The Travel Act in the Healthcare Space: 3 Notable Considerations

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Earlier this year, a notable trial took place in Dallas (United States v. Beauchamp, et al., 3-16 Cr. 516D (N.D. Tex.) that could have an impact on the healthcare industry in the coming years. In the trial, the DOJ brought criminal claims against multiple physicians under the Travel Act, which resulted in multiple physicians being convicted and sentenced to prison time. The trial tested the boundaries and application of the Travel Act and was, in many ways, unexpected. This article summarizes 3 things that you ought to know about this trial and its potential impact.

  1. The Travel Act Overview 

It is important to first understand the Travel Act, which was a main statute advanced by the federal prosecutors in the prosecution of the physicians.

The Travel Act, which was passed in 1961, establishes the illegality of committing unlawful acts across state lines – which can occur via email or other electronic means. The Travel Act has not historically been used in the healthcare context in this manner.

Historically, this act gave the federal government the ability to oversee or claim jurisdiction on a broader array of cases because the underlying criminal activity crossed state lines. While the federal government exercised this ability in many different spaces after the passage of the Travel Act, the federal government had not typically utilized the Travel Act in this manner in the healthcare space.

  1. Overview of the Trial

The trial in Dallas involved criminal charges that were brought by the federal government against Forest Park Medical Center and multiple physicians. The trial specifically targeted any kickbacks or bribes by the hospital to get doctors to refer their patients there. Many of the alleged bribes were facilitated through commercial or marketing contracts that purportedly provided free advertising for the physicians in return for their patient referrals.

As the Dallas News mentions, some physicians had the perception that they could avoid scrutiny by the federal government if they avoided patients who are covered by federal health programs. However, prosecutors built a case around the Travel Act in order to establish their jurisdiction. The Travel Act was implicated due to the interstate communications that allegedly aided in the unlawful acts of the hospital and the physicians.

  1. The Impact

This trial could have a substantial impact on the healthcare space. The Department of Justice has long made healthcare fraud enforcement a priority and is devoting substantial resources to its efforts to curtail and prosecute fraud in the healthcare industry. The use of the Travel Act as a means to pursue federal claims even where healthcare providers may not be submitting claims to federal healthcare programs expands the avenues under which the federal government may pursue such claims.

This reinforces the need for healthcare providers to carefully consider their financial and other relationships and to ensure compliance with all applicable laws, while serving as a reminder of the importance to carefully consider the propriety of such relationships even if claims are not being submitted to government payors. Additionally, the case serves as a reminder that simply having a contract in place is insufficient to eliminate potential exposure if there are illegal or improper aspects of the contract.

Overall, the Forest Park case reflects the further scrutiny that is being brought on practices in the healthcare space. We will continue to monitor this litigation and any other efforts by the government to use the Travel Act in this manner.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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