Penny Hobbs practices healthcare and employment law. In her healthcare practice, she represents a broad range of clients in regulatory, transactional and dispute resolution matters including litigation and arbitration. She offers a unique perspective and practical experience drawn from a twenty-year nursing career, combined with a master’s degree in business. In her employment practice, Penny counsels clients on day-to-day personnel matters and represents clients in litigation, arbitration and in responding to governmental investigations. She also serves as a neutral mediator and arbitrator in alternative dispute resolution proceedings, and is a dispute resolver with the American Health Lawyers Association.  Penny is a frequent speaker at health law seminars.

Penny serves on the firm’s Management, Marketing and Health Insurance Portability and Privacy Act (HIPAA) committees. She chairs the firm’s Health Law Practice Group and co-chairs its Insurance Practice Group. Penny also chairs the Health and Insurance Law Section of the State Capital Group.  She is Board Certified in Health Law by the Texas Board of Legal Specialization.

Penny has been listed in Best Lawyers© in the field of Health Care Law since 2006.  She is also a passionate community volunteer and active pro bono counsel.

Health Law

Penny has a wide array of health law experience, ranging from complex transactions to regulatory matters, dispute resolution and litigation.

Her transactional experience on behalf of healthcare clients includes:

  • Representing clients in transactions such as mergers and acquisitions, asset purchases and unwinding of relationships.
  • Representing clients in the development of integrated delivery systems, provider networks and an ambulatory surgery center.
  • Negotiating and drafting contracts such as management agreements, managed care provider contracts, employment agreements and administrative services agreements for self-funded plans.
  • Advising institutional clients on how transactional matters may be affected by various state and federal laws, such as the corporate practice of medicine, Starks I and II, Medicare fraud and abuse provisions, Medicare and Medicaid reimbursement provisions, and the Emergency Medical Treatment and Active Labor Act I (EMTALA).
  • Evaluating hospitals’ relationships with physicians and recommending changes, if any.
  • Drafting and reviewing physician recruitment agreements.
  • Forming and obtaining approval of nonprofit healthcare corporations.
  • Assisting physician and medical groups with practice incorporation, as well as compliance with state and federal laws and regulations governing the delivery of medical services.
  • Drafting and reviewing employment agreements between physicians and medical groups, and advising on the termination of such agreements.
  • Assisting clients with the enforcement of non-competition agreements.
  • Reviewing and negotiating emergency room coverage agreements and medical director agreements.
  • Advising a large national health maintenance organization and several physician practice management organizations on day-to-day issues.

Penny’s healthcare regulatory experience includes:

  • Advising clients about the effects of state and federal regulations on business operations.
  • Assisting with the development of procedures to implement a variety of statutory and regulatory requirements, including Employee Retirement Income Security Act (ERISA) claims and appeals rules, preemption, and Health Insurance Portability and Privacy Act (HIPAA) requirements. She also has experience developing procedures to implement insurance laws governing provider credentialing, utilization review, quality assurance, and appeals and complaints.
  • Representing managed care companies in negotiating and implementing managed care contracts with the Texas Health and Human Services Commission to participate in the Texas STAR and STAR+PLUS Medicaid programs.
  • Counseling healthcare companies regulated by the Texas Department of Insurance (TDI). Her work has included the development and implementation of procedures for TDI regulatory compliance, monitoring insurance legislation and advising on its effects and interpretation, and assisting clients with preparing testimony for public hearings before legislative committees and TDI rulemaking.
  • Representing institutional and individual clients in investigations, as well as contested and uncontested matters before the TDI, Office of the Attorney General, Texas Medical Board, Texas State Board of Pharmacy, Texas Board of Nursing and Texas Department of State Health Services, among others.
  • Representing physicians in investigations by the U.S. Department of Justice and the U.S. Attorney’s Office.
  • Representing insurance companies and agents in TDI regulatory filings for certificates of authority, change of control, mergers and acquisitions, holding company transactions, service area contractions and expansions, health insurance and health maintenance organization certificates and policies, annuities, and healthcare provider contracts.
  • Advocating on behalf of clients with the TDI regarding the merit and legal authority for product filings.
  • Representing insurance companies, health maintenance organizations and agents in compliance matters before the TDI.
  • Helping nursing home and acute long-term care facilities obtain licenses to operate, pharmacy licenses and U.S. Drug Enforcement Administration (DEA) licenses and Clinical Laboratory Improvement Amendments (CLIA) approval. She has also helped such facilities obtain and maintain participation status in the Medicare and Texas Medicaid programs, including obtaining National Provider Identifier (NPI) numbers.

Penny has broad experience serving as lead counsel for healthcare clients in state and federal litigation and arbitration proceedings. Her background includes:

  • Representing a healthcare plan in litigation against several defendants over tortious interference with business relationships and misappropriation of trade secrets.
  • Representing a national behavioral health company in litigation over payment under a government healthcare program.
  • Acting as lead counsel for a Federally Qualified Health Center (FQHC) in pursuing claims for payment against a national Medicaid managed care company.
  • Representing several related healthcare plan defendants in a multi-defendant antitrust action by a physician-owned facility alleging (among other things) that the health plans conspired with a large hospital system to exclude the physician-owned facility from provider networks.
  • Defending a managed care organization in arbitration brought by a Medicare Risk Adjustment vendor.
  • Defending a health plan against a multi-million dollar claim for payment by a national hospital chain, in which the case was removed to federal court, dismissed and ultimately settled on appeal.
  • Defending a national provider network against million-dollar claims by an insurance receiver, resulting in a complete dismissal.
  • Representing a healthcare plan in class action litigation by physicians against seven healthcare plans, in which the case was removed to federal court, partially dismissed and partially remanded, and ultimately completely dismissed.
  • Enjoining 19 independent practice associations from terminating provider agreements with a health plan, and defending the health plan in arbitration, brought by the independent practice associations related to the failing of their management services organization.
  • Defending health plans against provider claims for payment (several cases).
  • Enjoining state agencies from disclosing clients’ confidential proprietary information in response to document requests under the Texas Public Information Act.
  • Serving as a healthcare ombudsman in Chapter 11 bankruptcy proceeding.
  • Serving as an expert witness on the corporate practice of medicine for an employer being sued by physicians.
  • Serving as arbitrator in several healthcare matters.


Employment Law

Penny has counseled numerous employers regarding general personnel questions and employee benefit issues. She has also represented both employees and employers in court proceedings as well as regulatory matters.

Her significant experience includes:

  • Defending against wrongful termination claims in state and federal court, including all forms of exceptions to the at-will employment doctrine, such as claims of violation of federal and state antidiscrimination laws, retaliatory discharge claims and whistleblower claims.
  • Obtaining injunctive relief and enforcement of covenants not to compete in arbitration.
  • Representing respondents regarding state and federal agency charges of discrimination, as well as before other state agencies that have jurisdiction over employers (such as the Texas Workforce Commission).
  • Acting as an independent investigator for sexual harassment claims.
  • Preparing personnel manuals, employee handbooks and employment contracts.
  • Representing employers in administrative appeals of adverse employment decisions.
  • Preparing and reviewing employment contracts on behalf of employees.
  • Defending employee depositions in third-party actions.
  • Training both employers and employees on sexual harassment in the workplace.
  • Board Certified, Health Law, Texas Board of Legal Specialization
  • Listed in Best Lawyers© in the field of Health Care Law since 2006
  • Co-author and Speaker, Managing More "Managing" in Managed Care, 2011 Texas Health Law Conference, Austin, Texas
    October 2011

  • Speaker, Legislative Healthcare Update, Texas Medical Auditors Association 2009 Conference, Healthcare and Billing Update: A Celebration of Auditing, San Antonio, Texas
    September 2009

  • Author, New Form I-9 Required Beginning April 3, 2009, Employment Law Update, McGinnis Lochridge
    April 2009

  • Speaker, Developments Following 1999 IOM Medical Errors Reports, Austin Health Lawyers Association
    October 2008

  • Speaker, To Err is Human - Continuing to Err is Not: Industry Impact and Super Human Response, 2008 Annual Texas Managed Care Conference and Trade Show, Texas Association of Health Plans
    October 2008

  • Speaker, Human Resource and Legal Issues Related to an Aging Workforce in a Rapidly Changing Environment, 2008 Human Resources/Benefits Conference, Texas Electric Cooperatives, Austin, Texas
    May 2008

  • Speaker, Changes in Federal and State Laws That Clear the Way for Improving Health through Wellness Programs, Austin Health Lawyers
    August 2007

  • Speaker, Top Ten Things You Should Know About Employment Law, Texas Consumer Finance Association Annual Convention
    June 2007

  • Speaker, ERISA and Shane Litigation Update, 2006 Annual Texas Managed Care Conference and Trade Show, Texas Association of Health Plans
    October 2006

  • Speaker, Failing to Properly Handle Medical Certifications and Failing to Place the Employee in an Alternative Position When Available, Avoiding The FMLA Landmines: Top 10 FMLA Traps and How to Avoid Them in Texas, Lorman Education Services
    June 2006

  • Speaker, Advanced ERISA Issues, 2005 Annual Texas Managed Care Conference and Trade Show, Texas Association of Health Plans
    September 2005

  • Speaker, Health Law Update, 2004 Leadership Conference, Texas Nurses Association/Foundation
    September 2004

  • Author and Speaker, Leaves of Absence, Practical Applications of Employment Law, Sterling Education Services, Inc.
    May 2004

  • Author and Speaker, Wage and Hour Basics - More Important Now Than Ever, Practical Applications of Employment Law, Sterling Education Services, Inc.
    May 2004

  • Author and Speaker, Managed Care Liability Update: Cause, Effect and Evolution, 15th Annual Health Law Conference
    April 2003

  • American Health Lawyers Association (Dispute Resolver Panel)
  • State Capital Group (SCG Legal) (Chair of the Board 2011-2012)
  • State Bar of Texas: Health Law Section; Employment Law Section; ADR Section
  • Texas Board of Legal Specialization (Member of the Health Law Exam Commission)
  • Austin Bar Association: ADR Section (Treasurer 2007-08, Executive Committee 2007­-current); Diversity in the Profession Committee (also helped develop the Diversity Fellowship Program)
  • Austin Bar Pick Me! A Jury of My Peers (mock voir dire to help introduce students to the judicial system)
  • Brackenridge Ethics Committee, Member since 2009
  • American Association of Nurse Attorneys (former Treasurer, founding Member)
  • Speaking for Women’s Health (Nomination Committee)
  • Seton Parish Nursing Advisory Board
  • McGinnis Lochridge Family Law Pro Bono Clinic (Chair)
  • Accepted pro bono appointments as attorney ad litem for children in custody of the Texas Department of Family and Protective Services