South Florida Drug, Alcohol & Rehab Business: Big Business, Bigger Rules

The drug and alcohol rehab business is especially abundant in South Florida, yet few entrepreneurs are aware of the many laws that apply.  The recovery business is a highly regulated one, with great intricacy in terms of the options and also the applicable laws.

Substance abuse services in Florida are broadly regulated by Chapter 397, Florida Statutes.  The applicable regulations, however, drill down with remarkable granularity.  For instance—

The broadly crafted Client Rights listed in Section 397.501, like the ones applied to nursing home residents, are very open ended (requiring things like the “Right to Individual Dignity”) and yet create the basis of a lawsuit!  That said, people acting “in good faith, and without negligence” can rest assured they will not be found liable.

Though some may intuitively understand the specificity and seriousness of the regulations dealing with medical detox, residential treatment and Partial Hospitalization Programs (PHPs), including the staffing, service and supervision requirements, it may not be as readily apparent with the lower intensity of service options, like Intensive Outpatient Programs (IOPs).

Even PHP requirements can, however, be confusing.  For instance, it is well known that PHPs are not for people who require 24/7 residential treatment.  They stand somewhere between residential inpatient and intensive outpatient programs.  What is less known is that the staffing requirements are particularly detailed.  For instance, each PHP has to have a paid, awake employee on premises at all times when even one client is on the premises and also must have a paid employee on call when clients are at the community housing location.

Intensive inpatient programs are required to provide detailed services, to include 14 hours of counseling each week and 20 hours of “other structured activities.”  Like IOPs, staff coverage is very specific.  Nursing coverage must be available 24/7.  More specifically, an RN must supervise all nursing staff and an RN or LPN has to be physically present on site.  Finally, a physician has to be on call 24/7.

Outpatient programs have similarly detailed requirements, including the minimum counseling requirements and staffing client ratios.  Intensive Outpatient Programs (IOPs) of course have far greater service requirements (at least nine hours of services each week) and yet share the same staffing ratio as regular outpatient (50 clients per counselor).

One of the more vexing issues the recovery industry faces deals with marketing.  The industry is flush with commission based marketing professionals, and yet there are very detailed state and federal regulations that threaten that practice.  At the federal level, the Anti Kickback Statute, a criminal statute that criminalizes remuneration for patient referral, threatens these percentage based arrangements.  State laws also strike them hard.  For instance, the Florida Patient Brokering Act (PBA) is a criminal statute with serious consequences for violations.  While the PBA does have an exception for federal law compliance, many entrepreneurs may find themselves hard pressed to comply.

Though the term “recovery business” may seem like an oxymoron to some, it is an area of significant business opportunity that many have dug into.  Knowing the regulatory minefields of the industry is, however, an important step forward in both a successful business and a stable platform of care.

8 thoughts on “South Florida Drug, Alcohol & Rehab Business: Big Business, Bigger Rules

  1. Pingback: South Florida Drug, Alcohol & Rehab Business: Big Business … : Atom Wire

  2. The patient brokering statute is confusing. I feel it deals with referrals from health care provider to health care provider. Does the statute apply to employees who receive bonuses for converting a potential client to an actual client?

    • It’s a Florida criminal statute that applies to all people, not just healthcare providers. Essentially, it acts a lot like the federal Anti Kickback Statute by criminalizing essentially payment for patient referral. It also offers protection for arrangements that comply with federal law (e.g. the Safe Harbors). It’s a law that has precious little judicial interpretation and application, and as such it’s difficult to apply it with precision.

      • That’s interesting. It seems difficult to determine how employees can be compensated for driving business towards a facility. Obviously a straight salary would not be considered brokering, but that could backfire from a business stand point if the employee is not driven to bring in clients.

        I feel like the spirit of the law is to prevent facilities from giving kickbacks to other facilities for setting up referral programs and also to prevent employees from setting up these relationships.

  3. Pingback: Blue Cross Lawsuit Against Avee Attacks Point of Care Testing | Florida Healthcare Law Firm Blog

  4. Can a rehab center dispense Saboxin and valium as frequent as every four hours with only an “outpatient detox” license in Florida? This facility does has a living residence with 24 hour non-medical staff.

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