Wade’s Health Law Highlights for October 20, 2026

Anti-Kickback Statute & Stark Law

• The Eleventh Circuit held in United States v. Chun that the government need only prove a defendant knowingly agreed to accept remuneration for referring patients who could be federally insured to satisfy the Anti-Kickback Statute’s federal health care program element. The opinion affirmed the convictions of a Medicare-enrolled pain physician and an Insys Therapeutics sales representative, who received sentences of 42 and 48 months. Insys paid the physician $278,900 in honoraria through speaker programs that a former Insys sales executive testified were conditioned on Subsys prescription volume, and that were poorly attended and carried forged sign-in sheets. The court adopted the Fifth Circuit’s standard from United States v. Shah, 95 F.4th 328 (2024), reasoning that the statute’s phrase “payment may be made” reaches any possibility of federal payment. Evidence that the physician participated in Medicare was enough for the jury to find knowledge, and the government did not have to prove he knew any particular patient was a Medicare beneficiary. Source: Goodwin
• The Fourth Circuit upheld dismissal of a whistleblower’s False Claims Act suit alleging that Thomas Health System’s employed-physician pay violated the Stark Law and the Anti-Kickback Statute. In U.S. ex rel. Kyer v. Thomas Health System, decided June 4, the court held that wRVU-based pay rewards personally performed services that Stark excludes from referrals, and that pay above the 90th percentile does not by itself support an inference of inducement. The court also found that hospital subsidies covering the physician group’s losses after a shift to provider-based billing were at least as consistent with lawful explanations as with kickbacks, and that a $5,000 marketing stipend was aimed at the physicians’ own practices. The panel distinguished Tuomey, where a collections-based formula pulled in facility fees, and the Third Circuit’s Bookwalter, where pay ran to multiples of the 90th percentile. Separately, OIG updated its FAQs on April 23 to state that an arrangement meeting a Stark exception can still violate the Anti-Kickback Statute and that paying fair market value does not by itself protect an arrangement. Source: Becker’s ASC Review

Fraud Enforcement & Litigation

• CVS agreed to pay $315 million to resolve allegations that it filled invalid opioid and other controlled substance prescriptions and billed many of them to Medicare and other federal health care programs. The government alleged that from October 17, 2013, through December 2, 2025, CVS pharmacists filled excessive and early opioid prescriptions, “trinity” combinations of an opioid, a benzodiazepine, and a muscle relaxant, and prescriptions from pill-mill prescribers despite red flags, in violation of the Controlled Substances Act and the False Claims Act. The complaint tied the conduct to corporate performance metrics, incentive compensation, and staffing policies, and to policies that kept pharmacists from warning one another about problem prescribers. Under a separate memorandum of agreement with DEA, CVS must set up a reporting hotline, monitor its pharmacies’ dispensing patterns, and create a process to evaluate suspect prescribers. The settlement resolves United States ex rel. Hillary Estright v. CVS Health Corporation, a qui tam case filed by a former employee in which the United States intervened. Source: U.S. Department of Justice
• Twelve Travelers insurance companies filed a federal RICO suit alleging that Houston’s Meridian Hospital and affiliated clinics billed auto insurers millions for medically unnecessary spinal injections, including $3,385,515.87 for one patient. The 192-page complaint, filed October 13, 2026, in the Southern District of Texas, alleges that three unlicensed non-physicians controlled the operation through trusts, shell companies, and professional entities, with personal injury firms steering auto accident claimants through imaging, pain clinics, and predetermined hospital injections. Travelers alleges the combined charges were built to reach the claimant’s policy limit and exploit the Texas Stowers doctrine, under which an insurer that rejects a reasonable settlement demand within limits risks uncapped liability. Alleged billing practices include separate charges of $800 for a surgical tray and $2,500 for recovery room stays of 27 minutes or less, duplicate anesthesia bills from the hospital and a commonly controlled anesthesia group, and separately billed contrast materials. The suit brings nine RICO counts plus fraud, unjust enrichment, conspiracy, and declaratory claims and seeks triple damages, and none of the allegations have been tested. Source: Insurance Business

FDA & Compounding

• FDA sent the White House an “Interim Access Policy” that, according to people familiar with it, would give the agency enforcement discretion over certain compounded peptide drugs. The policy would allow FDA to decline to enforce current restrictions and assure compounding pharmacies they will not be targeted for making the peptides. FDA scientists determined in 2023 that a dozen injectable peptides lacked safety and efficacy data and posed risks, and removed them from the list of drugs compounding pharmacies may make. FDA announced in April that it would reconsider 12 peptides, and in July an advisory panel, at least six of whose nine new members have ties to peptide businesses, voted to recommend returning six of the first seven to the list over staff objections. Formally restoring the peptides requires rulemaking that could take years, and the Center for Science in the Public Interest has urged Acting FDA Commissioner Kyle Diamantas to disregard the panel’s recommendations. Source: Ars Technica

Coding & Reimbursement

• Starting January 1, 2027, CPT reporting will split global maternity care into separately reported antepartum care, labor management, delivery, and postpartum care. The AMA’s 2027 maternity guidelines delete 17 codes, add 12, and revise six, with new labor management codes 59080–59083, vaginal delivery codes 59431–59434, cesarean codes 59502–59504, and postpartum procedure code 59623. Antepartum visits and postpartum care after the delivery date will generally use E/M codes, while immediate postpartum care on the delivery date stays part of delivery care. Prenatal visits performed in 2026 follow 2026 CPT guidance even when delivery falls in 2027. The change may shift wRVU credit among midwives, physicians, and advanced practice providers, which can affect whether clinicians meet compensation thresholds. Source: VMG Health

Cybersecurity

• Ransomware groups are threatening employees and their families with physical harm as the share of victims paying ransoms falls from 78% in 2024 to 59% in 2026. Semperis’ third annual ransomware survey found that 37% of attacks involved threats against friends or family of staff, and 41% of respondents had been targets of physical or psychological intimidation. Among those personally threatened, 57% received threatening texts, letters, or packages, 17% were threatened with abduction, and 13% with bodily harm. Attackers followed through in 53% of cases, with about 25% of victims reporting doxxing and 23% reporting swatting. About a quarter of targeted individuals needed medical or mental health care, and 14% changed jobs, offices, or homes. Source: The HIPAA Journal