Three Factors Affecting the Mid-Level Practitioner Workforce, Part Two

In the last post, the subjects of collaborative agreements and autonomy were discussed in relation to how they affect mid-level practitioners. Today’s post now turns to how HRSA designation and limited services clinics will ultimately influence that workforce as well.

HRSA Designation

One area that could have a profound financial impact on mid-level practitioners that might not be obvious is HRSA’s ability to designate whether a certain area is a Health Professional Shortage Area (“HPSA”) or a Medically-Underserved Area (“MUA”). These designations create an opportunity for increased Medicare and Medicaid reimbursement based upon cost to encourage the establishment of Rural Health Clinics (“RHCs”) in underserved areas. RHCs may be established by a mid-level practitioner and receive cost based reimbursement. According to HRSA, there were at least 6100 Primary Care HPSAs in the United States with 132 in Kentucky as of June 2014. HRSA’s designations, however, must be recent for an area to qualify for new RHCs.

Communities with these designations provide special opportunities for mid-level practitioners. Service within a HPSA or MUA can provide benefits from HHS as part of the National Health Service Corps; these benefits include loan repayment and scholarships, both part of an aggressive push to supply health care providers to critically underserved areas. Not only can a clinic qualify for enhanced Medicare and Medicaid reimbursement, mid-level providers can reduce educational loan repayment.Doctors And NursesLimited Services Clinics

Limited services clinics, often referred to as retail clinics, may be staffed entirely by mid-level practitioners and owned by someone other than a licensed health care provider. These clinics are relatively new in Kentucky, with the very first clinics opening in 2011; as of December 2014 there were 65 Certificate of Need-approved clinics with 7 new clinics approved by the Office of Certificate of Need in January 2015. These clinics are a creature of Kentucky statute and regulations,[1] and are another response to the growing demand for health services in the Commonwealth.

To operate in Kentucky, limited service clinics must obtain a certificate of need and a license. These clinics, however, may operate independently of physician oversight or involvement and create new employment and entrepreneurial opportunities for mid-level providers. According to a recent RAND study, “approximately one in five visits to a primary care physician and one in ten visits to an emergency department are for a problem that can be treated at retail LSC.”[2]

Often, these clinics are located within retail outlets such as grocery stores, and regulations expressly limit the services they can provide to primary care. Although the services are limited by regulation, the Office of the Inspector General recently proposed an amendment to expand the scope of services to include chronic disease management for certain conditions such as diabetes, asthma and hypertension. Regulations prohibit limited services clinics from treating children younger than two. The Convenient Care Association, a trade group that represents limited services clinics nationwide, predicts that the number of limited services clinics will double between 2013 and 2016 in the US as a response to the Affordable Care Act. The growth of these clinics reflects a crucial shift in the health care community’s response to the influx of newly-insured patients, and this in turn provides a bevy of new possibilities for the Kentucky’s mid-level practitioners.

In conclusion, Kentucky mid-level providers have great opportunities to fill the void for primary care services in Kentucky and even receive increased reimbursement and financial benefits in rural areas. Limited services clinics create new entrepreneurial and employment opportunities as well as the ability for non-health care providers to address the need for primary care in Kentucky. Mid-level practitioners are an important part of the answer to Kentucky’s needs for primary care.

[1] KRS 216B.024; 902 KAR 20:400. Limited services clinics.

[2] Adamson, David, “Health Care on Aisle 7: The Growing Phenomenon of Retail Clinics”. RAND Health, 2010.

Lisa HinkleLisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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Three Factors Affecting the Mid-Level Practitioner Workforce, Part One

As more Kentuckians gain access to health care as a result of the Affordable Care Act, healthcare workforce shortages for primary care providers becomes problematic particularly in rural Kentucky. Never before have mid-level practitioners been more important. The Health Resource and Services Administration (“HRSA”) estimates that there will be a shortage of 20,400 primary care ­physicians by 2020, but this number could be drastically reduced – as low as 6,400 – with an abundant increase in the autonomous practice of mid-level providers[1]. The same HRSA study concluded that a fully-utilized workforce of mid-level practitioners could account for 28% of all primary care by 2020. Three factors make mid-level practice more attractive than ever in Kentucky.

Collaborative Agreements and Autonomy

Even though the American Association of Nurse Practitioners lists Kentucky as a “reduced practice” state[2], the trend in Kentucky lately has been towards increased autonomy of mid-level practitioners. A study by the American Nursing Association[3] determined that autonomy might be a factor in mid-level providers choosing to practice in rural areas. Kentucky’s recent legislative changes in midlevel practice in that direction should ostensibly have a positive effect on the ability of mid-levels to establish independent practices. With a shortage of primary care providers, particularly in rural Kentucky, nurse practitioners have new opportunities to establish independent clinics without physician collaboration or oversight.

Until recently, Kentucky required all Advance Practice Registered Nurses (“APRNs”) to enter into collaborative agreements with doctors to prescribe medications. These agreements fell into two categories Medical doctors group at the hospital.based upon whether the drug is classified as a controlled substance. Senate Bill 7, passed during the 2014 legislative session, modified this rule to allow for a new group of APRNs that will no longer require these agreements after four years of experience. Experienced APRNs are now free to treat patients and prescribe medications like antibiotics without a collaboration agreement, which is a great advantage for mid-level practitioners in Kentucky. Prescriptions for controlled substances, such as Adderall and Hydrocodone[4], will still require a collaborative agreement, but this new rule strikes a balance between those who worry that newer mid-level practitioners won’t have the necessary experience to make choices concerning prescription drugs and those who feel that experienced mid-level practitioners are more than capable to do so. The importance of the ability to practice without physician collaboration cannot be overstated; nurse practitioners have paid as much as $100,000 for physicians to enter into collaboration agreements. The amounts paid to physicians by nurse practitioners for these agreements has been unreasonable in some instances, and elimination of the physician collaboration rule for non-controlled substances reduces costs for APRNs and creates opportunities to establish clinics.

Read Part Two to learn more about what affects mid-level practitioners.

[1] U.S. Department of Health and Human Services, Health Resources

and Services Administration, National Center for Health Workforce Analysis. Projecting the Supply and Demand for Primary Care Practitioners Through 2020. Rockville, Maryland: U.S. Department of Health and Human Services, 2013. Available at

[2] American Association of Nurse Practitioners, State Practice Environment, (last visited Jan. 14, 2015)

[3] Susan M. Skillman, et al., Understanding Advanced Practice Registered Nurse Distribution in Urban and Rural

Areas of the United States Using National Provider Identifier Data (2012),

[4] For more on this, please see

Lisa HinkleLisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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Guidelines regarding APRNs prescribing Hydrocodone





In August, the U.S. Drug Enforcement Agency (“DEA”) published a final rule classifying Hydrocodone combination drugs as Scheduled II controlled substances.   Previously, Hydrocodone was listed as a Scheduled III controlled substance. Because of the specific provision in Kentucky law, Advanced Practice Registered Nurses (“APRN”) are permitted to continue to prescribe a 30 day supply of Scheduled II Hydrocodone combination products if allowed under their DEA license. KRS 218A.020(3) provides:

If any substance is designated, rescheduled, or deleted as a controlled substance under federal law and notice thereof is given to the Cabinet for Health and Family Services, the Cabinet for Health and Family Services may similarly control the substance under this chapter by regulation. If hydrocodone or any drug containing hydrocodone is rescheduled to Schedule II in this manner, the prescriptive authority existing on March 19, 2013, of any practitioner licensed under the laws of the Commonwealth to prescribe, dispense, or administer hydrocodone or drugs containing hydrocodone shall remain inviolate and shall continue to exist to the same extent as if those drugs had remained classified as Schedule III controlled substances.

According to the Kentucky Board of Nursing’s Guidance, “APRNs and Prescribing of Hydrocodone Combination Drugs”, “restrictions on prescribing pure Hydrocodone products designated as Scheduled II Controlled Substances prior to October 6, 2014 will remain Subject to Scheduled II prescriptive limits because the law in regard to these products has not changed.”

Prescription Drugs With A SyringeKentucky law permits APRNs to prescribe non-Scheduled as well as Scheduled drugs for their patients as long as practitioners adhere to all statutory and professional requirements, restrictions and accepted procedures. Under the current statute (KRS 314.011 §8, APRNs may prescribe a 30 day supply without refill for a Scheduled III controlled substance. “Any APRN who holds a DEA registration that does not allow prescribing of Scheduled II Controlled Substances will not be able to continue to prescribe Hydrocodone in any form after October 6, 2014, unless and until they obtain the appropriate authorization from the DEA.

Hydrocodone prescriptions written before October 6, 2014, and authorized to be filled or for refilling may be dispensed if such dispensing occurs before April 8, 2015. Hydrocodone combination prescriptions written on or after October 6, 2014 may not be refilled.

If things aren’t confusing enough, all Nurse Practitioners who are operating under a Collaborative Agreement for prescribing authority for controlled substances, should review that agreement to assure that the scope of prescribing is properly described. Because of the change in classification of Hydrodone combinations from a Scheduled III to a Scheduled II, these agreements must be carefully checked. Additionally, given the controversy surrounding APRN’s authority, it is suggested that the prescribing of Hydrocodone combination drugs be specifically outlined.

Additionally, another wrinkle relates in the wording of the statute itself. While the statute appears to apply only to those Nurse Practitioners who had prescriptive authority to prescribe Hydrocodone combination drugs on March 19, 2013, it could be argued that the statute covers the prescriptive authority for any Nurse Practitioner licensed under the law of the Commonwealth.

The Kentucky Board of Nursing has just published an APRN Alert for Butalbital prescribing. This Alert specifically states that “effective September 17, 2014 a prescriber without a DEA license cannot write or issue a prescription for a Butalbital containing product. (Fioricet, Bupap, Esgic, etc.)”   The Kentucky Board of Nursing goes farther to state that “any remaining refills on a Butalbital containing product prescription issued by a prescriber without a valid DEA license may not be dispensed. If a DEA licensed prescribed issued a prescription for a Butalbital containing product with refills and it has not been more than 6 months from the date written, it may be refilled.

Given the complicated state of the prescribing for Hydrocodone, it is advised that Nurse Practitioners check very carefully to assure that their prescribing is in keeping with both the DEA reclassification and their prescriptive authority under Kentucky law.

Gina M. Riddell, MPA, is a Research and Compliance Analyst of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Ms. Riddell concentrates her practice in healthcare law and is located in the firm’s Lexington office. She can be reached at  or at (859) 231-8780.

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On December 3, 2014, CMS issued its Final Rule that addresses provider enrollment. These new rules create new tools to police provider enrollment. CMS now has the ability to deny enrollment of providers, suppliers and owners who have been affiliated with an entity that has unpaid Medicare debt. CMS has announced that this provision will help prevent individuals and entities from incurring substantial Medicare debt, leaving the Medicare program, and then re-enrolling as a new business to avoid repayment of the outstanding Medicare debt. CMS has announced that it will only enroll eligible individuals or entities if they repay the debt or enter into a repayment plan.

  • CMS now has the ability to deny enrollment or revoke the billing privileges of a provider or supplier when a managing employee has been convicted of certain felony offenses.
  • CMS may now revoke billing privileges of providers and suppliers that have a pattern and/or practice of billing for services that do not meet Medicare requirements. This is intended to address providers and suppliers that regularly submit improper claims.
  • CMS also established a rule concerning when certain provider and supplier types, including ambulances, may bill for services prior to the date of their enrollment. Essentially, CMS has eliminated the ability to ambulance suppliers to bill for up to a year prior to enrollment in the Medicare program.

While the specifics of the new regulations are not yet available, it is significant now that CMS has created the power to deny enrollment to a provider with unpaid Medicare debt. Whether the provision addresses a provider that files bankruptcy and what the implications of bankruptcy may be have not been addressed.

What is clear is that CMS intends to use the Medicare enrollment process as an enforcement tool.

Lisa Hinkle




Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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Recently, the Office of Inspector General of the United States Department of Health and Human Services (“OIG”) released its Fiscal Year 2015 Work Plan summarizing its oversight and enforcement priorities for the 2015 Fiscal Year. Here are some highlights from the Work Plan.

Hospital-Related Policies and Practices

  • OIG will determine the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary copayments. OIG will specifically examine hospital inpatient claims for compliance with the “two midnight policy”.
  • OIG will review data from Medicare cost reports and hospitals to identify salary amounts included in operating costs reported to and reimbursed by Medicare. Employee compensation may be included in allowable provider costs only to the extent that it represents reasonable compensation for managerial, administrative, professional and other services related to the operation of the facility and furnished in connection with patient care.
  • OIG will provide greater Medicare oversight of facilities claiming provider-based status to determine the extent to which provider-based facilities meet CMS’s regulatory criteria.
  • OIG will provide greater oversight of hospital privileging by determining how hospitals assess medical staff candidates before granting initial clinical privileges, including verification of credentialing and review of the National Practitioner Databank.


OIG will review the use of hospice general inpatient care and will assess the appropriateness of hospices’ general inpatient care claims and the content of election statements for hospice beneficiaries who receive general inpatient care. OIG also plans to review hospice medical records to address concerns that this level of hospice care is being misused.

Ambulance Services

OIG will examine Medicare claims data to assess the extent of questionable billing for ambulance services, such as transports that never occurred or potentially were medically unnecessary transports to dialysis facilities.

Sleep Disorder Clinics

OIG will examine Medicare payments to physicians, hospital outpatient departments, and independent diagnostic testing facilities for sleep-testing procedures to assess the appropriateness of Medicare payments for high-use sleep-testing procedures and determine whether they were in compliance with Medicare requirements.

Provider Eligibility

OIG will determine the extent to which and the way in which CMS and its contractors have implemented enhanced screening procedures for Medicare providers pursuant to Section 6401 of the Affordable Care Act. CMS is implementing new authorities that include site visits, fingerprinting, and background checks, as well as an automated screening process.

Adult Day Health Care Services

OIG will review Medicaid payments by States for adult day care services to determine whether providers complied with Federal and State requirements.

Health care providers should review their compliance policies and procedures in light of the Work Plan and identify any compliance vulnerabilities. The full Work Plan can be found on the OIG website,

Chris Shaughnessy





Christopher J. Shaughnessy is an attorney at McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Mr. Shaughnessy concentrates his practice area in health care law and is located in the firm’s Lexington office.  He can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law activities and does not constitute legal advice.

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Telehealth/Telemedicine: An Opportunity for Physicians and Providers to Add a New Line of Service

The cost effectiveness of providing health care via telemedicine or telehealth promises to be an effective tool to increase coverage and reimbursement of healthcare provided remotely or through telehealth. Towers Watson, a national consulting company, recently published a 2014 study that suggests that telemedicine could save $6 billion annually for the health care industry. “Achieving this savings requires a shift in patient and physician mindsets, health plan willingness to integrate and reimburse such services, and regulatory support in all states,” according to Dr. Allan Khoury, a senior consultant at Towers Watson.[1] Recent studies have assigned significant cost savings generated by telehealth use that include cost savings of $537 million per year for emergency departments using telehealth to reduce transfers and spending reductions of 7.7% to 13.3% per person per quarter in the cost of care for chronically ill Medicare beneficiaries using a health buddy via telehealth. [2] As the cost effectiveness of providing services via telehealth and telemedicine is proven, Medicare, most state Medicaid programs and commercial insurers are increasing coverage as well as reimbursement for telehealth services. State law requirements for providing telehealth and coverage differ greatly. Consequently, physicians and health care providers should be aware of the complexity of providing telehealth and its requirements, but should also incorporate telehealth services into their practices as a new way of providing services and a new line of business.

What is Telemedicine/Telehealth?

Simply defining telemedicine can be tricky, as there is no single definition. CMS defines “telemedicine” as the “provision of clinical services to patients by practitioners from a distance via electronic communications.”[3] The American Telemedicine Association (“ATA”), a nonprofit organization dedicated to integrating telemedicine into health care systems, defines it as “the use of medical information exchanged from one site to another via electronic communications to improve a patient’s clinical health status.”[4]

Mobile devicesIn April 2014, the Federation of State Medical Boards (“FSMB”) adopted a model telemedicine policy and defined “telemedicine” as “the practice of medicine using electronic communications, information technology or other means between a licensee in one location, and a patient in another location with or without an intervening healthcare provider.”[5] On the heels of the FSMB policy, the American Medical Association (“AMA”) approved “guiding principles” regarding telemedicine in June, but offered no single definition. The AMA report instead addresses telemedicine within three broad categories of telemedicine technologies: store-and-forward telemedicine, remote monitoring telemedicine, and real-time interactive telemedicine services.[6]

At the state level, Kentucky’s Medical Practice Act[7] defines telehealth as “the use of interactive audio, video, or other electronic media to deliver health care. It includes the use of electronic media for diagnosis, consultation, treatment, transfer of medical data and medical education.” Telehealth is often used as a synonym for telemedicine, but precise definitions, as evident from above, may differ.[8] Importantly, the Kentucky Board of Medical Licensure (“KBML”) has recently adopted a very helpful policy that accepts the FSMB’s model policy as the accepted and prevailing standard of practice for use of telehealth tools when practicing medicine. In a detailed opinion, the KBML recognizes that a patient/physician relationship via telehealth can be established with the informed consent of the patient, but includes complicated requirements for establishing the patient/physician relationship, obtaining informed consent, providing examination and treatment services, keeping medical records, maintaining patient privacy and prescribing. While recognizing prescribing via telemedicine to be at the professional discretion of the physician, the KBML emphatically points out that all requirements for prescribing whether in person or via telemedicine must be met and physicians will be held to the same standards for in-person prescribing when prescribing via telemedicine. While the opinion does not rule out prescribing controlled substances via telemedicine, all statutory and regulatory requirements must be met. The KBML’s policy specifically states that using an on-line tool alone is not sufficient for prescribing. Thus, Kentucky physicians have guidance from the KBML about telemedicine, but still must address issues like prescribing thoughtfully and carefully as there is no specific recipe for compliance with Kentucky’s prescribing requirements via telemedicine.

Technology News On Apple Ipad Air





It is also interesting and important to note what telemedicine may not be. According to CMS, telemedicine does not include phone calls, emails, images transmitted via fax, and text messages without the visualization of the patient.[9] On the other hand, the ATA has interpreted telemedicine to include transmission of an evaluative or therapeutic act through any means, method, device, or instrumentality, including emails and phone calls.

Contrary to its definition of what telemedicine is not, CMS has announced an important new benefit that will pay a monthly fee to physicians, nurse practitioners, physician assistants and others to manage the care of patients with two or more chronic conditions starting in January 2015 without face to face communication. Significantly, this new benefit will cover case/care management services for patients with chronic diseases without visualization of patients. To be provided efficiently, these services will require communication via telephone, secure messaging and email. Use of these telehealth tools, however, does not mean that CMS considers the services to be telehealth; consequently, these services do not have to meet Medicare’s telehealth regulatory requirements even though the services meet the ATA’s definition of telemedicine.

Getting Reimbursed for Telehealth Services

  1. Medicare and Medicaid

After a long period of indecision, Medicare announced final requirements for telehealth services in July 2014. To qualify for Medicare reimbursement of telehealth services, a beneficiary must be located in an area outside a metropolitan statistical area or in rural health professional shortage area (“HPSA”). In addition, Medicare “ will only pay for a face to face, interactive consultation service where the patient is present in an approved healthcare facility (hospitals, rural health clinics, skilled nursing facilities, physician offices and community mental health centers), known as an “originating site.” As a condition of payment, an interactive audio and video telecommunications system must be used that permits real-time communication between the provider at the distant site and the beneficiary at the originating site.

Professionals who may receive payment for covered Medicare services include physicians, physician assistants, nurse practitioners, nurse-midwives, clinical nurse specialists, clinical psychologists and clinical social workers, and dieticians or nutrition professionals. In July 2014, CMS released its CY 2015 Physician Fee Schedule which expands Medicare-reimbursable telehealth services to include remote medical services, psychological testing, psychotherapy, prolonged office visits, annual wellness check-ups and non-face-to-face chronic care management as well as psychiatric and behavioral health services. These are welcome changes and cover key areas that have, to date, not been reimbursable. Under the final rule, CMS added codes for psychoanalysis and family psychotherapy as well as codes that will allow mental health providers to report sessions that require more than the one hour visit. In addition, codes for the new management of chronic illness have been issued.

In July of 2013, Kentucky Medicaid issued final rules expanding the coverage of telemedicine services for Medicaid beneficiaries. Although providers are still limited to using only interactive video-conferencing to qualify for reimbursement under Kentucky’s new rules, Medicaid beneficiaries now have access to a broader list of providers and telemedicine services. It is important to note that Kentucky has statutory requirements that include approval of equipment by its telehealth network. Providers have reason to be hopeful about future policy changes that will expand Medicare and Medicaid payment for services provided through telemedicine

Commercial Insurers

While expansion of commercial coverage of telemedicine often depends on whether state law requires parity vis a vis other services, insurers are expanding telehealth coverage to reduce unnecessary costs including urgent care and emergency department visits. Quite simply, attractive cost savings will drive commercial insurers and employers to cover and provide more services via telemedicine. Insurers already often encourage members to access contracted providers to address questions via telephone or email. The expansion of these services to include evaluation and treatment appears logical. The same critical analysis must be undertaken by providers, insurers and managed care organizations alike to determine whether services may be provided under state law through telehealth as well as the requirements for how those services should be performed via telehealth. Issues to keep in mind include state laws addressing telehealth/telemedicine, requirements for equipment, state professional licensure laws and guidance, prescribing laws, location of the patient, privacy, security and confidentiality of medical records as well as other miscellaneous concerns.


Widespread adoption and use of telemedicine is inevitable; so, too, is the potential for noncompliance and a minefield of problems. The requirements outlined just a few of the issues that providers must keep in mind as they establish innovative and exciting telehealth services. Telehealth services are the way of the future and will change the how health care is provided. Providers who incorporate telehealth as a new line of service may have tremendous opportunities to increase reimbursement.

Lisa Hinkle






Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.



[1] Katie Wike, “Telemedicine Could Save $6 Billion Per Year” Health IT Outcomes (August 15, 2014)

[2] Laurence Baker Integrated Telehealth and Care Management Program for Medicare Beneficiaries with Chronic Disease Linked to savings, Health Affairs, September 2011.

[3] 76 Fed. Reg. 25553 (May 5, 2011).

[4] ATA, What Is Telemedicine?, available at

[5] Federation of State Med. Bds., “Model Policy for the Appropriate Use of Telemedicine Technologies in the Practice of Medicine (2014),” available at

[6] AMA, Report of the Council on Medical Service, Coverage of and Payment for Telemedicine, June 2014.

[7] KRS 311.550(17).

[8] See The Joint Commission, Hospital Accreditation Standards, Glossary (Oakbrook Terrace, IL 2013).

[9] 42 C.F.R. 410.78(a)(1),(3).

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The DOJ Increases Scrutiny of Whistleblower False Claims Act Suits

The Criminal Division of the Department of Justice (“DOJ”) recently announced that it will review all complaints filed under the qui tam provisions of the federal False Claims Act (“FCA”) to determine if a parallel criminal investigation is appropriate. This announcement came during a September 17, 2014 speech by the recently-confirmed Assistant Attorney General for the Criminal Division of the DOJ, Leslie Caldwell, at the Taxpayers Against Fraud Education Fund Conference in Washington D.C. This DOJ announcement signals a departure from prior policy, which allowed, but did not require, the Criminal Division to investigate Civil Division claims. In the past, the decision to open a criminal investigation was left to the discretion of each U.S. Attorney’s Office.

Now, the Civil Division of the DOJ will share all new qui tam complaints with the Criminal Division as soon as they are filed. This change in procedure will likely be detrimental for defendants in future qui tam cases. With the Criminal Division more involved in False Claims cases, settlements with the government may become more difficult due to the need for approval from both the Civil and Criminal Divisions. Defendants may also face increased pressure to accept settlement offers from the government to avoid high-risk criminal penalties.

In 2009, Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), to increase coordination and optimize criminal and civil enforcement.  This coordination yielded momentous results: the Department recovered $12.1 billion dollars under the False Claims Act from January 2009 through the end of the 2013 fiscal year.  Most of these recoveries relate to fraud against Medicare and Medicaid Programs. In fiscal year 2013 alone, the DOJ recovered $2.6 billion dollars for health care fraud violations and brought health care fraud-related prosecutions against 345 individuals.

Fraud Background Conceptual Design.




Thus, providers seeking reimbursement from federal programs should be aware that non-compliance risks have never been greater. Providers or entities faced with a civil qui tam suit should immediately evaluate their exposure to possible criminal charges. Because an ounce of prevention is worth a pound of cure, companies should closely review their compliance programs and pay special attention to the protocols in place to prevent and detect potential false claims or billing violations.

Emily Hord





Emily M. Hord is an Associate of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hord concentrates her practice in healthcare law and is located in the firm’s Lexington office. She can be reached at or at (859) 231-8780. 

This article is intended as a summary of newly enacted federal and state law and does not constitute legal advice.

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