Has your attorney ever told you to do your best to comply with certain safe harbors to the Federal Anti-Kickback Statute, and you’ll be likely to survive scrutiny under the Florida Patient Brokering Act (the PBA)? If you’ve heard that, it’s time to re-examine that relationship. In the last month, the Patient Brokering Act has been amended, and then interpreted by a court of law in a way that affects all healthcare providers.
The Patient Brokering Act has been used in recent years to prosecute abuses in the addiction treatment industry. Other healthcare providers subject to the act have largely been uninvolved in these prosecutions. However, the PBA has been remolded 4 times in the past 5 years as a means to tailor it to allow for prosecutions of bad actors in healthcare, including addiction treatment. One item should be made clear: the PBA applies to any facility at all that is licensed by the Agency for Healthcare Administration (AHCA) or practitioner licensed by the Department of Health (DOH), including physicians, surgery centers, home health agencies, skilled nursing facilities, hospitals, DME providers, diagnostic imaging facilities, clinical laboratories, pharmacies and many other. During the legislative process, barely any healthcare industry representatives (from any provider group) showed up to any legislative workshops or produced counterbalancing input or language proposals that reflected a broader perspective.
Most everyone knows that laws are being implementing in federal and state government to address the opioid crisis in the US. One such law is the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“SUPPORT Act”) signed into law in October 2018 by President Trump. While the SUPPORT Act seeks to increase access to treatment for substance use disorders and prevention of substance use disorders, it also contains language to prevent abuse of the process to increase treatment access. Specifically, incorporated into the SUPPORT Act is the Eliminating Kickbacks in Recovery Act (“EKRA”) which directly targets unlawful referrals to recovery homes, clinical treatment facilities, and laboratories.
EKRA is similar to prohibited kickbacks and patient brokering pursuant to Sections 456.054 and 817.505, Florida Statutes, using similar language as both Florida statutes. EKRA makes it unlawful…
The core aspect of EKRA has to do with how to properly compensate marketing personnel who market the services of labs, addiction treatment facilities and recovery homes. For those of you already familiar with existing federal law pertaining to compensation arrangements (e.g. the bona fide employee exception (the “BFE”) and the personal services arrangement and management contract safe harbor (the “PSA”)), the EKRA provisions will look familiar! Key aspects of this law (which has to be read together with similar existing laws) include—
Regulatory compliance is a mandatory investment for any healthcare business owner looking to stay out of serious and personal legal peril, let alone one hoping to keep their company viable.
Yet there is seemingly an onslaught of providers that blatantly run afoul of many of these regulations, knowingly or not, or those that believe they may have found a loophole.
Concerning the latter, there is an important mantra that such DME and pharmacy providers should remember and live by: “[W]hat a provider cannot do directly, it cannot do indirectly through an intermediary.”
Marketing for DME – What exactly am I talking about?
DME providers enrolled with CMS (should) know they cannot solicit or ‘cold call’ Medicare Part B beneficiaries, per the Federal Anti-Solicitation Statute, and that they cannot offer anything of value to a potential patient that could induce them to utilize them as a provider, in accordance with the Beneficiary Inducement Statute.
In giving consideration to whether healthcare regulations apply to a proposed course of conduct it’s absolutely vital for a pharmacy to know its payor! This is especially so in the context of patient marketing and the various regulatory prohibitions on paying for healthcare referrals. Unfortunately, some pharmacy owners remain a bit mixed up about who the ultimate payor is for the medications they dispense, and, depending on that pharmacy’s billing operations, such mistakes can have devastating consequences.
A large part of this confusion might be attributed to the fact that in most instances, a pharmacy is not billing the ultimate payor directly (unlike a DMEPOS provider that may be directly submitting claims to Medicare Part B), but rather, the pharmacy is billing an intermediary entity called a Pharmacy Benefit Manager (“PBM”), which is usually a commercially run entity (non-government owned) that manages and adjudicates claims on behalf of health insurance plans that cover pharmacy benefits.
There are two criminal cases pending in Palm Beach County that threaten to put a bullet in the heart of healthcare professionals and businesses and also the law practices that advise them. Both State v. Simeone and State v. Kigar have a motion from the State pending before them to block any testimony that the defendants received legal advice concerning a contract entered into by an addiction treatment facility and a sober home. The State alleges that the contract violates the state Patient Brokering Act (PBA) because it was essentially a ruse whereby the addiction treatment facility was just paying for the sober home to refer patients. Now the State wants to make sure that the entire issue of the defendants being advised by counsel never sees the light of day.
How is this possible? How can it be that a client can seek legal counsel, get advise (and presumably follow it), and then be blocked from presenting that evidence? The State argues that the PBA has no wording that requires them to prove intent. And if intent isn’t an element to be proven, the argument goes, then evidence of the client intending not to violate the law by getting advice beforehand is inadmissible!
One healthcare employer’s compensation arrangement with its employees just got much needed support from the 11th Circuit Court of Appeals. The employer there, which provided AIDS patients certain healthcare related services, paid its employees a bonus of $100 per patient. The case was brought on the argument that the compensation arrangement constituted an illegal kickback under the federal Anti- Kickback Statute. The court, however, disagreed because the employees who received the bonuses were “bona fide employees.”
The court’s focus on the plain language of the safe harbor for bona fide employees was refreshingly clear, notably that “any amount paid by an employer to an employee (who has a bona fide employment relationship with such an employer) for employment in the furnishing or any item or service.” Essentially, any amount paid by an employer to a bona fide employee is not considered to be “remuneration” under the Anti-Kickback Statute.
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.
Before doing business in Florida, an entity providing substance abuse marketing services must be licensed by Florida’s Department of Agriculture and Consumer Protection. This includes includes either telephone solicitation from a location in Florida or solicitation from other states or nations for substance abuse and addiction treatment centers located in Florida.
As of November 27, 2017, only the following entities are licensed by the State of Florida to provide marketing services to substance abuse and addiction treatment centers:
A Way and a Means, LLC (Delray Beach, Florida)
Addiction International Holdings, LLC d/b/a The Addiction Advisor d/b/a The Recovery Miracle (Boca Raton, Florida)
Advanced Recovery Systems, LLC (Winter Park, Florida)
Bandwidth Interactive Company d/b/a Local Management (Boca Raton, Florida)
Delphi Behavioral Health Group, LLC (Fort Lauderdale, Florida)
Freedom From Addiction, LLC (Miami Beach, Florida)
Infoworx Direct, LLC d/b/a Addiction Hope and Help Line (Boca Raton, Florida)
Invigorate Solutions, LLC d/b/a Local Management (Boca Raton, Florida)
Meridian Treatment Solutions, LLC (Lauderdale by the Sea, Florida)
NPA Consulting Group, LLC (Pompano Beach, Florida)
Palm Partners, LLC (Palm Springs, Florida)
Parent Team, LLC (Santa Rosa, California)
Pryme Time Media, LLC (Sunrise, Florida)
R360, LLC (Fort Lauderdale, Florida)
Redwood Recovery Solutions, LLC d/b/a com (Riviera Beach, Florida)
Ring2Media, LLC (Westport, Connecticut)
Rybchinskiy Inc. (Boynton Beach, Florida)
Sober Network, Inc. (Delray Beach, Florida)
The Addiction Network, LLC (North Miami, Florida)
True Choice Health Group Limited Liability Company (Pompano Beach, Florida)
United Addiction Specialists, LLC (Hollywood, Florida)
USR Holdings, LLC (Coconut Creek, Florida)
It is a third degree felony for: any person to work for an entity that does not have a current and valid license; or for any entity to invite telephone calls or other communications with a substance abuse marketer who is soliciting clients without a current and valid substance abuse marketing license; or for any person or entity to solicit without a license; or for any person who otherwise violates the law requiring licensure either directly or indirectly. Any person who is convicted of a second or subsequent violation commits a felony of the second degree.
Healthcare regulatory compliance is too damn complicated sounding and scary! What the heck does it even mean? Basically it means making sure you’re following about a dozen specific laws, some of which interrelate. It’s a little like making a cake. You have to make sure you have flour, eggs, sugar and so on. And then you have to make sure you put enough in the bowl and bake it at the right temperature. So what’s so unique re healthcare regulatory compliance? Healthcare professionals and businesses are inundated by these confusing laws written in legalese, to the point where they go numb. They lose the ability to focus on them and to take them seriously. And they hire someone that uses the word “consultant” or “compliance”; and they think they’ve got compliance covered. But they don’t. And that’s a big mistake in the healthcare world!
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.