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Patient Brokering & Money Laundering: Bieda Arrests Raise Serious Issues

by admin on September 1, 2020 No comments

patient brokering arrest treatment center toxicology lab ownershipThree 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.

Insurance Companies Are in the Fraud Prosecution Business.  There was a time many years ago when the only entities people charged with crime would hear from was state or federal law enforcement.  Not anymore.  The truth is that, for at least the past handful of years, commercial insurers have stepped up their fraud investigations and are working hand in hand with law enforcement on an unprecedented basis.  So thinking for instance “Well, there’s no Medicare, so there’s no criminal risk” is just plain wrong.  This case makes it very plain that the leg work of one insurer’s special investigative unit (SIU—read “the FBI for commercial insurance companies”) was central to this prosecution.

Safe Harbor Navigation is Extremely Important in Florida.  If you are in ANY healthcare business, especially one that is the subject of intense regulatory focus (e.g. addiction treatment, durable medical equipment, pharmacy) and if your attorney thinks a safe harbor has something to do with a boat, run!  Safe Harbors are examples of permissible business relationships.  If you follow one to a T, then you didn’t violate the federal Anti-Kickback Statute (AKS), a particularly punishing federal law.  And even if the healthcare business doesn’t submit a single claim to a state or federal health insurer (a requirement for application of the AKS), Florida officials can pull on that law to punish violators of the state Patient Brokering Act (PBA).  Understanding any Safe Harbor is especially challenging, even to experienced healthcare lawyers, since the failure to satisfy each element of one does not necessarily mean you violated the AKS.  “Wait a minute,” you’re thinking, “if I don’t comply with a Safe Harbor, I didn’t violate the AKS?”  That’s right.  Federal authorities might dig deeper into the arrangement to see if they think a violation has occurred, but non-compliance doesn’t equate to an AKS violation.  Now, here’s the rub:  you can be determined to have not violated the AKS and still be found guilty of a PBA violation!  Now add to that the “landscape,” the way both insurers and regulators use and interpret these laws.  The latest case filing focused intensely on the lack of apparent Safe Harbor compliance and implies that Safe Harbor compliance is necessary in order to ensure PBA compliance (even though it’s not necessary to ensure AKS compliance).  The bottom line is that it takes tremendous experience and analytical skills with these specific laws to be able to help people understand and navigate the risks.

Where to from here?  Simple.  If you own an addiction treatment center, a toxicology lab and/or have any common ownership with a toxicology lab that services patients of the addiction treatment center, get with your healthcare lawyer and take a close look to make sure you know the laws, the options and risks.  And also what you can do to reduce regulatory risk, such as having rock solid medical necessity policies, procedures and actual practices.  These laws change regularly.  Even more important:  the way law enforcement and regulators interpret and enforce these laws changes regularly and in ways they do not openly advertise!

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