February 2017
Feds Two-Step on Texas Sovereignty has Far-Reaching Compliance Implications

The recent federal grand jury indictment of 21 health care executives, investors, and physicians in connection with the now defunct Dallas-based Forest Park Medical Center effectively turned the Texas health care compliance environment on its head. The individuals were allegedly involved in what federal prosecutors described as a “massive, multi-faced bribe and kickback scheme.”

The charges prompt the following business action items and considerations:
  • Texas health care business owners and providers with an investment interest in a provider entity that carves-out federal health care program business will need to reassess any potential kickback arrangement in light of the federal government’s enforcement action in Forest Park. 
  • A business arrangement that was previously considered “low-risk” under the Texas anti-kickback or bribery statutes—due to a lack of state government enforcement action—may now be exposed to a risk that the federal government may use the Travel Act to enforce previously unenforced state law against the arrangement. 
  • As Texas sovereignty wanes, business owners, investors, and providers will need to reassess business arrangements that could potentially expose them to the risk of criminal enforcement under the federal Travel Act. 
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