Many business people involved in some aspect of the recovery business world (e.g. IOPs, PHPs, Detox) are not aware of the punishing laws that apply to their marketing arrangements. Simply paying someone a commission based sales compensation without fully appreciate the applicable laws is dangerous and costly.
The drug and alcohol rehab business is especially abundant in South Florida, yet few entrepreneurs are aware of the many laws that apply. The recovery business is a highly regulated one, with great intricacy in terms of the options and also the applicable laws.
Substance abuse services in Florida are broadly regulated by Chapter 397, Florida Statutes. The applicable regulations, however, drill down with remarkable granularity. For instance—
The broadly crafted Client Rights listed in Section 397.501, like the ones applied to nursing home residents, are very open ended (requiring things like the “Right to Individual Dignity”) and yet create the basis of a lawsuit! That said, people acting “in good faith, and without negligence” can rest assured they will not be found liable.
Though some may intuitively understand the specificity and seriousness of the regulations dealing with medical detox, residential treatment and Partial Hospitalization Programs (PHPs), including the staffing, service and supervision requirements, it may not be as readily apparent with the lower intensity of service options, like Intensive Outpatient Programs (IOPs).
Even PHP requirements can, however, be confusing. For instance, it is well known that PHPs are not for people who require 24/7 residential treatment. They stand somewhere between residential inpatient and intensive outpatient programs. What is less known is that the staffing requirements are particularly detailed. For instance, each PHP has to have a paid, awake employee on premises at all times when even one client is on the premises and also must have a paid employee on call when clients are at the community housing location.
Intensive inpatient programs are required to provide detailed services, to include 14 hours of counseling each week and 20 hours of “other structured activities.” Like IOPs, staff coverage is very specific. Nursing coverage must be available 24/7. More specifically, an RN must supervise all nursing staff and an RN or LPN has to be physically present on site. Finally, a physician has to be on call 24/7.
Outpatient programs have similarly detailed requirements, including the minimum counseling requirements and staffing client ratios. Intensive Outpatient Programs (IOPs) of course have far greater service requirements (at least nine hours of services each week) and yet share the same staffing ratio as regular outpatient (50 clients per counselor).
One of the more vexing issues the recovery industry faces deals with marketing. The industry is flush with commission based marketing professionals, and yet there are very detailed state and federal regulations that threaten that practice. At the federal level, the Anti Kickback Statute, a criminal statute that criminalizes remuneration for patient referral, threatens these percentage based arrangements. State laws also strike them hard. For instance, the Florida Patient Brokering Act (PBA) is a criminal statute with serious consequences for violations. While the PBA does have an exception for federal law compliance, many entrepreneurs may find themselves hard pressed to comply.
Though the term “recovery business” may seem like an oxymoron to some, it is an area of significant business opportunity that many have dug into. Knowing the regulatory minefields of the industry is, however, an important step forward in both a successful business and a stable platform of care.