overwhelming evidence and medical consensus that the efforts to change a child’s sexual orientation or gender identity are unsafe and ineffective. In August 2025, the American Psychological Association, joined by the American Psychiatric Association and 12 other mental health and medical professional organizations, filed an amicus brief in support of the Colorado law. Research consistently demonstrates that “conversion therapy” has long-lasting consequences, including depression, anxiety, suicidality, substance misuse, damaged familial relationships, loss of connection to community, self-blame, guilt, and shame. Twenty-three states have prohibited healthcare providers from subjecting minors to “conversion therapy.” A recent UCLA study shows 698,000 LGBTQ+ adults have undergone “conversion therapy,” with half of them (350,000) receiving the treatment as adolescents.

The central question for the judges in Chiles is whether Colorado’s law interferes with free speech protected by the First Amendment, or whether it is a necessary legal regulation of professional conduct. Chiles argues that “conversion therapy” is speech, not conduct, and thus states “do not have a freer hand to regulate speech simply because the speaker is ‘licensed’ or giving ‘specialized advice.’” Conservative judges shared concerns about the law’s apparent threat to Christianity-informed free speech. Justice Alito called the statute “blatant viewpoint discrimination,” posing two hypotheticals—one in which a boy asks a therapist to help end his attraction to men, and one in which he asks for support to feel comfortable being gay—and stating that the statute requires opposite results depending on the viewpoint expressed. Justice Gorsuch and Justice Barrett also raised concerns regarding how laws justify medical regulations.

Justice Jackson, conversely, noted that states have a long history of regulating medical treatment, and doctors would clearly be liable if they used medication that the state deemed substandard care. Citing the Supreme Court 2024 decision in Skrmetti, which upheld the Tennessee law banning gender-affirming care for minors, Jackson questioned why the Colorado regulation “isn’t just the functional equivalent,” since both prohibit a medical treatment for minors that major medical associations say can lead to an increased risk of depression and suicidal thoughts. Justice Sotomayor was fundamentally concerned with whether Chiles even had standing to challenge the law, noting that “merely having a law on the books is not enough.” She pressed Chiles’ attorney to explain how she was personally harmed by the law, observing she does not face a “credible threat of prosecution.”

There is no clear consensus among circuit courts on First Amendment protections regarding professional speech. For example, the Ninth Circuit has held that there is a continuum, where on one end “public dialogue” gets robust protection, and on the other end, conduct such as individual treatment or professional counseling is not protected. Other courts insist that speech protections apply fully to counseling conversations even in professional settings, while many reaffirm that health professionals must provide treatment consistent with the government-regulated standard of care. In Chiles, the court seemed skeptical of Colorado’s claim that conversion therapy is conduct and not speech, but it remains uncertain if it will be sent back to the lower courts.

Chiles comes amidst a nationwide surge of anti-LGBTQ+ legislation and decisions, including laws that ban or punish gender-affirming care, restrict trans athletes from participating in sports, and create religious exemptions for LGBTQ+ nondiscrimination protections. In two Colorado cases, in 2017 and 2023, the Supreme Court sided with Christian business owners who opposed marriage equality and rebuked LGBTQ+ nondiscrimination laws in the process. Chiles could not only redefine the boundary between speech and conduct and set precedent for medical regulations, but also have wide-ranging consequences on legal safeguards meant to protect LGBTQ+ youth from discrimination and harm.

Does Trump’s Call For Expanding IVF Access Have Any Real Legal Teeth?

Assistance with fertility care is an urgent need for many families across the United States. According to findings from the 2024 Kaiser Family Foundation(KFF) Women’s Health Survey, one in eight reproductive-age women said that they or their partner needed fertility services to help them become pregnant or prevent a miscarriage. Fifteen states require some private insurers to cover some fertility treatment, but significant gaps in coverage remain. Only one state Medicaid program covers any fertility treatment, and no Medicaid program covers artificial insemination or in vitro fertilization.

Following the Dobbs decision, the future of assisted reproductive technology (ART) has been in question. In February 2024, the Alabama Supreme Court issued a ruling declaring frozen embryos in that state to be “unborn children” for the purposes of civil liability under Alabama’s wrongful death statute. Following national outrage from the decision, in March 2024, Alabama passed a law that provides immunity from civil and criminal charges for in vitro fertilization (IVF) patients and providers, which helped restart IVF services. However, this law did not overturn the state Supreme Court’s decision, keeping the legal status of embryos as “children” under the wrongful death statute.

In response to the uproar over the Alabama case, Senate Republicans announced support for protecting nationwide access to IVF. During the 2024 presidential campaign, Donald Trump pledged to make IVF free. On February 18, 2025, President Trump signed an executive order aimed at expanding access to in vitro fertilization (IVF). Following that executive order, on October 16, 2025, the White House revealed plans to offer discounts on certain IVF medications through a new government website, TrumpRx.gov. The White House also stated that it would work to develop more options for employers to voluntarily assist with fertility and family formation costs for their employees and dependents.

Following the White House’s announcement, the American Society for Reproductive Medicine (ASRM) issued a statement noting that, although the initiative was presented as a breakthrough for affordability, “key details about its implementation, scope, and equity remain unresolved.” Regarding legal considerations, they noted that classifying fertility coverage as an “excepted benefit” could undermine consumer protections under the Affordable Care Act (ACA) and the Employee Retirement Income Security Act (ERISA). Additionally, the announcement did not address the issue that across the country states are still navigating an evolving legal landscape that is emerging from disputes about pre-embryos making their way to court.

Many patients lack access to fertility services mainly because of high costs and limited coverage from private insurance and Medicaid. This initiative has no impact on existing state coverage mandates. As stated in the American College of Obstetrics and Gynecologists’ response to increase access to comprehensive care, employer-sponsored insurance plans should be both affordable and universally available. Coverage of IVF benefits can vary significantly and may not fully cover the entire cost of an IVF cycle, which typically ranges from $15,000 to $20,000. Many individuals facing infertility may need more than one IVF cycle. The cost of medication is just one part of the IVF process; discounts on these medications do not significantly lower the total expenses, which usually include both procedural and lab fees. As noted by KFF, laws regarding IVF insurance coverage vary, often limiting benefits to those with an infertility diagnosis and excluding single people and same-sex couples, and they do not apply to self-funded employer plans. The White House announcement leaves important gaps unaddressed. It also omits the 16 million reproductive-age individuals enrolled in Medicaid, who, even with a discount through TrumpRX, would find these treatments prohibitively expensive.

Senate Republicans have had the opportunity to support legislation that would provide comprehensive coverage of IVF and other ART treatments. However, despite their declared support, they blocked the passage of the Right to IVF twice, first in June and then in September 2024, legislation that would establish a right to IVF and ART, and help lower the costs of IVF treatments through expanded coverage. Republicans have cited increased costs to medical plans as their main concern with the bill, even though in 2024,  97% of large employers voluntarily offered fertility benefits reported no significant increase in costs to their medical plans. Despite this, the Access toFertility Treatment and Care Act, which would require most private insurance plans, as well as plans offered by Federal Employees Health Benefits Program, Medicaid, TRICARE, ERISA, and VA to provide coverage for treatment of infertility without any insurance or copays, remains a partisan bill. While the discounts are a step in the right direction, they fall short of truly enabling families to access the care they need.

The Patent Thicket Just Got Thicker: Limiting Inter Partes Review for Biologic Drug Patents

While a best-selling small molecule drug could be covered by up to five patents, biologic drugs (large chemical compounds produced by living cells) are covered by hundreds of patents. A primary purpose of patents is to give a limited monopoly to inventors to incentivize innovation, but this monopoly comes at a cost to consumers. For example, Humira (a rheumatoid arthritis medication) has 134 active patents and AbbVie Inc. charges consumers $6,500 per month for treatment. Most of these patents are “secondary patents” of questionable validity, covering things like dosage, drug formulations, and methods of using the drug to treat a new condition.

To combat these exorbitant prices, companies have been using biologic drugs as templates to produce biosimilars—therapeutically equivalent molecules. Without the extensive research and development costs associated with producing a novel biologic drug, biosimilars are brought to market and sold for less—around 90% less. Returning to the previous example, the biosimilar for Humira cost as little as $650 per month—just a tenth of the $6,500 monthly payment for the brand-name biologic.

The price of biosimilars could become even more affordable due to a recent announcement from the U.S. Food and Drug Administration (FDA) that it would be simplifying the process by which companies could bring biosimilar drugs to market. Now, the FDA will allow biosimilar manufacturers to circumvent expensive clinical testing in exchange for analytical testing. The manufacturer must show that their biosimilar does not have any clinically meaningful differences from the brand-name biologic drug (which has undergone clinical testing). The FDA used to require biosimilars to conduct “switching” clinical tests where patients would be treated first with the biosimilar drug then with the biologic drug (or vice versa) to determine any difference in responses to the drugs. If no meaningful differences were found, then the biosimilar was given “interchangeable” status, allowing pharmacists to prescribe the cheaper biosimilar instead of the brand-name biologic.

However, generic drug companies face another issue: challenging the validity of patents on a brand-name biologic drug. The web of patents protecting a single biologic drug makes it difficult for generic drug companies to enter the market because they must first demonstrate all the existing patents are invalid or not infringed by their product. Litigating these patents in a district court is expensive, complicated, and time-consuming.

Inter partes review (IPR) exists as an easier way for generic drug companies to clear out the patent thicket created by brand-name biologic drug manufacturers. However, the U.S. Patent and Trademark Office (USPTO) proposed a rule shortly before the FDA’s announcement, limiting the ability of biosimilar manufacturers to challenge the numerous patents filed on brand-name biologics. Previously, biosimilar manufacturers often used IPR through the Patent Trial and Appeal Board to challenge the validity of patents on brand-name biologic drugs. Now, IPR will not be available when “a petitioner intends to pursue invalidity challenges under §§ 102 [novelty requirements] or 103 [non-obviousness requirements] in other venues, such as district court or the U.S. International Trade Commission.” The USPTO frames this amendment as a way to “promote fairness and efficiency by channeling similar patent challenges to a single forum” and ensuring that IPRs are, not used in addition to, but as a complete substitute for, at least a phase of litigation. This has the effect of eliminating IPR as an avenue for biosimilar drugs to challenge the validity of broadly-drafted patents restricting their entry to the market, and thus increasing the cost of determining whether the numerous brand-name biologic drug patents are valid.

Allowing biosimilar manufacturers to use IPR as an avenue for challenging brand-name patent validity is important for two main reasons: lower costs and accelerated market entry. First, only 5% of prescription drugs are biologic drugs, but they account for $300 billion dollars in national total spending on medications. Thus, by creating therapeutic equivalents to patented biologics—biosimilars—which can compete with brand-name biologic drugs, prices will drop closer to the marginal cost of production and become more affordable to regular Americans. Second, legal battles between biologic manufacturers and brand-name biologics manufacturers can last years, delaying the arrival of affordable alternatives to consumers. Returning again to Humira as an example, it took seven years in court before the patent issues were resolved and the biosimilar could reach the market.

Although patents are meant to incentivize innovation by providing a limited monopoly, they are also meant to increase public access to cutting edge, socially beneficial technology, such as biologic and biosimilar drugs. By making it more difficult for biosimilar manufacturers to challenge validity of biologic drug patents, inventors and their monopoly are protected, but the USPTO has forgotten the public which patent law also seeks to protect.

What C.K. v. McDonald Mean for Children’s Mental-Health Access Through Medicaid

In August, it was announced that a landmark settlement agreement, was reached in a New York class action lawsuit against the New York State Department of Health (NYSDOH) and the New York State Office of Mental Health (NYOMH). This settlement follows settlements of similar cases in Michigan and Iowa, showing a movement towards systemic change for youth mental health and children’s advocacy. In C.K. v. McDonald, filed in 2022 by children and disability rights groups on behalf of four children in the U.S. District Court for the Eastern District of New York, the plaintiffs alleged that federal law requires mental health services be made available and provided through a state’s Medicaid program, yet, New York State’s services were “inadequate, inaccessible, and dysfunctional.” The plaintiffs primarily alleged that New York systematically denied Medicaid-enrolled youth access to community-based mental health care, which violated their federal rights and left them at risk of institutionalization and long-term harms. The complaint highlighted that the failure of NYSDOH and NYOMH disproportionately effect youth from low-income households and children of color.

Specifically, the plaintiffs cited a number of federal requirements that New York state was not adhering to, including the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) provision, which requires that Medicaid beneficiaries under 21 receive a number of medical services, including mental health care. The plaintiffs also brought claims under Title II of the Americans with Disabilities Act (ADA), which, under 28 C.F.R. § 35.130, prohibits discrimination or exclusion of qualified individuals from participation in services of a public entity by reason of disability.  The plaintiffs noted that 29 U.S.C. § 794 maintains identical requirements for any program or activity that receives Federal funding. Finally, the plaintiffs cited to Olmstead v. L.C., where the Supreme Court held that the ADA requires states to “provide community-based treatment for persons with mental disabilities.”

 The settlement agreement outlines an 18-month plan of action that the State must implement to improve mental health services for children. The plan establishes that agencies must provide intensive care coordination, in-home behavioral health services, and crisis response planning that does not rely on police. Additionally, the settlement establishes that the State must increase Medicaid reimbursements and institute annual quality audits of these services. The State will also initiate screening and assessment for children who are eligible for services and ensure that an expert is hired in tracking New York’s progress in meeting the agreements of the settlement.

While the settlement is awaiting the court’s final approval, the case outcome demonstrates progression towards improvements in mental health care for the 2.5 million children under 18 who are enrolled in New York’s Medicaid. This step addresses a major gap in care for some of the State’s most vulnerable residents, who so often have to rely on hospitals and residential facilities for care rather than in-home and communal services, which can be extremely distressing and traumatizing. Beyond New York, this case represents  systemic challenges that have been prevalent throughout the country for decades. The New York case, as well as the Michigan and Iowa cases, reinforce a legal precedent that States must be held accountable for providing meaningful, community-based mental health services that are non-discriminatory for Medicaid-eligible and enrolled children. Given the threats to Medicaid funding and massive financial cuts at the Federal level, it is more important than ever that Medicaid funds be spent on proven and effective services.