If your hospital, clinic or physician group pays anyone for patient referrals, or receives payment for sending patients elsewhere, Florida law may treat that arrangement as a felony. The Florida Patient Brokering Act, codified at section 817.505 of the Florida Statutes, is one of the state’s most aggressively enforced healthcare fraud laws, and it reaches well beyond the situations most providers expect.
This article explains what the Act prohibits, who is exposed, where legitimate-looking arrangements go wrong, and what healthcare businesses should do to protect themselves.
Key Takeaways
- Section 817.505 applies to any person, not just licensed providers, and to payors of every kind.
- Both paying for and receiving payment for referrals can be a felony.
- Penalties rise with patient count: third-degree felony and a $50,000 fine, up to a first-degree felony and a $500,000 fine at 20 or more patients.
- Percentage-based or per-patient compensation to marketers is among the highest-risk structures.
- The statute’s exceptions are narrow, so fixed fair-market-value pay for documented services is the safest footing.
What Is the Florida Patient Brokering Act?
The Patient Brokering Act makes it unlawful to offer, pay, solicit or receive a commission, bonus, rebate, kickback or bribe, directly or indirectly, in cash or in kind, to induce the referral of patients to or from a health care provider or facility. It also prohibits split-fee arrangements, and separately bars soliciting or receiving payment in return for the acceptance or acknowledgment of treatment. Anyone who aids, abets or advises others in this conduct is covered too.
Two features make the statute especially significant for healthcare businesses:
- It is an all-payor statute. Unlike the federal Anti-Kickback Statute, which centers on federal healthcare programs such as Medicare and Medicaid, Florida’s Act can apply even when the patient has commercial insurance or pays privately.
- It is criminal. A violation is a felony, and the conduct can also trigger licensing discipline, civil exposure and payor recoupment actions.
Who Is at Risk?
Because the statute covers both sides of a referral payment, liability can attach to the person paying and the person receiving. Businesses commonly exposed include:
- Hospitals and health systems
- Physician practices and specialty groups
- Behavioral health, addiction treatment and recovery providers
- Diagnostic imaging, laboratory and ambulatory surgery centers
- Urgent care and other clinic operators
- Management services organizations and healthcare marketing companies
- Owners, executives and individual clinicians
The statute expressly reaches officers, partners, agents and attorneys of a business, so individuals can be prosecuted personally, not just the entity.
Who Counts as a Health Care Provider or Facility?
The statute defines the term broadly. It covers anyone licensed, certified or registered with the Agency for Health Care Administration or the Department of Health, anyone required to be licensed or registered, and anyone lawfully exempt from licensure. It also reaches Medicaid contracted providers, county health departments, community providers contracting with the Department of Children and Families for alcohol, drug abuse or mental health services, substance abuse providers licensed under Chapter 397, and federally supported community health centers.
The prohibition itself applies to “any person,” so marketers, consultants and other non-licensed intermediaries are exposed even when they are not providers themselves.
Common Arrangements That Create Patient Brokering Risk
Most enforcement does not involve envelopes of cash. It involves business arrangements that look routine on paper.
1. Percentage-Based or Per-Patient Marketing Fees
Paying a marketer a percentage of revenue or a fee per admitted patient or per referral is among the highest-risk structures. Compensation tied to the volume or value of patients delivered invites scrutiny.
2. Free or Discounted Services to Referral Sources
Providing staff, office space, equipment, meals, lab services or other items of value to a referring practice can be treated as remuneration “in kind.”
3. Payments to Case Managers, Discharge Planners and Intermediaries
Gifts, bonuses or fees paid to those who influence where a patient goes can create exposure for the payer and the recipient.
4. Above- or Below-Market Leases and Service Agreements
Medical director agreements, space leases and consulting contracts that do not reflect fair market value or real services can be recharacterized as disguised referral payments.
5. Patient Inducements
Waiving copays, providing free transportation or housing, or offering gift incentives to attract patients can implicate both the Patient Brokering Act and related federal and state rules.
6. Lead Generation and Call-Center Arrangements
Paying vendors for patient leads or calls requires careful structuring, especially where the vendor steers patients to particular providers.
Is one of your arrangements on this list? A short review before you sign or renew can prevent a criminal exposure problem later. Call (561) 455-7700 or request a complimentary consultation.
Arrangement Risk at a Glance
| Arrangement | Why it draws scrutiny | Safer approach |
|---|---|---|
| Percentage or per-patient marketing fee | Pay moves with the number of patients delivered | Fixed fee at fair market value for defined, documented services |
| Free staff, space or meals for referral sources | Items of value can be remuneration in kind | Written agreement, fair market value, documented business purpose |
| Medical director or consulting agreement | Can be recharacterized if no real services are performed | Defined duties, time records, fair market value pay |
| Lease with a referral source | Above- or below-market rent can disguise a payment | Independent fair market value appraisal |
| Copay waivers, free transportation or gifts to patients | Can be seen as inducing patronage | Review under Florida and federal law before offering |
| Lead generation or call-center vendor | Paying for patients steered to particular providers | Flat fees, no steering, reviewed scripts and contracts |
This table is a screening tool, not legal advice. Whether a specific arrangement is lawful depends on its facts and on the statute’s exceptions.
Warning Signs in a Proposed Deal
- Compensation that changes with admissions, visits or revenue
- A vendor who promises a guaranteed volume of patients
- Payments described as “consulting” with no deliverables
- Pressure to sign quickly or keep the terms off paper
- Different rates offered to different referral sources for the same service
If you see any of these, pause and have counsel review the arrangement before you sign.
Penalties and Collateral Consequences
Penalties under section 817.505(4) scale with the number of patients involved, and every tier carries a mandatory fine. A violation is a third-degree felony with a $50,000 fine. Conduct involving 10 to 19 patients is a second-degree felony with a $100,000 fine, and conduct involving 20 or more patients is a first-degree felony with a $500,000 fine. Beyond criminal exposure, healthcare businesses may face:
- Disciplinary action against professional licenses
- Administrative actions affecting facility licensure or enrollment
- Payor audits, claim denials and repayment demands
- Civil claims, including under Florida’s Deceptive and Unfair Trade Practices Act
- Exclusion risk and parallel federal enforcement under the federal Anti-Kickback Statute and the False Claims Act
- Reputational harm that affects referral relationships and contracts
How Enforcement Works
The Florida Attorney General or the state attorney for the judicial circuit where any part of the offense occurred may bring an action for an injunction to enforce the statute, and can recover investigative costs, court costs and attorney’s fees. These remedies are in addition to any other civil, administrative or criminal action, and can be pursued against both companies and individuals.
Because the statute counts the number of patients affected, an arrangement that began small can move into a higher penalty tier as volume grows. Payors and federal investigators may also review the same conduct under other laws.
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Statutory Exceptions and Safe Harbors
Section 817.505(3) excludes specific payment practices, including any discount or payment practice not prohibited by the federal Anti-Kickback Statute and its regulations, payments among members of a group practice, payments for professional consultation services, insurance agent commissions, payments by health insurers and under contracted health plans, fees paid to licensed nurse registries, and fees paid to qualifying consumer information services that charge fixed, fair-market-value fees and do not steer patients. Exceptions are narrow and fact-specific. An arrangement that fits one only partly usually fits none. Compensation should be fixed in advance, consistent with fair market value, supported by documented services actually performed, and not determined by the volume or value of referrals.
Related Florida and Federal Laws to Review Together
Patient brokering analysis rarely stands alone. Healthcare businesses should evaluate referral arrangements alongside:
- The Florida Patient Self-Referral Act of 1992 (section 456.053)
- Florida’s anti-kickback provision for licensed professionals (section 456.054)
- The Florida Health Care Clinic Act
- The federal Anti-Kickback Statute and Stark Law
- Chapter 397 licensing rules for substance abuse service providers, who fall within the Act’s definition of covered providers
Practical Steps to Reduce Your Risk
- Inventory every referral-related relationship. Include marketing vendors, lead sources, consultants, medical directors, landlords and referral partners.
- Review compensation structures. Flag any payment that varies with patient volume, admissions or revenue.
- Document fair market value. Obtain independent support for rates, rent and professional fees.
- Put written agreements in place that define services, deliverables, term and compensation, and confirm the services are performed.
- Train staff and vendors. Make sure sales, intake and marketing teams understand what they cannot offer or accept.
- Audit regularly. Build patient brokering review into your compliance program.
- Get counsel involved before signing. Restructuring a contract in advance is far cheaper than defending an investigation.
What to Do If You Receive a Subpoena or Audit Notice
If your organization receives a subpoena, civil investigative demand, payor audit or inquiry from the Florida Attorney General, a Medicaid Fraud Control Unit, or a federal agency, contact counsel immediately. Preserve all records, suspend routine document deletion, and avoid discussing the matter with vendors or referral partners until you have received legal advice.
Frequently Asked Questions
Does the Florida Patient Brokering Act apply if the patient has private insurance? Yes. The statute is not limited to government programs.
Can a clinic pay a marketing company a percentage of revenue? This is high risk. Percentage or per-patient compensation can be treated as an unlawful payment for referrals, depending on what the marketer actually does. Have the structure reviewed before use.
Can both the payer and the recipient be liable? Yes. The statute reaches those who offer or pay and those who solicit or receive.
Is there a way to make a referral arrangement compliant? Often yes, through fixed fair-market-value compensation for real services, proper documentation and, where applicable, fitting within a recognized exception or safe harbor.
What are the penalties for patient brokering in Florida? A third-degree felony with a $50,000 fine, rising to a second-degree felony and $100,000 fine for 10 to 19 patients, and a first-degree felony and $500,000 fine for 20 or more patients.
Can the state seek relief without a criminal conviction? Yes. The Attorney General or the state attorney may seek an injunction and recover investigative costs and attorney’s fees, in addition to any other civil, administrative or criminal remedy.
Are marketers and consultants covered, or only licensed providers? The prohibition applies to any person, so unlicensed marketers and intermediaries can be liable along with the providers they work with.
Talk to a Florida Healthcare Regulatory Attorney
Our firm advises hospitals, physician groups, clinics and healthcare businesses on referral arrangements, marketing agreements, compliance programs and government investigations across Florida.
Call (561) 455-7700 or toll free (888) 455-7702 to speak with an attorney, or request a complimentary consultation.
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