Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
Conventional wisdom tells us that spending less money is the most effective approach to saving money. After all, a penny saved is a penny earned and the more you save, the more you have left over. That logic is hard to argue with, but it is not always fool proof. Saving money for your practice the wrong way can lead to diminished patient care, outdated equipment, the wrong location for your practice and additional negative results.
There are several critical factors often overlooked when a healthcare practice’s primary focus is paying the lowest rent vs. achieving the best combination of overall terms. Let’s look at three factors where paying higher rent could actually increase your profitability.
#1: The Cost to Build
Healthcare buildouts often cost two-to-three times more than a typical commercial real estate space. This is attributed to many factors that are unique to healthcare, including:
More durable finishes
Millwork and cabinetry
Plumbing and sinks in exam rooms, sterilization centers and laboratories
Increased electrical and HVAC requirements (heating, ventilation and air conditioning)
Investing in a healthcare related business involves significant time and money. Building a brand takes even more and is extremely important in today’s society. Having the ability to build a recognizable brand, scale, and potentially sell, is the goal of many healthcare business entrepreneurs. With the ever-booming impact of social media, online advertising, and online reviews, healthcare businesses seek to engage at a higher degree than ever before to attract new patients, retain current patients, and establish themselves as experts in their respective fields.
Building a brand is part of it, while protecting that brand is far more important. A well-recognized word or logo can be worth everything to your business. Obtaining ownership and protection over a name or mark is a fairly simply task with significant rewards. Trademarks are the names, slogans, tag lines, and/or logos that identify and represent your business, its services, and mission to the public, and are the foundation for the business’s overall branding and marketing. Trademarks can also be used to protect your business in a specific area or a specific area of expertise. If you do not protect your brand, a competitor could use it (or something similar, which could confuse the public and your patients and therefore potentially draw business away from your brand. read more
As of July 1, 2020, all Florida health care providers, and providers in training, are now required to obtain written consent from their patients (or their legal representatives) before performing a pelvic exam. The only exceptions to this requirement are when the exam is done pursuant to a court order, or in cases of emergency. Given the broad application of the new law, it is imperative for any provider who may need to perform a pelvic exam on a patient, even if it’s a fairly rare occurrence, to be ready to obtain the consent.
The law grew out of concerns for improper actions taken against sedated patients. And as initially proposed, it only covered pelvic exams performed in training settings. However, the legislature expanded the scope to include all settings and all providers. read more
In the beginning of June, 2020, the Department of Justice (“DOJ”) revised its Evaluation of Corporate Compliance Programs Guidance Document. The Document is designed to assist prosecutors in making informed decisions as to whether, and to what extent, the company’s compliance program is effectivefor purposes of determining, when a compliance violation has occurred, the appropriate form of any resolution or prosecution and monetary penalty. It also guides a prosecutor as to the company’s compliance obligations contained in any criminal resolution. The Document has been revised on three occasions since 2017, telegraphing the DOJ’s intent to prosecute those businesses without compliance plans, or without effective compliance plans, more harshly than those taking steps to identify and remedy risks.
A healthcare business’ failure to have in place a compliance program designed to detect and respond to potential fraud and security risks places it at a serious risk of civil and criminal liability. When a compliance issue is investigated, charged and resolved, DOJ prosecutors are instructed to consider whether the business has invested in and improved its corporate compliance program and internal controls systems. They must also determine whether those improvements have been tested to demonstrate that they would prevent or detect similar misconduct in the future. According to the DOJ, there are three fundamental questions that a prosecutor should ask when determining whether a business’ compliance plan is sound:read more
How do you handle a real estate negotiation if your landlord is also your patient?
Many healthcare tenants find themselves in this situation when approaching a lease renewal or relocation. Compounding the situation, is that most healthcare professionals are not prone to conflict or confrontation and would prefer to avoid them. This creates a scenario where tenants want to obtain the best terms possible for their practice without upsetting their landlord and losing them as a patient.
In an ideal world, you could tell people exactly what you hope to achieve and then expect to receive a fair response. Unfortunately, commercial real estate is not one of those worlds! The difference between a properly or poorly negotiated lease or purchase contract can benefit or cost you tens to hundreds of thousands of dollars over a ten-year period. Understanding how much is really at stake during a commercial real estate negotiation changes how you should approach every transaction.
To help your perspective, look at these foundational questions: read more
On March 31, 2020 the Florida Division of Workers’ Compensation (DWC) clarified that physicians are permitted to dispense medications to injured workers, and that an injured worker shall have full and free choice to utilize their physician for medication dispensing, as well as any other pharmacy or pharmacist.
It was declared by the DWC that it is not appropriate for employers/carriers to deny authorization or reimbursement for prescription medication solely because the medication is dispensed by the treating physician who is a licensed Florida dispensing practitioner instead of a pharmacist.
What Led to the DWC Bulletin?
A Florida dispensing practitioner was denied reimbursement for drugs dispensed out of their office to an injured worker in a recent reimbursement dispute claim. The physician asserted the claims administrator denied reimbursement for the dispensed medications because the physician was not authorized to dispense prescription medications. The Florida Department of Financial Services (DFS) ruled in favor of the physician – DFS Case No.: 20180824-007-WC – and subsequently issued DWC Bulletin DWC-01-2020 on March 31, 2020.
Thinking About Selling Your Practice? Preparation is key and the difference between a successful sale and seller’s regret.
Step 1: Call Your Financial Planner
Be sure that you can afford to leave the business
Most buyers will require a comprehensive non-compete and you should be certain that you are financially prepared to retire, sell, or move before signing any restrictions.
You will also want to ensure that you are planning for the income you are about to receive. Are there vehicles in place or options that are best to ensure the purchase price is put to its best use for you.
Consider post sale options if not retirement – are you going to be employed by the buyer? Are you selling to an associate and will phase out? Are you just moving and will need to find new employment/open a practice?
Step 2: Visit Your Accountant
Your business is only worth as much as can be defined on paper.
If a potential buyer cannot make sense of your accounts and assets, you may leave significant value on the table.
Get your financial history in order by reviewing tax returns, profit statements, AR reports, and payroll history for prior 3-4 years.
Clean up creative bookkeeping – you will have to promise the buyer that your financial statements are true and accurate.
Have your accountant help value assets of your business – or use an appraiser if necessary.
Discuss company structure – there may be restructuring needs or you may need to transition to a different structure for tax purposes.
Today no one can live without a smart phone, and we interact with the rest of the world through a series of apps that reside on our handheld devices. From the healthcare perspective many large healthcare institutions and private companies have developed a myriad of healthcare related apps that currently reside in Apple’s App Store and Googles Play Store. You can measure your heart rate, get clinical advice, view your records, check on your health insurance coverage, make appointments and virtually interact with many different types of healthcare providers. But even in today’s hyper-electronic society it took COVID-19 to really cause an explosion in telehealth, so what does that tell us? There is a lot more room for expanding electronic interactions with patients and clients through Apps. So, here are the top five legal concerns should you address when you develop a Healthcare App: read more
Out of network physician owned specialty hospitals are unique in that there are less stringent legal requirements on the facility, but patient care obligations remain the same. This means that patient care must be prioritized over profits and all actions taken by the hospital and any physician investor must showcase that order of priority.
Given the amount of scrutiny placed in physician owned specialty hospitals in the past two decades, these facilities are well served to identify and implement a process to remedy compliance concerns. Even when a facility does not submit claims to any Federal health insurance provider and is out of network with all commercial insurance companies, it is still required to follow the laws of the state where it is located.
The best plan for surviving scrutiny in such situations is to have a plan. Proactively seek out applicable laws and regulations, and determine how your hospital will abide by them. Compliance can be tailored to fit your facility.
Overutilization and Self-Referrals
A physician who shares ownership in a hospital may have a financial incentive to refer patients for services if he or she receives a percentage of the revenue generated. Laws including the Federal Stark Law and Anti-Kickback Statute were promulgated to combat unnecessary referrals. A 2003 study by the Department of Health and Human Services concluded that physician-investor referrals to hospitals in which they have an investment interest are similar to those physicians without investment interests. Nevertheless, the fear of overutilization and unnecessary self referral remains at the forefront of the regulators’ minds at both the State and Federal level. read more
When COVID-19 passes and the world begins to return to normal, you can be guaranteed that many of your old “friends” will come to visit you. To minimize future liability, pain and time, you should be preparing today for tomorrow’s visitors:
The Lawyers. Lawyers come in many flavors, and can bring good or bad news. Depending on your initial reaction to the pandemic, and your subsequent actions as the panic started to die down you may see three types of lawyers: (1) Those that represent past or present employees who have lost their job or contracted COVID-19; (2) Those that represent patients who claim malpractice based on the care that you did or did not deliver, and also those patients who assert that they contracted COVID-19 at your office; and finally (3) Those that represent creditors or debtors of your practice. The actions you should take today are many and varied and beyond the scope of this overview, however, you should be asking the following questions of yourself: (i) did you file a claim for business interruption despite the fact that your insurance broker said you were wasting your time? (ii) does your malpractice carrier cover you for liability outside of the normal scope of providing care? (iii) are your documenting your actions throughout the pandemic to demonstrate that you were acting reasonably at a time when you did not have all the facts? (iv) did you look at your business insurance policies for coverage for employee claims, or workers comp claims, or OSHA claims? (v) did you research what other similarly situated companies are doing, as you will most likely be held to the same standards? (vi) did you follow guidance from State and Federal entities? and (vii) did you provide notice during the pandemic to debtors or other parties who have breached their obligations? read more