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Forward Looking: How to Prepare for 2021

November 24th, 2020 by

fhlfhealthcarebusinesslawBy: Chase Howard

With 2020 coming to a close, and COVID-19 still very much a concern for businesses, there are a number of things for healthcare businesses and practices to consider before the New Year.

Here’s a list of items to review:

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Strategies for Successful Implementation of Mandatory Vaccine Policy for Your Workforce (Part 2)

November 7th, 2020 by

fhlf mandatory vaccineBy: Karen Davila

Read part 1 previously published on 11/1/20. 

DOES YOUR BUSINESS NEED A MANDATORY VACCINE POLICY?

Given the above, does a mandatory vaccine policy make sense for your organization?  This may depend on several factors, including the following:

  • Are your employees in direct contact with clients/customers/patients?
  • Is that contact prolonged and in indoor spaces where air circulation may be limited?
  • If one or more of your employees become ill, does that jeopardize continuity of your business?

If you answer “YES” to one or more of these questions, you may want to consider implementing a mandatory flu vaccine.

MANAGING ACCOMMODATIONS

In order to effectively implement a mandatory vaccination policy, you must develop both the policy and the process to manage exceptions (i.e. requests for accommodations).  The process generally involves the submission of an employer-developed form along with any additional supporting documentation.  The accommodations process should include review of information submitted by the employee in support of the accommodation, request for additional information as and when appropriate, an interactive process between the employer and employee in evaluating any potential accommodation, and ultimately a determination if the requested accommodation poses an undue burden that is more than de minimis on the employer. read more

When Does a Gift Become a Kickback?

October 30th, 2020 by

gift or kickbackBy: Zach Simpson

Since the beginning of the COVID pandemic many healthcare businesses are exploring various ways to increase their referrals, and although exchanging fees and gifts in return for referrals may sound like an easy way to obtain additional business, there are state and federal laws that strictly prohibit such activities that are discussed in greater detail below.

Two of the most important laws that all physical therapists should be aware of are the Anti-Kickback Statute and the Stark Law which are used to ensure that medical decisions are not made based on financial incentives. However, each of the laws do have distinctions that you need to be aware of. read more

COVID-19 and Copays: What Responsibility Do Patients Have

October 6th, 2020 by

fhlf covid and patient responsibility for copaysBy: Dean Viskovich

COVID-19 has affected all aspects of everyday life and healthcare rules and regulations are no exception.  All areas of healthcare have been impacted, including the patient’s financial responsibility for healthcare services in the form of co-insurance, copays and deductibles. The waiver of a patient’s financial responsibility for healthcare services is regulated by federal and state law. The waiver of co-pays, co-insurance and deductibles has been deemed a violation of the federal Anti-Kickback statue.  A provider who routinely waives the patient’s financial obligation may be violating the participating provider agreement with commercial carriers, state law and federal law with respect to Medicare beneficiaries.  Waiving patient fees is seen as an inducement to the patient to prefer one provider over another for financial reasons. However, The Centers for Medicare and Medicaid Services (CMS) and commercial carriers have been authorized by the federal government to waive patient financial responsibility during the pandemic in order to encourage the public to get treated for COVID-19 and non-COVID medical conditions without fear of a hefty bill.

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Home Health Acquisitions On the Run

September 15th, 2020 by

Home health acquisitions private equity transactionBy: Jeff Cohen

Home health agencies everywhere have become the favorite targeted acquisitions of “the financial world.”  Apparently, there is one seminar that every buyer attended convincing buyers or all kinds (buyers with money, buyers without money, buyers in the private equity space) that:

  1. HHAs are ripe for aggregation because the industry is disaggregated; and
  2. HHA owners lack business sophistication necessary to bring their businesses to the “next level.”

Unfortunately, some of the buyers lack any true industry experience and are looking at acquisition targets solely from a financial perspective.  They’re looking principally at business financials and nothing else.  And, worse yet, they’re not focused on the centrality of operational expertise.  All of which can come crushing down on the head of seller financed acquisitions.  In other words, if the buyer is paying the purchase price over time, the seller is effectively financing the transaction because the purchase proceeds are (in theory) coming from seller operational profits. This may make the transaction possible, but operations will ensure company profitability and growth, which is gonna drive seller interest.

So what?  A lot!  As current HHA owners know, the secret sauce is in not financial analytics.  It’s in the operations!  And the financial due diligence is just a part of the equation. What about regulatory due diligence? What about knowing where the bodies are buried (legally speaking)?  What are the payer relationships?  What are the marketing relationships?  What is really driving the business?  Who is the key reason why the HHA is successful?  It is typically one or two people.  And missing that or retiring them is a recipe for disaster for buyers and seller financed sellers.  As is missing illegal payments made to induce patient referrals, which can shut down even a completed transaction in a heartbeat.  None of this is part of the usual [financial] due diligence!

Lawyers might say “Yeah, but there will be plenty or reps and warranties to cover the transaction. And the indemnification sections will be tight.” So what?  The buyer doesn’t want a pig in a poke.  They want a reliable and growing income stream.  Details matter.  Especially the details both buyers and sellers are missing!

Further, if a buyer thinks they can buy an HHA on the cheap (1) without proper due diligence, (2) with lawyers waiting to get paid if the transaction closes and funds, and (3) with heavy seller financing, think again.  If you’re dealing with a buyer with pockets (or you have pockets) and will spend the right money on proper due diligence, the right (and experienced) marketing and management, have at it!  The HHA industry is ripe for aggregation.  But doing it in “the new way” isn’t new at all.  It’s just defective and a recipe for lots of heartache…and litigation.

Real buyers love due diligence. They love to measure twice (three times is even better!) and cut once.  They love either understanding the business they’re buying or buying the operational talent.  And they understand and embrace the notion of putting hard money to work.  They don’t try to buy something for nothing or find lawyers who don’t have enough work to do who are willing to work for free.  Real buyers are not trying to get something for nothing.  And they don’t allow a financial flow focus to blind them to the daily “wax on; wax off” aspects of the business.  Doing so would disappoint both sellers and buyer investors.

It’s great to see so much activity in the HHA space.  But the ones that win and stay will only be the ones that do it the old fashioned away—They’ll Earn It!

Patient Brokering & Money Laundering: Bieda Arrests Raise Serious Issues

September 1st, 2020 by

patient brokering arrest treatment center toxicology lab ownershipThree family members involved in owning an addiction treatment center and/or a toxicology lab were charged in July with patient brokering and money laundering in an alleged scheme involving roughly $2 Million.  The allegations arise out of a complex corporate enterprise involving at least four companies and some common ownership between the treatment center and lab.  While it’s premature to assume that the defendants did anything illegal, there are some interesting things in this case:

Complexity Invites Suspicion.  Every business owner in the addiction treatment and toxicology lab space knows three things:  (1) it’s extremely regulated, (2) law enforcement has an especially sharpened focus on these industries, and (3) insurance companies are very suspect of any situation involving either industry, especially when there is any common ownership.  So why then would one construct an enterprise that even “looks” complex or tricky?  It intensifies suspicion in an already highly scrutinized business space.  This is clearly one of the points of focus in this case.  There’s an old saying woven into the mind of every experienced healthcare lawyer:  if something can’t be done directly, it can’t be done indirectly.  Time will tell if anything in this case was wrong or if there are any good reasons for the corporate structure, but the complexity of the corporate structure certainly invites suspicion. read more

You Don’t Know What You Don’t Know – Acupuncturist Employment Contracts

August 20th, 2020 by

acupuncture doctors floridaBy: Chase Howard

Thinking about joining an integrated or group practice? The average employment contract exceeds twenty pages, not including exhibits. While some parts might seem simple and non-legalistic, many simply do not contemplate important terms that have serious impacts on Acupuncturists daily lives. An employment contract is the most significant financial decision of an Acupuncturists lifetime. The same can be said for each subsequent contract, which means that understanding, and negotiating, your contract is the most valuable investment you can make prior to entering into a contract.

To understand what’s in your employment contract, simply read it over a few times. To understand not only how those terms affect you, but also what isn’t in your contract, hire an experienced health care lawyer. While it’s important to understand what is in your employment contract, it’s equally as important to know what is missing from the contract and what to ask in regards to what is included. The below list considers terms that are important both during and after employment.

The following are nine items you should consider including in or asking about your contract:

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Lease Considerations – Acupuncture Practices

August 20th, 2020 by

real estate lease for medical buildingBy: Chase Howard

Reviewing a lease prior signing will save you extreme headache and cost in the long run. Landlords tend to act as if they have all of the power in negotiations and will make their own rules along the way. Lease negotiations are complex and involve significant business and legal considerations.

Here are guidelines to ensuring that your lease is reasonable and fair:

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Corporate Start-Up for Acupuncturists

August 19th, 2020 by

acupuncture law in floridaBy: Chase Howard

As an Acupuncturist in a private, solo-practice or group practice, proper start-up is key. Understanding how to set up your business properly with the State and IRS, developing a business plan, and understanding all requirements will help eliminate obstacles that will slow your growth.

When working with new acupuncture businesses, consider the following:

1. Corporate Structure

a. A company is considered a legal entity and recognized by both the IRS and the State. Depending on the number of owners and type of business, different options exist regarding entity type. Specifically, most healthcare professionals choose a limited liability company, corporation or a professional association. Once you choose the appropriate type of entity, you’ll want to meet with your CPA to discuss taxation of the entity and how that affects the owners personally.

2. Obtaining an EIN/TID

a. Before you can open a business bank account, or even do business in your city, you will need to obtain an Employer Identification Number or Tax ID for your business. Properly applying will save you time down the road with IRS tax issues.

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The DME Industry and the COVID-19 Pandemic: What’s Changed & What Hasn’t

August 10th, 2020 by

By: Michael Silverman

On January 31, 2020 the US Department of Health and Human Services (“HHS”) declared a public health emergency surrounding the COVID-19 coronavirus pandemic, which was renewed again for a period of 90 days effective July 25, 2020.

In an attempt to focus on patients over paperwork and to remove obstacles from access to patient care, HHS relaxed or suspended certain healthcare provider requirements. Several such changes directly impact current or prospective providers of durable medical equipment (“DME”) to Medicare Part B beneficiaries.

Here’s a high-level breakdown of some of those changes: read more