When Horizon Blue Cross/Blue Shield of New Jersey blasted Avee Laboratories in connection with a variety of business practices, some of which included kickback violations (in connection with the provision of POCT cups), businesses in the drug and alcohol recovery space took notice. With the recent FBI raid on a Palm Beach County sober house and the amped up attention of managed care payers to clinical lab testing, the industry is reeling! The good news, however, is that these recent developments, along with increased payor scrutiny (and payment denial!), is a call to compliance that has long seemed inapplicable to an industry that has been able for many years to operate with simplicity not found in other segments of the healthcare business community. Where facilities once viewed DCF as the only regulatory parent they had to please, they are now learning there is a far greater degree of regulatory complexity to be considered; and they are rushing towards compliance. Continue reading →
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 →
Healthcare professionals and businesses are routinely barraged with people who claim to be able to generate business for them. The business of healthcare is like none other in its abhorrence of anything that even smells like payment for patient referrals, so professionals and businesses alike have to be extremely cautious and well advised in crafting marketing and related business-enhancing relationships.
The federal Anti Kickback Statute (“AKS”) is a criminal law that arises in the context of individuals and entities that pay or receive anything of value in exchange for referring a patient whose care is compensated in any way by a state or federal healthcare program. Violations of the statute are punishable by a maximum fine of $25,000 and/or imprisonment up to five years. Federal courts have applied the statute to any arrangement where even one purpose of the arrangement was to obtain money for the referral of services or an attempt to induce additional referrals. Its exceptions (“Safe Harbors”) include permissible arrangements for independent contractors and employees, both of which are elusive because of the common requirement that the arrangement not vary based on the value or volume of business between the parties. The “value or volume” aspect of the regulations flies in the face of percentage based compensation arrangements (which seem to be the rule in marketing relationships). Continue reading →
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 →
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 →
Florida physicians are being approached to become owners of pharmacies to which they may refer, often compounding pharmacies, but may be unaware of the regulatory issues involved. Physicians need to be aware of the core laws that apply, which include the Florida Patient Self Referral Act (FPSRA), the Florida Anti Kickback Statute, the Patient Brokering Act and the Federal Investment Interest Safe Harbor. Continue reading →
On February 20, 2014, the Office of the Inspector General posted Advisory Opinion 14-02. The Advisory Opinion reviews the following scenario for compliance with the Federal Anti-Kickback Statute, 42 USC § 1320a-7b. Under the proposed scenario, a Medigap insurance provider participates with a preferred provider organization (“PPO”) which contracts with hospitals (“Network Hospitals”). The Network Hospitals discount Medigap policy-holders’ inpatient deductibles up to 100%. In exchange for each discount, the Medigap plan pays an administrative fee to the PPO. The Medigap plan also pays a portion of the discounted savings directly to the policy-holder who stayed at the Network Hospital. Continue reading →