SHOOT, READY, AIM: Palm Beach County’s Blind Shot at the Addiction Treatment Industry

addiction treatment industryBy: Jeff Cohen

We should all be afraid when there is a “war” declared on anything in our culture because it usually means the complex will be simplified, the innocent will be presumed guilty, details will be ignored and the baby will be thrown out with the bathwater.  Nowhere is that more apparent than the current War on Sober Homes in Palm Beach County.

When we read the stories published by the Palm Beach Post, we learn things like–

  • It is illegal for a sober home to receive payment from an addiction treatment facility for providing so called “case management” services;
  • Addiction treatment providers unethically bill thousands of dollars for urine tests that could be provided for pennies via a cup for sale at Walgreens; and
  • The Patient Brokering Act, a state criminal law, is being broken left and right by sober homes and addiction treatment providers.

Hooey!  It’s completely misleading.  Here’s why:

Case Management Issue.  The arrangement reported In the Post and described in charging documents describes a business arrangement where sober homes are paid by state licensed addiction treatment providers for helping addicts along their path of recovery.  Addiction treatment sees these patients maybe 20 hours a week.  Where are they the rest of the time?  What are they doing?  Addicts seeking treatment often have soft life skills from being off the grid, are often receiving assistance from supportive staff at sober homes who help them get on their feet.  They often come into treatment with no clothes, no money, no food, no job skills and a whole host of medical and psycho social needs.  And addiction treatment facilities want (and sometimes pay for) sober home staff to serve a function in the continuum of care, sometimes want to give them food cards, clothing, cigarettes and whatever they need to accept treatment.  And our sole focus is to do what, focus our regulatory attention on a business relationship that may exist in the treatment industry?  Continue reading

Physician Compensation Targeted by the Department of Justice

healthcare business change in ownershipBy: Jeff Cohen

The DOJ reported on August 5th a settlement with a South Carolina hospital concerning physician compensation.  Though certainly not the first or the biggest case of its kind (e.g. note the Halifax Hospital and North Broward Hospital District cases, which generated settlements of over $100M and $60M respectively), it’s attention grabbing nonetheless.

The SC case was brought by a whistleblower, a neurologist formerly employed by the hospital.  The doctor alleged that the seven year employment agreements violated Stark and the Anti Kickback Statute because the compensation was more than what was legally permissible and was also based in part on ancillary services ordered by the employed doctors.  Seasoned readers will understand that the concept of “fair market value” (FMV) is at the heart of regulatory compliance and also that compensation surveys of organizations like the Medical Group Management Association (MGMA) are important guides in term of what is/is not FMV.  In the SC hospital case, compensation met or exceeded the top 10% of similarly qualified physicians in the area, which is very interestingly noted by the DOJ (because some of the comp levels were still within the MGMA surveys).  In other words, the trend here is for the Feds to push back against comp levels on the high end of the FMV spectrum. Continue reading

Changes of Ownership in Healthcare Businesses

healthcare business change in ownershipBy: Jacqueline Bain

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.

Continue reading

Fee Splitting: Clearing Up the Confusion

anti kickbackHealthcare professionals and businesses are aware of the term “fee splitting,” but rarely understand what that means, and for good reason.  Is there some federal law against that?  No.  Is there a state law?  Yes, but definitions are elusive and confusing.

Florida law prohibits licensed healthcare professionals engaging in any split-fee, rebate, commission or bonus in exchange for referral of any patient.  In particular, Section 456.054 states it is a violation of a state criminal statute for a “healthcare provider” to “offer, pay, solicit, or receive a kickback, directly or indirectly, overtly or covertly, in cash or in kind, for referring or soliciting patients.”

Is there a court in Florida that has interpreted that law or opined on the concept?  Not exactly.  The closest thing we have is the Crow decision, where the 5th District Court of Appeals affirmed a Board of Medicine handling an issue involving the concept. Continue reading

Compounding Pharmacies and Alleged Tricare Abuses Back in the Spotlight

compounding pharmacyBy: Jacqueline Bain

On Thursday, February 11, 2016, the United States Attorneys’ Office from the Middle District of Florida announced a $10 million settlement with 4 physicians and 2 pharmacies regarding alleged abuses of Tricare program.  The case against these physicians and pharmacies was prosecuted as part of the United States government’s large-scale effort to combat questionable compounding practices.  Investigations revealed that patients were often prescribed compounded drugs that they never used, and that Tricare paid a mark-up cost of nearly 90% for compounded drugs over and above the pharmacy’s actual costs of making the drug.  Roughly 40% of the claims submitted by the pharmacies in question were written by 4 physicians with an ownership or financial interest in the pharmacies.

Tricare is a federal health care program designed to insure active duty military service members, reservists, members of the National Guard, retirees, survivors and their families.  Tricare outpatient costs have almost doubled in the last 5 years, and compound drugs have accounted for a large portion of that increase.  Continue reading

The OIG Addresses Free Patient Transportation Issues

vanBy: Jacqueline Bain

The issue of whether a medical provider can provide free patient transport is one that we are asked to look into a few times every year. Aside from the liability issues that it raises, it is one that we have never been able to justify from an Anti-Kickback and Patient Brokering perspective.  The fact is, even given the good intentions of most providers to allow their patients easier access to healthcare, transporting patients to and from your facility or practice is providing them with something of value in return for coming to see you.  However, under slightly different facts than we are usually asked to consider the question, last week, the Department of Health and Human Services Office of the Inspector General (“OIG”) came to a different conclusion.

The OIG issued an advisory opinion upon the request of a hospital system who had asked whether it could provide free transportation to persons who had limited access to public transportation to access the hospital’s facilities. The hospital system offered that the town had inadequate and infrequent public transportation services which would act as a barrier to healthcare for local residents.  The hospital system offered the following facts for consideration: Continue reading

Recent Governmental Enforcement and Regulatory Developments

Headshot - DDBy: Dave Davidson

The last few weeks have seen some significant examples of the federal government’s vigilance in policing the healthcare market.  These events serve as a reminder of the highly regulated and scrutinized industry in which we work.  They are also a reminder to physicians and other providers to make sure their practices and contractual arrangements can pass this scrutiny.

The most significant recent event is the $115 million settlement between the government and the Adventist Health System.  This settlement resolved two whistleblower cases brought against the system by three employees.  The lawsuits alleged that the Adventist Health System violated the Stark law, which generally prohibits payments to physicians for making referrals unless an exception to the law is met.  The specific allegations against the Adventist Health System were that the compensation paid by the health system to some of its employed physicians exceeded fair market value; that the structure of the practice of the employed physicians did not meet the “group practice” exception; that physician compensation improperly included payment work not performed by the physicians; and that the physicians were paid for making referrals to the system.  Continue reading