State Patient Brokering Act Cases to Throw out Legal Advice as Defense

palm beach county task forceBy: Jeff Cohen

There are two criminal cases pending in Palm Beach County that threaten to put a bullet in the heart of healthcare professionals and businesses and also the law practices that advise them.  Both State v. Simeone and State v. Kigar have a motion from the State pending before them to block any testimony that the defendants received legal advice concerning a contract entered into by an addiction treatment facility and a sober home.  The State alleges that the contract violates the state Patient Brokering Act (PBA) because it was essentially a ruse whereby the addiction treatment facility was just paying for the sober home to refer patients.  Now the State wants to make sure that the entire issue of the defendants being advised by counsel never sees the light of day.

How is this possible?  How can it be that a client can seek legal counsel, get advise (and presumably follow it), and then be blocked from presenting that evidence?  The State argues that the PBA has no wording that requires them to prove intent.  And if intent isn’t an element to be proven, the argument goes, then evidence of the client intending not to violate the law by getting advice beforehand is inadmissible!  Continue reading

Anti-Kickback Statute and Healthcare Marketing: 3 Legal Considerations

healthcare marketing

healthcare marketingBy: Matt Fischer

Healthcare marketing arrangements that violate the Anti-Kickback Statute (AKS) can lead to serious financial and criminal consequences.  Understanding the types of marketing arrangements that courts have found to be in violation of the statute and the potential implications are critical for marketers to know in order to operate in the healthcare industry.

Under the AKS, it is a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce referrals of items or services reimbursable by the Federal health care programs.  Where remuneration is paid purposefully to induce referrals of items or services paid for by a Federal health care program, the AKS is violated.  By its terms, the AKS ascribes criminal liability to parties on both sides of an impermissible transaction.  An example of a highly scrutinized arrangement involves percentage compensation.  For regulators, percentage compensation arrangements provide financial incentives that may encourage overutilization and increase program costs.

Here are 3 important things to know:Continue reading

False Claims Act Case Beaten by Bona Fide Employee Arrangement

false claims actBy: Jeff Cohen     

One healthcare employer’s compensation arrangement with its employees just got much needed support from the 11th Circuit Court of Appeals.  The employer there, which provided AIDS patients certain healthcare related services, paid its employees a bonus of $100 per patient.  The case was brought on the argument that the compensation arrangement constituted an illegal kickback under the federal Anti- Kickback Statute.  The court, however, disagreed because the employees who received the bonuses were “bona fide employees.”

The court’s focus on the plain language of the safe harbor for bona fide employees was refreshingly clear, notably that “any amount paid by an employer to an employee (who has a bona fide employment relationship with such an employer) for employment in the furnishing or any item or service.”  Essentially, any amount paid by an employer to a bona fide employee is not considered to be “remuneration” under the Anti-Kickback Statute.Continue reading

State Court Ruling on Patient Brokering Act Threatens Healthcare Facilities and Providers

patient brokering actA recent ruling by a state trial court handling the Palm Beach County Sober Home Task Force prosecutions against providers of addiction treatment and sober home services is creating lots of confusion and alarm around the state and could have very far reaching consequences for the entire healthcare industry well beyond addiction treatment.

The issue presented by the prosecution focuses on whether a person charged with violating the state’s Patient Brokering Act (PBA) can be found guilty even if he/she didn’t know what he was doing was unlawful. The PBA broadly prohibits paying someone for patient referrals, very much like the federal Anti-Kickback statute.  If allowed, the client would have gotten legal advice, paid for it, followed it, and still not be able to show a judge or jury that, despite all their best efforts, they simply followed the law as instructed.

Can a healthcare facility or provider be guilty of violating a criminal law [the PBA] if they’d gotten legal advice and followed it?  Traditionally, the answer would be a clear “no.”  The argument against the State’s position would be something like “How can someone intend to violate a criminal law if they got legal advice regarding how to comply with it and then followed that advice?”  The argument of the state might look something like “We don’t even think the judge or jury ought to be able to hear that the person got legal advice and followed it.”  The court punted the issue to the appellate court.Continue reading

DMEPOS Medicare Coverage & Reimbursement

DME medicare

DME medicareBy: Michael Silverman

Providers need to comply with all the Medicare ‘red tape’ but need not let fear of non-compliance inhibit their practice from offering Durable Medical Equipment Prosthetics & Orthotics Supplies (“DMEPOS”) to Medicare beneficiaries.

Here’s an overview of the steps providers need to take to enroll as a supplier of DMEPOS with Medicare to be eligible for Part B coverage and reimbursement:Continue reading

Medical Marijuana Law: Medical Use in Florida Part I

medical marijuana law FloridaBy: Susan St. John

As you have probably heard, Governor Scott signed Senate Bills 6A and 8A on June 23, 2017. What this means for practitioners is an increased opportunity to help patients that might derive benefit from treatment with medical marijuana. However, with increased opportunity comes increased scrutiny. Although these laws open up treatment options, practitioners need to ensure they strictly abide by the statutes and rules to be implemented by the Department of Health (“Department”). The Department has already published notice of the first conference call on Senate Bill 8A and emergency rule making authority, with the first conference call scheduled for Friday, July 14, 2017. Practitioners should also keep in mind that marijuana is still a schedule 1 controlled substance under federal law, thus, insurance companies are not covering treatment with medical marijuana.Continue reading

Beware The Hypnosis of Crisis

By: Jeff Cohen

One of the biggest challenges faced by addiction treatment providers today, especially in Palm Beach County, Florida, arises in the context of unprecedented pressure by law enforcement via the Sober Home Task Force, newspapers and insurers.  The threat of being targeted by law enforcement is an enormous thing in itself.  Add to that the mainstream media’s insatiable desire for readers, the industry’s drop into insurer red flagging and recoupment, the political football nature of addiction and addiction treatment, and treatment providers can lapse into a state of paralyzed tunnel vision, a sort of mass hypnosis.  Here’s the problem:  providers dealing with the current compliance crisis environment have a lot to lose if they take their eye off the bigger picture.  The more absorbed they become in “crisis mode,” the more likely they will miss important addiction treatment compliance details in an increasingly regulated and changing industry.  Losing the ability to see the entire picture (and trends) and quickly adapting to it can have costly (and even deadly) consequences.

The addiction treatment industry is like any other healthcare provider—enormously and increasingly regulated, highly scrutinized and always dynamic.  The moment it took on features of traditional healthcare (e.g. lab and physician services), it left the relatively warm and fuzzy comfort of behavioral health providers, sorta.  “Sorta” because medical behavioral health (e.g. psychology and counseling) has not had it easy in the past 10 years, as it came under crushing price compression with managed care driven networks and other price cutting middlemen that have often been owned or controlled by insurance companies.  Addiction treatment providers in the pure behavioral health space were “saved” from all this till about three years ago because they were out of network and not the focus of insurer driven price cuts.  As payors (and their price cut incentivized middle men) looked for more ways to drive up profits, the competitive and disorganized addiction treatment sector became a natural (and unprepared) sector to hit.  And they hit it hard!  Clearly, the Perfect Storm.  Addiction treatment providers now have no option but to learn to swim hard and fast in the ever changing river of the healthcare business industry.Continue reading

Recovery Business Marketing 2.0

By: Jeff Cohen

Concepts that drive sober home relationships like Anti-Kickback Statute, Patient Brokering Act and Safe Harbor have become ingrained in the minds of nearly every addiction treatment provider’s thought process, especially in Florida with the development of the Sober Home Task Force.  Providers now seem to fully embrace ideas like–

  • There’s a federal law (the Anti-Kickback Statute, the “AKS”) that can bring criminal liability for marketing done incorrectly;
  • There’s a state law, the Florida Patient Brokering Act (“PBA”), that can do the same;
  • Complying with the federal safe harbors and the bona fide employee exception is important, even when there are no state or federal healthcare program dollars involved;
  • Paying anyone for marketing, not just on a commission based sales model, without fully appreciate the applicable laws is dangerous, costly and invites criminal inquiries and liability; and
  • Achieving compliance with applicable federal law should be part of any recovery business’ overall compliance plan.

Recovery providers must become familiar with not only the AKS and state restrictions like the PBA, but also the law’s permitted examples, so called “Safe Harbors,” which specify specifically permitted arrangements (42 CFR 1001.952).  The “personal services arrangement and management contract” Safe Harbor, for instance, has particular application in the area of marketing, as does the AKS exception for “bona fide employment arrangements,” which apply to “bona fide” W-2 employees (entailing direction, supervision and control), but not independent contractor relationships.Continue reading

Managing Medical Device Anti Kickback Risks for Physicians

By: Shobha Lizaso

Less than a year ago that medical device developer, Olympus Corp, agreed to pay a $646 million settlement to resolve claims of illegal kickbacks to physicians and hospitals. This is considered to be the largest settlement amount in the history of violations to the Anti-kickback Statute. The federal Anti-Kickback Statute (“Anti-Kickback Statute”) is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce or reward the referral of federal health care program business.  Conviction for a single violation under the Anti-Kickback Statute may result in a fine of up to $25,000 and imprisonment for up to five (5) years.  In addition, a conviction will result in mandatory exclusion from participation in federal health care programs. The government may also assess civil money penalties, which could result in treble damages plus $50,000 for each violation of the Anti-Kickback Statute.

Between 2006 and 2011, Olympus offered consulting deals among many other bribes to influence physicians to order and prescribe Olympus medical devices. These consulting agreements provided for large up-front payments to physicians under the guise of medical device development. Olympus failed to focus on compliance and didn’t have policies and procedures in place to prevent illegal arrangements such as these. These physicians were retained as consultants, but most provided very little consulting services; they were utilized as device promoters. Physicians have a duty to order medical devices solely on the traditional standards of quality, price, and appropriateness for the medical conditions treated. Moreover, the ordering of medical devices by a physician must never be influenced by personal financial gain.Continue reading

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