Escobar in Action: Physician-owners’ fraud claims against hospital defeated in Fifth Circuit appeal for lack of materiality

Siena Caruso

Following the passage of the Affordable Care Act (“ACA”), which placed new limits on physician-owned hospitals, St. Luke’s Health System (“System”) took action to change one of its hospital’s ownership structures through a buy-out of the physicians’ partnership interests pursuant to the Texas Securities Act (“TSA”). The TSA allows rescission for the original price paid...