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.
The amount of regulation imposed upon those entering into the healthcare business arena can be staggering even for a highly experienced businessman. In the business world, buying and selling businesses is often accompanied by lawyers, documents and consultants. In the healthcare business world, buying into and selling healthcare businesses, or any portion of health care businesses, requires all of that support and much more.
Diving into a healthcare business requires many considerations that are unique to other areas of business. First, appropriate licensing bodies must be notified and/or approve any such purchase or sale. For instance, in the State of Florida:
the Department of Children and Families must be notified every time a new owner becomes a part of a licensed substance abuse treatment center and prior to taking ownership, must either submit to a level 2 background screen or provide proof of compliance with the level 2 background screening requirements.
the Agency for Health Care Administration must be notified sixty days prior to any change in ownership and will run a background check on new owners.
the Agency for Health Care Administration must be notified every time a new owner is added to an entity holding a Health Care Clinic License. Additionally, AHCA must approve any owner of more than 5% of the Health Care Clinic prior to such person becoming an owner.
The Stark Regs (1) forbid doctors and their immediate family members from referring their patients to businesses they own which provide “designated health services,” and (2) contains a long list of permitted financial relationships between health care providers. The list of what constitutes a “designated health service” (DHS) includes PT, rehab, diagnostic imaging, clinical lab, DME, and home health. A “physician” means an M.D., D.O., chiropractor, podiatrist, optometrist or dentist. An “immediate family member” is a husband or wife; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild. In short, if you or your family member owns a DHS, don’t refer to it. Unless of course your situation falls within one or more of the gazillion exceptions.
A few key changes from the third set of revisions (so called Stark III) which affect physicians are helpful to keep in mind. For instance, the way fair market value of physician compensation is determined in the Stark II regs has been simplified and now depends on an amorphous consideration of the transaction, its location and other factors. The clear formulas contained in Stark II was dropped and this makes the need for an expert FMV study even more compelling.
There has been some recent confusion about the new Medicaid requirement for providers to have their fingerprints done. AHCA recently distributed a memo on the requirement which states:
409.907 (8)(a), F.S., requires all initial or renewing provider applicants to Florida Medicaid to submit fingerprints for purposes of obtaining a criminal history record check unless they meet one of the exemptions as described in the statute.
All physicians do NOT need to go out and get their fingerprints done immediately. The ONLY physicians this applies to are those who are initially applying as a Medicaid provider or renewing their provider application. At that time, a provider will be required to submit his or her fingerprints with the application.
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.