By: Jeff Cohen
The Florida Health Care Clinic License (HCCL) law was created in 2001 to create accountability of healthcare businesses that are not owned by certain healthcare providers (e.g. physicians). The legislative thinking behind the law was that laypeople who acquire healthcare businesses that bill insurance companies have nothing to lose by “getting it (anything) wrong.” By attaching the license requirement to the lay owned business, those business people have to pay close attention to regulatory details, or they risk losing their HCCL and the ability operate their business. Accountability!
The HCCL law is often, however, a common stumbling block to Florida based healthcare start-ups and acquisitions when neither the buyers nor the sellers know of the HCCL requirement. This arises in two circumstances: (1) when the seller is exempt from the HCCL requirement and the buyer is nor; and (2) when the person starting up a healthcare business isn’t exempt (e.g. a physician). The “rub” arises when the requirement applies and the buyer [or the business person] hasn’t applied for the HCCL (which can take months to obtain, even with a clean application).
The consequences are rough too: a business that needs an HCCL cannot bill insurers. And if they do so without the HCCL in place, they risk having the insurers recoup every last penny obtained. Worse, when even an unknowing wrongdoer applies for the license and discloses that the business was operational before the license, they will not receive the HCCL and never may!
Some buyers and business people, having discovered the problem, will suggest that the services or products be billed under the seller provider number after the transaction. Bad news, since this often exposes the parties to fraudulent billing consequences. Some more thoughtful parties consider a management arrangement work around or simply time the closing with the HCCL being awarded.
Regardless of the resolution, the best approach is to know about the state HCCL requirement and PLAN FOR IT!