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EKRA Affects Marketing Relationships with Labs and Addiction Treatment Businesses

January 15th, 2019 by

By: Jeff Cohen

For those following the federal legislative developments on the issue of compensating marketing people who market the services of labs and addiction treatment facilities there is a new update to take note of. Congress passed on October 24, 2018 the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.”  Yes, that’s a real name!  Part of the law is the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”).

The core aspect of EKRA has to do with how to properly compensate marketing personnel who market the services of labs, addiction treatment facilities and recovery homes.   For those of you already familiar with existing federal law pertaining to compensation arrangements (e.g. the bona fide employee exception (the “BFE”) and the personal services arrangement and management contract safe harbor (the “PSA”)), the EKRA provisions will look familiar!  Key aspects of this law (which has to be read together with similar existing laws) include— read more

State Patient Brokering Act Cases to Throw out Legal Advice as Defense

October 9th, 2018 by

palm beach county task forceBy: Jeff Cohen

There are two criminal cases pending in Palm Beach County that threaten to put a bullet in the heart of healthcare professionals and businesses and also the law practices that advise them.  Both State v. Simeone and State v. Kigar have a motion from the State pending before them to block any testimony that the defendants received legal advice concerning a contract entered into by an addiction treatment facility and a sober home.  The State alleges that the contract violates the state Patient Brokering Act (PBA) because it was essentially a ruse whereby the addiction treatment facility was just paying for the sober home to refer patients.  Now the State wants to make sure that the entire issue of the defendants being advised by counsel never sees the light of day.

How is this possible?  How can it be that a client can seek legal counsel, get advise (and presumably follow it), and then be blocked from presenting that evidence?  The State argues that the PBA has no wording that requires them to prove intent.  And if intent isn’t an element to be proven, the argument goes, then evidence of the client intending not to violate the law by getting advice beforehand is inadmissible!   read more

False Claims Act Case Beaten by Bona Fide Employee Arrangement

August 23rd, 2018 by

false claims actBy: Jeff Cohen     

One healthcare employer’s compensation arrangement with its employees just got much needed support from the 11th Circuit Court of Appeals.  The employer there, which provided AIDS patients certain healthcare related services, paid its employees a bonus of $100 per patient.  The case was brought on the argument that the compensation arrangement constituted an illegal kickback under the federal Anti- Kickback Statute.  The court, however, disagreed because the employees who received the bonuses were “bona fide employees.”

The court’s focus on the plain language of the safe harbor for bona fide employees was refreshingly clear, notably that “any amount paid by an employer to an employee (who has a bona fide employment relationship with such an employer) for employment in the furnishing or any item or service.”  Essentially, any amount paid by an employer to a bona fide employee is not considered to be “remuneration” under the Anti-Kickback Statute. read more

State Court Ruling on Patient Brokering Act Threatens Healthcare Facilities and Providers

July 25th, 2018 by

patient brokering actA recent ruling by a state trial court handling the Palm Beach County Sober Home Task Force prosecutions against providers of addiction treatment and sober home services is creating lots of confusion and alarm around the state and could have very far reaching consequences for the entire healthcare industry well beyond addiction treatment.

The issue presented by the prosecution focuses on whether a person charged with violating the state’s Patient Brokering Act (PBA) can be found guilty even if he/she didn’t know what he was doing was unlawful. The PBA broadly prohibits paying someone for patient referrals, very much like the federal Anti-Kickback statute.  If allowed, the client would have gotten legal advice, paid for it, followed it, and still not be able to show a judge or jury that, despite all their best efforts, they simply followed the law as instructed.

Can a healthcare facility or provider be guilty of violating a criminal law [the PBA] if they’d gotten legal advice and followed it?  Traditionally, the answer would be a clear “no.”  The argument against the State’s position would be something like “How can someone intend to violate a criminal law if they got legal advice regarding how to comply with it and then followed that advice?”  The argument of the state might look something like “We don’t even think the judge or jury ought to be able to hear that the person got legal advice and followed it.”  The court punted the issue to the appellate court. read more

Healthcare Compliance: Providers Must Use Plans They Have in Place

January 22nd, 2018 by

medical practice complianceBy: Jacqueline Bain

In 2015, Assistant Attorney General Leslie Caldwell spoke publicly about the importance for every healthcare provider to not only have a compliance program on its shelf, but also being sure that the compliance program is “tailored to the unique needs, risks and structure of each business or industry.” Assistant Attorney General Caldwell explained, “the adequacy of a compliance program is a factor when [the DOJ] decide[s] how and whether to prosecute a company.  The lack or insufficiency of a compliance program can have real consequences for a company when a violation of law is discovered.” read more

Is Your Substance Abuse Marketing Service Licensed? Check Here

November 28th, 2017 by

addiction marketingBefore doing business in Florida, an entity providing substance abuse marketing services must be licensed by Florida’s Department of Agriculture and Consumer Protection. This includes includes either telephone solicitation from a location in Florida or solicitation from other states or nations for substance abuse and addiction treatment centers located in Florida.

As of November 27, 2017, only the following entities are licensed by the State of Florida to provide marketing services to substance abuse and addiction treatment centers:

  • A Way and a Means, LLC (Delray Beach, Florida)
  • Addiction International Holdings, LLC d/b/a The Addiction Advisor d/b/a The Recovery Miracle (Boca Raton, Florida)
  • Advanced Recovery Systems, LLC (Winter Park, Florida)
  • Bandwidth Interactive Company d/b/a Local Management (Boca Raton, Florida)
  • Delphi Behavioral Health Group, LLC (Fort Lauderdale, Florida)
  • Freedom From Addiction, LLC (Miami Beach, Florida)
  • Infoworx Direct, LLC d/b/a Addiction Hope and Help Line (Boca Raton, Florida)
  • Invigorate Solutions, LLC d/b/a Local Management (Boca Raton, Florida)
  • Meridian Treatment Solutions, LLC (Lauderdale by the Sea, Florida)
  • NPA Consulting Group, LLC (Pompano Beach, Florida)
  • Palm Partners, LLC (Palm Springs, Florida)
  • Parent Team, LLC (Santa Rosa, California)
  • Pryme Time Media, LLC (Sunrise, Florida)
  • R360, LLC (Fort Lauderdale, Florida)
  • Redwood Recovery Solutions, LLC d/b/a com (Riviera Beach, Florida)
  • Ring2Media, LLC (Westport, Connecticut)
  • Rybchinskiy Inc. (Boynton Beach, Florida)
  • Sober Network, Inc. (Delray Beach, Florida)
  • The Addiction Network, LLC (North Miami, Florida)
  • True Choice Health Group Limited Liability Company (Pompano Beach, Florida)
  • United Addiction Specialists, LLC (Hollywood, Florida)
  • USR Holdings, LLC (Coconut Creek, Florida)

It is a third degree felony for: any person to work for an entity that does not have a current and valid license; or for any entity to invite telephone calls or other communications with a substance abuse marketer who is soliciting clients without a current and valid substance abuse marketing license; or for any person or entity to solicit without a license; or for any person who otherwise violates the law requiring licensure either directly or indirectly. Any person who is convicted of a second or subsequent violation commits a felony of the second degree.

The Truth About Healthcare Regulatory Compliance

October 30th, 2017 by

medical practice complianceBy: Jeff Cohen

Healthcare regulatory compliance is too damn complicated sounding and scary!  What the heck does it even mean?  Basically it means making sure you’re following about a dozen specific laws, some of which interrelate.  It’s a little like making a cake.  You have to make sure you have flour, eggs, sugar and so on.  And then you have to make sure you put enough in the bowl and bake it at the right temperature.  So what’s so unique re healthcare regulatory compliance?  Healthcare professionals and businesses are inundated by these confusing laws written in legalese, to the point where they go numb.  They lose the ability to focus on them and to take them seriously.  And they hire someone that uses the word “consultant” or “compliance”; and they think they’ve got compliance covered.  But they don’t.  And that’s a big mistake in the healthcare world! read more

Addiction Treatment Law Changes Management Relationships

July 3rd, 2017 by

healthcare regulatory complianceBy: Jeff Cohen

Passage of the new and comprehensive Florida addiction treatment industry legislation (CS/CS/HB 807) will send addiction treatment facility management relationships back to the drawing board.  Prior to the new law, some DCF licensed facilities were managed by management companies, some of which were owned by people who either did not qualify to be on the DCF license or who did not want to be visible on the license.

The new addiction treatment law requires all such arrangements to be reconsidered.  Here’s why:  There are several sections in the new law where management is the subject of intensive focus.   Newly created 397.410 requires DCF to establish minimum licensure requirements for each service component limited in part to the number and qualifications of all personnel, including management.  Newly created 397.415(1)(d)1 authorizes DCF to deny, suspend or revoke licensure of any license based on a “false representation of a material fact in the licensure application or omission of any material fact from the application.”  Finally, 397.415 creates an entire category of potentially punishing fines and, in some cases, exposure to criminal prosecution.

The new law will create heavy regulatory suspicion for any non-transparent management relationship, even a third party relationship.  Worse, it’s conceivable that any suspicious or arguably noncompliant relationship could form the basis for recoupment by insurers.  When the state Health Care Clinic Law was created some years ago, payers took advantage of situations where facilities that required a license but didn’t have one.  Under a threat of insurance fraud (e.g. an unlicensed healthcare facility receiving compensation for services), some payers were able to extract huge recoupments.

Any DCF licensed facility with a third party management relationship needs to reconsider it in light of the new addiction treatment law.  Moreover, all interested parties should pay close attention to (and monitor and participate in) the new law’s rulemaking process which began at the end of June.

CLICK HERE for: SUBSTANCE ABUSE MARKETING SERVICE PROVIDER LICENSE APPLICATION

Recovery Business Marketing 2.0

April 17th, 2017 by

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

The Patient Brokering Act and Addiction Treatment

October 28th, 2016 by

anti kickbackBy: Jeff CohenFlorida 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