Archive for category: Fraud and Abuse

OIG Removes Federal Approval Gate for State Medicaid Fraud Data Mining

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By Molly VandeVoort

*Disclaimer: The author used AI-assisted tools in preparing this alert, including for grammar and structural review and to cross-check citations. All substantive content, legal analysis, and conclusions reflect the author’s independent professional judgment.

On August 13, 2026, the U.S. Department of Health and Human Services Office of Inspector General (OIG) eliminated a longstanding federal checkpoint that has constrained how state Medicaid Fraud Control Units (MFCUs) deploy data analytics against Medicaid claims. Under State Fraud Policy Transmittal No. 2026-1 (the “Transmittal”), MFCUs no longer need OIG approval before conducting federally funded data mining, and they no longer need to renew that approval every three years. OIG accomplished the change by waiving the prior-approval requirements in 42 C.F.R. § 1007.20(a)(4) in their entirety. State fraud investigators can now move faster and look deeper into provider billing data using advanced analytics, machine learning, and other modern detection technologies—without first obtaining federal permission. Read more

Fraud and Abuse in Private Payor Situations

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By Kim Stanger

Healthcare attorneys and their clients are generally aware of and take appropriate steps to avoid the severe penalties that may follow fraud and abuse of government payor programs such as Medicare and Medicaid. They may be less attuned to their potential liability in private payor situations and, consequently, more cavalier when considering mistakes, misconduct, and potential repayments to private payors, including patients, residents, insurers, or other third parties. Red flag situations may include, e.g., waiving copays or deductibles; providing patient or resident discounts or other inducements to receive services, especially for out-of-network patients; kickbacks or similar arrangements to induce referrals; billing and coding errors; false claims; billing for medically unnecessary services; billing for services that were provided by unlicensed or uncredentialed providers or misrepresenting the provider of services; failing to comply with coordination of benefits or secondary payor rules; double payments; claims that lack sufficient documentation; or claims for substandard care. Whether due to business concerns or regulatory mandates, private payors seem to be increasingly active in monitoring and responding to potential provider fraud or abuse. This memo will summarize some of the statutory, contractual, and common law bases for private payor enforcement. Read more

Beware Laws Affecting Healthcare Transactions

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By Kim Stanger

Republished with permission, this article originally appeared in the online edition of Idaho State Bar’s The Advocate on March 11, 2020.  

Attorneys risk substantial fines, malpractice claims, and even jail time for violating any of several laws implicated in even simple healthcare transactions.  Federal and state healthcare laws potentially affect any financial transaction involving healthcare providers, including employment or service contracts, group compensation structures, investment interests and joint ventures, leases for space or equipment, marketing programs, and patient billing practices.  Failure to comply may result in significant fines and penalties for clients as well as malpractice claims—or worse—against their lawyers.  This article describes several statutes and regulations that can be traps for the unwary in healthcare transactions. Read more

Key Terms for Provider Contracts

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By Kim Stanger

A good contract with an employed or contracted physician or other practitioner may help you avoid regulatory violations and future disputes. Here is a brief summary of some terms or issues that you should consider in your provider agreements.

Regulatory Compliance. If the practitioner will be performing or referring items or services payable by government healthcare programs, you should generally structure the contract to satisfy applicable safe harbors under the federal Anti-Kickback Statute (“AKS”), 42 CFR 1001.952(d) or (i). If the contract involves a physician, the contract must be structured to satisfy the Ethics in Patient Referrals Act (“Stark”), 42 CFR 411.355 or 411.357(c), (d) or (l). For information concerning these regulatory requirements, see our Client Alert, Stark Requirement for Physician Contracts. In addition, the federal Civil Monetary Penalties Law generally prohibits hospitals from offering inducements to physicians to limit medically necessary services payable by government programs. (42 USC 1320a-7a(b)(1)). If the employer is a tax-exempt entity, you will also want to ensure the compensation reflects fair market value to avoid 501(c)(3) tax issues. If your state recognizes the corporate practice of medicine doctrine, you may need to structure your arrangement to fulfill any unique requirements applicable to your state.

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Common Stark Concerns for Hospitals

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by Kim Stanger

Unless structured properly, a hospital’s financial relationship with referring physicians or other providers may violate the federal Ethics in Patient Referrals Act (“Stark”) and Anti-Kickback Statute (“AKS”), resulting in civil and criminal fines, penalties, and repayments. Under Stark, if a hospital has a financial relationship with a physician, the physician may not refer patients to the hospital for certain designated health services1 payable by Medicare or Medicaid unless the arrangement fits within a regulatory safe harbor. (42 USC § 1395dd; 42 CFR § 411.353). The AKS generally prohibits knowingly offering, paying, soliciting or receiving remuneration to induce referrals for items or services payable by federal healthcare programs unless the arrangement fits within a regulatory safe harbor. (42 USC § 1320a-7b(b); 42 CFR § 1001.952). Below are some of the top compliance concerns arising from relationships with referring providers:

1. No Written Agreement. Except for employment arrangements, Stark and the AKS generally require that financial arrangements are documented in writing and signed by the parties, including arrangements involving the payment for services, sale or lease of space or equipment, recruitment subsidies, etc. (See, e.g., 42 CFR §§ 411.357(a), (b), (d), (e), (l), (p), (y), and 1001.952(b)-(d)). CMS has confirmed that a single formal contract is not necessarily required; instead, “a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties, may satisfy the writing requirement…” (80 FR 71315).

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