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

AHCA Alert – File Now!

alert redIn a recent Alert, Florida’s Agency for Health Care Administration announced that Florida Medicaid is in the throes of updating its Provider General Handbook, and will soon require new enrollees to provide either a copy of their Health Care Clinic License or a Certificate of Exemption from the clinic licensure requirement.  Once Handbook changes have been adopted, Florida Medicaid will roll-out similar requirements for existing providers to produce either Licenses or Certificates of Exemptions.

Up until now there really has not been a compelling reason for an exempt provider to obtain a Certificate of Exemption.  We urge our clients to file for their Certificates of Exemption in an effort to avoid what is likely to be an onslaught at AHCA’s licensing bureau.”

The Stark Law Regulations: A Review

The Stark Regs (1) forbid doctors and their immediate family members from referring their patients to businesses they own which provide “designated health services,” and (2) contains a long list of permitted financial relationships between health care providers.  The list of what constitutes a “designated health service” (DHS) includes PT, rehab, diagnostic imaging, clinical lab, DME, and home health.  A “physician” means an M.D., D.O., chiropractor, podiatrist, optometrist or dentist.  An “immediate family member” is a husband or wife; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild.  In short, if you or your family member owns a DHS, don’t refer to it.  Unless of course your situation falls within one or more of the gazillion exceptions.

A few key changes from the third set of revisions (so called Stark III) which affect physicians are helpful to keep in mind.  For instance, the way fair market value of physician compensation is determined  in the Stark II regs has been simplified and now depends on an amorphous consideration of the transaction, its location and other factors.  The clear formulas contained in Stark II was dropped and this makes the need for an expert FMV study even more compelling. Continue reading

Medicaid Fingerprinting Requirements

via PBCMS medlink available at www.pbcms.org    

There has been some recent confusion about the new Medicaid requirement for providers to have their fingerprints done. AHCA recently distributed a memo on the requirement which states:

409.907 (8)(a), F.S., requires all initial or renewing provider applicants to Florida Medicaid to submit fingerprints for purposes of obtaining a criminal history record check unless they meet one of the exemptions as described in the statute.

All physicians do NOT need to go out and get their fingerprints done immediately. The ONLY physicians this applies to are those who are initially applying as a Medicaid provider or renewing their provider application. At that time, a provider will be required to submit his or her fingerprints with the application.