By: Jeff Cohen
Concepts that drive sober home relationships like Anti-Kickback Statute, Patient Brokering Act and Safe Harbor have become ingrained in the minds of nearly every addiction treatment provider’s thought process, especially in Florida with the development of the Sober Home Task Force. Providers now seem to fully embrace ideas like–
- There’s a federal law (the Anti-Kickback Statute, the “AKS”) that can bring criminal liability for marketing done incorrectly;
- There’s a state law, the Florida Patient Brokering Act (“PBA”), that can do the same;
- Complying with the federal safe harbors and the bona fide employee exception is important, even when there are no state or federal healthcare program dollars involved;
- Paying anyone for marketing, not just on a commission based sales model, without fully appreciate the applicable laws is dangerous, costly and invites criminal inquiries and liability; and
- Achieving compliance with applicable federal law should be part of any recovery business’ overall compliance plan.
Recovery providers must become familiar with not only the AKS and state restrictions like the PBA, but also the law’s permitted examples, so called “Safe Harbors,” which specify specifically permitted arrangements (42 CFR 1001.952). The “personal services arrangement and management contract” Safe Harbor, for instance, has particular application in the area of marketing, as does the AKS exception for “bona fide employment arrangements,” which apply to “bona fide” W-2 employees (entailing direction, supervision and control), but not independent contractor relationships. read more
By: Jeff Cohen, Florida Board Certified Healthcare Lawyer
Followers of the addiction treatment industry should be on high alert after the arrest of Christopher Hutson of Whole Life Recovery. The arrest marks the first arrest of any industry provider utilizing the state Patient Brokering Act (PBA). Relying solely on the allegations, the arrest is based on a business relationship between the provider and sober homes. Discussion in the “case management agreement” referred to in the arrest affidavit circles around some key allegations that include or imply (1) payment for patient referral, and (2) services by sober homes paid for by Whole Life which were not actually performed.
Serious industry providers absolutely MUST be well educated by lawyers who have years’ experience dealing daily with issues that include the federal Anti-Kickback Statute (and safe harbors), the bona fide employee exception to the AKS, the PBA and how insurers and regulators (inside Florida and outside Florida) interpret and apply such laws. Any contract (like the sort of agreement referred to in the arrest warrant affidavit) that isn’t preceded by careful client education about the laws, the options and risks of each option is just reckless. Clients who are well educated will understand things like— read more
By: Jacqueline Bain
The issue of whether a medical provider can provide free patient transport is one that we are asked to look into a few times every year. Aside from the liability issues that it raises, it is one that we have never been able to justify from an Anti-Kickback and Patient Brokering perspective. The fact is, even given the good intentions of most providers to allow their patients easier access to healthcare, transporting patients to and from your facility or practice is providing them with something of value in return for coming to see you. However, under slightly different facts than we are usually asked to consider the question, last week, the Department of Health and Human Services Office of the Inspector General (“OIG”) came to a different conclusion.
The OIG issued an advisory opinion upon the request of a hospital system who had asked whether it could provide free transportation to persons who had limited access to public transportation to access the hospital’s facilities. The hospital system offered that the town had inadequate and infrequent public transportation services which would act as a barrier to healthcare for local residents. The hospital system offered the following facts for consideration: read more
By: Jackie Bain
Does your healthcare entity have a governing Board? How involved is that Board in overseeing your business? Would your Board members be able to respond to questions about your business’ compliance-related activities? Recently, the Office of the Inspector General (“OIG”), in conjunction with a host of non-profit healthcare associations, released guidance on achieving compliance for healthcare governing boards. The guidance is not based on abstract principals of compliance, instead it points to applicable federal law, OIG guidance, case law, and sentencing guidelines.
Each and every healthcare organization, whether or not it accepts reimbursement from government payors, must have in place regulatory compliance measures designed to protect the population it serves, and the persons paying for and providing those services. All levels of a healthcare organization must be cognizant of their roles in the organization’s continuing commitment to compliance. Even Board members, who often do not experience the inner-workings of the entities they represent, have an obligation and duty to the organization to act in a manner that stressed compliance. Applicable federal and state laws, how they apply to an organization, and how the organization reacts to its obligations imposed by those laws, must be of paramount importance to a governing Board.
The OIG compliance guidance for healthcare Boards tracks 4 areas over which boards should have specific oversight: read more
Healthcare professionals and businesses are routinely barraged with people who claim to be able to generate business for them. The business of healthcare is like none other in its abhorrence of anything that even smells like payment for patient referrals, so professionals and businesses alike have to be extremely cautious and well advised in crafting marketing and related business-enhancing relationships.
The federal Anti Kickback Statute (“AKS”) is a criminal law that arises in the context of individuals and entities that pay or receive anything of value in exchange for referring a patient whose care is compensated in any way by a state or federal healthcare program. Violations of the statute are punishable by a maximum fine of $25,000 and/or imprisonment up to five years. Federal courts have applied the statute to any arrangement where even one purpose of the arrangement was to obtain money for the referral of services or an attempt to induce additional referrals. Its exceptions (“Safe Harbors”) include permissible arrangements for independent contractors and employees, both of which are elusive because of the common requirement that the arrangement not vary based on the value or volume of business between the parties. The “value or volume” aspect of the regulations flies in the face of percentage based compensation arrangements (which seem to be the rule in marketing relationships). read more
There is no such thing as a “medical spa” in Florida. True! They are not uniquely licensed. In fact, they are usually not licensed at all because (1) they are owned and operated by licensed healthcare professionals, and/or (2) they do not file claims for reimbursement with health insurers. And they are not a regulated entity.
What then is a “medical spa”? If you want the long answer, go here. The short answer is It’s simply a place where people receive traditional spa services (e.g. facials), plus many other medical procedures, typically focused on cosmetic services (e.g. hair removal, Botox). It’s “medical” because of the nature of the services provided. It’s “medical” because (ideally) physician supervision is woven into the business model.
By: David Hirshfeld
When people ask me what I do, I used to say “I’m a transactional health care attorney. I represent health care practitioners in their business deals. I don’t do malpractice.” That response does little to wipe the blank stare off my questioner’s face, and even I have to stifle the urge to yawn. My new and improved response is that “I spend a lot of time advising health care practitioners how they can share fees with people who refer them patients.” Now I get invited to all sorts of cocktail parties !!!
Practitioners split fees with one another for a variety of reasons; and they very often do not realize that a particular arrangement involves a split-fee arrangement, or that split-fee arrangements are often illegal in Florida. The purpose of this article is to provide practitioners with a general overview of the concepts underlying the prohibition against split-fee arrangements in Florida, in the context of three common business arrangements. read more
Many business people involved in some aspect of the recovery business world (e.g. IOPs, PHPs, Detox) are not aware of the punishing laws that apply to their marketing arrangements. Simply paying someone a commission based sales compensation without fully appreciate the applicable laws is dangerous and costly.
By: David W. Hirshfeld, Esq.
Durable medical equipment is commonly sold through sales leads generated through telephone and/or internet contact. These leads often begin with a seemingly innocuous internet survey or an application for something unrelated to DME. This “raw” lead may be as basic as a person’s name, telephone number or email address, and age. The lead is then further developed and “qualified” by obtaining more details about the subject; such as: whether and by whom the subject is insured, what (if any) medical issues does the subject suffer from, the name of the subject’s physician. Ultimately, the lead is sold to a DME vendor who uses the lead to accomplish the sale of medical equipment or supplies. In the course of a lead’s birth and life, it is handled by a chain of companies, some of whom purchase the lead, add a level of detail to it, and sell it for a higher price. In the past year or so, several lead generation companies from the “middle of the chain” have come to me asking me whether their business model gives rise to an illegal kickback. After a bit of research, I gave the lawyerly answer: “It depends.”
The Federal anti-kickback statute provides that it is a felony for a person or entity to knowingly and willfully offer or pay any remuneration to induce a person to refer an individual for the furnishing or arranging for the furnishing of any item for which payment may be made under a Federal health care program, or the purchase or lease or the recommendation of the purchase or lease of any item for which payment may be made under a Federal health care program. Florida’s corollary to this Federal law is the Florida Patient Brokering Act, but the Florida statute applies to all health care services, regardless of whether paid for by a Federal program. The Federal law creates criminal liability, and includes a knowledge requirement. Congress recognized that business models exist that may appear as willfully paying remuneration in exchange for a referral, but which have more innocent motivations, and are less likely to result in abuse to the health care program at issue. In order to give the health care industry a measure of comfort, Congress created several “safe harbors.” If a business model fits within a safe harbor, then it is deemed to not be an illegal kickback under Federal and Florida law.
The Department of Health and Human Services Office of the Inspector General (“OIG”) is the agency charged with enforcing the Federal anti-kickback statute. In November 2008 the OIG considered a situation in which an advertising company created a website that would give prospective patients contact information for a list of chiropractors in their area, in response to a zip code entered by the prospect. The prospect paid nothing for the service, but the chiropractors paid the advertiser a fee for each call or contact from the website that lasted over thirty seconds, regardless of whether the contact resulted in a prospect becoming a patient. This scenario is as close as the OIG has come to opining on a typical DME lead generation.
The OIG found that the chiropractors’ advertising service was not a prohibited kickback, and cited four factors as convincing: (i) the advertising company is not a health care provider or supplier, and is only affiliated with the health care industry through the arrangement at issue; (ii) the advertising program did not target Federal health care program beneficiaries; (iii) the fees paid by the health care practitioners did not depend upon whether the prospect actually became a patient; and (iv) the advertising program did not steer patients to a particular chiropractor.
When applied to the DME context, the OIG opinion and the anti-kickback statutes suggest that leads can be sold for a per-lead fee as long as the leads are not priced, and do not contain information so detailed, such that the purchaser can cherry-pick those leads it wants to purchase based on the likelihood that the lead will result in an actual sale of covered DME. For example, a “raw” lead comprised simply of a prospect’s name, contact information, and interest in speaking with a DME supplier is probably the sort of lead that could be sold for a per-lead fee without running afoul of the anti-kickback prohibitions. As more and more information is added to the lead, such as the type of DME products of interest to the prospect, information regarding the prospect’s insurer and plan coverage, the purchaser will be better able to determine whether the lead is likely to result in a sale of DME (a “qualified” lead). At a certain level of detail, a lead morphs from lead that can be sold on a per-lead basis, to a referral that cannot.
A lead generation company can sell highly detailed qualified leads if that sales relationship fits within the safe harbor for “Personal Services and Management Contracts.” That safe harbor requires that: (a) the aggregate compensation to be paid under the contract must be fixed in advance; (b) the compensation must be consistent with fair market value in an arm’s-length transaction; and (c) the compensation must not be determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made by a Federal health care program. The requirement that the compensation be fixed in advance does not tolerate a per-lead fee. Fixed in advance would be a weekly, hourly, annual fee.
So, if you are in the lead generation business, your liability for buying or selling health care referrals probably depends upon how detailed and “qualified” the lead is at the time of your transaction. The safe tack is to structure your transactions so that they fit within the safe harbor for Personal Services and Management Contracts so that just in case your leads are qualified enough to constitute “referrals.”
This article focuses on anti-kickback liability associated with DME leads, but there is also liability attached to how the lead is originated, and how the prospect is contacted. Lead generation companies are often well-served by committing their relationships to written agreements with advice from appropriate counsel.
 42 U.S.C. §1320a-7b(b)
 FL Statutes §456.054 and §817.505
 42 C.F.R. §1001.952(d)
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