The Florida Healthcare Law Firm Goes National

Followers & Friends – BIG Announcement coming out today! If you haven’t seen our new NATIONAL platform, check it out here at www.nationalhealthcarelawfirm.com and stay tuned for our #healthcare #legal news at 2pm EST !!!

Supreme Court upholds Obama health care law

Via @USAToday

The Supreme Court upheld President Obama’s health care law today in a splintered, complex opinion that gives Obama a major election-year victory.

Basically. the justices said that the individual mandate — the requirement that most Americans buy health insurance or pay a fine — is constitutional as a tax.

Chief Justice John Roberts — a conservative appointed by President George W. Bush — provided the key vote to preserve the landmark health care law, which figures to be a major issue in Obama’s re-election bid against Republican opponent Mitt Romney.

The government had argued that Congress had the authority to pass the individual mandate as part of its power to regulate interstate commerce; the court disagreed with that analysis, but preserved the mandate because the fine amounts to a tax that is within Congress’ constitutional taxing powers.

The announcement will have a major impact on the nation’s health care system, the actions of both federal and state governments, and the course of the November presidential and congressional elections.

A key question for the high court: The law’s individual mandate, the requirement that nearly all Americans buy health insurance, or pay a penalty.

Critics call the requirement an unconstitutional overreach by Congress and the Obama administration; supporters say it is necessary to finance the health care plan, and well within the government’s powers under the Commerce Clause of the U.S. Constitution.

While the individual mandate remained 18 months away from implementation, many other provisions already have gone into effect, such as free wellness exams for seniors and allowing children up to age 26 to remain on their parents’ health insurance policies. Some of those provisions are likely to be retained by some insurance companies.

Other impacts will sort themselves out, once the court rules:

— Health care millions of Americans will be affected – coverage for some, premiums for others. Doctors, hospitals, drug makers, insurers, and employers large and small all will feel the impact.

— States — some of which have moved ahead with the health care overhaul while others have held back — now have decisions to make. A deeply divided Congress could decide to re-enter the debate with legislation.

— The presidential race between Obama and Republican challenger Mitt Romney is sure to feel the repercussions. Obama’s health care law has proven to be slightly more unpopular than popular among Americans.

Full Story Here: http://content.usatoday.com/communities/theoval/post/2012/06/Supreme-Court-rules-on-Obama-health-care-plan-718037/1#.T-xqPhd5F9E

The Florida Healthcare Law Firm Announces National Expansion

(Delray Beach, FL) June 21st, 2012 – The Florida Healthcare Law Firm, one of Florida’s leading healthcare law firms, today announced a major increase in their legal practice capabilities with the official launch of the National Healthcare Law Firm, a d/b/a and new portal of the firm. The expansion to a national platform providing healthcare legal services to physicians and healthcare businesses is one that significantly increases resources for clients who lack qualified local healthcare counsel. While the Florida Healthcare Law Firm has for years assisted clients outside the state of Florida*, this new development further cements the firm’s commitment to providing ethical legal counsel in the healthcare industry.

“We are very excited about it. The fact that we serve clients all over the country has been a small secret for a while but we realized there’s a huge demand and decided to just go for it,” said Jeffrey L. Cohen, Esq. Founder and President of Florida Healthcare Law Firm.

According to Cohen, “It’s just a strange area of the law.  Nearly everything in healthcare business is regulated; leases, employment agreements, compensation.  Things you wouldn’t think are regulated are strongly regulated.  And there are large fines and criminal penalties for getting it wrong!  Our clients understand that healthcare business of any kind has serious legal risks and that they need uniquely qualified help.”

To request a service list or for any other firm information, call Autumn Piccolo at 888-455-7702 or visit the firm’s website at www.nationalhealthcarelawfirm.com or www.floridahealthcarelawfirm.com

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Acknowledged throughout the country for its service and excellence, Florida Healthcare Law Firm is one of the nation’s leading providers of healthcare legal services. Founded by Jeffrey L. Cohen, Esq and headquartered in South Florida, FHLF provides legal services to physicians and healthcare businesses with the right pricing responsiveness and ethics. From healthcare clinic regulation, home health agency representation and physician contracting to medical practice formation/representation and federal and state compliance matters, the Florida Healthcare Law Firm is committed to bringing knowledge and experience to a diverse group of clients.

OIG SLAMS COMPANY MODEL ANESTHESIA ARRANGEMENTS WITH SURGERY AND ENDO CENTERS

A long awaited opinion from the OIG on relationships between surgery, endoscopy (and other) centers (“Centers”) will doom many arrangements with anesthesiologists.  At the very least, they will have to significantly restructure.

Such “Company Model” arrangements basically involve a way for surgeon investors in Centers to share in the anesthesia services revenue.  These arrangements have always been suspect, but the OIG has been clear that they run afoul of applicable federal law.  In the June 1st OIG Opinion (12-06), two models were proposed, and both were essentially shot down.  The first involved requiring the anesthesiologists who provide services at the Center to engage a management company owned by surgeon owners of the Center to provide management services on a per patient fee basis.  The second, which is far more commonplace, involved establishing a company owned by the surgeons who also own the Center.  The new company would provide the anesthesia services and contract with the anesthesiologists in a way the leaves some of the anesthesia services income to be distributed to the surgeon in the Center, who also happen to generate all the cases for the Center, and hence all of the anesthesia revenue.

Such arrangements are not only “inherently suspect,” as described by the OIG, they have never made much common sense.  How is it not a kickback for the anesthesiologists to make 100% of the anesthesia related profit on Monday, but then have to “share” it with the surgeon owners on Tuesday, once a new management company or separate anesthesia services company (owned by the surgeons) is formed?

At the very least, surgeons looking for a share of anesthesia revenue will have to dig deep into the opinion and into prior opinions to see if there is any legitimate basis available.

Noncompete Case Underscores the Need for Right Wording

Noncompetition provisions are tricky.  Courts generally don’t like them; and the law is very particular about them.  Generally speaking, a noncompete is enforceable if it is well written and the employer has complied with the contract that contains it.  That said, since courts are not big fans of noncompetes and since the law is that a noncompete is to be strictly construed (against the party that drafted it), the devil is clearly in the details.  For instance, one court refused to uphold a noncompete when the wording was that it complied in the event the employment agreement was terminated, but in the case at hand the contract simply expired.  In other words, the contract said that it applied in the event the contract was terminated.  Since the contract simply ran out, the court refused to enforce the noncompete.

The same sort of thing has happened to a Florida veterinarian.  The employment agreement he signed prohibited the doctor from having anything to do with a competing business within a 35 mile radius, so the doctor located his practice outside that zone when the contract was terminated.  When the doctor provided services within the 35 mile zone, the employer sued…and lost.  Here’s why:  the contract did not prevent the doctor from practicing in the 35 mile zone.  It just prevented him from having anything to do with a competing business that practiced in that zone.  Tricky.

Husband and Wife Kickback Conviction Not Surprising

The convictions of a husband and wife were upheld on February 2nd by the Second Circuit Court of Appeals.  The couple was convicted of soliciting and receiving kickbacks, among other things.  They argued that, in fact, all they did was to recommend physicians refer patients to a certain imaging center.  Their argument was that the doctors used their own judgment in referring patients.  Audio and video records of their activities, however, supported the prosecution’s case that in fact the couple actually paid cash to referring physicians for referrals made by the doctors to the imaging center.  The couple will spend about two years in prison.  The court did not address the legal issue of whether or not commission based compensation arrangements for marketing services were permissible.

Noncompetes Are Once Again Relevant For Recruited Doctors

When the Stark II (Phase III) regulations were released in August, 2007, they clarified that when a hospital recruits a physician to a medical practice, the employment agreement between the medical practice and the newly recruited physician may contain practice restrictions as long as they do not “unreasonably restrict the recruited physician’s ability to practice medicine within the recruiting hospital’s service area. This stymied many medical practices which were reluctant to hire a new physician without a noncompete and nonsolicitation provision. A 2011 CMS Advisory Opinion (No. CMS-AO-2011-01) changed this.

The Advisory Opinion involved a pediatric orthopedist who was recruited by a hospital to a medical practice. The medical practice wanted to hire the new doctor, but was not willing to do so without a noncompetition provision and other restrictive covenants. The practice asked CMS for guidance because the Stark regs suggested that perhaps a noncompete could not be contained in the employment agreement of a physician recruited by a hospital to join a local medical practice. In fact, a prior version of the Stark regs was clear that noncompetes were not permitted in the employment agreements of physicians recruited by hospitals.

Hospital recruitment transactions involve bringing a physician into a new area and funding the start up period (usually a year). The nice thing for a medical practice is that the dollars given by the hospital to the practice (the difference between salary and benefits and collections) can run into the hundreds of thousands of dollars! The down side was that the medical practice could not tie the recruited physician’s hands with a noncompete or other similar restriction. The Advisory Opinion is, however, a game changer because it allowed the medical practice to impose a noncompete on the recruited physician.

As mentioned, the practice would not hire the recruited physician without the noncompete. The noncompete had a 25 mile radius, and the Opinion cited the following relevant facts:

1.The recruited doctor would remain on one of five hospitals within the 25 mile zone;
2.The recruiting hospital’s service area extended beyond the 25 mile zone, in which there were at least three other hospitals within a one hour driving range;
3.The noncompete complied with applicable state law.

Based on these facts, the OIG permitted a one year noncompete because it did not “unreasonably restrict the doctor’s ability to practice in the recruiting hospital’s service area. Certainly, many other medical practices can be sure to follow suit.

Physicians interested in nocompetes must be familiar with state law. Getting to the bone of the issue, noncompetes are enforceable in Florida if:

1.The geographic zone in the noncompete is reasonable. This depends on where the practice draws its patients. If patients come to the practice from just down the street, a ten mile radius is probably overbroad;

2.The duration is two years or less (though it can be longer in some limited circumstances);

3.The employer has complied with all of the terms of the employment agreement. If the employer has breached the contract that contains the noncompete, most courts will reject a claim to enforce it;

4.The employer does the type of thing that the departing employee does. If the employee is the only person performing toe surgery for instance, and the practice will not provide toe surgery services once the employee leaves, the practice probably does not have a legitimate business interest to protect by enforcing the noncompete; and

5.Stopping the ex employee from practicing in the geographic zone does not create a healthcare crisis or shortage. This is tough. Very few practice areas are in such dire straits that the departure of one doctor will adversely affect the provision of such services in the area.

Physicians should also be familiar with the practical aspects involved in noncompetes.

Mistake #1 – Racing to litigation

Going to court is a crap shoot. Once litigation begins, it takes on a life of its own and costs can be nuts, sometimes in the hundreds of thousands of dollars. You may think it’s a simple noncompete case. There rarely is such a thing. And if you sue someone on a noncompete breach, they may turn around and sue you in the same lawsuit for something. And….insurance does not cover any such claims. That means you are paying out of pocket for a lawsuit, the certainty of which can never be guaranteed and which will seem endless once you run out of patience or money for the process. Often, the reality is that noncompete litigation involves the strategy or seeing which party can outspend the other one.

If you are an employer, ask yourself the following two questions before commencing litigation:
1.Does it make good economic sense to enforce the noncompete? Is the former employee a business threat?

2.Is there a way to work out a deal with the employee, short of litigation?

In some situations, it makes no business sense to pursue a noncompete. For instance, if the employee has been employed for several months and if the patients are all referred by the employer, then the employee may not be a competitive threat to the employer. The employer will find a replacement doctor at some point and refer the business to the new doctor. Case closed.

It is also possible to work out settlements before going to court. For instance, you might avoid litigation by lowering the geographic zone or the duration. You might also negotiate a buy out of the noncompete.

If you are an employee who wants out of the noncompete, sit down with the employer and see if you can agree on a way out, so that both of you can have peace and move on.

Mistake #2 – Doing it Yourself

Noncompetes are governed by state law. There are both statutes and cases that inform lawyers about what types of noncompetes are enforceable and which are not. Do not work off of an old contract to create a new noncompete, since the laws (and the cases that construe them) change often. Do not use a friend’s noncompete, since you will not be able to tell if it will be enforceable at this time or under the circumstances that apply to you. The enforceability of noncompetes is extremely fact specific. Since noncompetes are strictly construed by courts, drafting them requires a trained eye.

The Advisory Opinion marks a significant development in the area of noncompetes for physicians recruited to medical practices by hospitals. Though some states do not allow noncompetes to be applied to physicians, many states do, including Florida. Finding a way to satisfy both the federal and state authorities will be essential for ensuring an effective and enforceable noncompete.


Fraud & Abuse Enforcement Soars Sky High

Investigations and successful prosecutions for violation of laws like the Anti Kickback Statute (“AKS”), the Stark Law and the False Claims Act were dramatically up in 2011 and are expected to climb still higher in 2012. For instance 13 doctors were charged in December, 2011 with violating the AKS by receiving payment for referring patients to an MRI center. Physicians and other healthcare business people MUST have any suspect arrangement closely scrutinized by highly qualified counsel. A “suspect arrangement” is any arrangement between providers of healthcare services that involve, to any degree, the exchange or payment of anything of value, including money. The AKS is a criminal statute; and the risks of enforcement are now huge.
Business and arrangements which are designed at all to lock in physician referrals carry particularly large risks and require close scrutiny. For instance, surgery centers that received referrals from non-owner physicians viewed that as a great thing. Now, referrals from unaffiliated physicians are viewed as inherently suspect. “What,” the regulator thinks, “is driving this referral? What wrongful conduct is being engaged in here?” This is especially so with any marketing arrangement as well.

Physicians and other healthcare business people would do well to recall that if even “one purpose” of the arrangement is to compensate (cash or anything of value) someone for a patient referral, the AKS is triggered. Moreover, where Safe Harbor Act compliance was recommended, many now find it necessary.


Supervisory Requirements for IDTFs

supervisionWe get questions all the time regarding the supervisory requirements for Independent Diagnostic Treatment Facilities (IDTF). Here are some tips in complying with one of the key elements in obtaining and maintaining status as an IDTF and as a Medicare provider.

An IDTF must have one or more supervising physicians who are responsible for the direct and ongoing oversight of the quality of the testing performed, the proper operation and calibration of equipment used to perform tests, and the qualifications of non-physician IDTF personnel who use the equipment. Not every supervising physician has to be responsible for all of these functions. One supervising physician could be responsible for operation and calibration of equipment, while other physicians are responsible for test supervision and the qualifications of non-physician personnel.Continue reading

The Secret About Large Practices

Change in health care delivery and business is driving tremendous integration activity in all sectors. Hospitals are merging. Medical practices are merging with competitors (typically in single specialties). Size and growth is becoming the magic pill in this era of change and fear. But it is not “necessary” and it is certainly not enough.

“The day of the onsies and twosies is coming to an end.” How many lawyers and other consultants have said this? For how many years? For a very long time. And yet, one and two person practices persist and even flourish! That said, there are clear opportunities available to those practices that embrace the concept of size:

1.Economies of scale. Stuff costs less when you buy more of it, and large practices buy more stuff;

2.Pricing power. To some extent, the larger group gets to muscle back against commercial payers. Though this depends on complex things like the scope of services and geographic availability, the clear truth seems to be that size is a factor in pricing;

3.New income opportunities. Sure. Larger groups have a greater opportunity to develop new income sources. Ancillary services, for instance, are volume driven, so the larger the group, the greater the opportunity.

So, what’s the secret about large practices? Size alone does not fix much. People selling size are selling their expertise and consulting services. They are not in the business of making businesses operational, so their fix is structure (size) alone. Put another way, as someone one said “To a carpenter, everything is a nail.”

There are three medical practices—One, Two and Three. They each have their own challenges, successes and cultures. Put them into one large practice, what do you have for certain? A large practice with a collection of challenges, successes and cultures. Where is it going? How will it get there? Who will run it? Will they fund development, growth, operations, evolution? If questions like this aren’t asked and answered, the only thing certain is that the new large group will simply mirror the challenges, successes and cultures of their component parts.

Size alone is no panacea! And the truth is always the same in business, even medical practice: without business leadership (expertise) and commitment (money) and hard work over time, no business can grow, thrive or evolve. But, as Jerry Seinfeld once said “Not that there’s anything wrong with that.”