A 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.
Patient Brokering Act Case
The case (Case Number 17-2660 CF Simeone – Order – MTD – Criminal Intent) has big ramifications in Florida and applies not only to addiction treatment providers, but also to any facility at all that is licensed by the Agency for Healthcare Administration (AHCA) or Department of Health (DOH), including surgery centers, home health agencies, skilled nursing facilities, hospitals, DME providers, diagnostic imaging facilities, clinical laboratories, pharmacies and many others. It’s interesting to see which providers are exempt from the law, for instance health insurers and nurse registries. Presumably, the exempt parties had representation in Tallahassee when the law was revised and blown up a year ago.
While the Simeone court is targeting services agreements between licensed addiction treatment facilities and sober homes, the statute being used to attack those relationships applies well beyond addiction treatment to the providers mentioned above and more. If the state is successful, then legal advice sought by many healthcare providers about permissible marketing or compensation arrangements that are clearly lawful under federal law would be subject to criminal prosecution under state law, and following the advice of counsel would arguably be irrelevant.
Patient Brokering Act Violation
If, unlike most criminal statutes, a specific showing of intent is not required to prove a violation of the PBA, the floodgates to PBA prosecution would be open (even for those who got legal advice and followed it). As argued by the defense in this case, the State’s position is at odds with the federal law that spawned it, the federal Anti-Kickback Statute (which clearly requires a showing of intent). Even more, the long-established exceptions to both the state and federal laws (so called “safe harbors”) could arguably become irrelevant because they arise from a statute where the intent of the accused must be proven and where the advice of counsel is relevant. Following the state’s assertion that “good faith reliance on the advice of counsel” should be excluded from consideration would essentially gut the advice of counsel defense and make state prosecution much easier in the entire healthcare industry.
The state filed a motion for clarification in the case, which the court denied. Appeal by the state on the issue is expected. Regardless of which way that goes, all eyes need to be on this one!
One lesson to be taken from the Simeone case is that there is a clear method to ensure that the entire healthcare sector can become a whipping post for state prosecutors: do nothing. When the PBA was proposed for enormous expansion last year, barely any healthcare industry representatives (from any provider group) even showed up to any legislative workshops or produced counterbalancing input or language proposals that reflected a broader perspective than law enforcement’s desire to get the bad guys. While getting bad guys needs to happen, the legislative process is only as good as its ingredients. When providers and facilities don’t collectively monitor, cooperate and participate in the legislative process, poorly crafted and applied laws like the PBA are the result. The Simeone case is ripe for all sorts of amicus filings; and the next legislative session SHOULD include lots of refinement to the PBA (but only if the healthcare industry steps up and gets it one).