Conventional wisdom tells us that spending less money is the most effective approach to saving money. After all, a penny saved is a penny earned and the more you save, the more you have left over. That logic is hard to argue with, but it is not always fool proof. Saving money for your practice the wrong way can lead to diminished patient care, outdated equipment, the wrong location for your practice and additional negative results.
There are several critical factors often overlooked when a healthcare practice’s primary focus is paying the lowest rent vs. achieving the best combination of overall terms. Let’s look at three factors where paying higher rent could actually increase your profitability.
#1: The Cost to Build
Healthcare buildouts often cost two-to-three times more than a typical commercial real estate space. This is attributed to many factors that are unique to healthcare, including:
More durable finishes
Millwork and cabinetry
Plumbing and sinks in exam rooms, sterilization centers and laboratories
Increased electrical and HVAC requirements (heating, ventilation and air conditioning)
In the beginning of June, 2020, the Department of Justice (“DOJ”) revised its Evaluation of Corporate Compliance Programs Guidance Document. The Document is designed to assist prosecutors in making informed decisions as to whether, and to what extent, the company’s compliance program is effectivefor purposes of determining, when a compliance violation has occurred, the appropriate form of any resolution or prosecution and monetary penalty. It also guides a prosecutor as to the company’s compliance obligations contained in any criminal resolution. The Document has been revised on three occasions since 2017, telegraphing the DOJ’s intent to prosecute those businesses without compliance plans, or without effective compliance plans, more harshly than those taking steps to identify and remedy risks.
A healthcare business’ failure to have in place a compliance program designed to detect and respond to potential fraud and security risks places it at a serious risk of civil and criminal liability. When a compliance issue is investigated, charged and resolved, DOJ prosecutors are instructed to consider whether the business has invested in and improved its corporate compliance program and internal controls systems. They must also determine whether those improvements have been tested to demonstrate that they would prevent or detect similar misconduct in the future. According to the DOJ, there are three fundamental questions that a prosecutor should ask when determining whether a business’ compliance plan is sound:
There are numerous COVID-19 grants available from the United States Government, spanning the addiction treatment industry to assisted living, hospitals and providers. There’s money for workplace modernization and for telehealth funding. But how does one keep it all straight and avoid missing out? Join Florida Healthcare Law Firm Attorney Steven Boyne for this informative webinar designed to share an overview and strategy for determining how best your healthcare business can be supported during this unprecedented public health emergency.
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.
The debate over the pro’s and con’s of physician-owned hospitals has been raging for decades. Physician-owners say their hospitals are more patient-focused, provide higher quality care, obtain better outcomes and therefore receive higher patient satisfaction scores. They also point out their convenience and efficiency.
Opponents argue that physician-ownership leads to overutilization and cherry-picking of only the best patients. The less-desirable patients (both clinically and financially) are then left to be taken care of by the community hospitals. For those reasons, both the American Hospital Association and the Federation of American Hospitals remain strongly opposed to physician-owned hospitals.
Federally, the Stark Law includes an exception which allows a physician to refer patients to a hospital in which the physician has an ownership interest, so long as the ownership interest is in the entire hospital, and not just a subdivision of the hospital. However, in 2010, the federal government weighed in again on the issue, and passed the Affordable Care Act (ACA), which includes provisions which (i) restrict physician referrals to hospitals in which they hold an ownership interest; (ii) restrict any increases in physician-ownership of a hospital; and (iii) restrict expansion of physician-owned hospital facilities. CMS has granted exceptions to these restrictions, but those have been limited to rural hospitals and high Medicaid hospitals, and attempts to amend the law have failed.
June 1, 2020 – Florida Healthcare Law Firms adds experienced attorney Steven Boyne to the team to assist with human resource law, corporate and transactional law, as well as telemedicine, healthcare tech and cyber breaches.
Florida Healthcare Law Firm has announced that they have added Steven Boyne to the team. Steven brings over twenty plus years experience working with different types of healthcare entities from Air Ambulances to large healthcare insurance companies, and everything in between. Steven specializes in areas including specific healthcare business human resource issues, telemedicine and HIPAA, strategic disaster planning for healthcare providers, business interruption insurance, health insurance and air ambulances.
“Positioning your healthcare business to be proactive is one of the most important things you can do. Who would have imagined we’d see a global pandemic in our lifetime? Being prepared for ‘interruptions’ help keep your business afloat when disaster strikes, especially when it comes to finances. Steven’s experience in large health insurance companies brings a wealth of knowledge and expertise that will help individual practitioners be just as prepared as the big guys. And, as technology grows in the healthcare industry, Steven is on board to help with his tech expertise,” Florida Healthcare Law Firm COO Autumn Piccolo says. Founder and President, Jeff Cohen, goes on to say that, “We advise many clients on telemedicine and telehealth laws. Steven’s passion for tech is a great addition for current and future clients. His unique firsthand knowledge on cyberbreaches, tech software and security systems is hyper-specific, which will benefit healthcare business owners.
The COVID-19 virus has and will probably continue to change the way healthcare providers and business associates interact and help their patients. As many providers are aware, a HIPAA violation is a serious issue, and can cost a healthcare entity large amounts of time and money to respond to any regulatory investigation. Recognizing that the COVID-19 pandemic has strained every corner of the economy and is THE MOST IMPORTANT issue for almost every industry, the federal government has rolled back some HIPAA protections. It is unclear how long these rollbacks will last, and it is possible that some of them may be permanent, but for now healthcare providers and their business associates can take some comfort that they can focus on delivering care and not dealing with overly burdensome regulations and investigations. The major changes include:
Telehealth. Changes include allowing physicians and other healthcare providers to offer telehealth services across State lines, so State licensing issues should not be a concern. Additionally, Providers are essentially free to choose almost any app to interact with their patients, even if it does not fully comply with the HIPAA rules. The HHS allows the provider to use their business judgment, but of course, such communications should NOT be public facing – which means DO NOT allow the public to watch or participate in the visit!
Disclosures of Protected Health Information (PHI). A good faith disclosure of such information will not be prosecuted. Examples include allowing a provider or business associate to share PHI for such purposes as controlling the spread of COVID-19, providing COVID-19 care, and even notifying the media, even if the patient has not, or will not grant his or her permission.
Business Associate Agreement (BAA). As most healthcare providers know, a BAA agreement between a provider and an entity that may have access to PHI is required by law. During the COVID-19 pandemic, the lack of a BAA is not an automatic violation.
There are 116 specific COVID-19 grants available from the United States Government, spanning the addiction treatment industry to assisted living, hospitals and providers. There’s money for workplace modernization and for telehealth funding. But how does one keep it all straight and avoid missing out? Join Florida Healthcare Law Firm Attorney Steven Boyne for this informative webinar designed to share an overview and strategy for determining how best your healthcare business can be supported during this unprecedented public health emergency.
Florida Healthcare Law Firm Attorney Chase Howard will cover the top 10 questions healthcare providers and businesses are asking related to COVID-19. He will provider solutions and strategies to implement to help you through this pandemic and be better prepared for the new normal of the future. Submit your questions in advance!
COVID is proving to be so burdensome on employers that we are seeing lay-offs and furloughs all over the country. As the virus curve bends back in a positive direction and physician and patient concerns for safety wane, patients will stream back to office. But what happens to the laid off (or furloughed) employees and contractors with non-competes? Will they come back or will they have moved on, possibly in a way that violates their noncompetes? And will a court think a noncompete has been violated when an employee or contractor was let go and there is no specific provision in their written contract that allows the employer to immediately let someone go without notice due to this type of situation? How will the COVID based lay-offs and furlough affect noncompetes? The short answer is we don’t yet know, but widespread lay-offs and furloughs may result in a flood of cases being filed because (1) many have been let go, (2) there likely isn’t a provision in their contract with the employer that specifically authorizes that sort of termination, and (3) a contract’s “breach” (e.g. no contract based allowance for the prompt termination) is traditionally a defense to an action to enforce a noncompete.
The COVID Issue
Though there is an exception for unusual specialties or where there is essentially a community need, noncompetition covenants are generally enforceable in Florida with respect to doctors and other healthcare professionals. Many people think doctors in particular can’t be restricted from practicing medicine under any circumstances. That is just not true.
Getting to the bone of the issue, noncompetes are enforceable in Florida if:
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.