The 6th Circuit Court of Appeals on Monday ruled that an $11 million 2011 verdict against a medical imaging company accused by a whistleblower of violating the False Claims Act was incorrect. The appeals judges said MedQuest Associates, operator of a number of BioImaging facilities in Middle Tennessee, had not violated Medicare payment rules as it relates to physician supervision of procedures. Instead, the company's shortcomings relate to so-called "conditions of participation" in Medicare, which cannot result in a False Claims judgment.

The court also said the penalties levied by District Court Judge John Haynes against MedQuest for using a Medicare billing number belonging to a company it had acquired were not warranted.

“We have little sympathy for MedQuest, which sometimes skirted and appears to have often ignored applicable regulations in the conduct of its centers. However, because these regulations are not conditions of payment, they do not mandate the extraordinary remedies of the FCA and are instead addressable by the administrative sanctions available, including suspension and expulsion from the Medicare program.”

The appeals court's complete opinion is available here and Haynes' 2011 ruling can be read here.

SEE ALSO: Waller's take on the 2011 verdict

The U.S. Supreme Court on Tuesday said the Federal Trade Commission can proceed with its challenge to a Georgia hospital merger involving an HCA Holdings facility. The FTC had initially lost its case to stop HCA's sale of Palmyra Medical Center but the high court said local bodies aren't excepted from antitrust rules.

Thanks to states-rights principles, state governments are immune from federal antitrust laws. That immunity, however, doesn't necessarily extend to municipalities and other government entities created by the state. Under prior legal precedent, local governing bodies aren't exempt from antitrust scrutiny unless the state has clearly authorized them to engage in anticompetitive conduct.

HCA Holdings and the Justice Department said Wednesday have reached a $16.5 million settlement over violations of federal laws that restrict financial relationships between hospitals and physicians. The AP reports that Justice officials say two HCA doctors’ subsidiaries gave financial benefits to Diagnostic Associates of Chattanooga, a physicians group, in an effort to get more patient referrals to HCA facilities.

The case arose from a whistleblower lawsuit filed in East Tennessee. The whistleblower will receive an 18.5 percent share of the settlement money. The settlement requires Parkridge to hire an independent organization to review its business arrangements and transactions and work with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure compliance with federal laws.

Just a few weeks after formally opening its office in Austin, law firm Waller has been tabbed by the Texas Health Services Authority to help it draw up the legal and privacy frameworks for a statewide health information exchange. Waller attorneys also will negotiate and write up the various shared service agreements the state will sign with vendors for the HIE.

SEE ALSO: Why did Waller pick Austin again?

Law firm Waller will in November host its second Directions in Healthcare conference at the Loews Vanderbilt. The event will feature panels on compliance and hospital acquisitions, among other topics, and will feature a luncheon speech from HCA Holdings President and CFO Milton Johnson as well as a keynote from Lewis Morris, the former chief counsel to the inspector general of the U.S. Department of Health & Human Services. Get more details here.

HealthStream has been on a roll for a good while now, adding hospital clients and employee users. On the company's second-quarter earnings conference call Tuesday, Chairman, President and CEO Bobby Frist said his team is looking to break into related health care business such as long-term care, behavioral health and home health services. HealthStream would do so primarily by following its hospital clients as they buy their way into those spaces.

We haven’t declared this, but maybe in our next conference call we’ll give more insight, a renewed focus and maybe a financial investment focus in areas of launching new markets [...] [O]bviously those investments would precede earnings growth if we were to do those and we’re in our strategic planning process the next four months and out of that may come new initiatives for next year, early next year.

Always trying to make things simpler, the folks at the Centers for Medicare and Medicaid Services have amended certain rules related to ambulatory surgery centers.

The main reform in the final rule for ASCs is CMS’ announcement that ASCs will no longer be required to notify patients of their rights "in advance of the date of the procedure" but rather simply "prior to the start of the surgical procedure." The previous wording effectively prohibited an ASC from performing a surgery on the same day as the patient referral, and ASCs argued that it resulted in unnecessary scheduling inconveniences and travel issues for some patients. Now ASCs have the ability to perform same-day surgeries and still meet the patient notification requirement. CMS has also made certain technical corrections to the wording of ASC regulations that are not anticipated to have a substantive impact on ASC operations.

Colorado's attorney general has approved the proposed acquisition by HCA Holdings of the 40 percent of HCA/HealthOne it does not already own. But John Suthers has negotiated to have the hospital giant extend to 15 years its indigent-care and community benefit programs as well as a number of other smaller conditions.