Category: HealthLaw Blog

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

Someone posted a photo today on Facebook showing Uptown Dallas 18 years ago. There is almost nothing there, except the American Airlines Center. In fact, standing on the rooftop terrace of the Swexan Hotel (which is one of the new uptown buildings that wasn’t there a minute ago), I made the observation that I have a story for just about every building in the Dallas skyline.

In the 1990’s, before the American Airlines Center was built, I used to play basketball every day with Mark Cuban in the the Premier Club building across from SMU. This was before he became the Owner of the Mavericks. I distinctly remember exchanging the usual, “What to you do?”

He said he had a company that allows people to listen to basketball games over the internet. In 1990 there was almost no way to pick up radio signal, let alone video, in Texas if broadcast from anywhere farther than Oklahoma. So he invented “Broadcast.com.”

I thought, “good luck making any money with that!” He sold the company a couple years later for $5.7 billion to Yahoo, which never made a cent on the purchase. In fact, the other thing I remember him saying on television:

“For any proposed business arrangement, look around the table and try to spot the one being played for a fool, if you can’t spot him, it’s you.”

The “Door Dash” Trap. I suppose the “.com bubble” (of which Yahoo was a part), has always left me with suspicion about online platforms. I am not picking on Door Dash, but it is an online platform, that neither cooks food, nor delivers it, and like many “.com” companies, has never made a penny in profit.

If you have ever wondered how the Door Dash model makes any financial sense—it doesn’t. There is no way to deliver a McDonalds meal in a private car for anywhere near the cost the customer would willingly pay. Because it can’t be done.

I am told, the online platform eats up any profit the restaurant would make. But the drivers are the ones in jeopardy. The driver is paid for the trip, but at the hidden cost that his vehicle depreciates at a rate of $.67 a mile. He is basically giving away his car, one mile at a time. Worse, he is very likely driving “naked,” without liability insurance, because auto personal auto insurance usually excludes driving for a delivery service.

I did check, Door Dash says it provides “excess” liability coverage, while the independent driver must maintain “primary” coverage. Which probably means (just a guess), that absent primary coverage, there is no liability insurance coverage at all. The driver also doesn’t have coverage, for the same reason, if he totals his car crashing into a tree while delivering food.

I am sure, without reading it, the Door Dash independent contractor agreement is perfectly legal and clearly states this and drivers should know better than to drive without commercial insurance (making the driver the fool.)

Online Marketing of the Delivery of Legal Services and Health Services. But a platform can be perfectly legal and people with licensees can still get in trouble. Doctors and lawyer who “deliver” professional services come to mind.

SOAH is the same State Office of Administrative Hearings which revokes driver’s licenses, just the same as medical and law licenses. I should know, I have defended a few.

This all came to mind because I gave a legal ethics speech I gave last week. One of the attendees asked me for my thoughts on Legal Services Plans, in which a third-party online platform advertises to clients that for “one low fee,” lawyers will provide a free “consultation” and “discounted services.” There is no way the up front fee the client pays, could cover the entire legal services bill.

The problem, the attendee said, is that people don’t understand what “consultation” means. (And instead, think “discount” means that everything the lawyer does is discounted to “zero,” because the customer already paid the online platform company.)

Much the same way people don’t understand what “primary” and “excess” auto insurance means, this illustrates the problem with online marketing of any professional service. While the plan might be “legal,” that doesn’t mean there won’t be legal problems for lawyers or medical professionals whose licenses are on the line when someone else speaks for them about the services being delivered.

If you allow online platforms to do the marketing and advertising, you can’t necessarily control the expectations that the client or patient is being led to believe. Especially if there is a phone call where the customer is talking to a person at the online platform, which generated the lead, about the services professionals are to deliver.

Licensing boards, like the state bar and medical boards, don’t generally have jurisdiction over non-licensees. Going after online platforms companies requires involvement with the attorney general’s consumer protection division, which is fairly over-worked as it is.

If you are a professional licensee, medical or legal, and sign up for online marketing services, you must watch what these people are telling customers.

Look around the room, if you can’t spot the one being played fool, it could be you.

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

This week, the same week I turned 62, D Magazine came out with its “Best Lawyers List” for 2024. After nearly 4 decades of nonstop litigation work, seeing my name on the list is mostly comforting because it is some assurance I am not dead yet.

Not that 62 is that old. I honestly feel I could do this another 30 years. Instead, I feel more like Captain Hook in Peter Pan, who has a crocodile chasing him with a ticking clock in its belly, representing mortality. It’s already eaten a piece of him, and the “tick, tick ticking” reminds the anti-hero Hook, that he has no idea when mortality is coming back to get the rest.

Oh. . . and also this week, the FTC banned non-competes.

FTC Bans Non-Competes. I have been put out of business twice in my life by changes in the law. The first was workers compensation. Which is a kind of health law, though I didn’t know it at the time. Worker’s Comp was the kind of case firms would assign a kid out of law school, because the stakes are so low, it would be hard to screw it up in any way that matters.

Then, they changed the law on Medical Malpractice, meaning nobody was suing doctors and there was no need for me to defend them. But the one good thing about knowing how to try cases, is that it is a skill that can transfer to any other sort of litigation. Like non-compete litigation in healthcare cases. So I learned that.

Then, “tick, tick, tick” the FTC just gobbled that up too.

The new rule has several features:

• It does not affect non-competes in the sale of a business
• It invalidates existing non-compete clauses for low-level employees
• It does not invalidate any causes of action that accrued before the effective date
• It grandfathers in any executive non-competes which exist at the time the rule becomes effective, which is 120 days after published in the federal register
• Executives are $151,164 annually and who are in policy-making positions
• It could be blocked by litigation over the FTC’s authority
• Exiting state non-compete laws which are more restrictive on non-competes could remain in effect. Otherwise, they are preempted.
• It wouldn’t affect Trade Secret theft and other NDA protections for confidential information.
• Employers must notify workers that non-competes are invalid, rather than re-draft existing contracts.

You can find the rule at FTC.gov by Googling “FTC Final Rule Non-competes.”

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

I just returned from Miami and a visit with the FBI, OIG and DOJ to negotiate about a client’s case (that I can’t talk about.) I can tell you we stayed in the hotel Fontainebleau where they filmed the James Bond scene in Goldfinger.

I had never been to Miami, but having watched way too many episodes of Miami Vice in the 80’s, I was half expecting that the hotel soap would be at last 20 percent illegal narcotics. But no. Miami is just a lovely place; I didn’t see any gangsters or international spies.

This did get me thinking, however, that one of the big the differences between narcotics smugglers and Medicare law breakers (which could mean anything which the OIG declares to be “law breaking”), is that narcotics outlaws have better sense than to hazard illegal activity– where the federal government is the intended customer.

It is super hard to get away with much, when most of what the government needs to know about unlawful claims is giftwrapped and delivered to their door, on the HCFA 1500 claim form. The rest of what the government needs is in the medical records that must be preserved for 7 years, lest a doctor have his NPI number revoked by CMS (for up to 10 years) under 42 C.F.R. § 424.535(a)(10).

Most medical records mistakes are not crimes, but can be civilly-actionable errors, that can be very, very costly.

Trouble with Telemedicine and MSOs. If you are a doctor, an attorney representing doctors who wish to try telemedicine platforms, it might sound tempting to turn the administrative headaches over to an online management platform and think no more of it.

Please understand, many telemedicine companies and Management Services Organizations are new to this nascent telehealth industry and have absolutely no idea what the rules are for doctors and medical record keeping. The doctor can do everything correctly, but a chain is only as strong as its “weakest link.”

Last year, I defended a doctor at the Texas Medical Board, who signed on with a telehealth company, which stored records electronically in the cloud. But nobody told the $12 an hour receptionist this.

When investigators called the telehealth company to ask to review certain medical records, the receptionist looked around the room, and not seeing any, told investigators: “I don’t think we have any medical records here.” ( Notice: When the complaint was filed, It wasn’t the receptionist nor the telehealth platform who ended up before the medical board.)

What needs to be in a medial record? CMS and most states require that records be kept for 7 years in most cases. As to the contents of the records, take a look at 22 TAC 165.1 as a good roadmap (just Google it). MSOs and telemedicine companies must be prepared to produce medical records containing the following:

a) Contents of Medical Record. Regardless of the medium utilized, each licensed physician of the board shall maintain an adequate medical record for each patient that is complete, contemporaneous and legible. For purposes of this section, an “adequate medical record” should meet the following standards:

(1) The documentation of each patient encounter should include:
(A) reason for the encounter and relevant history, physical examination findings and prior diagnostic test results;
(B) an assessment, clinical impression, or diagnosis;
(C) plan for care (including discharge plan if appropriate); and
(D) the date and legible identity of the observer.

(2) Past and present diagnoses should be accessible to the treating and/or consulting physician.

(3) The rationale for and results of diagnostic and other ancillary services should be included in the medical record.

(4) The patient’s progress, including response to treatment, change in diagnosis, and patient’s non-compliance should be documented.

(5) Relevant risk factors should be identified.

(6) The written plan for care should include when appropriate:
(A) treatments and medications (prescriptions and samples) specifying amount, frequency, number of refills, and dosage;
(B) any referrals and consultations;
(C) patient/family education; and
(D) specific instructions for follow up.

(7) Include any written consents for treatment or surgery requested from the patient/family by the physician.

(8) Include a summary or documentation memorializing communications transmitted or received by the physician about which a medical decision is made regarding the patient.

(9) Billing codes, including CPT and ICD-9-CM codes, reported on health insurance claim forms or billing statements should be supported by the documentation in the medical record.

(10) All non-biographical populated fields, contained in a patient’s electronic medical record, must contain accurate data and information pertaining to the patient based on actual findings, assessments, evaluations, diagnostics or assessments as documented by the physician.

(11) Any amendment, supplementation, change, or correction in a medical record not made contemporaneously with the act or observation shall be noted by indicating the time and date of the amendment, supplementation, change, or correction, and clearly indicating that there has been an amendment, supplementation, change, or correction.

(12) Salient records received from another physician or health care provider involved in the care or treatment of the patient shall be maintained as part of the patient’s medical records.

If a telemedicine company or an MSO offers to handle the administration of records, doctors, not laymen, are responsible for complying with the law.

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

If you ever feel you can’t summon the strength to climb that next hill, it might help you to think, “if fellow lawyer, Dr. Stan Churchwell can do it,” you can too.

I had known Charles Stanley “Stan” Churchwell, JD, DPM for some time, as a referring transactional lawyer. I knew he had dual legal and podiatric medical doctorates and served as the past president of both the Texas Podiatric Medical Association and the Dallas County Podiatric Medical Society. And I knew he has a thriving legal practice, usually representing other doctors throughout the state in transactional matters. But that’s all I knew.

We decided to meet over lunch at the Capital Grille to discuss a non-compete litigation case he had referred to me. He walked in, sat down and I soon noticed he was making adjustments under the table. He looked up, as if he had just dropped a napkin, and said, “Sorry, I can’t tell where my feet are.” He then explained and later gave me permission to write about it here.

Stan began his career as a podiatric surgeon in 1984, after graduating from Jesuit High in Dallas and earning a BS in Engineering from Tulane.

Then, one night just before Thanksgiving in 1986, Stan was struck from behind by a young drunk driver on I-10 in San Antonio. He awoke in the hospital with fractures to the C-5, C-6 and C-7 and damage to the spinal cord, which rendered him a quadriplegic in what is called a “miracle” spinal contusion. While in the hospital, Stan suffered deep vein thrombosis and a pulmonary aneurysm.

Understand, any one of these might have killed a normal person. But not Stan. Instead, he picked himself up, clawed himself back and after years of grueling rehab, was able to walk and function well enough to become board certified in foot surgery in 1991. But he wasn’t done yet.

Stan then decided to go to law school to add a JD to his engineering degree and DPM. He was licensed to practice law in Texas in 1993. Then, this Energizer Bunny force of nature just kept going and going. He earned an LLM in Estate Planning in 2013, another LLM in Technology and Intellectual Property Law, from the University of Liverpool, 2016.

He has served on the Texas State Board of Podiatric Medical Examiners, Governor Appointment 1996-2002 and seems to have been elected or appointed to a leadership role of every organization he has ever joined.

If you read his c.v., however, you will find no mention of the accident or of the super-human struggles he overcame. In fact, he doesn’t even have a website. Never needed one to keep busy. I now understand why.

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

People love a shot at redemption. But now there is a literal “shot of redemption.” A miracle in a vial, which will not only redeem your past sins, but also wash clean those you plan to commit on the next fun night out. You can eat anything you like, drink what you like and not pay for it. All in one convenient FDA approved dose. It’s basically like “Jesus in a syringe.” What could possibly go wrong?

If you have ever read the Book of Revelation, you know “all hell follows with” the second coming (we just don’t know what that means). Same with this miracle. God usually doesn’t give with “both hands.” So, maybe slow your roll on this, or at least keep one foot on the ground, things might get a little bumpy when we find out the side-effects.

What is Ozempic? Semaglutide, the ingredient in Ozempic, is a miracle diabetes/weight loss drug which has become so scarce, that the FDA invented rules which throw the patent out the window (a patent creates a monopoly for the company that holds the patent). If a drug is scarce, compounding pharmacies can legally make copies of the drug, to fill the gap. But we still don’t have enough of the stuff.

It has gotten so bad and people so desperate that I am now getting health law cases where nursing and pharmacy staff are alleged to have pilfered patients’ supplies of the drug. Which is a great big “no, no” on so many levels.

Why Diabetes is relative: E=MC2. So how do we get diabetes? In a nutshell, Type II Diabetes comes from eating too many carbohydrates, which come from plants (which are delicious), especially when highly processed. Einstein’s equation works because “energy and mass” are the same thing. (Please don’t ask me about the square of the speed of light part, I have never known, and the equation works just fine without it.) Mass is a store of energy. Neither can be created, nor destroyed. (Also, please don’t ask me where this matter came from in the first place, whatever works for you, works for me.) Just know, at present, energy and mass appear to change forms from time to time, but never disappear. How does this make diabetes?

First, the sun blows up and shoots energy at us through space (energy is mass in a different form). Then plants soak up this energy and through photosynthesis, mix it with carbon dioxide taken from the atmosphere (emphasis on “carbon”), and good old liquid H2O or water (emphasis on “hydrogen”), and “poof” you have “carbo. . .hydrates.” Plant-stored energy. Which is how an acorn becomes an oak tree. It’s really pretty simple. If all these plants die and rot in the ground for millions of years, you get “hydro-carbons,” a different form of “stored plant energy” which makes jets go fast.

Little humans grow into big humans, by consuming plant energy after the sun blew up. Some of which comes from directly from plants as carbohydrates, and some from animals, which is just getting your energy the long way round (the animals ate the plants first, then we ate the . . . well, best not to think too much on this.)

Some of these carbohydrates are delicious, right off the plant. Like maple syrup and fruit. Others, must be processed and cooked to be digested. That’s why we can’t get energy from eating grass, but can mill corn and wheat into flour, which becomes spaghetti or cornbread. The smashing and heating frees up the carbohydrate plant energy stored in seeds. Before we can use this energy, these plant carbohydrates must be turned into a type of sugar in our digestive tracts and enter the blood, hence “blood sugar.”

But humans need insulin, produced in the pancreas, to allow blood sugar to pass out of the blood and into the body for fuel. Insulin also tells our bodies to store the extra carbohydrates in the liver and body for later. Which is why if you eat or drink too much, you get a fatty liver and massive waist line. While too much stored energy as fat is bad for your health, at least the sugar is out of your blood.

Sugar left in the blood is highly inflammatory, and corrosive to nerves and blood vessels. Kidneys will try to pull out as much as they can, but it is a losing battle. That’s why diabetics can lose circulation in their feet and limbs and kidneys will fail. Sugar in the blood has literally eaten away the ability to circulate oxygen and worn out other organs.

While Type I diabetics are born with no ability to produce insulin, Type II diabetics get this way by over-eating carbs. There is a nasty connection between dopamine and things that taste good. If you constantly bombard your body with carbs, eventually the pancreas can’t produce enough insulin to keep up. In some cases, the pancreas just burns out or gives up altogether.

Once this happens, diabetes can be treated in two ways. Plan A: behave yourself. Stop eating carbs and exercise daily, to burn the carbs you do eat, then you won’t have high levels of sugar left in your blood. Doctors will tell you, any plan that counts on us to behave ourselves, had better have a backup plan. So, Plan B: Take drugs like insulin, which has known side effects and now, this new miracle drug, that no one knows if there will be long-term side effects from taking.

That’s what we know so far.

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

Chris Williamson’s podcast gave me a new rule of thumb: “Don’t imagine someone is acting with ‘malicious intent’ over ‘simple stupidity.’” I am going to attempt to describe the “mailbox money trap,” which can cost doctors their careers, under the assumption that people don’t realize what they are getting themselves into.

Suppose some businessperson, often a competing ancillary provider, shows up at a doctors office and pitches a physician on a new way to make money, in which all the physician really has to do is lend his NPI number to a plan, then go to the mailbox and retrieve the check each month.

There are two main ways these things can turn out badly: (1) pass-through billing, and (2) suspect joint ventures. Precisely how much trouble a doctor can get into often depends upon what type of insurance is billed.

Commercial Payers vs. Government Payers. All health plans use a claims payment manual (both federal and commercial health insurance tend to use CMS Medicare rules). The difference being— the people who show up in a doctor’s lobby to talk about governmental displeasure with a provider’s behavior, frequently have “badges and guns.”

While commercial health insurance plans don’t have law enforcement powers, they do have impressive titles such as “special fraud investigation unit” and have two things going for them. Like “mall cops,” special fraud units are able to “observe and report” suspicious activity to medical boards and law enforcement. They can also get doctors kicked out of their PPO insurance contracts for not playing nice in the money-making sandbox.

“Pass Through” Billing Schemes. As a general rule, each provider must bill only for services the provider actually rendered. If you happen to be a doctor’s office, for example, you can usually bill for any work done by yourself, your partners, and employees, including any in office ancillary services, lab tests, drugs and x-rays, imaging and other items—provided that your group owns all the equipment and the people doing the work are bona fide employees. Your group can also have as many offices as you need.

But what if an independent contractor sonographer offers to wheel in sonogram equipment to a doctor’s office, run the machine, the doctor bills under his NPI (billing number) and the two split the payment 50/50 when insurance pays?

On March 8, 2019, Harris Brooks CEO of Palo Pinto General Hospital in Texas pleaded guilty to multi-million-dollar healthcare fraud due to pass through billing involving labs. (The hospital didn’t have a lab, but billed as if it did.) According to his plea agreement, Mr. Brooks will face up to five years in prison and will be required to pay restitution to those he defrauded.

The logic for the rule lies in the idea that the payment from insurance anticipates the clinic is at risk of loss due to overhead, the cost associated with buying the equipment, employee benefits, and of course, the group must pay the W-2 technician, even when there is no work to do. Not so with a 1099. The clinic only pays money when work is needed, and escapes the overhead.

Suspect Joint Ventures. Suspect joint ventures are best conceptualized as pass through billing “writ large.” Instead of rolling a simple sonogram machine into a doctor’s office, the suspect joint venturer will offer to finance a second clinic, specializing in one kind of ancillary service, which will be fed by the doctor’s existing patients. As before, the doctor doesn’t pay for anything, nor do anything. He just sends patients to the new venture. Usually, the doctor pays a management fee, but only for the new venture clinic, not his existing one.

The OIG has been warning physicians since 1989 that certain of these “suspect joint ventures” could violate the Anti-kickback statute, even if structured lawfully under Stark law’s ancillary services exception.

According to the 2003 OIG Special Advisory Bulletin[ I added the numbers to make it easier to read]:

“[Q]uestionable contractual arrangements where (1) a health care provider in one line of business (hereafter referred to as the “Owner”) (2) expands into a related health care business (3) by contracting with an existing provider of a related item or service (hereafter referred to as the “Manager/Supplier”) (4) to provide the new item or service to the Owner’s existing patient population, including federal health care program patients. (5) the Manager/Supplier not only manages the new line of business, but may also supply it with inventory, employees, space, billing, and other services.

In other words, the Owner contracts out substantially the entire operation of the related line of business to the Manager/Supplier – otherwise a potential competitor – receiving in return the profits of the business as remuneration for its federal program referrals.

The “kickback” lies in the fact that the physician really doesn’t have to do anything except send patients and collect “mailbox money.” This “money without risk,” or financial investment by the physician is the “kickback.” The reason the “manager/supplier” is in this arrangement, is because it doesn’t have any patients of its own.

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

When I was a kid growing up in a Mississippi river town, we were scared of absolutely nothing. Long before the invention of “personal watercraft,” we would go behind the Yamaha Motorcycle dealer and grab Styrofoam packing crates, about the size of a closet door and use them for river rafts.

Our summers were spent fearlessly rafting with venomous snakes, fast currents, and other hidden dangers. It was just fun for us. Although, come to think of it, there were probably some pretty angry sea turtles in and around Mobile Bay, who might have tried to procreate with those abandoned motorcycle crates after they washed up on shore.

“Never let ‘em see you sweat.” I am not a kid anymore and like most professionals, I do have stress. (Instead of looking in the mirror for signs of aging, I now look for any signs of youth.) I also subscribe to the notion, “never let ‘em see you sweat.” Great, that’s one more thing to worry about just before trial.

But, I have always heard that deep breathing is a good way to combat stress, but never really tried it. Probably, because no one ever explained “why.” I am the kind of person who needs to know “why” something works, before accepting it. My teacher wasn’t amused in 9th grade algebra: “Given x, find y.” I didn’t understand why I would want to find y? Maybe y doesn’t want to be found? (It was the only D I ever got.)

But I did know, from swimming in rivers, that if you breathe in at the wrong time and take in water, you can be in big trouble quickly. That’s how good swimmers drown in lakes. Panic sets in when you can’t breathe normally.

Turns out, that’s also why deep breathing works with stress on dry land. I learned this from watching self-help videos on YouTube this month, and verified it from a study on the NIH PubMed website.

The answer is “carbon dioxide.” We breathe in oxygen and breathe out carbon dioxide. When too much carbon dioxide builds up in our system, we start to panic, hard.

The National Institute of Health tested this:

“We randomly selected six panic disorder subjects, using the Structured Clinical Interview for DSM-IV. All subjects went double-blindly through an inhalation of 35% CO2 and compressed gas (atmospheric air) on two occasions. At the first test five patients (83.3%) had a severe panic attack with high levels of subjective anxiety during carbon dioxide inhalation.”

This makes sense to me. Shallow breathing from stress, increases carbon dioxide in our blood, which sends a message to our brains, “this is the perfect time to panic.” And we do. Deep breathing gets rid of anxiety, by increasing oxygen and lowering carbon dioxide.

Now that you know why it works, maybe like me, you will be more likely to embrace deep breathing the next time you appear in court or present to a large audience.

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

It’s another week and again my phone blew up, because another round of doctors and Pharmacy executives have been indicted under the Travel Act, (which is code for a “commercial only,” non-federal payer kickback case, like Forest Park.)

This iteration is US v. Mortazavi, in 3:24 -CR-049-S filed in the Northern District of Texas Dallas Division, involving something that happened just a squeak under 6 years ago which I believe is code for “an AUSA was looking for something to do,” and decided to see which cases had a statute of limitations coming up. It’s a “fish or cut bait” issue.

At any rate, the grand jury indicted the defendants for violations of the Travel Act 18 USC §1953, Commercial Bribery, Tex. Penal Code §32.43, Money Laundering, 18 USC §1956 and “Conspiracy to Deprive Patients of the Intangible Right to Honest Services,” 18 USC §1346 (which is a federal “bribery of a fiduciary” statute ).

All of this is related to Andrew Hillman’s Next Health, which was an amalgamation of MSO’s, CLIA Labs, pharmacies, surgical implant and device distributors, and only God knows what else (well, the government knows). Next Health has spun off more civil and criminal litigation than I have fingers and toes to count them with.

Tex. Patient Anti-Solicitation Statute. But what I really want to talk about is the Patient Solicitation Statute. Once again, an indictment mentions, but does not actually charge anybody with violations of the Texas Patient Anti-Solicitation Statute, Tex. Occ. Code 102.001. (The indictment opens with an observation that the Tex. Patient Anti-solicitation statute exists, but then makes no more mention of it in remainder of the entire indictment.)

Which if you ask me, is a clear violation of the narrative principle of “Chekhov’s Gun” (if you show a gun on the wall in Act I of a play, you are supposed to shoot somebody with it the end of Act III.) But nobody asked me.

Why no one is ever charged with 102.001. I have a three-part theory why no one ever is charged with Patient Solicitation under Occ, Code 102.001: (1) it stupidly written (it doesn’t outlaw anything it is supposed to outlaw (2) is probably unconstitutional as a violation of “commercial free speech” problems under the Central Hudson test and (3) it is only a Class C misdemeanor, so the “juice” isn’t worth the prosecutorial “squeeze.”

On the first point, take a look at Sec. 102.003. “Federal Law; Construction.” “Section 102.001 permits any payment, business arrangement, or payment practice permitted by 42 U.S.C. Section 1320a-7b(b) [the AKS] or any regulation adopted under that law.”

Trouble is, every kickback arrangement that does not involve federal payers, is permitted under 42 U.S.C. Section 1320a-7b(b), which only forbids kickbacks in government payer cases. Therefore, kickbacks of every other kind are permitted by 102.001 by the express wording of the statute. There is a reason 102.001 is written this way, it is supposed to recognize the supremacy of federal safe harbors over state law to the contrary. The legislature just butchered the drafting and execution.

Commercial Free Speech. Under 102.001, “(a) A person commits an offense if the person knowingly offers to pay or agrees to accept, directly or indirectly, overtly or covertly, any remuneration in cash or in kind to or from another for securing or soliciting a patient or patronage for or from a person licensed, certified, or registered by a state healthcare regulatory agency.”

The problem here is that unlike, say “soliciting prostitution,” providing pharmacy services is a lawful act. The statute completely bans paying someone to say truthful, non-misleading, commercial speech about a lawful activity, that is not restricted as to time or place. (There is a reason lawyer barratry statutes are specific as to when and how a lawyer can contact a car wreck victim.) These laws must be narrowly tailored to pass “strict scrutiny.”

That is the very definition of a Central Hudson free speech violation found in Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), where Justice Blackmun wrote for the majority explaining that states still retained the power to regulate some commercial speech, via content-neutral time, place, and manner regulations. Likewise, states retain the power to prohibit false or deceptive advertisements. However, he held that the states could not suppress truthful information about a lawful economic activity, simply out of fear of potential consequences (people might use too many services paid for by commercial insurance, for example.)

“Please Tell Me you Didn’t. . . How to Keep Client’s Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

“Help! The FBI is in my lobby!” The call usually begins, but even that is an understatement. When I get there, the client’s lobby looks more like an explosion at an alphabet soup factory. There will be swarms of blue and gold law enforcement jackets emblazoned with “FBI,” “DEA,” the “HHS OIG,” and the “DOD OIG.”

A March 2024 D Magazine article describes these scenes as “a hawk descending on a field mouse.” I can vouch that this is the one time the government doesn’t seem to skimp on the expense of throwing a party.

Most lawyers hope to go their entire careers without their clients ever meeting an FBI agent in person. I would like to help keep it that way. I can start by pointing out that some of the blue blazers often read “IRS.” Even stolen or ill-gotten money is considered “income” for tax purposes. Tax evasion is usually less difficult to prove than underlying crimes. That is after all, how Al Capone ended up in Alcatraz.

But the IRS codes have even nastier cousins down the hall at the Treasury Department, beginning with 18 USC § 1956 “Money Laundering” and the long list of ancillary crimes, like conspiracy and aiding and abetting.

In healthcare crimes, I often see cases where a search warrant results in agents finding a safe with hundreds of thousands of dollars in cash in it (that no one can explain). The “no apparent legitimate business purpose” is one of the tests for tax evasion and money laundering.

Usually, where a lot of money is in a healthcare client’s safe, it is difficult for clients to deny they were “in on” some kind of “white envelope” shenanigans, such as payments are being made under the table to hide illegal kickbacks.

In other client’s cases, it is not so apparent to the recipient that the money is from an illegal source. Other than the obvious fact that there is an awful lot of it. Either way, it’s a fun day for federal agents, when they open a client’s safe and find hundreds of thousands of dollars in cash.

What is “money laundering?” The problem for criminals, which I suppose may of us learned from the television show Breaking Bad, is that it is really hard for them to spend or accumulate cash that hasn’t been reported as legitimate income. They often need to recruit witting and unwitting helpers to launder it.

In layman’s terms, money laundering is taking the proceeds from ill-gotten gains, and making it look like it came from legitimate sources. This often includes a scheme to pay taxes on cash “earned” by a seemingly legitimate business, to cover the money’s illegal origins.

“Smurfing” and other Ancillary Crimes. A really good overview of what money laundering is, and how clients can unwittingly become involved, can be found in the U.S. Department of Treasury FinCen website, entitled “Money Laundering Prevention.” (Just Google it, it will pop right up.) According to the FinCen website money laundering can be a complex process. It involves three different, and sometimes overlapping, stages:

Placement involves physically placing illegally obtained money into the financial system or the retail economy. This can involve “Smurfing” also known as “structuring,” whereby illegal funds are divided into smaller amounts by multiple people (like little “Smurfs”) who deposit smaller amounts into multiple bank accounts or financial institutions. This is done to circumvent financial regulations that require banks to report large transactions.

Layering involves separating the illegally obtained money from its criminal source by layering it through a series of financial transactions, which makes it difficult to trace the money back to its original source.

Integration involves moving the proceeds into a seemingly legitimate form. Integration may include the purchase of automobiles, businesses, real estate, etc.

The “accidental criminal,” meaning the unwitting client who might not know he is doing something wrong, can sometimes end up being charged with “conspiracy” or “aiding and abetting” when he simply thought he was helping out some acquaintance.

Any time large sums of unexplained cash are involved, it is always a good idea to advise clients to tread carefully if not, “run the other way.” Otherwise, they could end up covered in alphabet soup.

This is a topic that has been on my mind for a while, because I see it so much in my health law practice. Sometimes I put partnerships together, and sometimes, they get business “divorced.” And a big reason is today’s topic.

According to Medical News Today, “Emotional Blackmail” can be defined as “using another party’s fear, guilt, or sense of obligation to pressure them to comply with a demand.” Essentially, someone, whether a business partner, a boss, an employee, co-employee, a parent, children, good friends (or maybe someone you just met) expects you to do something you don’t want to do, and there will be consequences (to you or them) if you don’t comply.

Emotional blackmail is a natural phenomenon which requires two people. Much like lighting, which happens because of friction when the wind blows and two clouds rub together. You get people together, there will be friction, there will be flashes, some of it will be emotional blackmail. My point being, you can’t eliminate nature, in fact, you’d have better luck talking to the clouds. But you might just be able to help yourself get out of harms way.

Psychological “splitting.” Psychological “splitting” starts when we are infants. Little versions of humans can’t tell whether our wants and needs are life-threatening. So, just to be safe, infants will go “all out” with temper tantrums.

Psychologists also believe that for a long time, infants can’t tell that the “withholding” parent and the “giving” parent are actually the same person. Hence the “splitting.” The tantrum is designed to make the withholding parent go away, and cause the gratifying parent to come back. You can see where I am going here. You are a saint if you give them what they want, and the devil if you don’t. Emotional blackmailers are often infants that never grew up.

Do you have a “dog problem” or an “owner problem. Some “monsters” are born, and some are created. You first have to figure out if you caused the problem, by giving the emotional blackmailer permission to feel entitled to your help.

In other words, if we had followed you around with a court reporter and a videographer, would we find a point where you gave the emotional blackmailer the idea that they could rely on you to give them money, services, support that you now don’t want to give? If so, you don’t have a dog problem, you have an owner problem.

“Oedipal parenting” behavior. There is a range of possibilities why this would happen, some good and some pathological. On one end of the spectrum, “you are just nice” and therefore a doormat (also pronounced, “target.”) At the extreme other end, you might be a covert narcissist who loves volunteering, then sucking all the air out of the room complaining about being a victim to anyone who will listen.

Somewhere in between is “Oedipal parenting” behavior, where we might tend to infantilize our friends, children or coworkers, to keep them close. Often because we have nothing going on in our own lives. So, we make others weak and dependent on us. Like giving a drunk a drink. It isn’t good for them. But maybe we keep giving, to keep them close and needy. Either way, you’ve got work to do.

What if the problem is you? If you started it, then you can end it, if you want to. Dave Ramsey, the financial guru puts it this way when speaking of cutting off financial resources, “better to feel guilty, than resentful.” But it might take a while to turn the ship around. There might be some anger involved. You might lose friends when you say, “hey, I don’t want to do this anymore.” That’s what infantilizing your relationships will do– turn others into babies. Maybe you can’t go cold turkey, but you can set a deadline for when your help ends. Which takes a lot of courage and resolve, especially if the problem is you.

At the end of the day, only you can decide if you want to continue to allow others’ expectations to become your obligations.

What if the problem is them? Some people are just unfixable. The DSM-5 (a/k/a “The Big Book of Crazy”) classifies some of these people as “Cluster B” (sociopathic, narcissistic, borderline disordered.) I would just call them “parasites,” who don’t care that you don’t want to help them. They feel entitled to your time, money and services. The way to tell, is that they do it to everyone (not just you.) If you have one of those, “run.” You can’t fix them.

What if the problem is both of you? But you don’t have to be a clinical narcissist, nor a co-dependent, to get locked into this type of behavior. There is a book by Ross Rosenberg called The Human Magnet Syndrome, which explains that some people are simply co-dependent “fixers” who are drawn magnetically to narcissistic “takers.” You put a co-dependent and a narcissist in a crowed room, they will find each other. Narcissists just know who you are and vice versa. The same thing seems true for sub-clinical “takers” and “givers.”

The only thing you can do is work on yourself. That is what The Human Magnet Syndrome is all about. How to realize you are worthy of relationships, without giving away unreasonable amounts of resources to others by setting boundaries and enforcing them.