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.
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 →
By: Jeff Cohen, Florida 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 →
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:
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;
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;
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
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.
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 →
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.
Healthcare 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 →
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 →
Providers of healthcare items or services are well-served to take note: a Federal Court of Appeals has recently held that “the Anti-Kickback Statute prohibits a doctor from receiving kickbacks that are made in return for a referral. It does not require that the referral be made in return for a kickback.” Thus, receiving any unauthorized payment from a health care provider to whom you send patients is a very bad idea.
The Federal Anti-Kickback Statute, 42 USCS § 1320a-7b(b) states, in pertinent part, that a person may not knowingly or willfully solicit or receive any remuneration directly or indirectly, overtly or covertly, in cash or in kind, in return for referring an individual for the furnishing of a healthcare item or service that is payable in whole or in part by a Federal healthcare program. In laymen’s terms, a person cannot pay or receive anything of value in return for furnishing a Medicare patient to receive a healthcare item or service. (Note, however, that the law does set forth examples of permissible payments, or “safe harbors,” but we won’t address those in this article.) Continue reading →
Across the healthcare industry, providers and healthcare businesses are consistently faced with the decision of whether to employ or contract with their workers. Whether it’s a physician working with a group practice, or a marketer on behalf of a healthcare service, correctly structuring relationships between healthcare businesses and their workers is important. For tax reasons, many workers strongly prefer to enter into independent contractor relationships. However, simply calling oneself an independent contractor is not enough to solidify the relationship. Many times, workers who call themselves independent contractors are actually employees in the minds of the government. And sometimes, so-called “employees” with several part-time positions are actually viewed as independent contractors.
On July 15, 2015 the Administrator of the Department of Labor’s Wage and Hour Division (WHD) provided additional guidance regarding the application of the standards for determining who is an employee under the Fair Labor Standards Act (FLSA). The goal of the guidance is to help the regulated community in classifying workers and decreasing misclassification. The Administrator’s Interpretation reviews the pertinent FLSA definitions and the breadth of employment relationships covered by the FLSA. The Administrator’s Interpretation then addresses each of the factors of the “economic realities test”.
According to the Administrator, when determining whether a worker is an employee or independent contractor, the application of the economic realities factors should be guided by the FLSA’s statutory directive that the scope of the employment is very broad. The FLSA’s definitions establish the scope of the employment relationship under the Act and provide the basis for distinguishing between employees and independent contractor.
The Supreme Court and Circuit Court of Appeals have developed a multi-factorial “economic realities” test to make the determination whether a worker is an employee or an independent contractor under the FLSA. The test focuses on whether the worker is economically dependent on the employer or in business for him or herself. The factors include: Continue reading →
The HHS Office of Inspector General in a fraud alert released 6-9-15 is telling physicians to be cautious about entering into payment agreements that could violate the Anti-Kickback statute. In the alert, OIG tells physicians entering into such payment arrangements that their compensation must reflect the services’ market values. Further, OIG notes that such an arrangement could violate the Anti-kickback Statute if it seeks to increase the number of referrals the organization receives from those physicians.