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 businesses are bought and sold every day! Though sophisticated people are fully aware of the risk difference between an entity sale and an asset sale, some do not understand the lingering nature of Medicare related liability.
When a legal entity (company, limited liability company, whatever) is bought, the liabilities of that entity are often assumed by the buyer. This is because buyers that purchase selling healthcare entities like the idea of keeping both term managed care agreements and the Medicare provider number intact. Keeping them intact can help ensure continual cash flow of the seller, but will also create Medicare liability to the buyer. Continue reading →
Many drug and alcohol treatment facilities see continuity of care and income opportunities in providing qualitative (and even quantitative) toxicology screening to make sure they know (1) what their residents/patients are taking, and (2) in what quantities. Facilities need to make sure they know that federal and state law will view them as a clinical lab, even when they are simply taking urine and using cups. CLIA will require they obtain “waived” status (since dipsticks are in that category). Facilities also need to examine whether state licensure (as a “Healthcare Clinic”) is also required. Chapter 400, Florida Statutes requires any entity to obtain a healthcare clinic license if (a) healthcare services are provided, and (b) claims for those services are submitted. Even though most facilities are out of network, most do submit claims to insurance carriers and hence implicate the state healthcare clinic license law (which is different from the CLIA law).
Beginning January 1, 2013, healthcare organizations owned by both chiropractors and M.D.s (or D.O.s) will have to obtain a Florida Health Care Clinic License (HCCL) in order to take care of patients whose care is compensated by PIP. These sort of “integrated practices” are clearly on the upswing, especially after the tough new PIP Clinic regulations were passed this year, which makes providing care to patients injured in motor vehicle accidents tricky. Continue reading →