By Brad Adatto, JD, Partner, ByrdAdatto
Legal enforcement has been a big topic among med spas across the country recently, and that includes Dallas. During the last 12 months we have covered a wide range of articles on significant litigation by the government and the commercial payors challenging how providers submit bills. The allegations have ranged from completely fabricated bills to overpayment of fees for out-of-network services.
The civil litigation has involved United Healthcare’s allegations against Next Health, LLC for engaging in fraudulent activity, Quest Diagnostics’ settlement of a whistleblower lawsuit; and Blue Cross Blue Shield of Mississippi’s suit against a community hospital alleging it violated its contract for overpayment and recoupment of claims.
This May, the Dallas area health care industry had two new breaking enforcement stories. The Dallas Morning News reported on an FBI raid at a Dallas-based healthcare management company. The FBI has not provided any insight as to the reason for the raid, and the company has denied any wrong doings.
That same week, the Dallas Morning News broke a separate story of federal authorities settling a civil suit with a physician for allegedly being paid kickbacks by a Dallas-based lab. Federal authorities believe that the lab used a “sham investment model” to make payments for blood and urine screens. The lab was not a part of the settlement agreement, and no allegations have been made against it.
With these types of allegations, and heightened enforcement by the federal government, parties should ensure they understand the implications of the federal anti-kickback statutes, the federal travelers act, and wire fraud rules because the federal government is using these laws to pursue providers. Providers must scrutinize all their health care related investments, be conscious of these cases, and be mindful that any arrangement they enter into must be compliant with both state and federal laws, in both form and substance. (AmSpa members: check your state’s medical aesthetic legal summary for more information on the legal regulations in your state.)
For more information on your state’s laws and regulations, attend an AmSpa Medical Spa & Aesthetic Boot and be the next med spa success story.
Brad Adatto, JD, is a partner at ByrdAdatto, a business, healthcare, and aesthetic law firm that practices across the country. He has worked with physicians, physician groups, and other medical service providers in developing ambulatory surgical centers, in-office and freestanding ancillary service facilities, and other medical joint ventures. He regularly counsels clients with respect to federal and state health care regulations that impact investments, transactions, and contract terms, including Medicare fraud and abuse, anti-trust, anti-kickback, anti-referral, and private securities laws.