MSO & DSO Scrutiny On The Horizon

Prepared by: Carlos Arce, Esq.

The Office of Inspector General (“OIG”) and the Centers for Medicare & Medicaid Services (“CMS”) have been vocal and have put out opinions thorough out the years on their concerns surrounding management services organization (“MSO”) engaging in management services agreements (“MSA”) with provider groups. The concerns usually stem from the control over the physicians in the group which contracts with the MSO, and whether overutilization occurs as a result of an MSA engagement between a physician practice and an MSO. However, with the involvement of private equity and venture capital into the healthcare space, CMS and the OIG through the OIG’s reports have expressed concerns over these MSA engagements and whether these agreements fit into the Anti-Kickback Statute, Personal Services and Management Arrangement Safe Harbor.

Concerns surround control over the medical practice groups and lack thereof oversight over practice billing which results in federal payor reimbursement (“overbilling”), percentage-based compensation which disguises marketing success rates which are derived by volume and value of referrals generated through the marketing and advertising efforts, and the lack of culture over healthcare compliance. For years the OIG has enforced serious regulations and oversight over hospitals, and in the last few years over the insurance companies who service federal plans. The trend is now focusing on private equity, venture capital, crowd funding, and family office involvement in the healthcare space.

The OIG has made it very clear that the business involvement by these new players will require close adherence to the law and proper compliance practices. Compliance stems from the due diligence conducted in transactions which private equity, venture capital, crowd funding, family office backed MSO’s engage in. Purchasing a provider practice surrounded by false claims, anti-kickback violations, and stark violations are not something that the Buyer should place no importance over, this is the catalyst to the future business relationship.

Most private equity, venture capital, crowd funding, and family office engage large firms with multiple practice departments to assist them in these transactions, the merger and acquisition lawyers typically don’t have healthcare law backgrounds, and only if they spot an issue in the deal will they suggest brining on a healthcare lawyer to opine on the finds. This is the process where things get missed and ultimately the private banking company has now bought a lemon. Not knowing that something was a foul or ignorance of the fact is typically not a defense in healthcare law. As of late False Claims Act violations are on the rise and the OIG through the Department of Justice is dedicated to sniffing out these types of allegations in the private equity and venture capital space. Do you want to take your chances in a judicial forum, or would you rather know prior to entering the transaction, and prior to entering into the MSA?

Attorney Carlos H. Arce works with the Florida Healthcare Law Firm in Delray Beach, FL. He has deep experience with health law, business law, and mergers & acquisitions. Carlos has handled multi-million-dollar healthcare transactions and has served as out-of-house counsel to various small to large healthcare entities. He can be reached via email at [email protected] or by calling 561-455-7700.

State Farm Loses FDUPTA Claims Against Chiropractors

Prepared by: Carlos Arce, Esq.

Hot of the press. The jury spoke yesterday, November 8, 2023, in the pending litigation “State Farm Auto. Ins. Co. v. Michael Thomas Larocca, D.C., et al.”, Case Number 8:21-cv-2536-SCB-AEP, the 16 Defendants, which included Chiropractors, Medical Doctors, and Nurse Practitioners were held not guilty of committing fraud, civil conspiracy, unjust enrichment, and violating the Florida’s Unfair and Deceptive Trade Practices Act (FDUTPA). State Farm had filed a claim against the 16 defendants back in 2021, the allegations were the usual elements raised by Special Investigation Units (SIU), non-medically necessary procedures, and engaging in illegal patient brokering and kickback schemes based on the marketing activities performed by the chiropractic clinic.

For years the SIU has brought forth these sorts of allegations and audits against chiropractors, and providers engaged in the person injury space. Yesterday was a big win for those providers. With the passing of HB837 it has been difficult to understand the future of the personal injury protection space and the bodily injury space. Providers are fighting back and are challenging draconian measures passed down by the motor vehicle insurers.

This case shows how lack of compliance with Florida Patient Brokering Act, marketing practices, and referral relationships between providers allows for these payors to bring claims against a medical provider for Fraud, False Claims, and FDUPTA. The only way to fight back without having to do so in court, such as in the Laroccacase, is to meet compliance in your practice.

Another lesson that could be learned from this case is seeking skilled and knowledgeable counsel on these matters. Knowing the laws, the options, the risk and the landscape on how those laws are used are the cornerstone of the required legal representation when dealing with motor vehicle insurance SIU claims.

Many chiropractors and providers who are involved in the personal injury space are undergoing these investigations at this time and will continue to do so as long as motor vehicle accidents are around. Chiropractors and providers should have a few key elements in place when ensuring compliance, policies and procedures surrounding patient intake, billing and coding practices, proper employment and/or independent contractor agreements between the clinic and the providers performing the services, a functional electronic medical records platform, and proper documentation during patient encounters.

Attorney Carlos H. Arce works with the Florida Healthcare Law Firm in Delray Beach, FL. He has deep experience with health law, business law, and mergers & acquisitions. Carlos has handled multi-million-dollar healthcare transactions and has served as out-of-house counsel to various small to large healthcare entities. He can be reached via email at [email protected] or by calling 561-455-7700.

Relevance of Compounding, Reconstituting and Piggybacking in IV Therapy

Compounding

Compounding is the process of combining of two or more drugs. Practitioners in hospitals, clinics, and other health care facilities sometimes provide compounded drugs to patients when an FDA-approved drug is not medically appropriate to treat them.Importantly, compounded drugs have not been approved by the FDA. Quality requirements for compounded drugs differ depending on the setting where compounding occurs. Drugs compounded in outsourcing facilities are subject to current good manufacturing practice (CGMP) requirements. Drugs compounded by a licensed pharmacist in a state-licensed pharmacy, or federal facility, or by a physician, in accordance with the conditions of section 503A of the FD&C Act, are exempt from compliance with CGMP requirements. These facilities may be subject to less stringent quality standards set in state law or policy. Such standards may differ from state to state and therefore is crucial that practitioners understand what quality requirements are applicable to their practices that engage in compounding.

Reconstitution

Reconstitution is the process of adding a liquid diluent to a dry ingredient to make a specific concentration of liquid.In some cases, reconstitution is necessary because a medication doesn’t remain stable long enough to be distributed in solution form, so it comes from the manufacturer in a powdered or crystalized form and must be “reconstituted” with a liquid prior to being administered parenterally by injection. It is crucial to follow the reconstitution instructions from the manufacturer and to maintain a thorough understanding of who can engage in reconstitution and when it is legally appropriate in accordance with state and federal guidelines.

Piggybacking

An IV piggyback, also known as an IVPB or secondary infusion, is a method of administering medication through an intravenous (IV) line. It involves attaching a smaller bag of medication to the primary IV line and allowing it to infuse intermittently. The primary bag contains maintenance fluids or flush, while the secondary bag contains the medication that needs to be administered.

This method is commonly used when multiple medications need to be administered through the same IV line. The use of an IV piggyback can help reduce the risk of infection and minimize the number of needle sticks required for clients who require multiple medications. In other words, piggybacking allows medications to be administered without interruption of the primary IV fluids. When “piggybacking” it is important to ensure that this is done compliantly to avoid increased risk of contamination and infection, as well as negative adverse reactions.

Despite which of these methods are being employed by your practice, certain disclosures are legally required depending upon which practice(s) you may be engaging in. Considering the rapid growth within the IV therapy industry, compliance with administrative and regulatory federal and state law is more crucial than ever so that when governmental enforcement agencies have the opportunity to catch up with the industry, your healthcare businesses are protected from unforeseen enforcement and related fall out.

Are you Legit? Third Party Certification is Here and It’s Time to Comply

Written By: Chase Howard 

Just like anything in healthcare, the trend comes first and the regulation follows. In this case, online prescribers, pharmacies, and others, are now under the pressure of a certain third-party verification platform called LegitScript to get certified or risk losing access to vital aspects of their business. 

From LegitScript directly: LegitScript Healthcare Merchant Certification provides a recognized stamp of approval for businesses that facilitate transactions for pharmacies. Many banks, advertising programs, social media platforms, and e-commerce websites require certification from a recognized organization like LegitScript to support your merchant account. Our certification is recognized by Visa, Mastercard, Google, Microsoft Bing, Facebook, and TikTok.

Read that again. Does that apply to your healthcare business? Have you ever heard of the term LegitScript? Do you like operating smoothly and without interruption? It’s time to get certified and avoid the stonewall that will prevent your healthcare business from making another dollar. 

  • Who does thPharmacies including internet pharmacies, mail-order pharmacies, brick-andmortar pharmacies, local pharmacies with remote dispensing, internet veterinary pharmacies, and sterile compounding pharmacies.is apply to: 
  • Telemedicine and telehealth providers that facilitate prescribing.
  • Supply chain businesses including pharmaceutical manufacturers, wholesalers, and distributors.
  • Other healthcare merchants such as prescription eyeglass and contact lens merchants, price comparison websites/apps, and discount pharmacy websites/apps.

Without certification from a recognized entity like LegitScript, many banks, advertising programs, social media platforms, and e-commerce websites will terminate your accounts. Sometimes, without notice. If you think you can react once this happens, think again. The application and approval process can take months, if you do it right. 

Don’t wait. Let’s get you certified today before its too late.

Comparing Business Structures

Choosing the right business structure is a key decision for business owners, as it affects aspects ranging from liability to taxation to management. Each business structure has its own advantages, drawbacks, and legal implications. The focus of this article is to understand the differences between six common business structures: general partnership, limited partnership, limited liability partnership, limited liability limited partnership, limited liability company and corporation.

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Top 3 Ways Your Laboratory is Giving Away Free Testing Without Knowing It

Whether aclinical laboratory is a start-up or has been in business for years it is likely that giving away free testing is occurring without owners and operators even knowing it.Successful, established labs are even more susceptible, as high-volume claims can actually mask losses. However, over time, hundreds of thousands of dollars are at stake and any dip in claims volume can create an expedited path to an untimely demise. So what can be done?

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Here’s How Community Pharmacies Can Generate a Significant Increase in Revenue Through the 340(B) Program

The 340B Program, administered by Health Resources and Services Administration (“HRSA”), requires drug manufacturers participating in Medicaid to provide outpatient drugs to “covered entities” at significantly reduced prices. Generally, covered entities are facilities whose patients are from the most vulnerable populations, live in low-income households, are frequently uninsured and they include certain nonprofit hospitals and federal grantees/clinics. Some examples include but are not limited to federally qualified health centers (“FQHC”) or FQHC look-alikes, state-operated AIDS drug assistance programs, Ryan White Comprehensive AIDS Resources Emergency (CARE) Act clinics and programs, tuberculosis clinics, black lung clinics, Title X family planning clinics, sexually transmitted disease clinics, hemophilia treatment centers, urban Indian clinics and native Hawaiian health centers. 

Under the 340B program, covered entities can purchase outpatient medications from manufacturers at a discounted rate (between 20% to 50%) that is predetermined through an agreement between the manufacturer and the secretary of Health & Human Services. The covered entity will then administer or dispense discounted medications through entity-owned or contracted pharmacies. Said differently, independent pharmacies are able to contract with 340B-covered entities to dispense prescription medication to the covered entities’ qualified patients. Such a relationship provides a community pharmacy with the opportunity to provide real value to a patient seeking access to prescription medication while also adding an additional income stream to its existing business model. Covered Entities may establish agreements either through multiple contracts with individual pharmacies or through a single contract with a chain pharmacy that identifies the specific pharmacy locations that will support the Covered Entity’s 340B program. Based on the regulatory and legislative requirements necessary to minimize fraud and abuse within the program, contract pharmacies may be compensated at a higher dispensing rate to meet such standards and provide indigent care. In the above scenario, if the patient has insurance, the pharmacy will bill the insurance and receive reimbursement for the medication at standard rates. But because the medication was purchased at a discount, this results in an increased reimbursement amount, otherwise referred to as “340B savings”. 

The 340B program has had a great impact on access to HIV treatment and prevention services in the United States and stands to benefit many other vulnerable populations as well. If you operate a pharmacy and are interested in learning more about contracting with a covered entity in your community, please reach out to the Florida Healthcare Law Firm, we’d be happy to help.

Can Non-Physicians Engage in the Corporate Practice of Medicine in Florida?

Can Non-Physicians Engage in the Corporate Practice of Medicine in Florida?

The corporate practice of medicine (“CPOM”) is a legal doctrine that generally prohibitsunlicensed individuals and entities practicing in healthcare, including medicine, podiatry, dentistry, optometry, and chiropractic care. The CPOM prohibition aims to prevent unlicensed individuals or entities from influencing professional healthcare treatment decisions that heighten the risk of a provider dividing his or her loyalty between generating profits and administering quality care.

Florida is one of only a few states that do not specifically prohibit physicians from engaging in the practice of medicine through a corporate structure, with certain exceptions. For example, dentistry (Florida Statute §466.0285)and optometry (Florida Statute §463.014) practices still require those professionals to own the dental or optometry practice entirely, while Florida law does not prohibit the CPOM for physician practices. Notwithstanding the tools available for non-physicians to engage with the management and business aspects of a practice, such as a Management Services Organization, non-physicians still can have an ownership interest in a healthcare practice, subject to certain conditions.

The Corporate Practice of Medicine in Florida for Physician Practices.

In Florida, non-physicians can both own a medical practice on their own or jointly own a medical practice with other physicians.However, Florida requires entities with non-physician owners to register the practice as a health care clinic and a physician must be employed as a medical director to direct and supervise the clinical aspects of the practice.In other words, a physician may be employed by or contracted by non-physician owned entities for the delivery of healthcare services. For this arrangement, the non-physicians must not be engaged in the diagnosis and treatment of patients and cannot exercise any control over the physician’s professional judgment or the way he or she renders medical care to patients.

Florida’s Health Care Clinic Act requires health care clinics to obtain a license, unless an exemption applies.TheActmandates that facilities with non-physician owners to obtain a health care clinic license.

What Is a Clinic Under the Act?

Florida’s Health Care Clinic Act defines a “clinic” as “an entity where health care services are provided to individuals and which tenders charges for reimbursement for such services” (i.e., governmentpayors, such as Medicare and Medicaid, or private commercial insurance). The Act provides for exemptions that allow certain facilities to operate withoutobtaining a health care clinic license. If exempt,the Agency for Health Care Administration (“AHCA”)allows health care clinics to apply for a Certificate of Exemption.However, non-physicians with ownership interests in healthcare clinics do not fall under any exemption.

Healthcare providers must be careful to comply with the CPOM doctrine.While non-physicians may engage in the CPOM, it is important to ensure that the practice complies with the applicable laws and regulations. Violating the Health Care Clinic Act is a felony and could result in loss of license and repayment of all revenue for billed services, as well as other fines and penalties.

Does your practice store medical records via an electronic medical records platform?

“As of 2021, nearly 4 in 5 office-based physicians (78%) and nearly all non-federal acute care hospitals (96%) adopted a certified EHR. This marks substantial 10-year progress since 2011 when 28% of hospitals and 34% of physicians had adopted an [electronic medical records platform (“EMR”)]” says the Office of the National Coordinator for Health Information Technology. With a majority of the countries’ health care providers creating, accessing, storing, and transmitting personal health information (“PHI”) via the internet of things, the safety of our PHI is at the highest risk of nefarious use by hackers.

As of July 1, 2023, Florida Governor Ron Desantis signed into law Senate Bill 264.Although the majority of the bill outlines restrictions by foreign actors relating to real property; the end of the bill addresses changes to Florida Statute 408.051,“Florida Electronic Health Records Exchange Act”.

Section 408.051(3) has been amended to state as follows:

“SECURITY AND STORAGE OF PERSONAL MEDICAL INFORMATION. In addition to the requirements in 45 C.F.R. part 160 and subparts A and C of part 164, a health care provider that utilizes certified electronic health record technology must ensure that all patient information stored in an offsitephysical or virtual environment, including through a third-party or subcontracted computing facility or an entity providing cloud computing services, is physically maintained in the continental United States or its territories or Canada. This subsection applies to all qualified electronic health records that are stored using any technology that can allow information to be electronically retrieved, accessed, or transmitted”.

More likely than not your EMR platform is storing your data either on a physical server overseas or via the cloud which is controlled by a foreign country (not including Canada).If you are found not to be in compliance you could be at risk forcompensatory damages.

With this change there are many priority items that now must be taken into consideration if are to comply with the new law. Although it is unclear if a grace period will be offered, or what position the court will take towards these types of future lawsuits, one thing is for sure, PHI is one of the highest concerns of 2023 from a patient’s perspective.

We’ve seen shifts in PHI access, and the simplification of the medical records request procedure under the “21st Century Cures Act”, the federal and state governments are fixed on patient access and safety relating to their PHI.

I’ll leave you with a few questions: 1. Do you know if your EMR platform stores the information via the cloud or at a physical location? 2. When was the last time you updated your patient data privacy practices? 3. Did a healthcare lawyer prepare your policies and procedures relating to PHI? 4. Does your practice use a call center, and is that call center located within the United States, its territories, and/or Canada?

Statute of Limitations for Medical Malpractice In Florida

false claims act

Medical malpractice is a serious concern that can have far-reaching consequences for patients and medical professionals alike. In Florida, as in many other states, there are laws that govern the timeframe within which an individual can file a medical malpractice claim. This legal timeframe is known as the statute of limitations. Understanding the statute of limitations is crucial for patients who believe they have been victims of medical negligence, as it dictates when they can seek legal recourse. This article explores the statute of limitations for medical malpractice in Florida, providing a comprehensive overview of its significance and implications.

Definition of the Statute of Limitations

The statute of limitations refers to the specific period during which a plaintiff can file a medical malpractice lawsuit. In Florida, this timeframe is determined by law and aims to strike a balance between the rights of patients to seek compensation for damages caused by medical negligence and the need for certainty and finality in legal matters.

Statute of Limitations for Medical Malpractice in Florida

In Florida, the statute of limitations for medical malpractice cases is generally set at two years from the date when the patient discovered, or should have reasonably discovered, the injury caused by medical negligence. However, there is also a broader statute of repose, which states that medical malpractice claims cannot be filed more than four years after the alleged malpractice occurred, regardless of when the injury was discovered.

This means that patients who have experienced harm due to medical negligence have up to four years from the date of the incident to file a lawsuit, regardless of whether they were aware of the injury at the time. However, there are certain exceptions and nuances to these timeframes, which may warrant the assistance of a qualified attorney to ensure compliance with the law.

Exceptions to the Statute of Limitations

Florida law recognizes a few exceptions to the standard statute of limitations for medical malpractice cases. These exceptions may extend the filing deadline under specific circumstances:

Fraud or Misrepresentation: If the medical professional conceals or misrepresents the malpractice, the statute of limitations may be tolled until the patient discovers the deception.

Foreign Objects: In cases where a foreign object, such as a surgical tool, is left inside the patient’s body, the statute of limitations may be extended beyond the general timeframes.

Minors: If the injured party is a minor at the time of the malpractice, the statute of limitations may be tolled until they reach the age of 18.

Incapacity: If the plaintiff is mentally or physically incapacitated, the statute of limitations may be delayed until they regain capacity.

Significance and Implications

Understanding the statute of limitations for medical malpractice in Florida is essential for both patients and medical practitioners. For patients, it emphasizes the importance of timely action when seeking legal recourse for medical negligence. Failing to file a claim within the designated timeframe can result in the loss of their right to compensation, regardless of the severity of the negligence.

On the other hand, the statute of limitations also provides medical professionals with some level of certainty and protection from potential lawsuits long after the incident occurred. This encourages timely resolution of claims and helps maintain the integrity of medical practices.

The statute of limitations for medical malpractice in Florida plays a critical role in regulating the timeframe within which patients can seek legal redress for injuries caused by medical negligence. As a two-year discovery period with a four-year statute of repose, patients must act promptly if they suspect they have been victims of malpractice. Exceptions to these timeframes exist, but it is essential to seek legal counsel to navigate these complexities properly. For medical professionals, understanding the statute of limitations serves as a reminder to maintain the highest standards of care and mitigate the risk of potential lawsuits. Overall, the statute of limitations serves as a balance between the rights of patients and the need for legal certainty in medical malpractice cases in Florida.