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

The Patient Brokering Act and Addiction Treatment

anti kickbackBy: Jeff CohenFlorida Board Certified Healthcare Lawyer 

Followers of the addiction treatment industry should be on high alert after the arrest of Christopher Hutson of Whole Life Recovery.  The arrest marks the first arrest of any industry provider utilizing the state Patient Brokering Act (PBA).  Relying solely on the allegations, the arrest is based on a business relationship between the provider and sober homes.  Discussion in the “case management agreement” referred to in the arrest affidavit circles around some key allegations that include or imply (1) payment for patient referral, and (2) services by sober homes paid for by Whole Life which were not actually performed.

Serious industry providers absolutely MUST be well educated by lawyers who have years’ experience dealing daily with issues that include the federal Anti-Kickback Statute (and safe harbors), the bona fide employee exception to the AKS, the PBA and how insurers and regulators (inside Florida and outside Florida) interpret and apply such laws.  Any contract (like the sort of agreement referred to in the arrest warrant affidavit) that isn’t preceded by careful client education about the laws, the options and risks of each option is just reckless.  Clients who are well educated will understand things like— Continue reading

Marketing in Healthcare: It Ain’t What It Used to Be

By: Jeff Cohen

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 key here is to realize that, while the laws haven’t changed, what regulators are doing with them has!  The environment of healthcare marketing has never been more treacherous than it is today.  So what’s changed?  How about:

  1. Commission based marketing and sales involving federal or state payers, even those that arguably comply with the personal services arrangement and management contract safe harbor, are detested by federal regulators;
  2. The regulators will look to pierce any enterprise, including those consisting of multiple tax ID entities, in hopes of making the case that commercial based marketing payments were in exchange for even one drop of federal/state payer money;
  3. Both health insurers and large providers (e.g. labs, pharmacies) work hand in hand with federal regulators to pursue suspicious activity, the result of which is to support the large provider; and
  4. Targets of enforcement activity who have obtained good legal advice often pay just to put an end to the enforcement because there’s a risk of losing and “winning” can feel like losing when one considers the enormous defense costs.

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

Addiction Treatment Attack by Payers Grows

money viseBy: Jeff Cohen

Addiction treatment providers continue to react to an assault by payers to run them “out of town.”  The first round of attacks (in the Fall of 2014) focused on the practice of copay and deductible write offs.  The phrase cooked up by lawyers for Cigna, “fee forgiveness,” wound its way into the courts system in Texas in a case (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division) against a surgery center, where Cigna argued that the practice of a physician owned hospital in waiving “patient responsibility” relieved the insurer from paying ANYTHING for services needed by patients and provided to them.  Though the case did not involve addiction treatment providers, it gave addiction treatment lawyers a look into what was going to come.  The same argument made in the Texas case was the initial attack by Cigna in a broad attack of the addiction treatment industry, especially in Florida.

As addiction treatment providers fielded Cigna’s “fee forgiveness” attack in the context of “audits,” providers held firm to the belief that justice would prevail and that they would soon restore a growing need for cash flow.  “If we just show them that we’re doing the right thing,” providers thought, “surely they will loosen up the purse strings.”  After all, this was a patient population in terrific need of help, with certain [untested] protection by federal law (the Mental Health Parity Act). 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

A Legal Look at The Healthcare Landscape in 2016

By: Jeff Cohen

MACRA 

The Medicare Access and CHIP Reauthorization Act was enacted to replace the flawed sustainable growth rate (SGR).  MACRA contains performance measures for new payment models that will go in place in 2017.  MACRA also established the Merit-Based Incentive Payment System (MIPS).

Physicians have to begin to learn about MACRA to improve performance and to avoid payment penalties.

We also have the Physician Quality Reporting System (PQRS), which penalizes providers for failing to report quality measures data on Part B services.  To avoid a 2018 PQRS payment adjustment, for instance, providers have to report for a 12 month period.

There is also the Value Based Payment Modifier (VM) program that rewards groups for providing high quality, low cost care.  It’s interesting to note that CMS proposes to publically report those providers who receive an upward adjustment.  It’s being waived for Pioneer ACOs.  It’s interesting to note that the measures used for the VM program are different than those used for ACOs; and this is causing a lot of confusion.

Bottom line:  an increased use of benchmark establishment for quality and cost and financial incentive programs to achieve or surpass those benchmarks.

STARK LAW CHANGES

A new compensation arrangement exception is established for timeshare arrangements for the use of office space, equipment, personnel, items, supplies and other services.  This sort of “overhead sharing” arrangement is done, but there hasn’t been a specific Stark provision for it till this year.  It’s expected to be particularly useful in physician/hospital arrangements.

This exception amplifies the existing requirements that such arrangements must (1) be located where the physician or practice sees its patients, and (2) be used for designated health services that are incidental to what the doctor does, meaning E&M services and DHS that are provided at the time of such E&M services. Continue reading