The Patient Brokering Act and Addiction Treatment

anti kickbackBy: 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

The Move to Self-Reporting Continues: Self-Referral Disclosure Protocol

health law complianceBy: James Saling

The Center for Medicare and Medicaid Services (CMS) issued proposed Self-Referral Disclosure Protocol (SRDP) forms and revisions to the regulations on May 6, 2016. This was an additional step in the move for providers to self-report violations of the Stark Law.  Part of the revisions to the regulations came as a result of the final overpayment rule issued earlier this year on February 11, 2016 (60 Day Rule). CMS expects that the SRDP forms will facilitate faster review of a self-disclosure and make it easier for providers to report violations.

The SRDP was established as a result of the Affordable Care Act and is a tool for resolving Stark Law compliance issues. One of the problems with the SRDP is the time that self-disclosures worked their way through the system.  Some self-disclosures have yet to be resolved and were initially made years ago.Continue reading

Fee Splitting: Clearing Up the Confusion

anti kickbackHealthcare 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 OIG Addresses Free Patient Transportation Issues

vanBy: Jacqueline Bain

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

The Anti Kickback Statute: What Constitutes a “Referral”?

healthcare fraud

anti kickbackBy: Jackie Bain

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

New OIG Advisory Opinion Frowns on Proposed Lab/Physician Arrangement

OIG crestMarch 25, 2015 Advisory Opinion No. 15-04 addresses a proposed arrangement involving a clinical/anatomic lab’s desire to position itself as the single lab recommended by practices.

The proposal arises in the context of the OIG Advisory Opinion process, which allows the OIG to opine on its view of how the federal anti-kickback statute might view a proposed arrangement.  Though Advisory Opinions are not “law,” they do provide good insight into prosecutorial intent.

Facts Presented

The clinical/anatomic lab (“Lab”) wanted to have agreements with physician practices to provide all their lab services.  To deal with the fact that some commercial insurers have exclusive arrangements with labs,  the Lab proposed that if a practice patient’s insurer required the patient to use another lab, the Lab would waive all fees for the affected practice patients and would not bill the patient, the medical practice or the patient.  The Lab would provide its services to these “exclusive patients” for free, while billing all other patients (and/or their insurers, including governmental payers) its fee scheduled or contracted rates.  The proposed arrangement would allegedly simplify things for the practices and keep lab results uniform.  A practice patient would be required to use the Lab.  The Lab’s services would simply be offered by the practices to their patients.  The Lab stated that the provision of free services to certain practice patients would not provide any financial benefit to the practices, although the lab would provide the practice a limited-use interface.  Samples would not be drawn in physician offices.Continue reading

Breaking Down Legal Buzzwords: Fair Market Value & Commercial Reasonableness

book-stacks-colorful.jpgBy: Jackie Bain

Federal fraud and abuse laws often require that arrangements between health care providers are “fair market value” and “commercially reasonable.” And while these terms look like legalese and are easy to overlook, in fact, they are important. For example, the Federal Stark law requires strict compliance with its terms. A physician may enter into a prohibited arrangement with the intention that it falls within an exception to the law. If, however, the arrangement is not fair market value, the physician’s arrangement would violate the law, subject the physician to fines and risk the physician’s ability to participate in Medicare. Continue reading

Recovery Business Industry Forced to Grow Up Fast

bcbs lawsuitBy: Jeff Cohen

When Horizon Blue Cross/Blue Shield of New Jersey blasted Avee Laboratories in connection with a variety of business practices, some of which included kickback violations (in connection with the provision of POCT cups), businesses in the drug and alcohol recovery space took notice.  With the recent FBI raid on a Palm Beach County sober house and the amped up attention of managed care payers to clinical lab testing, the industry is reeling!  The good news, however, is that these recent developments, along with increased payor scrutiny (and payment denial!), is a call to compliance that has long seemed inapplicable to an industry that has been able for many years to operate with simplicity not found in other segments of the healthcare business community.  Where facilities once viewed DCF as the only regulatory parent they had to please, they are now learning there is a far greater degree of regulatory complexity to be considered; and they are rushing towards compliance.Continue reading

Point of Care Test Cups Held to be a Prohibited Benefit to Physicians Who Could Not Otherwise Bill for Them

pee in a cupBy: Jackie Bain

When a physician cannot bill for test results, and a company offers to give that physician those test results for free, a Florida Federal Court has ruled that the company is offering the physician prohibited remuneration.  On May 5, 2014 the Middle District of Florida granted partial summary judgment on the latest motion in a contentious litigation between Ameritox Ltd. and Millennium Laboratories, Inc.  Ameritox and Millennium are competitors and clinical laboratories that screen urine specimens for the presence of drugs.

Millennium provided free point of care testing cups to physicians, who use the cups for initial testing and then return the cups back to Millennium for confirmation tests.  Physicians do not bill patients or insurance companies for the point of care tests.Continue reading

When is Marketing An Illegal Kickback?

kickbackHealthcare 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 federal Anti Kickback Statute (“AKS”) is a criminal law that arises in the context of individuals and entities that pay or receive anything of value in exchange for referring a patient whose care is compensated in any way by a state or federal healthcare program.  Violations of the statute are punishable by a maximum fine of $25,000 and/or imprisonment up to five years.  Federal courts have applied the statute to any arrangement where even one purpose of the arrangement was to obtain money for the referral of services or an attempt to induce additional referrals. Its exceptions (“Safe Harbors”) include permissible arrangements for independent contractors and employees, both of which are elusive because of the common requirement that the arrangement not vary based on the value or volume of business between the parties.  The “value or volume” aspect of the regulations flies in the face of percentage based compensation arrangements (which seem to be the rule in marketing relationships).Continue reading