Commercial Litigation Update

Armed with audit evidence of widespread fraud, waste, and abuse (FWA), federal and state regulators have launched a wave of criminal and administrative enforcement actions against applied behavior analysis (ABA) providers. The enforcement activity now underway spans Department of Justice (DOJ)-led criminal indictments, state Medicaid Fraud Control Unit (MFCU) prosecutions, and state administrative terminations and rate-reform litigation. These data-driven investigations are feature coordination across multiple departments and agencies.

Hospitals and health systems are familiar with traditional medical malpractice cases, but as healthcare is increasingly seen as a business, healthcare providers need to understand the potential for, and limitations of claims brought under the guise of consumer protection laws. 

Consumer protection laws can be tempting causes of action for individuals who believe they have been wronged by the healthcare system. Unlike medical malpractice claims, which require expert testimony and may include damages caps, consumer protection statutes often include treble damages, punitive damages, and attorneys’ fees. Consumer protection laws may also offer injunctive relief as a remedy, do not require a plaintiff to prove causation or damages, and have the potential for class action lawsuits. To prevent plaintiffs from reframing a negligence case to sidestep the limitations of medical malpractice cases, some courts and states have drawn boundaries between consumer protection and medical malpractice cases.