Healthcare Litigation Overview

HEALTH CARE LITIGATION OVERVIEW
HENRY H. ROBINSON
Kelly Hart & Hallman, LLP
201 Main Street, Suite 2500
Fort Worth, Texas 76102
State Bar of Texas
Soaking Up Some CLE
May 15-16, 2014
South Padre Island
CHAPTER 2

BIOGRAPHICAL INFORMATION
AFFILIATIONS AND HONORS
Listed in The Best Lawyers in America®, 2001-2014
Recognized as "Texas Super Lawyer" by Texas Monthly magazine 2003, 2005-2013
EDUCATION
Cornell University, Masters in Industrial and Labor Relations, 1975
Cornell Law School, J.D., 1974
The University of North Carolina, A.B., 1969
SPEECHES AND PUBLICATIONS
"Legal Implications of the Individual Mandate." Fort Worth Business Press, October, 13, 2013.
"The Affordable Care Act's New Retaliation Claims" in the Fort Worth Business Press, July 29, 2013 issue.
Speaker, Presenter, "The Calm Before the Storm"; an update on the impact of Health Care Reform, at the
2013 CareFlite Emergency Care Update Conference, May 20, 2013
"Let's Get Serious About Health Care Reform" (2012)
"How Employers Can Respond to Employee Use of Technology and Social Media" (2012)
"Employers and Health Care Reform" (2012)
"Don't Overlook Downturn's Hidden Costs" (2010)
“Supreme Court Sparks Revival of Non-Competes” (2006)
“Employment Implications of Sarbanes-Oxley” (2004)
"Why Corporate Reorganizations Fail or Succeed" (2002)
“The Legal Side of Strategic Keys to Successful Reorganizations” (2002) (co-author)
“What is the Meaning of the ‘At-Will’ Rule and What Are Its Limits?” (2001)
“Successful Navigation Through the Waterways of Multiple Affirmative Action Programs and OFCCP
Regulatory Requirements” (2001)
“Exceptions to the Employment At-Will Doctrine in Texas” (2001)
Co-Author, “A Simple Roadmap to the Intersections of Employment and Environmental Regulations”
(1996)
“Employment Discrimination and Harassment” (1995)
“Texas Labor and Employment Law” (1992)
“New and Emerging Issues in Employment Law” (1991)
“Wrongful Discharge and Work-Related Torts” (1991)
“Employment Law in Texas II: Employment At-Will, Negligence, and Employer Liability, Drug Testing,
and Other Emerging Areas of Liability” (1989)
“Employee Polygraph Protection Act of 1988: An Overview” (1989)
“Workers Compensation and Unemployment Compensation” (1986)
“Legislation: What Did Pass, What Didn’t, What May” (1986)
Co-Author, "Companies Must Cope with Ledbetter Fair Pay Act," Fort Worth Business Press, April 13,
2009
Co-Author, "Don't Overlook Downturn's Hidden Costs," Fort Worth Business Press, November 17, 2008
Negotiability in the Federal Sector Cornell/American Arbitration Assn. 1981/1983
Co-Author, “Report of the Committee on Federal Service Labor-Management Relations Law,” Section of
Labor and Employment Law, 1982 ABA Committee Reports, Vol. II, p. 75
“Challenges for Federal Sector Arbitration,” 4 Federal Service Labor Relations Review 30 (Fall 1981)

Health Care Litigation Overview Chapter 2
i
TABLE OF CONTENTS
Page
I. CONSTITUTIONAL ISSUES UNDER THE MAJOR AFFORDABLE CARE ACT (“ACA”) .......1
A. Constitutionality of Employee Shared Responsibility (Employee Mandate) and
Medicaid Expansion.................................................................................................................1
B. Constitutionality of Employer Shared Responsibility (Employer Mandate) ...........................1
C. Availability of Government Subsidies at Federal Exchanges..................................................1
D. Religion and Requirement that Plans Cover Contraceptives. ..................................................1
1. Conflicting Opinions Over Standing............................................................................1
2. Contraceptive Requirement Unconstitutional. .............................................................2
E. Origination Clause....................................................................................................................2
II. INCREASED EMPHASIS ON HEALTH CARE OVERBILLING, BILLING FOR
UNNECESSARY MEDICAL CARE, FRAUD AND KICKBACKS.................................................2
A. Legal Focus: Money................................................................................................................2
B. The Flow of Money: Claims, Codes and Medical Necessity..................................................2
III. FALSE CLAIMS ACT.........................................................................................................................3
A. Recent Examples Demonstrating the FCA’s Application to Claims Containing
Incorrect Coding.......................................................................................................................3
1. Upcoding ......................................................................................................................3
2. Billing for Services Not Medically Necessary.............................................................3
3. Billing for Services Not Actually Performed...............................................................4
B. Categories of FCA Cases. ........................................................................................................4
C. Who May Bring FCA Case. .....................................................................................................5
D. Treble Damages and Penalties. ................................................................................................5
E. Recent FCA Legal Developments............................................................................................6
IV. PHYSICIAN REFERRAL STATUTE (OR STARK LAW)...............................................................6
A. Elements of Prohibited Referral...............................................................................................7
B. Definitions Defining the Elements...........................................................................................7
1. Referral.........................................................................................................................8
2. Entity. ...........................................................................................................................8
3. Designated Health Services (DHS)..............................................................................8
4. Financial Relationship..................................................................................................8
a. Ownership or Investment Interest. ...................................................................8
b. Compensation Arrangement.............................................................................9
C. Eight Matters Outside the Scope of the Stark Law ................................................................10
D. Sanctions and Liability Under the Stark Law. .......................................................................10
E. Self-Referral Disclosure Protocol ..........................................................................................11
F. Recent Example of Application of Stark Law to Financial Relationship ..............................11
V. ANTI-KICKBACK STATUTE .........................................................................................................11
A. Examples Demonstrating Importance of Law........................................................................11
1. Criminal Liability: Referrals/Commissions ..............................................................11
2. Civil Liability .............................................................................................................11

ii
B. Elements of a Violation..........................................................................................................11
C. Criminal, Civil and Administrative Penalties ........................................................................12
D. Matters/Events/Subjects to Which Anti-Kickback Statute Does Not Apply .........................12
E. Regulatory Safe Harbors ........................................................................................................13
VI. TEXAS MEDICAID FRAUD PREVENTION ACT. .......................................................................13
A. Example Demonstrating Application of TMFPA ..................................................................13
B. Unlawful Acts ........................................................................................................................13
C. Liability ..................................................................................................................................14
D. Who May Bring an Action.....................................................................................................14
E. TMFPA’s Significance to State of Texas...............................................................................14
VII. FEDERAL HEALTH CARE ADMINISTRATIVE SANCTIONS...................................................14
A. Mandatory Exclusions............................................................................................................14
B. Permissive Exclusion .............................................................................................................14
C. Administrative Civil Monetary Penalties...............................................................................14
VIII. POTENTIAL CRIMINAL LAWS APPLIED TO HEALTH CARE BILLING AND OTHER
TRANSACTIONS .............................................................................................................................15
A. Health Care Fraud Statute ......................................................................................................15
B. Theft or Embezzlement in Connection with Health Care ......................................................15
C. False Statement, Concealment or Trickery Relating to Health Care Matters ........................15
D. Making or Causing to be Made False Statements or Representations in Connection
with Health Care.....................................................................................................................15
E. False Statements and Entries..................................................................................................15
F. Mail Fraud..............................................................................................................................15
G. Wire Fraud..............................................................................................................................15
H. False, Fictitious or Fraudulent Claims ...................................................................................15
IX. MULTIPLE ENTITIES ENFORCE LAWS AGAINST HEALTH CARE WASTE, FRAUD AND
ABUSE...............................................................................................................................................16
A. Federal Level: OIG, FBI, DOJ, MAC, RAC, ZPIC, HEAT .................................................16
1. Centers for Medicare and Medicaid Services.............................................................16
2. DHHS’s Office of Inspector General .........................................................................16
3. Medicare Administrative Contractor..........................................................................16
4. Medicare Recovery Audit Contractor ........................................................................16
5. Zone Program Integrity Contractor............................................................................16
6. Federal Bureau of Investigation .................................................................................16
7. Department of Justice.................................................................................................17
8. Combined Task Force ................................................................................................17
B. State Level: HHSC’s OIG, Attorney General, TMHP, RAC................................................17
1. HHSC’s Inspector General.........................................................................................17
2. Texas Medicaid and Health Care Partnership............................................................17
3. Texas Attorney General’s Office ...............................................................................18
4. Texas Medicaid Recovery Audit Contractor..............................................................18
C. Joint Federal/State/Local........................................................................................................18
X. DISCLOSURE OF PERSONAL HEALTH INFORMATION .........................................................18
A. Texas Law ..............................................................................................................................18
1. Hospital Disclosure of Health Care Information........................................................18

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2. EMS Provider Disclosure of Health Care Information ..............................................18
3. Medical Records.........................................................................................................19
B. HIPAA (Federal Law)............................................................................................................19

healthcarelaw-anoverview-140606152059-phpapp01.DOCX 1
HEALTH CARE LITIGATION OVERVIEW
I. CONSTITUTIONAL ISSUES UNDER
THE MAJOR AFFORDABLE CARE
ACT (“ACA”)
A. Constitutionality of Employee Shared
Responsibility (Employee Mandate) and
Medicaid Expansion
The Supreme Court upheld the
constitutionality of the ACA’s individual shared
responsibility tax (individual mandate). National
Federation of Independent Business v. Sebelius,
132 S. Ct. 2566 (2012). In the same case, the
Supreme Court held that it is unconstitutional for
Congress to impose compulsory Medicaid
expansion on states.
B. Constitutionality of Employer Shared
Responsibility (Employer Mandate)
The employer mandate will not go into effect
until January 1, 2015. Oklahoma ex rel. Pruitt v.
Sebelius, 2013 WL 40522610 (E.D. Okla. 2013).
Hotze v. Sebelius, ___ F. Supp. 2d. ___, 2014
WL 109407 (S.D. Tex. 2014), appeal pending
(employer mandate is a tax and is constitutional).
Liberty University v. Lew, 733 F.3d 72 (4th
Cir. 2013, cert denied Dec. 2, 2013) (employer
mandate is constitutional under taxing authority
and does not violate Free Exercise Clause or
Religious Freedom Restoration Act).
C. Availability of Government Subsidies at
Federal Exchanges.
Government subsidies are not available
except when an individual (1) goes to an
exchange and obtains insurance, and (2) meets
the eligibility standards for a government subsidy
in the form of a premium tax credit or cost
sharing reduction. If a state elects not to set up an
exchange, the federal government’s exchange is
available to that state’s citizens. 42 U.S.C. §
18031. The argument has been raised that
government subsidies are not available through a
federal exchange and are available only through a
state exchange. Two federal district courts
rejected the argument. King v. Sebelius, ___ F.
Supp. 2d. ___, 2014 WL 637365 (E.D. Va. 2014);
Halbig v. Sebelius, __ F. Supp. __., 2014 WL
129023 (D.C.C. 2014). Halbig v. Sebelius is
presently on appeal before the D.C. Circuit, and
oral argument was heard March 24, 2014.
D. Religion and Requirement that Plans
Cover Contraceptives.
The ACA gives the Secretary of the
Department of Health and Human Services
(“DHHS”) the authority to determine what should
be included in basic health coverage. The
Secretary determined that plans should cover
contraception. The United States Supreme Court
consolidated and granted certification on Sebelius
v. Hobby Lobby Stores, Inc., Case No. 13-354,
and Conestoga Wood Specialties Corp. v.
Sebelius, No. 13-556. The broadly framed issue
is whether the Religious Freedom Restoration
Act, 42 U.S.C. 2000bb, et seq., allows a for-profit
corporation to deny its employees the health
coverage of contraceptions to which employees
are otherwise entitled by federal law, based on the
religious objections of the corporation’s owners.
The briefing of Hobby Lobby does not object to
contraception preventing the fertilization of an
egg, but rather, the objection is limited to
“providing coverage for contraceptives that risk
destroying a human embryo.” (p. 34-35). Oral
argument occurred March 25, 2014.
The lower courts’ opinions are splintered.
1. Conflicting Opinions Over Standing.
Eden Foods, Inc. v. Sebelius, 733 F.3d 626
(6th
Cir. 2013) (for-profit organization lacks
standing to raise “religious exercise” claim under
Religious Freedom Restoration Act).
Conestoga Wood Specialties Corp. v.
Secretary of U.S. Dept. of Health and Human
Services, 724 F.3d 377 (3rd
Cir. 2013) (neither
for-profit corporation nor shareholder may raise
free exercise clause so as to challenge women’s
preventive health care regulations issued pursuant
to ACA).
Hobby Lobby Stores Inc. v. Sebelius, 723
F.3d 1114 (10th
Cir. 2014), cert granted Nov. 26,
2013 (10th
Circuit ruled that corporations have
standing to raise free exercise claim to challenge
ACA’s contraception requirement).
Gilardi v. U.S. Dept. of Health and Human
Services, 733 F.3d 1208 (D.C. Cir.) (for-profit
organization may not make religious challenge to

ACA’s provision that health care plans cover
contraception, but if the organization is owned by
only a few individuals, they can raise a challenge
based on their religious objections).
2. Contraceptive Requirement Unconstitutional.
Korte v. Sebelius, 735 F.3d 654 (7th
Cir.
2013) (ACA’s requirement of contraception
coverage burdens religious exercise and is
unconstitutional).
E. Origination Clause.
Sissel v. U. S. Dept. of Health and Human
Services, 951 F. Supp. 2d. 159 (D.C.C. 2013)
(ACA was to expand health coverage and is not
subject to Origination Clause, and in any event,
the bill originated in the House).
Hotze v. Sebelius, ___ F. Supp. 2d ___, 2014
WL 109407 (S.D. Tex. 2014) (ACA does not
violate Origination Clause).
II. INCREASED EMPHASIS ON HEALTH
CARE OVERBILLING, BILLING FOR
UNNECESSARY MEDICAL CARE,
FRAUD AND KICKBACKS
A host of reasons contribute to health care
costs. These include, among others: doctors
trying to save lives, persons demanding medical
care, the system’s complexity, the threat of
malpractice, the fee-for-service system, patents,
greed (including fraud), and a desire to lengthen
life spans.
The ACA increases emphasis on deterring
and detecting health care providers who bill
inappropriately, who engage in acts that
encourage unnecessary medical care, or who
engage in acts that may impair the objectivity of
physicians. The ACA increases funding for
fighting health care waste, abuse and fraud. A
host of laws apply. Multiple government
agencies and multiple private contractors conduct
health care billing, audits and investigations.
Court cases may be civil or criminal.
Administrative sanctions are also available.
A. Legal Focus: Money
According to the Centers for Medicare and
Medicaid Services, in 2012 health care spending
in the United States was $2.8 trillion.
www.cms.gov/Research-Statistics-Data-and-
Systems-Trends-and-Reports/NationalHealth
Expenddata. In the United States, health care
spending accounts for 17.7% of GDP.
www.oecd.com/unitedstates/ Briefing-Notes-
USA-2013. Whether a health care expenditure is
wasteful or abusive implicates moral, economic,
philosophical and religious judgments. There are
projections -- but no valid dollar numbers --
specifying the quantities of medical care that are
unnecessary/avoidable versus necessary/
unavoidable, due to unacceptable economic greed
versus not due to unacceptable economic greed,
or fraudulent versus non-fraudulent.
In trying to alter a spending trend that is
unsustainable over the long run, much of the legal
focus has been on health care dollars and
practices that are wasteful, abusive or fraudulent.
Audits and investigations have increased. For
FY2013, the United States Department of Justice
(“DOJ”) and Centers for Medicare and Medicaid
Services reported recoveries totaling $4.3 billion.
Whistleblowing is important. On the state level,
in 2012 Texas recovered $38.3 million in
Medicaid recoveries, and 95% stemmed from
suits originally filed as qui tam or whistleblower
cases.
B. The Flow of Money: Claims, Codes and
Medical Necessity
Since the focus is on the flow of money, it is
necessary to identify several matters prerequisite
(or supposed to be prerequisite) to the flow of
money through the system.
Claims. The health care provider provides a
service to a patient, prepares medical records, and
initiates the billing process. As part of the
process, the health care provider prepares a claim
(except for 100% self-pay), including assignment
of a procedure code to each service. As
explained in the following paragraph, that code is
relevant to the dollar amount billed and the dollar
amount paid. The health care provider transmits
the claim to a third-party payor who in turn
examines the claim in making a payment
decision. A claim is prerequisite to a health care
provider’s collection of money from a third-party
payor.

Codes. Procedural codes are supposed to
describe nearly every service a health care
provider may render to a patient. The American
Medical Association (AMA) develops and
annually publishes Current Procedural
Terminology codes (CPT codes). “CPT” is the
AMA’s registered trademark. For example,
“99397” may be used for a preventative exam for
a patient over 65, “90658” may indicate a flu
shot, and “12002” may indicate the stitching up
of a one-inch cut on a patient’s arm. There are in
the vicinity of 8,000 CPT codes. Also, there are
add-ons and modifiers. Medicare uses a
Healthcare Common Procedure Coding System
(HCPCS); it includes CPT codes and a second set
of codes for matters not included in the CPT
codes, such as durable medical equipment,
prosthetics, orthotics and supplies.
Each CPT code has a Relative Value Unit
assigned to it, and when multiplied by a
conversion factor and geographical adjustment,
creates a compensation level for the particular
service. For example, the CPT code for thyroid
imaging is 78013, and the associated 2013
payment rate might be $150.04.
Medical Necessity. Every service or item
billed must have been medically necessary. The
medical or patient records are expected to show
that the medical care was necessary and that the
health care provider in fact provided the service
for which the provider billed. Whether medical
necessity exists may be subject to debate.
Standing alone, a patient’s desire for a medical
service does not constitute medical necessity.
Unnecessary medical services drive up the cost of
medical care; unnecessary medical services mean
there is a lack of medical necessity. Certain
financial relationships may encourage
unnecessary medical care or drive up its costs.
Kickbacks may impair medical judgment and
encourage unnecessary medical care.
III. FALSE CLAIMS ACT
The False Claims Act (“FCA”) is a powerful
civil statute. The qui tam provisions make it
worthwhile for whistleblowers to file cases. The
enormity of potential penalties and damages leave
most health care defendants with little choice but
to settle.
A. Recent Examples Demonstrating the
FCA’s Application to Claims Containing
Incorrect Coding
1. Upcoding
Ambulance services are generally coded as
basic life support (“BLS”) which produces a
relatively lower dollar reimbursement value or as
advanced life support (“ALS”) which produces a
relatively higher dollar reimbursement value.
Whether an ambulance transport should be coded
at a BLS or ALS level depends on the condition
of the patient and whether BLS or ALS services
were rendered. The United States and State of
Texas contended that the City of Dallas directed
its billing contractor to code every 911-
dispatched transport at the ALS level, which
necessarily caused what should have been any
BLS codes to be “upcoded” to ALS codes. The
upcodes were false and appeared on claims
submitted to Medicare and Medicaid. The City of
Dallas settled the case for $2.47 million. U. S.
Dept. of Justice, Press Release (June 7, 2011),
“City of Dallas to Pay $2.47 Million to Resolve
Allegations that it Caused Improper Medicare and
Medicaid Ambulance Claims,” www.usdoj.gov/
usao/txn.
2. Billing for Services Not Medically Necessary
Kyphoplasty is a procedure used to treat
spinal compression fractures. It can be safely and
effectively performed on an out-patient basis
(meaning billing charges are less). Fifty-five
hospitals had kyphoplasty performed on an in-
patient basis, which generated more dollars of
income. Claims containing codes were submitted
for the in-patient procedures. A FCA case was
brought. The case argued that the claims were
not legitimate because in-patient procedures were
not necessary. Fifty-five hospitals agreed to pay
$34 million. Press Release, U.S. Att’s Office,
W.D.N.Y., Fifty-five Hospitals to Pay U.S. More
than $34 Million to Resolve False Claims Act
Allegations Related to Kyphoplasty (July 2,
2013), www.justice.gov/usa/nyw/press/press
releases/2013/July/55Hospitals.

3. Billing for Services Not Actually Performed
A health care provider is supposed to bill
only for services actually performed. Billing for
procedures not performed is fraudulent. A
diagnostic imaging group was accused of billing
for tests not actually performed. The government
initiated a FCA enforcement action. Diagnostic
Imaging Group agreed to pay $15.5 million. OIG
HHS Criminal & Civil Enforcement Archive
(Feb. 2014).
B. Categories of FCA Cases.
The FCA creates three sources or types of
liability applicable to medical billing.
First Category: False or Fraudulent Claim.
One type of violation occurs when a health care
provider submits a false or fraudulent claim to the
federal government. Under 31 U.S.C. §
3729(a)(1)(A) the elements are:
 A person presents or causes to be presented
to an agent of the United States
 A claim for payment (“claim” is defined 31
U.S.C. § 3729(b)(2))
 The claim was “false or fraudulent”
 The provider acted “knowingly”
31 U.S.C. § 3729(b)(1)(A) defines
“knowingly” as meaning the person (i) has actual
knowledge with respect to the information, (ii)
acts in deliberate ignorance of truth or falsity of
the information, or (iii) acts in reckless disregard
of the truth or falsity of the information.
Significantly, § 3729(b)(1)(B) explicitly states
that knowingly “requires no proof of specific
intent to defraud.” This effectively reversed the
earlier Supreme Court opinion in Allison Engine
Co. v. United States ex rel Sandero, 553 U.S. 662
(2008), which had held that in a FCA case the
government must provide that the false claim was
made with the specific intent of inducing the
government to pay or approve payment of a false
or fraudulent claim.
Every claim that is incorrect may be
technically “false.” The FCA does not statutorily
define “false” or “fraudulent.” According to the
Office of the Inspector General (“OIG”) of
DHHS, when honest or merely negligent billing
errors or mistakes occur, the OIG will not pursue
FCA liability. But the OIG will administratively
ask the provider to return the funds. Final
Compliance Program Guidance for Individual and
Small Group Physicians Practices, 65 Fed. Reg.
59434, 59436 (Oct. 5, 2000). However, courts
have imposed FCA liability where a person failed
to make “minimal examination” of the records
that were the basis for the false claims and the
claims were prepared in a “sloppy and
unsupervised fashion.” Gulf Group General
Enterprises Co. W.L.L. v. U.S., 114 Fed. Cl. 258,
328-29 (Feb. Cl. 2013).
Second Category: False Record or
Statement. A second category of FCA violation
relating to medical billing pertains to the medical
records which are used to prepare the claim that
goes to the federal government. A violation
occurs when a person “knowingly makes, uses or
causes to be made or used, a false record or
statement material to a false or fraudulent claim.”
31 U.S.C. § 3729(a)(1)(B). This creates liability
for an entry that is not part of the claim but is
used to prepare the claim. For example, a FCA
violation may occur if a physician, nurse or
paramedic writes up medical records stating that a
patient was seen when he/she was not actually
seen, stating that a patient presented symptoms
that he/she did not actually present, or stating that
a test was administered when it actually was not
administered.
Third Category: Failure to Return
Overpayment After Identification. A third type of
FCA violation relating to medical billing relates
to Medicare and Medicaid overpayments not
returned. 42 U.S.C. § 1320a-7k(d) provides that
a person who has received an overpayment shall
“report and return the overpayment,” the deadline
for reporting and returning the overpayment is
within 60 days after it was “identified,” and the
duty to report and return overpayments is
enforced as an obligation for the purpose of 31
U.S.C. § 3729 of the FCA. The ACA imposes
the additional obligation that the report to the
government must state the “reason for
overpayment.” 42 U.S.C. § 1320a-7k(d)(1) and
(2).

An overpayment is defined as “any funds
that a person receives or retains. . .to which the
person, after applicable reconciliation, is not
entitled.” 31 U.S.C. § 1320a-7k(d)(4)(B). The
duty to return overpayment is not limited to
overpayments caused by falsity or fraud.
The FCA is not the only statute providing a
penalty for failure to return an overpayment. 42
U.S.C. § 1320a-7a(a)(10) provides that a person
who does not report and return an overpayment
under § 1320a-7k(d), is subject to – in addition to
other penalties – a civil monetary penalty “of
more than $10,000 for each item of service. . . .”
The full impact of § 1320a-7k(d) has not yet
been determined. It appears to condition liability
on retention, in which case the law may
potentially eliminate statute of limitations
defenses that health care providers could
otherwise assert. It is difficult to escape the
suspicion that, in practice, § 1320a-7k(d) may
perversely encourage a failure to identify
overpayments. In apparent anticipation of such a
potential outcome, a proposed regulation states
that a person has “identified an overpayment if
the person. . .acts in reckless disregard or
deliberate ignorance of the existence of the
overpayment. 77 Fed. Reg. 9179 (Feb. 16, 2012),
proposing 42 C.F.R. § 401.305(a)(2).
C. Who May Bring FCA Case.
The United States Attorney General may
initiate a FCA case. 31 U.S.C. § 3730.
In addition, a qui tam provision allows a
private person to file a complaint bringing a civil
action for a FCA violation. 31 U.S.C. §
3730(b)(1). The complaint is “filed in camera,”
remains under seal for at least 60 days, and is not
served on the defendant until the court so orders.
31 U.S.C. § 3730(b)(2). The government may or
may not intervene. 31 U.S.C. § 3730(b)(3). If
the government intervenes, the qui tam plaintiff is
entitled to 15% to 25% of the proceeds or
settlement of the claim. 31 U.S.C. § 3730(d). If
the government does not intervene, the qui tam
plaintiff is entitled to 25% to 30% of the
proceeds. Id. 15% to 30% of a potentially
enormous verdict is a powerful motivator.
Private whistleblower FCA actions have been
what initiated a great number of FCA cases either
settled or tried to verdict.
D. Treble Damages and Penalties.
The FCA imposes both damages and penalty.
For each claim in violation of the FCA, a person
may be liable to the United States for: (1) a civil
penalty ranging from $5,000 to $11,000 for each
violation, and (2) three times the amount of
damages which the government sustained because
of each violation. 31 U.S.C. § 3729(a); 28 C.F.R.
§ 85.3(a)(9). Depending on size, a health care
provider generally will submit thousands to
millions of claims every year. Each code for each
service may potentially give rise to a separate
FCA penalty and damages.
The threat of an enormous amount due to
FCA penalties creates enormous settlement
pressure on health care providers. For example,
suppose one solo physician provides 50 services
per day and each is separately coded. Many of
the patients would be for office visits where the
patient may present symptoms that are mild,
moderate or severe. Suppose that ten times a day,
the billing clerk codes the office visit as
moderate, but it should have been coded as mild.
This produces ten false claims per day. If the
physician works 280 days per year, then there
would have been 2,800 false claims for the year.
For the one year, the penalties alone on the single
physician would range from $1,400,000 to
$3,080,000.
To continue the example, if hypothetically a
clerk codes the one service at a level providing
for a $60 reimbursement and if coded correctly
the reimbursement would have been only $30,
then the annual net difference for 2,800 incorrect
codes would have been $84,000, and three times
that would be $252,000. The aggregate of
penalties and treble damages would range from
$1,652,000 ($252,000 + $1,400,000) to
$3,332,000 ($252,000 + $3,080,000) compared to
actual damages of only $84,000.
If the above hypothetical numbers for a sole
practitioner were extrapolated to a large hospital
system, the penalty alone could conceivably run
into billions of dollars.

E. Recent FCA Legal Developments.
Particularity Pleading Requirement.
Relators must plead false claims with
particularity. Simply alleging a fraudulent
scheme is not sufficient. United States ex rel.
Nathan v. Takada Pharm, N.A., Inc., 707 F.3d
451, 455-56 (4th
Cir. 2013, petition for certiorari
filed No. 12-1348, May 10, 2013). U. S. ex rel.
Ge v. Takeda Pharmaceuticals Co., Ltd., 737
F.3d 116, 123-24 (1st
Cir. 2013) (dismissing
relator’s complaint for failure to identify claims
presented to government for reimbursement).
Narrow Scope of Discovery. United States
ex rel. Duxbury v. Ortho Biotech Prods, L.P., 719
F.3d 31, 39 (1st
Cir. 2013) (limiting relator’s
discovery to narrow set of claims of which relator
had direct knowledge and which were pleaded
with particularity).
The Violation Alleged Must Have
Established Conditions of Payment for the FCA
Claims. In United States ex rel. Hobbs v.
MedQuest Associates, Inc., 711 F.3d 707 (6th
Cir.
2013), MedQuest certified that it met the
conditions for participation in Medicare.
Subsequently, MedQuest violated Medicare
requirements by (1) using physicians not
approved by Medicare to supervise diagnostic
tests, and (2) failing to register a new facility with
Medicare and instead using the former owner’s
ID number when submitting reimbursement
claims. The United States alleged that the false
certification was a FCA violation. The Sixth
Circuit disagreed, explaining that there is a
distinction between a false certification to
conditions of participation and a false
certification to conditions of payment. Id. at 714.
The Sixth Circuit held that the false certification
was not as to conditions of payment. According
to the Sixth Circuit, the falsifications alleged
would not “tend to influence CMS’s decision to
pay on the claims.” Id. at 717. Failure to comply
with technical requirements do not trigger the
FCA’s “hefty fines and penalties.” Id.
Net Trebling Versus Gross Trebling. In
United States v. Anchor Mortgage Corp., 711
F.3d 745, 748-49 (7th
Cir. 2013), a brokerage
company provided false information in
connection with FHA mortgage application
guarantees. For trebling, the trial court did not
take the amount the government paid to lenders,
subtract the amount the government realized by
selling the properties, and treble the remainder
(loss). Rather, the trial court trebled the gross
amount the government paid to lenders under the
guarantees. The Seventh Circuit reversed, ruling
that net loss (after mitigation) is what should have
been trebled.
This net-versus-gross distinction applies to
medical coding by health care providers.
Frequently, the service is reimbursable and the
issue is simply whether the service should be
assigned a higher or lower code. Contractors
employed by the Centers for Medicare and
Medicaid Services (“CMS”) sometimes seek
recovery of the total amount that was reimbursed,
rather than the difference between (i) the amount
reimbursed, and (ii) the amount the
government/contract claims should have been
reimbursed. This opinion clarifies that the net
loss is to be trebled, not the gross loss.
Constitutional Limitation: Excessive Fines
Clause. The Eighth Amendment to the
Constitution of the United States prohibits
excessive fines. In United States v. Bajakajion,
524 U.S. 321, 337-38 (1998) the United States
applied the excessive fines clause to a “grossly
disproportionate” penalty where, through
forfeiture, the government took $357,144 from a
person who failed to report his taking of more
than $10,000 in currency out of the United States.
The excessive fines clause has now been applied
to FCA penalties. United States ex rel. Bunk v.
Gosselin World Wide Moving N.V., 741 F.3d 390,
405-09 (4th
Cir. 2013) (in order to avoid violation
of excessive fines clause, a court has discretion to
accept a penalty less than the FCA’s statutorily
prescribed amounts). Trial courts have been
reluctant, based on the excessive fines clause, to
reduce FCA judgments.
IV. PHYSICIAN REFERRAL STATUTE
(OR STARK LAW)
The Physician Referral statute, or Stark Law,
is at 42 U.S.C. § 1395nn. It is a civil law, not a
criminal law, and is basically a strict liability
statute. On a macro level, the Stark Law
generally imposes two prohibitions and has
approximately 42 exceptions.

The first prohibition is that a physician may
not refer a patient to any entity, in which the
referring physician has a financial relationship,
for certain designated health services (DHS) that
will be paid by Medicare. 42 U.S.C. §
1395nn(a)(1)(A)(i); 42 C.F.R. § 411.353(a).
The second prohibition is that the entity that
receives the impermissible referral (under the first
prohibition) may not present a claim (for the
DHS) to Medicare, an individual, a third-party
payor, or any other entity. 42 U.S.C. §
1395nn(a)(1)(B); 42 C.F.R. § 411.353(b). An
entity that collects payment for a prohibited
referral must refund the money unless the entity
did not have actual knowledge of, and did not act
in reckless disregard or deliberate ignorance of,
the identity of the physician who made the
referral. §§ 411.353(d) and (e).
Significantly, an entity that bills a claim
which arises from a Stark Law violation
necessarily submits an impermissible claim which
in turn may qualify as a false claim under the
FCA, triggering its treble damages and onerous
penalties. A $237.5 million example may be
found in United States v. Tuomey Healthcare
System, Inc., 675 F.3d 394 (4th
Cir. 2012), order
and opinion after remand and new trial at 2013
WL 5503695 (D.S.C. Oct. 2, 2013). Tuomey
Healthcare System, Inc. (Tuomey) operated a
hospital and several medical centers. Tuomey
projected that over 13 years it would lose $9.6
million in facility revenue if gastroenterologists
redirected endoscopy work away from Tuomey to
a new competitor. *2. Tuomey recruited
specialist physicians to enter part-time contracts
requiring physicians to provide outpatient
procedures at Tuomey. Under the contracts, the
specialist physicians were paid 31% above and
beyond total net collections as independent
contractors (i.e., in excess of fair market value).
Tuomey submitted two claims for each
procedure: a professional fee for the physician’s
service (“professional component”) and a facility
fee for the hospital providing the space, nurses
and equipment (“facility component”). *3.
A doctor (with whom Tuomey had failed to
successfully negotiate a contract) filed a qui tam
or whistleblower suit under the Stark Law and
False Claims Act. The United States intervened.
A jury returned a verdict that Tuomey had
submitted 21,730 claims in violation of the first
prohibition in the Stark Law. *5. By submitting
the claims, Tuomey violated the Stark Law’s
second prohibition. By submitting prohibited
claims, Tuomey also submitted false claims under
the False Claims Act. In effect, Tuomey violated
the False Claims Act 21,730 times. The value of
the claims was $39,313,065. *10. Under the
FCA, Tuomey was liable for treble damages, or
$117,939,195. The court imposed 21,730
penalties of $5,500 each, which equaled
$119,515,000. *14. The total judgment
(including interest) was for $237,454,195. *15.
A. Elements of Prohibited Referral
As subsequently discussed in “C,” there are
eight matters not within the scope of the Stark
Law. Assuming that a matter is not outside the
scope, then according to 42 C.F.R. § 411.353(a),
the elements of a prohibited referral are as
follows:
 Physician
 Makes a Referral
 To an Entity
 For the provision of Designated Health
Services
 For which Medicare payment may be made,
and
 Physician or an immediate family member
has a financial relationship with the entity
(unless one of five exceptions applies) by
virtue of (i) ownership or investment interest
(unless one of five exceptions applies), or (ii)
compensation arrangement (unless one of 24
exceptions applies).
B. Definitions Defining the Elements
The definitions contribute to a complicated
legal scheme.

1. Referral.
“Referral” is broadly defined and may be
direct or indirect. 42 U.S.C. § 1395nn(h)(5). See
42 C.F.R. § 411.351. Radiologists, pathologists
and radiation oncologists are excluded from
“referral” when they order DHS pursuant to a
consultation requested by another physician. 42
C.F.R. § 411.351.
2. Entity.
“Entity” includes the person or entity that
“presented a Claim” to Medicare and the person
or entity that “performed the DHS,”
notwithstanding that another person or entity
actually bills for the services as DHS. 73 Fed.
Reg. 48,434, 48,751. This appears to create
“entity” status for any organization that provides
services “under arrangement” to a hospital.
(“Under arrangement” is a relationship in which a
hospital contracts with a third party to provide a
service to the hospital and its patients. The
hospital bills and collects for the service and also
pays the third party a fee for providing the
service.)
3. Designated Health Services (DHS).
The CMS website lists CPT and HCPCS
codes deemed to constitute DHS. Generally,
DHS would include: clinical laboratory services;
physical therapy services; occupational therapy
services; radiology services (except nuclear
medicine and radiology/imaging services
requiring the insertion of a needle, catheter, tube
or probe; radiology therapy services and
supplies); durable medical equipment and
supplies; parenteral and entered nutrients,
equipment and supplies; prosthetics, orthotics and
prosthetic devices and supplies; home health
services; outpatient prescription drugs; and
inpatient and outpatient hospital services. 42
U.S.C. § 1395nn(h)(6).
4. Financial Relationship.
A “financial relationship” may arise through
(i) a direct or indirect ownership or investment
interest, or (ii) a direct or indirect compensation
arrangement. 42 C.F.R. § 411.354(a).
a. Ownership or Investment Interest.
Ownership or investment interest may be
direct or indirect. Direct ownership or investment
interest may arise through stock, equity, debt,
partnership shares, limited liability memberships,
or “other means,” 42 C.F.R. § 411.354(b), but
does not include interest in retirement plans,
stock options and convertible securities received
as compensation (until the options are exercised
or the securities are converted to equity),
unsecured loans or “under arrangements”
contracts between a hospital and an entity owned
by a physician or physician group. Id. §
411.354(b)(3).
Indirect ownership or investment interest is
less clear. One definition provides that “indirect”
is satisfied if “indirect” exists. 42 C.F.R. §
411.354(b)(5). Another provision provides that
an indirect ownership or investment interest
exists if (i) there is an unbroken chain of
ownership/investment interests between the
referring physician and entity furnishing DHS,
and (ii) the entity furnishing DHS has actual
knowledge or, or acts in reckless disregard or
deliberate ignorance, of the referring physician’s
ownership or investment interest in the entity
furnishing DHS. 42 C.F.R. § 411.354(b)(5). To
this extent, the “know or should have known”
concept appears to be an element determinative of
whether an indirect ownership or investment
interest exists.
There are five exceptions that do not
constitute “ownership or investment” interest in a
financial relationship. The first exception is for
publicly-traded securities that meet certain
criteria. 42 C.F.R. § 411.356(a). The second
exception is for mutual funds (regulated
investment company) that had total assets
exceeding $75 million for either the most recent
fiscal year or on average during the three
previous fiscal years. 42 C.F.R. § 411.356(b).
The third exception is ownership or investment
interest in a “rural provider.” 42 C.F.R. §
411.356(c)(1). The fourth exception includes any
hospital located in Puerto Rico. 42 C.F.R. §
411.356(c)(2). The fifth exception is for hospitals
not in Puerto Rico and at which the referring
physician performs services, the hospital is not a
specialty hospital, the ownership or investment is
in the entire hospital (as distinguished from in

just one department), and by September 23, 2011
the hospital met the requirements of § 411.362.
b. Compensation Arrangement.
For the purpose of defining a “financial
relationship,” a “compensation arrangement” is
any arrangement involving remuneration, direct
or indirect, between a physician (or his/her
immediate family member) and an entity. 42
C.F.R. § 411.354(c).
“Remuneration” is statutorily given a broad
definition at 42 U.S.C. § 1395nn(h). Similarly, at
42 C.F.R. § 411.351, “remuneration” is defined
broadly as “any payment or other benefit made
directly or indirectly, overtly or covertly, in cash
or in kind.”
There are three exceptions to the broad
definition of “remuneration”: (1) forgiveness of
amounts owned for inaccurate tests or procedures
or correction of minor billing errors; (2)
furnishing of items, devices or supplies (not
including surgical items, devices or supplies)
used to collect, transport, process or store
specimens or used solely to order or communicate
results of tests or procedures for the entity; or (3)
payments to physicians or insurers or self-insured
plans or their subcontractors to satisfy a claim,
submitted on a fee-for-services basis, for the
furnishing of health services by that physician to
an individual insured by the insurance policy or
self-funded plan, provided (i) the health services
are not furnished, and the payment is not made,
under a contract or other arrangement between
the insurer or self-funded plan (or their
contractor) and the physician; (ii) the payment is
made to the physician on behalf of the covered
individual and would otherwise be made directly
to the individual; and (iii) the amount of the
payment is set in advance, does not exceed fair
market value, and is not determined in a manner
that takes into account directly or indirectly, the
volume or value of any referrals.
A “direct compensation arrangement” exists
if “remuneration passes” between the referring
physician (or a member of his or her immediate
family) and the entity furnishing DHS without
any intervening persons or entities. 42 C.F.R. §
411.354(c)(1)(i). A physician is “permitted” to
“stand in the shoes” of his/her physician
organization if the only “intervening entity
between the physician and the entity furnishing
the DHS is his or her physician organization.” §
411.354(c)(1)(iii). With one exception, a
physician is deemed to “stand in the shoes” of
his/her physician organization and have a direct
compensation arrangement with an entity
furnishing DHS if (A) the only intervening entity
between the physician and the entity furnishing
the DHS is his/her physician organization, and
(B) the physician has an ownership or investment
interest in the physician organization. §
411.354(c)(ii).
“Indirect compensation arrangement” entails
(1) an unbroken chain of financial arrangements
linking the referring physician to the entity
furnishing the DHS; (2) variation in aggregate
compensation (closest to the physician) based on
volume or value of the physician’s referrals to, or
business generated for, the DHS entity; and (3)
whether the DHS entity has actual knowledge that
the aggregate compensation varies in this manner.
42 C.F.R. § 411.354(c)(2). For this purpose, a
physician “stands in the shoes” of his/her
physician organization if he/she has an ownership
or investment interest in it. 42 C.F.R. §
411.354(c)(2)(iv).
There are approximately 24 exceptions that
do not come within the scope of “compensation
arrangement.” 42 U.S.C. § 1395nn(e) provides
that the following are not compensation
arrangements: (1) rental of office space and
payment from a lessee to a lessor for use of
premises, provided certain criteria are satisfied;
(2) rental of equipment and payments from a
lessee to a lessor for use of equipment, provided
certain criteria are satisfied; (3) bona fide
employment relationship that satisfies certain
conditions; (4) personal service arrangements that
satisfy a host of criteria; (5) a physician incentive
plan that satisfies certain criteria; (6)
remuneration from a hospital to a physician that
does not relate to the provision of DHS; (7)
remuneration provided by a hospital to induce the
physician to relocate to the geographic area,
provided that certain criteria are satisfied; (8)
isolated financial transaction (e.g., one-time sale
of a practice), provided certain criteria are
satisfied; (9) an arrangement, that began before

and has been in continuous effect since December
19, 1989, whereby a “group practice” provides
DHS that are billed by a hospital, provided
certain conditions are satisfied; (10) payments by
a physician to a laboratory for clinical laboratory
services or to an entity as compensation at fair
market value, for other items or services, but the
entity providing such items or services must
provide the Secretary of the DHS with specified
information.
42 C.F.R. § 411.357(i), et seq., then add 14
additional exceptions to “compensation
arrangement.” They are: (11) charitable
donations meeting certain criteria; (12) non-
mandatory compensation meeting certain criteria;
(13) fair market value compensation meeting
certain criteria; (14) medical staff incidental
benefits meeting certain conditions; (15) risk-
sharing arrangements between a physician and
managed care organization (or independent
practice association) meeting certain conditions;
(16) compliance training meeting certain criteria;
(17) indirect compensation arrangements (defined
in § 411.354(c)(2)) provided certain conditions
are satisfied; (18) referral services meeting all
conditions set forth in § 1001.952(f); (19)
obstetrical malpractice insurance subsidies
provided certain conditions are satisfied; (20)
professional courtesy (as defined in § 411.351),
provided certain conditions are satisfied; (21) for
underserved areas, hospital retention payments to
physicians, provided certain conditions are
satisfied; (22) sharing of information in
community-wide health information systems,
provided certain conditions are met; (23)
hardware, software, information technology and
training for receipt and transmission of electronic
prescription information, provided certain
conditions are met; and (24) software information
technology and training for creation,
maintenance, transmission and receipt of
electronic health records, provided certain
conditions are met.
C. Eight Matters Outside the Scope of the
Stark Law
42 C.F.R. § 411.355 provides that the §
411.353 Stark Law prohibition does not apply in
eight contexts. First, the Stark Law prohibition
does not apply to physician services personally
furnished by one member of a group practice to
another member of the group practice. §
411.353(a).
Second, provided a host of conditions are
satisfied, the Stark Law prohibition does not
apply to in-office ancillary services, with certain
exclusions. § 411.355(b).
Third, provided that certain criteria are
apply to services furnished by an organization to
enrollees in certain specified prepaid group plans.
§ 411.355(c)
Fourth, provided certain conditions are met,
the Stark Law prohibition does not apply to
academic medical centers. § 411.355(e).
Fifth, provided certain conditions are
apply to implants furnished by an ambulatory
surgical center. § 411.355(f)
Sixth, provided certain conditions are
apply to EPO and other dialysis-related drugs. §
411.355(g). EPO is erythropoietin, a hormone
produced by the kidneys.
Seventh, provided certain conditions are met,
the Stark Law prohibition does not apply to
preventive screening tests, immunizations and
vaccines. § 411.355(h)
Eighth, provided that certain conditions are
apply to eyeglasses and contact lenses that are
covered by Medicare when furnished to patients
following cataract surgery. § 411.355(i).
D. Sanctions and Liability Under the Stark
Law.
The statute prescribes three sanctions. First,
42 U.S.C. §§ 1395nn(g)(1) and (2) provide there
is not to be a payment for a service which is
provided in violation of § 1395nn(a)(1), and if
such a payment has been made, it is to be
refunded.
Second, 42 U.S.C. § 1395nn(g)(3) provides
that any person who presents a claim for a service
which the person knows or should know is in
violation of (a)(1) is subject to a civil monetary
penalty of not more than $15,000 for each
service.

Third, 42 U.S.C. § 1395nn(g)(4) provides
that for each arrangement or scheme having the
principal purpose of circumventing the Stark
Law, for referrals in violation of the section, the
physician or entity is subject to a penalty of not
more than $100,000.
As explained above, the Stark Law’s second
prohibition implicates the FCA and its penalties.
E. Self-Referral Disclosure Protocol
Section 6409 of the ACA requires the
Secretary of DHHS to establish a self-referral
disclosure protocol (SRDP) setting forth a
process for providers and suppliers to self-
disclose actual or potential violations of the Stark
Law. The Secretary has issued the SRDP. See
OMB Control Number 0938-1106. Basically the
provider who has violated the Stark Law may
self-disclose. The self-disclosure must be
accompanied by specified information. Upon
self-reporting, the 60 day deadline for reporting
and return of the overpayment is suspended. The
CMS may negotiate a settlement with the
provider who self-reports.
F. Recent Example of Application of Stark
Law to Financial Relationship
A staffing company employed medical
oncologists who treated patients at a hospital.
Whenever one of the oncologists personally
provided a service, the hospital billed Medicare
for a professional fee and a facility fee (e.g., for
items such as space and equipment). The hospital
paid salaries and bonuses by transferring the
money to the staffing company which in turn paid
the medical oncologists. Incentive bonuses to
physicians included 15% of the operating margin
for the hospital’s oncology department; this
included fees for services not personally provided
by the medical oncologists (e.g., fees for services
related to administration of chemotherapy). The
court ruled that the medical oncologists made
inappropriate referrals to the hospital and that the
hospital inappropriately billed Medicare. U.S. v.
Halifax Hosp. Medical Center, 2013 WL
6017329 (M.D. Fla. 2013). The hospital and
staffing company then entered a settlement for
$85 million. DOJ Press Release, Office of Public
Affairs (Mar. 11, 2014). “Florida Hospital
System Agrees to Pay the Government $85
Million to Settle Allegations of Improper
Financial Relationship with Referring
Physicians.”
V. ANTI-KICKBACK STATUTE
The anti-kickback statute is at 42 U.S.C. §
1320a-7b(b). It is a criminal statute but also
gives rise to FCA civil liability.
A. Examples Demonstrating Importance of
Law
1. Criminal Liability: Referrals/Commissions
Robinson owned and operated Memorial
Medical Supply (“MMS”) which provided
durable medical equipment to Medicare
beneficiaries. Robinson paid referral fees or
commissions to Lisa Jones and Shirley Chairs in
exchange for referral information leading to new
customers. Robinson was convicted of providing
unlawful health care kickbacks and sentenced to
97 months of imprisonment. U.S. v. Robinson,
505 Fed. Appx. 385 (5th
Cir. 2013).
2. Civil Liability
Johnson & Johnson (along with Janssen)
paid millions and millions of dollars to Omnicare,
Inc., the nation’s largest pharmacy specializing in
dispensing drugs to nursing homes. The money
was accounted for as market share rebate
payments, data purchase agreements, “grants,”
and “educational funding.” The payments were
intended to induce Omnicare and its consultant
pharmacists to engage in “active intervention
programs” to promote the use of Risperdal and
other drugs. The payments worked. But then the
government brought an action contending that the
payments were kickbacks. Johnson & Johnson
and Jannsen paid $149 million to resolve the
government’s contention that the kickbacks
caused Omnicare to submit false claims to federal
health care programs. DOJ, Office of Public
Affairs, Press Release (Nov. 4, 2013), “Johnson
& Johnson to Pay More than $2.2 Billion to
Resolve Criminal and Civil Investigations.”
B. Elements of a Violation.
A violation of the anti-kickback statute
occurs if the following elements are satisfied:

(1) Remuneration, in cash or
kind, including any kickback, bribe,
rebate, directly or indirectly, overtly or
covertly,
(2) offered, paid, solicited or
received, directly or indirectly
(3) knowingly and willfully
(4) (a) to refer, or in return for
referring, an individual to a person for
the furnishing or arranging for
furnishing of any item or service, or
(b) to purchase, lease, order
or arrange, or in return for or
recommending or purchasing, leasing,
ordering or arranging, any good,
facility, service or item
(5) for which payment will be
made in whole or in part under a federal
health care program.
The anti-kickback statute already stated that
the act (solicitation, receipt or offer) must be
knowing and willful. § 1320a-7b(b). The ACA
added a new provision stating that “a person need
not have actual knowledge of this section or
specific intent to commit a violation of this
section.”
The anti-kickback was intended to eliminate
arrangements that may contribute to unnecessary
medical care and/or detract from a physician
making decisions based only on his/her sound
objective medical judgment. But the anti-
kickback statute may arguably impact some
physicians who engage in collegial behavior or
who try to provide financial assistance to the
underprivileged. For example, the once common
practice whereby physicians gave either free or
reduced-rate care to other physicians and their
families, is arguably now unlawful, at least if the
recipient is in a position to refer patients.
As another example, routinely waiving co-
pays to help low-income earners may carry risks.
The DHHS’s OIG believes that waiving Medicare
or Medicaid co-pays is not permissible in many
circumstances. Publication of OIG Special Fraud
Alert, Federal Register, Dec. 19, 1994; and 67
FED. REG. 72, 896 (Dec. 9, 2002). Moreover,
waiving a co-pay may inadvertently result in a
health care provider overcharging and ergo
submitting a fraudulent claim. Suppose that
under Medicare, physicians are paid 80% of the
lesser of the allowable amount or actual charge.
If the health care provider accepts “whatever
insurance pays,” if Medicare pays $80 of the
$100 charge and the $80 is accepted as full
payment because all the provider charges is what
insurance pays, then the actual charge may be
deemed to be $64, in which case the provider
would have overbilled Medicare by $16.
Furthermore, to substantiate the contention of
inability to pay, the physician may want to use an
appropriate form to gather evidence establishing
the inability to pay.
C. Criminal, Civil and Administrative
Penalties
A violation of the anti-kickback statute is
both criminal and civil. A violation is a felony
subjecting the person to a fine of not more than
$25,000 and/or imprisonment of not more than
five years. § 1320a-7b(b).
A claim resulting from a violation of the
anti-kickback statute is a per se false or
fraudulent claim for the purpose of the False
Claims Act, which subjects the person to a civil
penalty of $5,000 to $11,000 per claim and to
treble damages. § 1320a-7b(g).
42 U.S.C. § 1320a-7a(a) provides that
violation of § 1320a-7(b) subjects the violator to
a $50,000 fine for each act. A violation of the
anti-kickback statute may lead to administrative
exclusion from federal health care programs.
D. Matters/Events/Subjects to Which Anti-
Kickback Statute Does Not Apply
The anti-kickback statute does not apply in
certain specified contexts or circumstances.
 Discount or other reduction in price,
provided certain conditions are satisfied. 42
U.S.C. § 1320a-7b(b)(3)(A).
 Amounts paid to bona fide employee for
employment in provision of covered items or
services. § 1320a-7b(b)(3)(B).
 Amounts paid to a vendor authorized to act
as purchasing agent for groups furnishing

reimbursable services, provided certain
conditions are satisfied. § 1320a-
7b(b)(3)(C).
 Waiver of coinsurance under Part B,
provided certain conditions are satisfied. §
1320a-7b(b)(3)(D).
 Certain risk-sharing agreements, provided
certain conditions are satisfied. § 1320a-
7b(b)(3)(F).
 Waiver or reduction by pharmacies of cost-
sharing imposed under Part D, provided
7b(b)(3)(G).
 Remuneration between a federally qualified
health center and an AMA organization,
provided certain conditions are satisfied. §
1320a-7b(b)(3)(H).
 Remuneration in support of serving
medically underserved populations, provided
7b(b)(3)(I).
 Drug discounts from a manufacturer to a
beneficiary under the Medicare coverage
gap. § 1320a-7b(b)(3)(J).
E. Regulatory Safe Harbors
42 U.S.C. § 1320a-7b(b)(3)(E) authorizes the
Secretary of DHHS to establish payment
practices which will not constitute illegal
remuneration. There are approximately 23
payment practices which “shall not be treated as a
criminal offense” listed at 42 C.F.R. § 1001.952,
some of which are duplicative of the statutory
provisions. The payment practices include,
among others: investment interests in large
publicly traded entities or certain small entities;
space rentals; equipment rentals; personal
services and management contracts; sale of
practice; referral services; warranties; discounts;
employees; group purchasing organizations;
certain Medicare Part A waivers of coinsurance
and deductibles; increased coverage, reduced
cost-sharing amounts, or reduced premium
amounts offered by certain health plans (managed
care); price reductions offered to certain health
plans (managed care); investment interests in
underserved areas; investment interests in
surgeon-owned single specialty, multi-specialty
and hospital/physician ambulatory surgical
centers; investment interests in group practices
composed exclusively of active investors who are
licensed health care professionals; rural
practitioner recruitment incentives; obstetrical
malpractice insurance subsidies; referral
agreements for specialty services; cooperative
hospital service organizations; ambulance
replenishment arrangements; electronic
prescribing and electronic medical records; and
federally qualified health centers.
VI. TEXAS MEDICAID FRAUD
PREVENTION ACT.
Texas administers its Medicaid program.
The Texas Medicaid Fraud Prevention Act
(“TMFPA”) is a state civil statute aimed at
Medicaid fraud and abuse. TEX. HUM. RES. CODE
ANN. §§ 36.001, et seq.
A. Example Demonstrating Application of
TMFPA
The TMFPA should not be underestimated.
In Actavius Mid Atlantic LLC v. State, 2012 WL
1142711 (Tex. Amarillo 2012, no pet.), the
Attorney General’s Civil Medicaid Fraud Section
obtained a trial court judgment that included
actual damages in the amount of $34,555,953,
punitive damages in the amount of $130,961,906,
and attorneys’ fees. The parties later settled the
case.
B. Unlawful Acts
The TMFPA lists 13 unlawful acts. §
36.002. The categories are: (1) false statement or
misrepresentation under Medicaid; (2) concealing
or failing to disclose unauthorized Medicaid
payment; (3) receipt or conversion of Medicaid
benefits due another person; (4) inducing a false
statement or misrepresentation; (5) solicitation or
payment of extra money for continued provision
of service covered by Medicaid; (6) claim for
service provided by unlicensed provider; (7)
claim for service that was inadequate or product
that was mislabeled; (8) claim that fails to

indicate the ID number of the provider who
actually provided the service; (9) conspiracy; (10)
provider fails to provide a required health care
benefit or service; (11) obstruction of an
investigation; (12) false record or statement
material to transmission of money/property under
Medicaid program; or (13) presents claim,
receives kickback, or otherwise violates §
32.039(b) [dealing with kickbacks, bribes, rebates
for certain purposes].
C. Liability
A person who commits an unlawful act
under the TMFPA may be liable to the State for:
 The value of the payment as a result of the
unlawful act, two times the value of the
payment as a result of the unlawful act, and
interest
 for each unlawful act that results in injury to
an elderly or disabled person or a person
younger than age 18, a civil penalty
generally ranging from $5,500 to $15,000
 for each unlawful act that does not result in
injury to an elderly or disabled person or a
person younger than 18, a civil penalty
generally ranging from $5,000 to $11,000.
§ 36.052.
D. Who May Bring an Action
The Attorney General has the authority to
investigate or prosecute a case. §§ 36.007,
36.051, 36.053, 36.054.
Also, a private individual has a right to bring
a civil suit. § 36.101. Such a suit is filed in
camera and must be served on the Attorney
General. § 36.102. The State may proceed with
the suit. § 36.104. If the State obtains a
recovery, the private plaintiff may receive 15%
to 25% of the proceeds. § 36.110(a). If the State
declines to take over the action, the private person
may proceed without the State’s participation. §
36.104(b). If the State does not proceed with the
action, the private individual is entitled to 25% to
30% of the proceeds. § 36.110(a-1).
E. TMFPA’s Significance to State of Texas
In Texas, from FY2006 through FY2012,
Texas recovered $821 million for Medicaid fraud
under the TMFPA and FCA. Of this amount,
$394 million was from cases in which Texas led
the investigation and prosecution under the
TMFPA. Of the $821 million, over 95%
stemmed from whistleblower-initiated cases. The
annual number of Texas Medicaid Fraud and
Recovery cases are: 11 cases in 2006, 5 cases in
2007, 11 cases in 2008, 6 cases in 2009, 15 cases
in 2010, 15 cases in 2011, and 25 cases in 2012.
All information in this paragraph is from Fighting
Medicaid Fraud in Texas by Jack Meyer and
Chris Wolff (March 2013).
VII.FEDERAL HEALTH CARE
ADMINISTRATIVE SANCTIONS
A. Mandatory Exclusions
The Secretary of the DHHS must exclude
persons criminally convicted of Medicare and
Medicaid offenses or other certain felony
offenses related to health care. 42 U.S.C. §
1320a-7(a)(1) and (2).
B. Permissive Exclusion
The Secretary of the DHHS may exclude
persons, among others: (1) convicted of criminal
misdemeanors relating to certain health care-
related fraud, theft, embezzlement, breach of
fiduciary responsibility and other financial
misconduct; (2) convicted of obstructing an
investigation or audit; (3) misdemeanor
conviction relating to controlled substances; (4)
determined to have submitted claims for
excessive charges or unnecessary services or to
have failed to furnish medically necessary
services; (5) fails to grant immediate access, upon
reasonable request, to certain federal and state
agents; and (6) making false statements or
misrepresentations of material facts. 42 U.S.C. §
1320a-7(b). Excluded persons are entitled to
notice may request a hearing, and may seek
judicial review. 42 U.S.C. § 1320a-7(f).
C. Administrative Civil Monetary Penalties.
42 U.S.C. § 1320a-7a is titled “Civil
Monetary Penalties” and authorizes the DHHS to
levy civil money penalties of not more than

$10,000 for “each item or service” plus three
times the amount claimed.
Conduct within the scope of § 1320a-7a
includes, among other things, knowingly making
claims for services not provided or for services
not medically necessary, offering remuneration to
a Medicare or Medicaid beneficiary for the
purpose of influencing the beneficiary to obtain
items or services, knowingly making or using a
false statement material to a false or fraudulent
claim, filing to grant timely access to the
Inspector General (“IG”), or knows of but does
not report or return an overpayment. 42 U.S.C. §
1320a-7a(a).
Persons subjected to monetary penalties are
entitled to notice, may request a hearing, and may
seek judicial review. 42 U.S.C. § 1320a-7(c).
VIII. POTENTIAL CRIMINAL LAWS
APPLIED TO HEALTH CARE BILLING
AND OTHER TRANSACTIONS
As explained above, the Anti-Kickback
statute carries criminal penalties. A number of
additional federal criminal statutes have been
applied.
A. Health Care Fraud Statute
18 U.S.C. § 1347 provides that it is a crime,
if in connection with the delivery of, or payment
for, health care benefits, a person knowingly and
willfully executes or attempts to execute, a
scheme or artifice:
(1) to defraud any health care
benefit program; or
(2) to obtain, by means of false
or fraudulent pretenses, represen-
tations or promises, any of the
money or property owned by, or
under the custody or control of,
any health care benefit program,
Significant, specific intent to commit a
violation of the Health Care Fraud Statute is not
required. Subsection (b) provides:
With respect to violations of this
section, a person need not have
actual knowledge of this section or
specific intent to commit a
violation of this section.
For a case based on § 1347, see United States
v. Martin, 2014 465704 (5th
Cir. 2014).
B. Theft or Embezzlement in Connection
with Health Care
18 U.S.C. § 669 is a criminal statute aimed at
theft or embezzlement in connection with a health
care benefit program.
C. False Statement, Concealment or Trickery
Relating to Health Care Matters
18 U.S.C. 1035 is a criminal statute that
prohibits falsity, concealment or trickery in
connection with health care benefits, items or
services.
D. Making or Causing to be Made False
Statements or Representations in
Connection with Health Care
42 U.S.C. § 1320a-7b(a) is a criminal statute
that prohibits false statements or representations
in connection with benefits, payments, eligibility,
receipt, services by an unlicensed physician, or
disposal of assets to become eligible for medical
assistance.
E. False Statements and Entries
18 U.S.C. § 1001 is a general criminal statute
that generally prohibits the making of false,
fictitious or fraudulent entries.
F. Mail Fraud
The mail fraud statute is at 18 U.S.C. § 1341.
G. Wire Fraud
The wire fraud statute is at 18 U.S.C. § 1343.
H. False, Fictitious or Fraudulent Claims
18 U.S.C. § 287 is a general criminal statute
aimed at false, fictitious or fraudulent claims
made upon the federal government.

IX. MULTIPLE ENTITIES ENFORCE
LAWS AGAINST HEALTH CARE
WASTE, FRAUD AND ABUSE
A health care provider may have to deal
with, or be a target of, multiple entities that
enforce state and/or federal laws.
A. Federal Level: OIG, FBI, DOJ, MAC,
RAC, ZPIC, HEAT
1. Centers for Medicare and Medicaid Services
DHHS oversees Medicare and Medicaid.
Medicare and Medicaid together provide health
insurance for approximately 25% of the
population. Within the DHHS, the CMS has
responsibility for the Medicare and Medicaid
programs. CMS oversees billing. As part of that
function, CMS focuses on health care fraud.
2. DHHS’s Office of Inspector General
The CMS works with the DHHS’s OIG
which, among other things, is responsible for
investigating fraud and abuse in the Medicare and
Medicaid programs. The OIG may pursue
administrative sanctions (e.g., civil monetary
penalties or barring a health care provider from
participating in the Medicare and Medicaid
programs). OIG investigations may be initiated,
among other reasons, upon receipt of a complaint,
such as one from a patient or disgruntled current
or former employee. OIG investigations may
also be a follow-up to audits by contractors
external to the DHHS.
3. Medicare Administrative Contractor
CMS does not process the millions of
Medicare claims. Instead, the CMS contracts out
the work to private sector Medicare
Administrative Contractors (“MACs”). 42 U.S.C.
§§ 1395kk-1, 1395h and 1395u. MACs make
decisions to pay or deny claims; when a claim is
denied, an appeal process is available. Each
MAC is also charged with investigating and
identifying potential fraud, waste and abuse.
Although a MAC may conduct an investigation or
audit, the MAC may also refer its suspicions or
findings to the OIG.
4. Medicare Recovery Audit Contractor
Pursuant to 42 U.S.C. § 1394ddd, the DHHS
has a Medicare RACs under which outside
private sector contractors are engaged to identify
underpayments and overpayments and to recoup
overpayments. RACs generally use data mining
or similar electronic methodology to identify
which health care providers to audit on a post-
payment basis. RACs are paid on a contingency
fee basis and may refer cases to the OIG.
Once a RAC determines an overpayment
has been made, notice is sent to the health care
provider along with a demand for repayment.
The notice and demand set forth the reasons for
the RAC’s decision. There is a five-step appeal
process. The RAC appeal process is not
functioning properly. At the administrative law
judge stage, there is a backlog of 357,000 claims.
Because of the backlog, on February 18, 2014,
the CMS suspended appeals to administrative law
judges for two years; after the two-year
suspension, the delay at the administrative law
judge stage will exceed six months, for a 30
month delay.
5. Zone Program Integrity Contractor
The CMS has a Zone Program Integrity
Contractors (“ZPIC”) program. The CMS
engages private entities whose primary focus is to
investigate potential fraud, waste and abuse. See
Chapter 4 of Medicare Program Integrity
Manual. ZPICs conduct audits. Generally, there
are three possible outcomes of a ZPIC program
audit. The ZPIC may conclude that the health
care provider needs to obtain additional education
(or provide such to its employees). Second, ZPIC
may refer audit results to a MAC for collection of
overpayment. The provider may appeal the
overpayment determination. Third, ZPIC may
refer the case for criminal prosecution, civil
litigation under the False Claims Act, or
imposition of civil monetary penalties or other
sanctions.
6. Federal Bureau of Investigation
Each office of the FBI investigates health
care fraud, among other things.

7. Department of Justice
The CMS, OIG and FBI do not bring
criminal prosecutions or civil enforcement
actions. Potential criminal prosecutions or civil
enforcement actions are referred to the DOJ,
specifically, to the United States Attorney’s
Offices (“USAOs”). Each USAO has a Civil
Health Care Coordinator. USAOs bring criminal
and civil actions arising from health care fraud,
waste and abuse.
8. Combined Task Force
The DOJ and DHHS have a combined
Health Care Fraud and Abuse Control
(“HCFAC”) Program. In FY2013, it recovered
$4.3 billion in taxpayer dollars. This amounted to
a recovery of $8.10 for every dollar spent in
combating health care fraud. Part of the HCFAC
Program is the Health Care Fraud Prevention and
Enforcement Action Team (“HEAT”), a
combined DOJ/DHHS effort. HEAT’s purpose
is, among other things, to combat fraud and
recover overpayments. See HHS Press Release
dated February 26, 2014.
B. State Level: HHSC’s OIG, Attorney
General, TMHP, RAC.
1. HHSC’s Inspector General
Each state handles its own Medicaid
program. The Texas Health and Human Services
Commission (“HHSC”) runs the Medicaid
program in Texas.
2013 legislation (SB 1803) provides that the
HHSC’s IG may receive “allegations of fraud”
and within 30 days must investigate to determine
whether a full investigation is warranted. The
HHSC recoups any improper payments.
The Texas OIG may recoup Medicaid
overpayment or a debt arising from a Medicaid
fraud or abuse investigation. It appears that the
process will be that, after review by a qualified
expert, the OIG sends a Notice of Proposed
Recoupment of Overpayment or Debt to the
health care provider who within 30 days must
request an initial Informal Resolution Meeting
(“IRM”). Then, within 20 days after the initial
IRM, the health care provider must request a
second IRM. Then the OIG issues a Final Notice
of Recoupment of Overpayment or Debt. Within
15 days of receipt of the Final Notice, the health
care provider must request an administrative
hearing at HHSC or State Office of
Administration Hearings (“SOAH”); a provider
requesting a SOAH hearing must deposit a cash
security to cover one-half of the cost. After
hearing, a Final Order is issued. The provider
may appeal to Travis County District Court for a
substantial evidence review.
The Texas OIG may implement a Medicaid
payment hold against a health care provider. It
appears that the new process will be that, after
review by a qualified expert, the OIG places a
hold on payments and then, within five days,
notifies the provider within 30 days of receipt of
the Notice of Payment Hold, the provider must
(1) first deposit a cash security to cover one-half
of the cost of SOAH hearing, (2) request a SOAH
hearing, and (3) request an initial IRM. Within
20 days of the initial IRM, the provider must
request a second IRM. The SOAH hearing is
stayed until the IRM process is complete. After
the SOAH hearing, a Final Order is issued. The
provider may appeal the Final Order to the Travis
County District Court for substantial evidence
review.
On March 17, 2014, the HHSC’s OIG
entered a settlement with Carousel Pediatrics.
According to the HHSC’s New Release, the OIG
imposed a payment hold. Apparently, the OIG
demanded reimbursement of $17.9 million plus a
$4 million penalty. Carousel acknowledged
billing errors and contended they were not
intentional. The case was settled for $3.75
million. Under the settlement, Carousel pays an
initial $614,000 to be followed by monthly
payments. HHSC News Release (Mar. 17 2014),
“OIG Reaches $3.75 Million Settlement with
Carousel.”
2. Texas Medicaid and Health Care Partnership
The HHSC outsources Medicaid Claim
processing to a private consortium named Texas
Medicaid & Health Care Partnership (“TMHP”).
As indicated, the TMHP is supposed, among
other things, to look for fraud.

3. Texas Attorney General’s Office
In Texas, the Office of Attorney General has
a Medicaid Fraud Control Unit. It conducts
criminal investigations of Medicaid providers
(not recipients) suspected of cheating Medicaid.
The Unit employs investigators, auditors and
attorneys located in Austin and eight other cities.
4. Texas Medicaid Recovery Audit Contractor
Pursuant to 42 U.S.C. § 1396a(a)(42)(B),
Texas has established RAC Program. 15 TAC §
354.1451. According to the regulation, RACs
review, analyze and audit Medicaid claims for
which payment to health care providers has been
made. The RAC refers suspected fraud and abuse
to the HHSC’s OIG.
C. Joint Federal/State/Local.
The DOJ/HHS Medicare Fraud Strike Force
is an effort to coordinate federal, state and local
investigators who fight Medicare fraud. Dallas,
Texas, is one of the cities which has a Medicare
Fraud Strike Force Facility.
X. DISCLOSURE OF PERSONAL
HEALTH INFORMATION
Disclosure of personal health information
may become important in civil discovery or
criminal investigations.
A. Texas Law
Several Texas statutes address disclosure of
health care information.
1. Hospital Disclosure of Health Care
Information
Texas Health and Safety Code Chapter 241
is titled “Disclosure of Health Care Information.”
It applies to hospitals. A written authorization is
required before a hospital may disclose health
care information. § 241.152(a). The
authorization must be in writing, dated, signed,
identify the information to be disclosed and the
recipient, and be in a document separate from the
consent to medical treatment. § 241.152(b).
There are twenty exceptions permitting
disclosure of health information without the
patient’s authorization. § 241.153. For example,
the exceptions include, among others, disclosure
to a health care provider rendering health care to
the patient, to a prospective health care provider,
to a government agency authorized to receive the
information, and pursuant to the Texas Rules of
Civil Procedure or Code of Criminal Procedure.
A patient aggrieved by a violation may seek
injunctive relief and damages. § 241.156. The
cause of action may be maintained against
hospitals. Public sector hospitals may assert
immunity. Payne v. Center for Health Care
Services, 2008 WL 4172270 (Tex. App.—San
Antonio 2008, no pet.).
2. EMS Provider Disclosure of Health Care
Information
Texas Health and Safety Code, Chapter 773,
Subchapter D, addresses Confidential
Communications between emergency medical
service personnel and a patient. The
communications and records are confidential and
may not be disclosed. § 773.091(a) and (b). The
“privilege of confidentiality” does not extend to
information about the patient’s age, sex, nature of
injury or illness. A person aggrieved by
unauthorized disclosure of EMS communications
may sue for damages. § 773.094.
Section 773.092(b) provides exceptions for
court or administrative proceedings when there is
written consent, to collect for services rendered,
or in civil or administrative litigation in which the
patient is attempting to recover money damages.
Section 773.092(e) contains additional
exceptions.
The criminal proceeding exception is
relatively narrow. First, there is no exception
when the patient is the person being investigated
or potential criminal defendant. Section
773.092(b)(5) excepts communications for a
criminal prosecution in which the patient is the
victim, witness or defendant, but § 773.092(c)
provides that this exception “does not authorize
release of confidential information to instigate or
substantiate criminal charges against a patient.”
Second, surprisingly, Chapter 773 does not
contain -- when the patient is a civil defendant or
potential criminal defendant -- an exception for
the Rules of Civil Procedure or Code of Criminal
Procedure. The statutory language creates a
Rules of Civil Procedure/Code of Criminal

Procedure exception for hospital disclosure of
health care information but not for emergency
medical service provider disclosure of health care
information. Logically, in a criminal proceeding,
the appropriate course of action is to resort to §
773.092(d). Section 773.092(d) provides that
confidential records or communications are not
discoverable in a criminal proceeding until the
court in which the prosecution is pending makes
an in camera determination as to the relevancy of
the records or communications. . . .”
3. Medical Records
Texas Health and Safety Code Chapter 181
addresses medical records privacy. Section
181.004(a) requires covered entities to comply
with HIPAA. Section 181.101 requires covered
entities to provide training to employees. Section
181.152 sets forth requirements with which a
covered entity must comply before using or
disclosing protected health information for
marketing. With certain exceptions, § 181.153
prohibits the sale of protected health information.
Chapter 81 does not create a private right of
action. The Texas Attorney General may institute
civil actions seeking civil penalties and injunctive
relief. § 181.201. Penalties range from $5,000 to
$250,000. If the covered entity is licensed, the
Attorney General may institute an action for a
civil penalty only if the licensing agency refers a
violation to the Attorney General. § 181.201(e).
B. HIPAA (Federal Law)
The Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”), Pub. L.
No. 104-191, 110 Stat. 1936 (1996) is codified
primarily at Titles 18, 26, 29 and 42 of the U.S.C.
HIPAA includes, among other things, privacy
protections for individually identifiable health
information, security provisions, standards for
electronic health care transactions, breach
notification, and a person’s right to access and/or
amend his/her medical records.
The Health Information Technology for
Economic and Clinical Health Act addresses
privacy and security concerns associated with
electronic transmission of health information.
The ACA builds upon HIPAA with new and
expanded provisions. These include, among
other things, requirements to adopt operating
rules for each of the HIPAA covered transactions,
a unique and standardized Health Plan Identifier,
a standard for electronic funds transfer, and
certification of steps required for compliance.
On the federal level, a person files a health
information privacy complaint with the DHHS’s
Office of Civil Rights. See Form OMB No.
0990-0269. Failure to comply with HIPAA’s
requirements may result in criminal penalties and
administrative monetary penalties. 42 U.S.C. §
1320d-5. Monetary penalties may range from
$100 to $50,000 or more per violation, with up to
$1,500,000 for repeated violations within a year.
HIPAA does not give a private right of
action. Acara v. Banks, 470 F.3d 569, 571-72 (5th
Cir. 2006) (concluding that Congress did not
intend for private enforcement of HIPAA).

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