Kennedy Attorneys & Counselors at Law

The hidden risks of paying for hospice patient referrals

2026-10-21T11:47:47Z

Building relationships with referral sources is part of running a hospice. However, paying for those referrals may create serious legal problems. In some cases, the results can be severe and long-lasting.

Understanding referral payment laws

Hospice care providers sometimes feel pressure to pay for patient referrals. This practice might seem like a simple business approach. The Anti-Kickback Statute bans offering payment in exchange for patient referrals. The aim is to prevent unnecessary or inappropriate treatment recommendations.

Why compliance matters

Breaking referral payment laws leads to serious financial consequences. Violating the Anti-Kickback Statute may result in harsh penalties. Criminal consequences may involve fines totaling $100,000. Violators may also face jail time for up to ten years. Civil monetary penalties can reach $100,000 per kickback. Providers may also owe three times the total money paid. Providers may also face removal from Medicare and Medicaid programs. Beyond monetary fines, illegal referral payments hurt professional standing and community trust

Types of illegal payments

Many hospice operators do not realize what counts as illegal payment. The law covers far more than simple cash deals. Common violations include:

Cash payments for referrals
Free goods or services for referral sources
Expensive gifts to potential referrers
Below-market office rent
Above-market payments for services
Service contracts or leases without written one-year terms
Payments based on referral volume instead of fair market value

Even deals that seem legitimate can be a problem. This happens when they serve as hidden rewards for patient referrals.

How investigations begin

Referral payment investigations often start with whistleblower complaints. Unhappy employees or competitors may report suspicious activity. Medicare audits can also uncover irregular patterns. Once an investigation begins, it can take significant time and resources. Defense costs alone can reach hundreds of thousands of dollars.

When to review business practices

Prevention is always better than facing an investigation. Building a strong compliance program starts with regular staff training. When team members understand the rules, they can spot potential problems early. Documenting all business relationships can help show that transactions are legitimate. Internal audits can help identify arrangements that might raise red flags. The cost of these preventive steps is small compared to defending against enforcement actions.

Making compliance a priority

Operating a hospice in Texas requires strict adherence to referral payment laws. A commitment to compliance starts at the top and extends throughout the entire organization. Protecting the practice means protecting the vulnerable patients who depend on quality care.

How hospice providers can address Medicare compliance risks

2026-09-23T14:44:53Z

A family often relies on hospice for clear answers during a difficult time. Behind that care, your agency may need records that support each patient’s eligibility and the services it provides. If you own or lead a hospice, gaps in those records can put Medicare payment at risk. Knowing where to look may help you catch problems early while giving your staff a clearer way to document the care they deliver. That review works best when it follows a patient’s path from admission through discharge. These practices can allow you to check each stage and address gaps before they spread across the record.

Show why the patient qualifies for hospice

Review the physician’s certification alongside the clinical notes. Medicare requires a prognosis of six months or less if the illness follows its normal course. The certification also needs a brief narrative explaining the findings behind that judgment. For example, a diagnosis alone gives reviewers less context than notes describing changes in the patient’s condition and daily function.

Compare the care plan with visits

Your interdisciplinary team (IDT) can bring different views of a patient’s needs. In Texas, state guidance says the team directs and supervises the hospice care and services it provides. Compare its plan with visit notes, medication records and later updates to see whether they tell a consistent story. If a nurse changes the visit schedule after symptoms worsen, the plan should reflect that decision.

Review discharge records

Give equal attention to patients who leave hospice care while still alive. If their condition improves or stabilizes enough to lose hospice eligibility, the file should explain the clinical reason for discharge and show the related planning. Looking at discharge patterns across your agency can also reveal cases that might deserve a closer review.

Check leadership and reporting practices

Confirm that medical directors take part in clinical review and that the record shows their work. Then check whether certifying physicians meet Medicare’s enrollment or opt-out requirement. Also screen relevant staff and contractors against the federal exclusion list. These evaluations can reveal risks that clinical notes alone may miss.

What you can do when you find a compliance gap

If your review finds missing notes or conflicting records, you may look at how the gap arose and address the process behind it. That move can help your team keep future records clear and consistent. You may also need to examine past Medicare claims or your agency’s enrollment if the gap could affect either one. An attorney familiar with health care rules can help you assess its scope and decide how to respond.

What hospice providers should know about Anti-Kickback rules

2026-08-18T08:19:50Z

The federal Anti-Kickback Statute prohibits offering, paying, requesting or receiving something of value to influence referrals for services paid by federal healthcare programs. For hospice providers, this can affect relationships with physicians, facilities, marketers and other professionals who may refer patients. Here are the key rules to understand.

Paying for Medicare or Medicaid referrals can violate federal law

Paying someone to generate referrals for federally reimbursed hospice services can violate the Anti-Kickback Statute. The law applies when you offer or provide something of value with the intent to influence referrals or generate business covered by a federal healthcare program. For example, paying a marketer based on the number of Medicare patients referred to your hospice. That could raise serious concerns because the compensation connects directly to the referrals.

A kickback does not have to be a direct cash payment

A kickback can involve anything of value, including gifts, free services, discounts or other benefits offered to influence referrals. You should therefore look beyond direct referral payments when reviewing your business relationships. For example, providing valuable services to a referral source at no cost. That could create concerns even though you never hand that person money for sending patients to your hospice.

A legitimate business arrangement can still create referral risk

A legitimate business purpose does not eliminate Anti-Kickback concerns when referrals influence the arrangement. You may have a genuine relationship with a physician, facility or marketing company, but the way you structure and compensate that relationship still matters. An agreement should therefore clearly define the services being provided and the basis for compensation rather than tying payment to the number or value of referrals.

Safe harbors protect only qualifying arrangements

An Anti-Kickback safe harbor protects an arrangement only when you satisfy all of that safe harbor's requirements. Federal regulations provide protection for certain arrangements, but each safe harbor has specific conditions that the parties must meet. Failing to fit within a safe harbor does not automatically mean you violated the Anti-Kickback Statute. However, you cannot rely on that safe harbor for protection.

Review referral arrangements before signing

Review compensation, marketing and other referral-related agreements before you enter into them or change their terms. If an arrangement raises questions about referrals or compensation, legal guidance can help you assess the structure before it creates a larger compliance problem. Addressing the issue early can give you more options for fixing the arrangement.

Four Decades in Health Law. Nearly 25 Years Leading Kennedy Attorneys.

2026-08-12T08:16:52Z

Mark S. Kennedy Recognized by Best Lawyers® and Super Lawyers®

For nearly four decades, Mark S. Kennedy has practiced where health care, government regulation, and the law intersect. His career has included service inside the federal government, work with Medicare intermediary and contractor organizations, and nearly 25 years as the founder and principal of Kennedy Attorneys & Counselors at Law, a firm devoted to representing health care providers and practitioners.

That experience has also earned recognition from two of the legal profession’s established peer-review organizations. Kennedy has been selected for inclusion in The Best Lawyers in America® and Texas Super Lawyers®, while Kennedy Attorneys & Counselors at Law has also received recognition from Best Lawyers® through its Best Law Firms® rankings.

The recognitions reflect a career built almost entirely around health law.

Before entering private practice, Kennedy served as an attorney with the federal government, gaining firsthand experience with the agencies, administrative processes, and regulatory structures that govern federally funded health care. He also worked with Medicare intermediary and contractor organizations, providing an additional perspective on how Medicare reimbursement, program integrity, audits, appeals, and enforcement operate from inside the system

Kennedy brought that experience to private practice and, almost 25 years ago, founded Kennedy Attorneys & Counselors at Law.

The firm was built around a straightforward mission: to represent the people and organizations that actually deliver health care.

Today, Kennedy Attorneys represents physicians, physician groups, pharmacies, hospices, home health agencies, laboratories, suppliers, and other health care providers and practitioners in matters involving their businesses and their participation in federal and state health care programs.

The firm's work frequently involves Medicare and Medicaid reimbursement, audits and overpayments, payment suspensions, enrollment and revocation matters, program exclusions, administrative appeals, licensing and disciplinary proceedings, investigations, regulatory compliance, government enforcement, and litigation arising from those disputes.

For Kennedy, that work is particularly important because a government health-program dispute is rarely just a regulatory problem. It can threaten a professional license, interrupt reimbursement, jeopardize a provider's participation in Medicare or Medicaid, disrupt a health care business, and ultimately affect the provider's ability to continue serving patients. That reality has shaped the firm's approach for nearly a quarter century. Kennedy Attorneys combines the perspective gained from Kennedy's federal government and Medicare-contractor experience with decades spent representing providers on the other side of the regulatory table. The objective is not simply to identify what a regulation says, but to understand how the government is likely to apply it, what procedural rights are available to the provider, and what strategy gives the client the strongest path forward. Recognition by both Best Lawyers® and Super Lawyers®, together with Best Law Firms® recognition of Kennedy Attorneys, provides independent acknowledgment of that longstanding commitment to health law. But the firm's purpose remains the same as when Kennedy founded it almost 25 years ago: Stand with health care providers and practitioners when their businesses, professional practices, and ability to participate in government health care programs are at stake.

Mark S. Kennedy

Founder & Principal | Kennedy Attorneys & Counselors at Law Nearly four decades in health law. Federal government and Medicare-contractor experience. Almost 25 years leading a firm dedicated to protecting health care providers and practitioners.

What must a Texas hospice document for bereavement care?

2026-07-20T09:44:16Z

After a patient dies, family members and caregivers may need different kinds of support. Texas and federal rules require your hospice to assess those needs, create an appropriate bereavement plan and keep records showing how the program responds. Focus on these five documentation areas:

1. Initial bereavement assessment

Your care team must complete the patient’s initial comprehensive assessment, including a review of initial grief-related needs, within five calendar days after the patient chooses hospice care. The team may include medical, nursing, social work and counseling staff. The review must consider social, faith-based and cultural factors that may affect how they cope with the patient’s death. Examples include religious mourning customs, language barriers, cultural views on death or little support from family and friends.

2. Findings included in the plan of care

Include the assessment findings in the patient’s overall care plan. You must also consider those findings when developing the separate bereavement plan. Records should identify the people who may need support and the needs revealed during the assessment.

3. Services and how often you will provide them

The written bereavement plan must state:

The kinds of services the hospice will offer
How often you will provide those services

Services may include counseling, support groups, calls, written materials or referrals based on each person’s needs.

4. Who will oversee the program

A qualified professional must oversee your hospice’s bereavement program. Document the supervisor’s education or experience in grief and loss counseling, along with their role in overseeing the program.

5. Support offered after the patient’s death

You must make bereavement services available for up to one year after the patient dies. Keep records of attempts to contact family members or caregivers, accepted or declined services, reassessments and changes in support.

Make documentation part of your compliance strategy

Bereavement records can reveal whether the hospice has clear procedures for assigning responsibilities, meeting deadlines and addressing gaps in care. A health care attorney can compare your policies, forms and staff procedures with Texas requirements and the federal Medicare Conditions of Participation, or Medicare compliance requirements. This review may help you identify inconsistencies before they become an issue during a survey, audit or regulatory investigation.

What to know before partnering to open a practice

2026-07-20T08:46:04Z

Many healthcare professionals dream of opening their own medical practice with like-minded doctors who share their patient-first values. While it is exciting to break away from large hospital systems, it also brings heavy compliance and legal responsibilities. Therefore, before you sign a partnership agreement, you must understand the rules that govern multi-physician practices in Texas.

Partnership agreements carry hidden legal duties

Your partnership agreement serves as more than just a standard business document. In fact, it creates a safety framework that affects every single part of your practice. Specifically, the agreement must clearly define what each partner needs to do to follow the law. It should also outline who makes the final decision on legal matters and establish steps for fixing violations. Additionally, you should include rules for regular legal audits and staff training. Without these clear guidelines, you risk creating major confusion when legal issues pop up.

Financial arrangements must follow federal anti-kickback standards

When you design pay structures and split profits among partners, you enter a tricky legal territory. First, the Stark Law bans certain financial relationships between doctors and the businesses where they send patients. Similarly, Anti-Kickback Statutes stop deals that might unfairly influence where doctors refer patients. Consequently, you must design your partnership's finances to follow these rules:

Reflect fair market value: Pay partners what their services are actually worth on the open market.
Keep referrals separate: Never tie a doctor's pay to the number of patients they refer.
Keep clear records: Document a legitimate business purpose for every single payment.

Ultimately, these safeguards protect your practice from serious legal consequences and heavy fines.

Texas restricts corporate ownership of medical practices

Texas follows a rule called the corporate practice of medicine doctrine, which stops non-doctors from owning a medical practice or controlling medical decisions. This rule directly affects how you build your business, especially if you want to include business investors or managers who are not doctors. Because Texas law prohibits non-physicians from being partners in a medical entity, you must utilize a Management Services Organization (MSO) model to split clinical ownership from business operations. As a result, you must ensure that:

Doctors maintain total control through a 100% physician-owned entity.
Management contracts with outside investors do not hurt a doctor's independence.
Non-physician managers do not take profits based on the volume or value of medical treatments.
The business structure follows Texas laws for professional companies and management services.

Because of these strict rules, you face specific limits when you bring in business partners or look for outside money.

Buy-in and buy-out terms require legal planning

When partners join or leave your practice, the money moving around can trigger serious legal concerns. For this reason, your contract should address several key issues right from the start.

First, it should explain how leaving doctors will handle their ongoing patients.
Next, it must establish Texas-compliant non-compete rules that include required buyout provisions while respecting a patient's right to choose their own doctor.
Finally, it should use fair math to value the business.

In addition to those steps, you need a clear plan to split up legal costs during these ownership changes.

Talk about legal investments before you sign

Partners often argue over how much money to spend on legal software, staff training and legal support. Therefore, before you officially lock into a partnership, discuss your legal philosophy openly. Ask your potential partners about how much risk they are willing to take, their past experiences with law enforcement and their willingness to spend money on preventing problems. In the end, these tough conversations will reveal whether you share the same core values about running a safe, lawful practice.

Building your practice on solid ground

Legal compliance forms the foundation of any successful multi-physician partnership in Texas. However, trying to manage these complex rules without help can lead to expensive mistakes and missed opportunities. Fortunately, a strong legal team can help you handle these challenges. With the right guide, you can build a strong practice that protects your patients and reflects your professional values.

What physicians should know before signing a hospital employment contract

2026-05-29T15:51:53Z

Signing a hospital employment contract is one of the most consequential decisions you will make as a physician. The terms you agree to today can shape your income, your autonomy and your ability to practice for years to come.

How Texas law governs non-compete clauses

Texas restricts physician non-compete agreements under Tex. Bus. & Com. Code § 15.50. A valid covenant must be reasonable in scope and duration. Courts generally limit geographic restrictions to within five miles of your primary practice location and cap the post-employment period at one year. The agreement must also include a buyout clause at a reasonable price. Critically, the covenant cannot prevent you from treating a patient during an acute illness after your employment ends. Key terms to review in any non-compete clause include:

Geographic scope: Confirm the radius matches the statutory limit.
Duration: One year is generally the enforceable maximum.
Buyout amount: The figure must be reasonable and clearly stated.
Acute care carve-out: This patient protection must appear in writing.

Understanding these limits can help you identify language that may not hold up in court.

What to know about malpractice tail coverage

Tail coverage protects you from claims filed after you leave a position. If your policy is claims-made rather than occurrence-based, you will need tail insurance when your employment ends. This cost can range from $20,000 to $100,000 or more. Your contract should clearly state who pays for it.

How compensation structures work

Many hospital contracts start with a guaranteed base salary. After one to two years, your pay may shift to a work Relative Value Unit (wRVU) model tied to productivity. You should confirm the conversion rate, the bonus thresholds and whether those figures align with benchmarks for your specialty and region.

Understanding termination and call obligations

Most hospital contracts allow termination without cause with a 60- to 90-day written notice period. Contracts requiring longer notice periods can restrict your flexibility. For-cause terminations should include a cure period so you have time to address issues before the hospital ends your employment. Call obligations should be explicitly capped, with clear language on whether additional compensation applies above a set threshold.

Speaking with a healthcare attorney before you sign

Contract language that appears standard may carry significant risk. An attorney familiar with Texas healthcare law can help you identify terms worth negotiating. Speaking with a lawyer may clarify how these rules apply to your situation

Responding to a hospice whistleblower complaint in Texas

2026-04-29T06:27:01Z

A whistleblower complaint can put your hospice operation under immediate legal scrutiny. Texas and federal law impose strict obligations on employers who receive these reports.

Stop and secure before you act

Your first priority is to avoid retaliation. Texas Health and Safety Code § 161.134 prohibits hospice employers from suspending, terminating or disciplining an employee for reporting a legal violation. The law creates a 60-day presumption. If you discipline a reporting employee within that window, Texas law presumes the action was retaliatory and shifts the burden of proof to you. Preserve all relevant records right away. Secure emails, billing files and patient documentation tied to the complaint. Limit access to senior leadership and your compliance officer.

Identify what the complaint involves

Not every complaint carries the same legal risk. Review the report carefully to understand its focus. Common categories include:

Patient care: Neglect, abuse or safety concerns.
Billing: Suspected Medicare or Medicaid fraud.
Licensing: Regulatory noncompliance or documentation gaps.

Each category triggers different legal obligations and may involve different agencies. Knowing the complaint type early shapes how you respond.

Investigate with a neutral party

Assign someone without a direct connection to the allegations to lead the review. This could be an internal compliance officer or outside legal counsel. Conduct interviews, review records and document every step. A thorough investigation protects your organization if the matter reaches a state or federal agency. If the review confirms a significant billing violation, consult your attorney about voluntary disclosure to the Office of Inspector General or Texas Health and Human Services.

Speak with a healthcare attorney early

A hospice whistleblower complaint can involve the False Claims Act, state retaliation statutes and Medicare regulations at the same time. An attorney experienced in healthcare law can help you understand how these overlapping rules apply to your situation. For guidance on how these obligations may affect your practice, consider speaking with a lawyer who handles healthcare business matters.

What happens when the OIG audits your Dallas practice

2026-04-01T05:15:12Z

The Office of Inspector General (OIG) recovered $95.7 million from Texas healthcare providers in early 2026. This means your Dallas practice could face an audit at any time. Missing documentation during an audit may cost you more than money, potentially ending your ability to participate in federal healthcare programs.

New documentation requirements

Federal healthcare programs have strict documentation standards. The False Claims Act holds providers liable for submitting claims without proper supporting records. Auditors can find billing errors based on missing files even when you actually provided the services. The Centers for Medicare and Medicaid Services (CMS) finalized new rules in March 2026. These rules require secure electronic timestamps for audit submissions. Practices still using paper logs or faxes may face penalties, with Dallas area providers in Medicare or Medicaid facing closer review under these new rules.

Common documentation failures that trigger penalties

The OIG's 2026 Work Plan targets specific gaps in your records. Healthcare practices may face consequences when auditors find issues like:

Electronic signatures that look the same across all patient files
Weak records for office visits billed on the same day as a procedure
Billing codes that do not match what your records show
Missing proof of 20-plus minutes spent on chronic care management

Each of these gaps can lead auditors to say you billed incorrectly. Physicians made up 17% of Texas cases in Q2 2026, with many facing penalties for these exact documentation problems.

How artificial intelligence (AI) targets your practice

The OIG now uses computer programs to find practices with unusual billing patterns. These programs compare your billing to other North Texas practices. If your billing is much higher than average, the system flags your practice for a detailed review of your records.

How compliance programs protect against audit exposure

Healthcare practices without formal compliance programs face greater risk during OIG audits. The February 2026 Industry Segment-Specific Compliance Program Guidance requires practices to demonstrate active internal self-audits performed within the last 12 months. Generic compliance manuals no longer provide sufficient protection.

Why legal guidance matters for OIG audits

OIG audits involve complex federal rules that healthcare providers rarely encounter in daily practice. A skilled healthcare compliance attorney can review your documentation practices and identify areas of potential legal risks. The documentation you create today becomes the evidence that either protects or exposes you tomorrow.

Common types of Medicare fraud to watch out for in Texas

2026-02-26T15:28:57Z

One stolen Medicare number can lead to months of improper billing, and while losing money is problematic enough, this can also ruin your medical record. Medicare fraud can also delay care when you need it or cause complications with taxes and billing. In order to protect yourself, you will need to familiarize yourself with what the law considers Medicare fraud.

What is Medicare fraud?

Medicare fraud is the intentional deception of the Medicare program by providers or individuals to receive payment without authorization. Bear in mind that Medicare is a federal program, which means federal law drives most enforcement, even when the conduct occurs in Texas. Under 42 United States Code Section 1320a-7b(b), it is against the law to offer or receive payment to induce referrals for services that federal healthcare programs provide. This discourages fraud in health care benefit programs such as Medicare.

Examples of Medicare fraud schemes in Texas

Many scams start with phone calls, online ads or offers of “free” items. If someone pressures you to share your Medicare number or promises something for nothing, you should pause and verify the source. Some common examples of fraud include:

Billing for services you never received. You see charges for office visits, lab tests, therapy or home health services that you did not receive or ask for.
Unnecessary equipment or supplies. A caller pushes braces, genetic tests, catheters or diabetic supplies you do not need, then bills Medicare after a brief or nonexistent consultation.
Upcoding. A provider bills Medicare for a more complex or expensive service than the one you actually received.
Kickbacks. Someone offers you cash, gift cards or other benefits in exchange for your Medicare number or for using a specific clinic, lab or supplier.
Sham telehealth visits. A short call, or no call at all, leads to claims for telehealth services or to orders for equipment and tests.

You can reduce the risk of becoming a victim to Medicare fraud by reviewing your Medicare Summary Notice and comparing it to the care you receive. If you find mismatching or incorrect charges, you can report to Medicare or the HHS Office of Inspector General. In Texas, Medicare fraud often involves false billing, unnecessary equipment schemes, upcoding, kickbacks and sham telehealth claims. You can help protect yourself by keeping your Medicare number to yourself, reviewing your statements carefully and reporting suspicious activity to the relevant agencies and authorities as soon as possible.