Mid-Atlantic Health Law TOPICS

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Did You Know? Summer 2011

False Claims: Did you know that a health care management holding company was recently dismissed from a suit alleging that one of its subsidiary residential treatment centers violated the False Claims Act and the Virginia Fraud Against Taxpayers Act? A federal district court in Virginia, in U.S. v. Universal Health Services, granted the motion to dismiss Universal Health Services, Inc. (UHS) when the government's complaint failed to include allegations specifically showing either how UHS participated in the claims process of its subsidiary or why the distinct corporate identities of UHS and its subsidiary should be ignored. The court reasoned that the mere existence of a parent-subsidiary relationship does not make the parent liable for the fraudulent activity of the subsidiary.

Physician Discipline: Did you know that the Maryland Court of Special Appeals, Maryland's intermediate appellate court, recently ruled, in Kim v. Maryland Board of Physicians, that a physician may be found liable for making a false statement to the Board of Physicians in a licensure renewal application, even if the physician did not intend to deceive the Board, and even if the physician did not believe that disclosing the true information would cause the licensing body to refuse to grant the physician a license? In this situation, Dr. Kim failed to disclose a pending malpractice claim to the Board, and the Board fined Dr. Kim $5,000, issued him a letter of reprimand, requested him to take an ethics course, and placed him on probation, all of which actions were upheld by the court.

HIPAA Penalty: Did you know that HHS imposed a $4.35 million civil monetary penalty on Prince George's County's Cignet Health for failing to respond timely to patient requests for copies of their medical records, as required by the Health Insurance Portability and Accountability Act (HIPAA)? The size of the penalty partly reflected the agency's conclusion that, in addition to the underlying HIPAA violation, Cignet also failed to cooperate with the HIPAA investigation.


June 14, 2011




Rosen, Barry F.


Health Care