Point of Care Test Cups Held to be a Prohibited Benefit to Physicians Who Could Not Otherwise Bill for Them

pee in a cupBy: Jackie Bain

When a physician cannot bill for test results, and a company offers to give that physician those test results for free, a Florida Federal Court has ruled that the company is offering the physician prohibited remuneration.  On May 5, 2014 the Middle District of Florida granted partial summary judgment on the latest motion in a contentious litigation between Ameritox Ltd. and Millennium Laboratories, Inc.  Ameritox and Millennium are competitors and clinical laboratories that screen urine specimens for the presence of drugs.

Millennium provided free point of care testing cups to physicians, who use the cups for initial testing and then return the cups back to Millennium for confirmation tests.  Physicians do not bill patients or insurance companies for the point of care tests. Continue reading

Medical Marijuana in Florida: One Big Pot Hole

pot hole article

By: Jeff Cohen

“Shoot, ready, aim” might be the right approach in many situations—like in war or when your kid runs into the street.  But the approach never makes much sense in the context of law making.  The best law making involves careful analysis, ensuring public protection and basically doing the best for the most (people).  The issue of medical marijuana seems, however, to be driven by self interest and seems lacking in balanced and serious concern for the public.  Reader caution:  this article isn’t intended to subliminally advertise this law firm.  It’s just venting, plain and simple.

On August 29, 2013, the Federal Department of Justice issued a memorandum stating it will continue to rely on state and local authorities to address marijuana activity through enforcement of state narcotics laws.  Nevertheless, in light of new state laws allowing for possession of a small amounts of marijuana and regulating production, processing and sale of marijuana, the Department designated eight criteria to guide state law enforcement.  States must (1) prevent the distribution of marijuana to minors; (2) prevent revenue from the sale of marijuana from flowing to criminal enterprises; (3) prevent the diversion of marijuana from states where it is legal to states where it is illegal; (4) prevent marijuana activity from being used as a cover for the trafficking of other illegal drugs; (5) prevent violence and the use of firearms in the cultivation and distribution of marijuana; (6) prevent drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; (7) prevent the growth of marijuana on public lands; and (8) prevent marijuana possession or use on federal property.  In the event that the Federal Government determines that States are not adhering to such criteria, the Federal Government reserves its right to challenge State laws.  The Feds didn’t say how any of that was to be done.  They simply said the states should do that.  But Florida has apparently been looking the other way. Continue reading

Physicians in the Middle of the Marijuana Battle

medical marijHow physicians became the gatekeepers between cannabis and the public and how physicians should approach cannabis as a form of treatment

By: Jacqueline Bain

The Federal Government lists marijuana as a “Schedule I” controlled substance, meaning it has a high potential for abuse and no currently accepted medical use.  21 USC § 812(b)(1).  Because there is no current accepted medical use, Federal law prohibits physician from issuing prescriptions for marijuana.  21 CFR § 1306.04(a).  However, the Federal Government has traditionally deferred to the States to prosecute small-scale marijuana violations.  This lack of Federal enforcement has encouraged the States to enact less stringent controls on the marijuana industry. Continue reading

Toxicology Labs Owned by Referral Sources – Is it Really so Wrong?

Notebook and lens concept

By: David Hirshfeld & Jeff Cohen

Lately we’ve noticed an uptick in criticism of toxicology labs that are owned by the substance abuse treatment programs and recovery residences that refer to them.  Sadly, this criticism seems to be coming from within the addiction and recovery industry itself.  In addition to being absolutely necessary for substance abuse treatment, toxicology screens have become a meaningful source of revenue that helps to fund treatment programs and scholarships for those who cannot afford to pay the full cost of treatment.  We cannot understand why the substance abuse treatment industry would want to help pull the rug out from under itself, but that seems to be what is occurring.  Under the current state of Florida law, toxicology labs can be owned by their referral sources without much risk if that arrangement is properly structured. Continue reading

Time to ReThink RePackaging Drugs

By: David Hirshfeld

Winston Churchill once commented that “Anyone can rat, but it takes a certain amount of ingenuity to re-rat.”  Well, this sentiment evidently applies to the re-packaging and re-labeling of prescription drugs here in Florida; and the legislature seems to have caught up with the ingenuity.

For years, workers’ compensation insurers have been complaining about the perceived increased cost of repackaged and relabeled drugs.  With CS/SB 662 Florida’s legislature seems to have answered the payors’ cries, and closed a loop-hole in workers’ compensation reimbursement with respect to repackaged and relabeled drugs. Continue reading

Discounted Fee Organizations Have Surprising Regulation

percentageThe idea of an organization which provides discounted fees to patients is not a new concept.  Organizations like independent physician associations (IPAs), even accountable care organizations (ACOs) and simpler discounted fee plans will be surprised to know that Florida may require them to be licensed by the  Office of Insurance Regulation (OIR), even though they do not handle pre payments and do not collect premiums.  That’s perhaps the most startling aspect of the regulations—there is no financial risk involved, and yet Florida law seems to require regulation.

Pursuant to Fla. Stat. 636.202(2), a “discounted medical plan organization” means an entity which, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount.  A “discount medical plan” means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount.  Fla. Stat. 636.202(1).  A discount medical plan does not include any product regulated under chapter 627, chapter 641, or part I of chapter 636 (governing Prepaid Limited Health Service Organization).  Fla. Stat. 636.202(1), which of course is no comfort to providers looking to garner or protect market share by discounting services or by creating a collection of discount services providers, which is typical of IPAs and “networks.”

Before doing business in Florida as a DMPO, an entity must be legally organized in a compliant way and must be licensed by the OIR as a discount medical plan organization or be licensed by the office pursuant to chapter 624 [Florida Insurance Code], part I of this chapter [Prepaid Limited Health Service Organization], or chapter 641 [HMO, Prepaid Health Clinic]. Fla. Stat. 636.204(1) emphasis added.  Each discount medical plan organization must at all times maintain a net worth of at least $150,000.

Providers looking to provide discounted fee arrangements in a simple and effective manner many be surprised to know how complex that endeavor in fact is.  Moreover, the discounts will likely (and ironically) have to be reduced in order to bear the state licensure and financial viability fees.  Go figure!

Florida Board of Medicine Says: Take a Pause

Via Florida Board of Medicine – – – The Florida Board of Medicine’s Surgical Care/Quality Assurance Committee has been reviewing Rule 64B8-9.007, Florida Administrative Code – Standards of Practice in an effort to reduce the number of wrong patient, wrong site and/or wrong procedure disciplinary cases. This rule outlines requirements for taking a pause prior to beginning surgery to ensure you have the right patient, the right site and are performing the right surgery as described in the Informed Consent signed by the patient. The Board continues to see disciplinary cases in which the required “pause” is performed but surgery is still performed on the wrong patient, wrong site or the wrong procedure is performed. The Committee met three times and heard public testimony. During that testimony, it was determined the definition of surgery also needed to be clarified. Changes to the rule include:

  • Physicians are required to confirm the patient’s identity, confirm the procedure being performed and confirm the correct surgical site with another healthcare practitioner
  • “Pause” must be performed again if the physician leaves the room at any time during the procedure or surgery
  • Clarification of the definition of surgery

These changes are effective January 29, 2013 and are underlined in the rule language below:

64B8-9.007 Standards of Practice.

The Board of Medicine interprets the standard of care requirement of Section 458.331(1)(t), F.S., and the delegation of duties restrictions of Section 458.331(1)(w), F.S., with regard to surgery as follows:

(1) The ultimate responsibility for diagnosing and treating medical and surgical problems is that of the licensed doctor of medicine or osteopathy who is to perform the procedure. In addition, it is the responsibility of the treating physician or an equivalently trained doctor of medicine or osteopathy or a physician practicing within a Board approved postgraduate training program to explain the procedure to and obtain the informed consent of the patient. It is not necessary, however, that the treating physician obtain or witness the signature of the patient on the written form evidencing informed consent.

(2) This rule is intended to prevent wrong site, wrong side, wrong patient and wrong surgeries/procedures by requiring the team to pause prior to the initiation of the surgery/procedure to confirm the side, site, patient identity, and surgery/procedure.

READ ON

 

Physicians & Facilities Frustrated in Upcharging Lab Fees

Licensed healthcare providers and facilities (including many drug and alcohol recovery businesses) who enter into arrangements with clinical labs to provide services to their patients and who then wish to charge more for those lab services will be very disappointed to learn about the restrictions under Florida law.

Section 456.054, Florida Statutes prohibits “kickbacks” and reads—

(1) As used in this section, the term “kickback” means a remuneration or payment, by or on behalf of a provider of health care services or items, to any person as an incentive or inducement to refer patients for past or future services or items, when the payment is not tax deductible as an ordinary and necessary expense.

(2) It is unlawful for any health care provider or any provider of health care services to offer, pay, solicit, or receive a kickback, directly or indirectly, overtly or covertly, in cash or in kind, for referring or soliciting patients.

(3) Violations of this section shall be considered patient brokering and shall be punishable as provided in s. 817.505.

The issue involved in a provider or facility charging more for lab services than they were charged by the lab itself is that the prohibition above applies to healthcare providers and “any provider of healthcare services.”  Regulators may find any reduced fee by the lab to constitute a kickback in exchange for a volume of patient referrals.

A related issue has to do with Florida insurance laws that pertain to charging more for an item or service than the provider or facility was charged.  For instance, if Lab 1 charges the provider/facility $10 for lab work, and the provider/facility charges an insurer $20, that can be found to constitute insurance fraud.

The key Florida prohibition, however, is found in the Florida Administrative Code, which reads—

59A-7.037 Rebates Prohibited – Penalties.

(1) No owner, director, administrator, physician, surgeon, consultant, employee, organization, agency, representative, or person either directly or indirectly, shall pay or receive any commission, bonus, kickback, rebate or gratuity or engage in any split fee arrangement in any form whatsoever for the referral of a patient. Any violation of Rule 59A-7.037, F.A.C., by a clinical laboratory or administrator, physician, surgeon, consultant, employee, organization, agency, representative, or person acting on behalf of the clinical laboratory will result in action by the agency under Section 483.221, F.S., up to and including revocation of the license of the clinical laboratory. In the case of any party or individual not licensed by the agency acting in violation of this Rule, a fine not exceeding $1,000 shall be levied and, as applicable, the agency shall recommend that disciplinary action be taken by the entity responsible for licensure of such party or individual.

(2) No licensed practitioner of the healing arts or licensed facility is permitted to add to the price charged by any laboratory except for a service or handling charge representing a cost actually incurred as an item of expense. However, the licensed practitioner or licensed facility is entitled to fair compensation for all professional services rendered. The amount of the service or handling charge, if any, shall be set forth clearly in the bill to the patient.

(3) Each licensed laboratory shall develop a fee schedule for laboratory services which shall be available to the patient, the authorized person requesting the test or agency upon request and shall be subject to subsection 59A-7.037(2), F.A.C.

In this era where healthcare providers and facilities are struggling to hold onto dwindling profit margins, it is understandable why some are considering arrangements with clinical labs.  Still, Florida providers and facilities have to be extremely cautious when entering into such arrangements.

 

Florida Board of Medicine Set to Tackle Telemedicine Issue

Florida laws that pertain to telemedicine are precious few.  In fact, there is really only one regulation dead on target, and that requires face to face physician contact with a patient in order to write a prescription.  The impact of the hormone replacement therapy (HRT) providers was pretty immediate, but the legal issues related to telemedicine are just not currently addressed in Florida law.  Does providing a telemedicine consult create a physician patient relationship?  What are the requirements related to the medical records arising out of the consult, and who owns the records?  These issues and many more are simply not handled.  And yet, if it is true that telemedicine will be an important tool in the effort to both broaden the availability of care while reducing associated costs, we can be sure that Florida law will evolve on these issues. Continue reading

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.