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.
Enforcement against medical device companies is not new and yet, these companies continue to engage in schemes that land them in hot water. Frequently the same schemes are repeated over and over- some form of payment by the device company to a physician who selects/recommends the device to patients. In some cases, the payment is in the form of an honorarium for speaking engagements. In others, the payment is an all-expense paid travel to attend device company-sponsored “CME” in exotic locations or consulting fees for assisting in the evaluation and design of the device.
Announced yesterday by the U.S. Department of Justice (DOJ), is the settlement of allegations against Florida-based Arthrex Inc., a medical device company that specializes in orthopedic products. Under the settlement agreement, Arthrex will pay $16 million for allegedly paying kickbacks to an orthopedic surgeon (Dr. Peter Millett) in Colorado. The “payment” in this case was structured as royalty payments purportedly to compensate the orthopedic surgeon for his “contributions” to the development of two of Arthrex’s products when in fact the “payment” was intended to induce the surgeon’s recommendation/selection of the Arthrex products. By offering the payments to the surgeon with the intent to induce purchase of Arthrex’ products which were then billed to Medicare, Arthrex violated the Anti-Kickback Statute (AKS) as well as the False Claims Act. read more
There are a number of laws in place to ensure that patients are protected and never sent out for unnecessary referrals that may be more financially than medically motivated.
For this reason, Florida has instituted the Florida Patient Brokering Act, otherwise known as anti-kickback statutes, that may impact local healthcare clinics and medical offices.
What Is the Patient Brokering Act?
The Patient Brokering Act in Floridamakes it illegal for any organization to provide bonuses, split-fee arrangements, benefits, commissions, or any kickbacks for patient referrals.
This means that a specialist may not pay a commission or kickback to a general practitioner for referring a patient to their care, nor can any healthcare office offer a bonus or rebate to any patient for choosing their services.
How Did the Florida Patient Brokering Act Change Healthcare Practices?
Previously, it was normal practice for one healthcare facility to recommend a certain provider or treatment center to patients who sought care outside of the originating facility’s purview. In return, the referred party might pay a commission on the services rendered to that patient or otherwise offer a bonus or kickback of some kind for that referral.
Unfortunately, that practice resulted in a number of referrals being made for patients who may not be in medical need of that care. With the goal of generating a kickback, a referring facility might send a patient to the partner provider even if it was not for a necessary treatment. This meant that the referred facility would charge the patient’s insurance for care that may or may not be medically necessary, creating an abuse of insurance and, in some cases, putting the patient at risk as well.
What Do the Florida Patient Brokering Laws Mean for Florida Healthcare Providers?
For healthcare facilities or providers that have been charged with patient brokering, action is needed. Contacting a healthcare attorney is essential to making sure that you are fully equipped to protect your reputation and get back to focusing on what you do best.
No healthcare professionals are immune to the Florida Patient Brokering Act. Doctors, dentists, and pharmacists may all be accused of taking kickbacks for patient referrals.
Similarly, hospitals, dental offices, drug addiction treatment programs, nursing homes, and pharmacies can be brought up on the statute as well.
Are There Any Exceptions to the Anti-Kickback Statutes in Florida?
Yes, there are a few. Perhaps the most important of these is that providers within the same group practice can avoid repercussions for referrals with any financial benefit if they are for providers within the same group.
Similarly, some contracted health benefit plans can circumvent the problem as well.
Genetic tests are valuable because they can provide important information to patients and their medical providers regarding diagnoses, treatment, and disease prevention. However, the rapid growth in the number of tests ordered, especially in light of the telemedicine expansion during the pandemic, has invited well-earned scrutiny to the industry.
Make no mistake: genetic testing is heavily regulated (and enforced). The Federal Anti-Kickback Statute, Eliminating Kickbacks in Recovery Act, and Commercial Insurance Fraud Law have all been used to prosecute unscrupulous marketers, call centers, and telemedicine providers in the last few months. Kickbacks in exchange for genetic specimens are just as illegal as kickbacks for patients. Three months ago, a Florida man was sentenced to 10 years in prison for conspiracy to commit health care fraud. His actions resulted in the submission of approximately $3.3 million in fraudulent claims to Medicare for genetic testing. read more
Florida Department of Children and Families (DCF) is vested with authority over substance abuse services and is responsible to approve at least one credentialing entity to develop and administer a voluntary certification program for recovery residences also referred to as sober homes. DCF approved FARR (Florida Association of Recovery Residences) as the provider for the voluntary certification program, and it is the only certifying entity, it is the only game in town for sober homes. The issue at hand now is not whether certification is good or necessary for the sober living industry, rather, the issue is that sober homes have no due process giving them an entry point into the system to challenge DCF or FARR when their certification has been denied, revoked or suspended or some other sanction has been imposed!
While sober home certification is referred to as “voluntary” there is absolutely nothing voluntary about it. A sober home will not be able to keep its business running without FARR certification. This is because substance abuse providers cannot refer any of their clients to a sober home that is not FARR certified and cannot accept a referral from an uncertified sober home. This prohibition on referrals to and from non-FARR certified sober homes also makes it a first-degree misdemeanor for anyone who violates the prohibition. In addition, there is an administrative fine of $1000 per occurrence in the law should anyone violate the referral prohibition. read more
Three 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
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
Botox. Fillers. Lasers. The aesthetic options for patients today are endless with more and more treatments available all the time. The “MedSpa” world is booming, and anyone can get in on the expected growth, including dentists. If you’re a dentist and you’re thinking about adding aesthetic treatments to your practice, you should first consider the following:
Scope of Practice. While most medspas provide full body aesthetic treatments, Dentists are limited to providing treatments that are with her or his scope of practice. For example, Botulinum Toxin-A may be prescribed by a dentist, but is limited to the face and neck of patients. This also means that for nurse practitioners working under the supervision of a dentist, they too are limited in practice. While certain other treatments don’t require any specific medical license or training, dentists should evaluate the type of treatments they wish to provide or supervise to ensure it is within their scope of practice.
Ownership. While medspas may be owned by anyone, including non-licensed providers, Dentists must be careful if taking on business partners due to corporate practice of dentistry. Under Florida law, no person other than a Florida licensed dentist, nor any entity other than a professional corporation or limited liability company composed of dentists may employ a dentist in the operation of a dental office. While most aesthetic services are not dental services, a non-dentist may not directly employ a dentist. Violation of these laws will subject the dentist to disciplinary action. If you’re a dentist in Florida, you can legally add limited aesthetic treatments to your practice. If you’re opening a new business with non-dentist partners, however, you will need to be cautious of these laws.
Keeping Things Separate. Adding aesthetics to your practice carries not only financial risk, but also professional risk. It’s recommended that rather than operate and bill for aesthetic services under your dental practice entity, incorporate a new entity to keep your new business separate from traditional practice.
Regulatory Compliance. Although aesthetic treatments are primarily elective and paid in cash, certain Florida laws still apply to dentists, patients, and marketing and referral arrangements. Dentists must maintain compliance with the Florida Patient Brokering Act when it comes to marketing or referral arrangements. Understanding these laws and exceptions is significant when it comes to avoiding scrutiny.
HIPAA. While it may seem obvious, many believe that because aesthetic services are elective, patient confidentiality does not apply. That is simply not true and providers must maintain compliance with HIPAA, even for such elective treatments.
Training. Anytime a medical business is expanded with the addition of new services, it is vitally important to be well-trained and educated in delivering such treatments. Even if you are not individually performing a treatment that you supervise, it is highly recommended that you be trained in such procedures. Aesthetic and elective services are just as highly litigated by unhappy patients and patients that feel as though a treatment resulted in negative outcomes. Even as a supervising providing, your license is at risk.
While there are many more considerations to adding aesthetic services to your dental practice, the above stated would be sufficient to get a dentist in Florida started on the path to adding a new line of business to their traditional practice.
Has your attorney ever told you to do your best to comply with certain safe harbors to the Federal Anti-Kickback Statute, and you’ll be likely to survive scrutiny under the Florida Patient Brokering Act (the PBA)? If you’ve heard that, it’s time to re-examine that relationship. In the last month, the Patient Brokering Act has been amended, and then interpreted by a court of law in a way that affects all healthcare providers.
The Patient Brokering Act has been used in recent years to prosecute abuses in the addiction treatment industry. Other healthcare providers subject to the act have largely been uninvolved in these prosecutions. However, the PBA has been remolded 4 times in the past 5 years as a means to tailor it to allow for prosecutions of bad actors in healthcare, including addiction treatment. One item should be made clear: the PBA applies to any facility at all that is licensed by the Agency for Healthcare Administration (AHCA) or practitioner licensed by the Department of Health (DOH), including physicians, surgery centers, home health agencies, skilled nursing facilities, hospitals, DME providers, diagnostic imaging facilities, clinical laboratories, pharmacies and many other. During the legislative process, barely any healthcare industry representatives (from any provider group) showed up to any legislative workshops or produced counterbalancing input or language proposals that reflected a broader perspective. read more
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
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