U.S. DISTRICT COURT RULING STRENGTHENS STATE STARK LAW

false claims act

Most readers know that the federal Stark Law deals primarily with matters involving physician self referral. The state equivalent, the Florida Patient Self Referral Act of 1992, has provisions that are even tougher than the Stark law. For instance, the Stark law allows some physicians to refer to renal dialysis centers in which they have an ownership interest, but the Florida law does not. Fresenius, a provider of renal dialysis services, filed suit seeking a declaration that the federal law (and not the state law) should control on the issue. Since there are several key areas where state law is more stringent than federal law (e.g. supervision requirements and ownership of entities that don’t provide “designated health services”), many eyes were on the court. Instead of giving Fresenius a pass and saying “Florida can’t make it tougher than what the federal law says,” the court stated that the federal laws do not preempt (supplant) the state ones.

Since the Stark Law does not preempt the state law and since the state law does not violate the U.S. Constitution, business people and professionals will have to make sure that both layers of compliance (state and federal) and solidly in place.


11th Circuit Court Lends a Hand to Florida Tort Reform

A recent decision out of the 11th Circuit Court of Appeals will help Florida’s tort reform efforts. As part of broad tort reform measures, the Florida Legislature implemented a $1 Million cap on noneconomic damages (e.g. pain and suffering damages). Florida has had a hard road in implementing tort reform measures, which often fall under Florida Supreme Court analysis; and many insiders wondered if the 11th Circuit Court in Atlanta would strike Florida’s cap. Nope!

The case involved the death of a woman following childbirth. The District Court determined her death was caused by the negligence of her medical team, the members of which were U.S. military employees. The plaintiffs were awarded $2 Million in noneconomic damages, but the court reduced it to comply with the $1 Million noneconomic damage cap. On appeal to the 11th Circuit, the plaintiffs argued that the cap violated the state’s equal protection clause; but the court rejected the argument.

Since, however, the court did not address other aspects of the plaintiff’s state constitutional challenge (right of access clause, right to jury trial clause and separation of powers clause), the matter was sent to the Florida Supreme Court for final resolution. The state Supreme Court may take up the case; and if it does, it’ll be important to watch.