Category Archives: Employment Law Compliance

The Reality of the “Economic Realities Test”

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contractBy: Valerie Shahriari & Jacqueline Bain

Across the healthcare industry, providers and healthcare businesses are consistently faced with the decision of whether to employ or contract with their workers.  Whether it’s a physician working with a group practice, or a marketer on behalf of a healthcare service, correctly structuring relationships between healthcare businesses and their workers is important.  For tax reasons, many workers strongly prefer to enter into independent contractor relationships.  However, simply calling oneself an independent contractor is not enough to solidify the relationship.  Many times, workers who call themselves independent contractors are actually employees in the minds of the government.  And sometimes, so-called “employees” with several part-time positions are actually viewed as independent contractors.

On July 15, 2015 the Administrator of the Department of Labor’s Wage and Hour Division (WHD) provided additional guidance regarding the application of the standards for determining who is an employee under the Fair Labor Standards Act (FLSA).  The goal of the guidance is to help the regulated community in classifying workers and decreasing misclassification.  The Administrator’s Interpretation reviews the pertinent FLSA definitions and the breadth of employment relationships covered by the FLSA.  The Administrator’s Interpretation then addresses each of the factors of the “economic realities test”.

According to the Administrator, when determining whether a worker is an employee or independent contractor, the application of the economic realities factors should be guided by the FLSA’s statutory directive that the scope of the employment is very broad.  The FLSA’s definitions establish the scope of the employment relationship under the Act and provide the basis for distinguishing between employees and independent contractor.

The Supreme Court and Circuit Court of Appeals have developed a multi-factorial “economic realities” test to make the determination whether a worker is an employee or an independent contractor under the FLSA.  The test focuses on whether the worker is economically dependent on the employer or in business for him or herself.  The factors include: Continue reading →

Governing Boards in Healthcare Organizations – Making Compliance Your Priority

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compliance manualBy: Jackie Bain

Does your healthcare entity have a governing Board? How involved is that Board in overseeing your business? Would your Board members be able to respond to questions about your business’ compliance-related activities? Recently, the Office of the Inspector General (“OIG”), in conjunction with a host of non-profit healthcare associations, released guidance on achieving compliance for healthcare governing boards. The guidance is not based on abstract principals of compliance, instead it points to applicable federal law, OIG guidance, case law, and sentencing guidelines.

Each and every healthcare organization, whether or not it accepts reimbursement from government payors, must have in place regulatory compliance measures designed to protect the population it serves, and the persons paying for and providing those services. All levels of a healthcare organization must be cognizant of their roles in the organization’s continuing commitment to compliance. Even Board members, who often do not experience the inner-workings of the entities they represent, have an obligation and duty to the organization to act in a manner that stressed compliance. Applicable federal and state laws, how they apply to an organization, and how the organization reacts to its obligations imposed by those laws, must be of paramount importance to a governing Board.

The OIG compliance guidance for healthcare Boards tracks 4 areas over which boards should have specific oversight: Continue reading →

Protecting Your Practice Through Restrictive Covenants

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Contract CWBy: Charlene Wilkinson

The beginning of a new year is a great time to evaluate your medical practice and determine ways to protect its healthy growth for the future.  The time, effort and dedication that it may take to build a successful practice may be quickly undermined without certain contractual protections in place.   As you seek to establish or expand your practice, it is essential to protect your hard earned efforts from employees and consultants taking a portion of your patient base, employees and valuable proprietary business processes to compete against you.

One of the ways physicians seek to protect the investment that they have made in their practice is through the use of restrictive covenants. Restrictive covenant is an all-inclusive term used to refer to all contractual restrictions upon competitive practices; nonsolicitation; confidential information and use of trade practices.  Restrictive covenants may be found in a number of documents related to your practice. A restrictive covenant may be found in your practice governing documents, such as the shareholder agreement, the partnership agreement of a partnership or the operating agreement of a limited liability company. A restrictive covenant is often included in an employment contract where it prevents an employee from engaging in certain competitive practices while they are an employee and for a period of time after their employment ends. There may be a restrictive covenant provision in a contract for the sale of a party’s interest in the practice. Continue reading →

Breaking Down Legal Buzzwords: Fair Market Value & Commercial Reasonableness

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book-stacks-colorful.jpgBy: Jackie Bain

Federal fraud and abuse laws often require that arrangements between health care providers are “fair market value” and “commercially reasonable.” And while these terms look like legalese and are easy to overlook, in fact, they are important. For example, the Federal Stark law requires strict compliance with its terms. A physician may enter into a prohibited arrangement with the intention that it falls within an exception to the law. If, however, the arrangement is not fair market value, the physician’s arrangement would violate the law, subject the physician to fines and risk the physician’s ability to participate in Medicare.  Continue reading →

The Effect of being excluded from Participation in Federal Healthcare Programs

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blacklist

The Government recently clarified six areas related the effect of exclusion from participation in Federal Healthcare Programs.

  1. Switching professions during a period of exclusion does not change the exclusion and payment prohibitions.
  2. You can accept a referral from an excluded provider as long as the excluded provider does not provide any services to the referred patient.
  3. Being excluded along with the payment prohibitions extends beyond just direct patient care.
  4. If you are excluded you cannot provide either administrative or management services to non excluded provider.
  5. Excluded providers cannot even provide volunteer services, and
  6. Excluded providers can work for non excluded providers as long as the services they provide are furnished to non-federal healthcare program patients.

Providers need to screen every professional, employee and contractor they do business with to insure they are not on the Exclusion list. It is always best to check the list of Excluded Individuals/Entities (LEIE) for anybody you work with.

Why Compliance Plans Make Sense

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Clipboard with Checklist and Red PenHas your practice implemented a compliance program or considered improving an existing one?  Is it really necessary?  Prior to the Patient Protection and Affordable Care Act (ACA), the necessity for physician practices to develop compliance plans was merely voluntary.  However, the ACA will now require physician practices to have a fraud and abuse compliance plan in place as a condition of continuing to participate in Medicare or Medicaid programs.  Because the government first published guidelines in the year 2000 for the voluntary use of compliance plans in physician practices and has subsequently enacted a mandate in the ACA for compliance plans, many physician practices are proactively implementing them.  While this compliance plan mandate may be viewed by physicians as yet another administrative burden and expense to the practice, it can have many benefits as well.  Implementing an effective compliance program can have the result of not only reducing liability risks, but can also allow a practice to reap monetary benefits.  In fact, it could be more costly for the practice not to have one! Continue reading →

The Florida Healthcare Law Firm Goes National

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Followers & Friends – BIG Announcement coming out today! If you haven’t seen our new NATIONAL platform, check it out here at http://www.nationalhealthcarelawfirm.com and stay tuned for our #healthcare #legal news at 2pm EST !!!

Supreme Court upholds Obama health care law

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Via @USAToday

The Supreme Court upheld President Obama’s health care law today in a splintered, complex opinion that gives Obama a major election-year victory.

Basically. the justices said that the individual mandate — the requirement that most Americans buy health insurance or pay a fine — is constitutional as a tax.

Chief Justice John Roberts — a conservative appointed by President George W. Bush — provided the key vote to preserve the landmark health care law, which figures to be a major issue in Obama’s re-election bid against Republican opponent Mitt Romney.

The government had argued that Congress had the authority to pass the individual mandate as part of its power to regulate interstate commerce; the court disagreed with that analysis, but preserved the mandate because the fine amounts to a tax that is within Congress’ constitutional taxing powers.

The announcement will have a major impact on the nation’s health care system, the actions of both federal and state governments, and the course of the November presidential and congressional elections.

A key question for the high court: The law’s individual mandate, the requirement that nearly all Americans buy health insurance, or pay a penalty.

Critics call the requirement an unconstitutional overreach by Congress and the Obama administration; supporters say it is necessary to finance the health care plan, and well within the government’s powers under the Commerce Clause of the U.S. Constitution.

While the individual mandate remained 18 months away from implementation, many other provisions already have gone into effect, such as free wellness exams for seniors and allowing children up to age 26 to remain on their parents’ health insurance policies. Some of those provisions are likely to be retained by some insurance companies.

Other impacts will sort themselves out, once the court rules:

— Health care millions of Americans will be affected – coverage for some, premiums for others. Doctors, hospitals, drug makers, insurers, and employers large and small all will feel the impact.

— States — some of which have moved ahead with the health care overhaul while others have held back — now have decisions to make. A deeply divided Congress could decide to re-enter the debate with legislation.

— The presidential race between Obama and Republican challenger Mitt Romney is sure to feel the repercussions. Obama’s health care law has proven to be slightly more unpopular than popular among Americans.

Full Story Here: http://content.usatoday.com/communities/theoval/post/2012/06/Supreme-Court-rules-on-Obama-health-care-plan-718037/1#.T-xqPhd5F9E

The Florida Healthcare Law Firm Announces National Expansion

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(Delray Beach, FL) June 21st, 2012 – The Florida Healthcare Law Firm, one of Florida’s leading healthcare law firms, today announced a major increase in their legal practice capabilities with the official launch of the National Healthcare Law Firm, a d/b/a and new portal of the firm. The expansion to a national platform providing healthcare legal services to physicians and healthcare businesses is one that significantly increases resources for clients who lack qualified local healthcare counsel. While the Florida Healthcare Law Firm has for years assisted clients outside the state of Florida*, this new development further cements the firm’s commitment to providing ethical legal counsel in the healthcare industry.

“We are very excited about it. The fact that we serve clients all over the country has been a small secret for a while but we realized there’s a huge demand and decided to just go for it,” said Jeffrey L. Cohen, Esq. Founder and President of Florida Healthcare Law Firm.

According to Cohen, “It’s just a strange area of the law.  Nearly everything in healthcare business is regulated; leases, employment agreements, compensation.  Things you wouldn’t think are regulated are strongly regulated.  And there are large fines and criminal penalties for getting it wrong!  Our clients understand that healthcare business of any kind has serious legal risks and that they need uniquely qualified help.”

To request a service list or for any other firm information, call Autumn Piccolo at 888-455-7702 or visit the firm’s website at www.nationalhealthcarelawfirm.com or www.floridahealthcarelawfirm.com

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Acknowledged throughout the country for its service and excellence, Florida Healthcare Law Firm is one of the nation’s leading providers of healthcare legal services. Founded by Jeffrey L. Cohen, Esq and headquartered in South Florida, FHLF provides legal services to physicians and healthcare businesses with the right pricing responsiveness and ethics. From healthcare clinic regulation, home health agency representation and physician contracting to medical practice formation/representation and federal and state compliance matters, the Florida Healthcare Law Firm is committed to bringing knowledge and experience to a diverse group of clients.

Noncompete Case Underscores the Need for Right Wording

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Noncompetition provisions are tricky.  Courts generally don’t like them; and the law is very particular about them.  Generally speaking, a noncompete is enforceable if it is well written and the employer has complied with the contract that contains it.  That said, since courts are not big fans of noncompetes and since the law is that a noncompete is to be strictly construed (against the party that drafted it), the devil is clearly in the details.  For instance, one court refused to uphold a noncompete when the wording was that it complied in the event the employment agreement was terminated, but in the case at hand the contract simply expired.  In other words, the contract said that it applied in the event the contract was terminated.  Since the contract simply ran out, the court refused to enforce the noncompete.

The same sort of thing has happened to a Florida veterinarian.  The employment agreement he signed prohibited the doctor from having anything to do with a competing business within a 35 mile radius, so the doctor located his practice outside that zone when the contract was terminated.  When the doctor provided services within the 35 mile zone, the employer sued…and lost.  Here’s why:  the contract did not prevent the doctor from practicing in the 35 mile zone.  It just prevented him from having anything to do with a competing business that practiced in that zone.  Tricky.