April 6, 2023

Healthcare is one of the most vital and vast industries in our nation, and it is also perhaps the most regulated.  Physicians, pharmacists, hospitals, managed care organizations, and other healthcare providers face significant consequences in investigations and civil and criminal lawsuits. These consequences can include steep financial penalties and other liabilities, loss of licensure, inability to participate in Medicare or Medicaid programs, reputational damage, and even jail and prison time. 

When faced with the signs of an investigation by a state, federal, or licensing organization – or the potential threat of a civil lawsuit – there can be a temptation to try to resolve it on your own without the assistance of counsel, or to simply hope it goes away without further development. However, the risks to doing so are significant to your career and perhaps even your freedom, and individuals and organizations facing such legal challenges are strongly encouraged to seek out experienced counsel as soon as possible to address these challenges in a proactive and confidential manner. 

The healthcare defense attorneys of Zweiback, Fiset & Zalduendo LLP are experienced in providing robust defense to physicians, other healthcare professionals, and healthcare organizations in state and federal investigations and criminal inquiries as well as in civil litigation, including in the following areas. 

Stark Law Defense

The “Stark Law” is a common title for the federal Physician Self-Referral Law found at 42 U.S.C. § 1395nn. The Stark Law prohibits certain types of referrals for health services for which payments are submitted for reimbursement under federal health care programs including Medicaid and Medicare. 

In brief, the federal Stark Law prohibits a physician from making referrals for designated health services to entities in which that physician or an immediate family member of the physician has a financial interest. A financial interest in another entity can include either an ownership or investment interest of the referring physician (or family member) in the entity, or a compensation arrangement between the referring physician (or family member) in the entity. A compensation arrangement is any financial arrangement involving remuneration – whether overtly or covertly, directly or indirectly, or in cash or in kind. 

Physicians found to violate the Stark Law can face exclusion from participating in Medicare and Medicaid, denial of payment, and civil penalties of up to $15,000 per submitted claim and $100,000 for the existence of each arrangement or scheme. 

Anti-Kickback Law Defense

The Anti-Kickback Statute – or AKS – is a federal criminal law found at 42 U.S.C. § 1320a-7b(b), which prohibits the knowing and willful payment or receipt of any “remuneration” (including any kickback, bribe, or rebate) in return for either:

  • Referring an individual to a person for any item or service for which payment may be made in whole or in part under a federal health care program, or
  • Purchasing, leasing, ordering, or arranging for any good, facility, service, or item for which payment may be made in whole or in part under a federal health care program (or simply for recommending the purchase, leasing, or ordering of any such good, facility, service or item)

Thus, at a basic level, the Anti-Kickback statute makes it a crime to have any paid referral arrangement (whether in cash, property, or in-kind arrangement) for any health care services or goods for which payment is made under federal health care programs such as Medicare or Medicaid, subject to certain exceptions.

An individual found guilty of violating the Anti-Kickback Statute faces up to ten years in prison and a $100,000 fine, in addition to being excluded from federal healthcare programs. 

Federal and State False Claims Act Defense 

The federal False Claims Act (FCA) makes it illegal to knowingly defraud the federal government in a variety of scenarios, including submitting inflated and/or otherwise fraudulent Medicaid/Medicare claims. Similarly, the California False Claims Act (CFCA) makes it illegal to defraud the California state government, and such claims are often pursued in the context of submitting claims to the state government for reimbursement for provisions of healthcare services, prescriptions, and devices. 

A notable aspect of both the FCA and the CFCA is that the laws in a sense deputize anyone with knowledge of such illegal actions to file a lawsuit against a defendant under seal, and then the federal or state government will investigate such claims and determine whether to join in the lawsuit. There is great incentive for an individual to an FCA or CFCA lawsuit, as a successful FCA or CFCA plaintiff can obtain a significant financial reward for having done so. In the context of healthcare, it is not uncommon for employees such as nurses, physicians, data entry specialists, or even C-suite level executives to pursue FCA claims against their employer. 

Common types of activities that can lead to an FCA or CFCA lawsuit include the following: 

  • Billing for services or goods that were not provided
  • Billing for services or goods that were not medically necessary
  • Upcoding in billing to receive reimbursement at a higher rate than is justified
  • Unbundling in billing to receive reimbursement at a higher rate than is justified
  • Off-label drug promotion
  • Kickbacks

In addition to the liability that an individual or entity can face from actions alleged to violate the FCA or CFCA, such parties can also face further liability if they are alleged to have taken any action to retaliate against an FCA whistleblower, such as terminating that individual’s employment or other actions that might impair their employment, including suspending or transferring the employee. 

Illegal Prescription Practices

Pharmacists and other healthcare professionals can face significant civil and/or criminal exposure related to illegal prescription practices, including but not limited to: distributing prescription medications without a valid prescription, writing prescriptions for use by themselves, or dispensing prescription medication while under the influence. 

Licensing Issues

In addition to civil and criminal penalties, an individual or entity might face risks from state licensing boards over perceived misconduct. Because the loss or suspension of a license can mean the loss of one’s livelihood and professional reputation – which a professional has typically spent many years and hard work attaining – it is critical to take the process seriously.

Medical professionals may face licensing issues related to alleged legal or ethical violations in the context of their work (e.g., a doctor or pharmacist’s alleged misconduct related to prescription drugs), or outside of their duties whether inside or outside of the workplace, such as sexual misconduct, alcohol and drug-related activities (including DUIs), theft, fraud or other activities. 

While a licensure investigation may seem different from a criminal or civil enforcement action, the consequences may be just as significant, and it is important to work with experienced healthcare defense counsel at the first signs of such an investigation, and specifically before speaking to investigators. 

Healthcare Civil Litigation

While much of this article has focused on the significant threats that individuals and organizations face with respect to investigations and enforcement actions pursued by state, federal, and licensing authorities, healthcare professionals and entities of course also face legal risks related to civil litigation between private parties. 

Such civil matters can include contract and insurance disputes, data breach and cybersecurity related matters, malpractice actions, trade secret actions, elder abuse actions, physician termination and other employment-related actions. Our attorneys have extensive experience in defending individuals and organizations in civil litigation in numerous healthcare related matters. 


Healthcare providers and professionals face unique and complex legal risks, and our attorneys have the legal experience and industry knowledge to counsel and protect clients in all aspects of the industry. It is important to respond properly to legal risks as soon as they arise.  Our attorneys are here to provide counsel and representation to mitigate risk at the earliest possible moment. Contact our office to speak with an experienced healthcare defense attorney regarding your situation today. 

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