Category Archives: Health Care Law

Pain Management Clinics and the New Law: What Every Owner Should Know

The Florida Legislature passed a new law, which came into effect on October 1, 2010, aimed to discourage so-called "pill mills" that have flourished across the state in recent years. While the law imposes tighter restrictions and requirements on pain management clinics (PMCs) in an effort to discourage rampant dispensing and prescribing of controlled substances to addicts and drug dealers, legitimate PMCs with no previous problems need to strictly comply with the new state requirements or risk having their clinics shut down. The following article summarizes key aspects of the new law. For a more detailed analysis, and how it may apply to your PMC, please refer to one of our attorneys.

Registration with the Department of Health
The most significant change in the new law (codified in part under Section 458.3265, Florida Statutes) is the requirement that all privately-owned PMCs which advertise, or employ a physician who is primarily engaged in the treatment of pain by prescribing or dispensing controlled substance medications, be registered with the Department of Health (DOH) prior to operation. Further, any PMC that is not fully owned by a licensed physician, or group of physicians, may have its registration denied under the new law. However, as with almost any law, there are some exceptions to this registration requirement.

Exceptions to Registration
A PMC is not required to register with the DOH under the new law if any of the following exceptions apply:

• The PMC is already licensed as a facility under Chapter 395 (Hospital Licensing and Regulation).

• The majority of the physicians who provide services in the clinic are engaged primarily in providing surgical services.

• The PMC is owned by a publicly-held corporation whose shares are traded on a national exchange or on the over-the-counter market and whose total assets exceed $50 million at the end of the corporation’s most recent fiscal quarter.

• The PMC is affiliated with an accredited medical school at which training is provided for medical students, residents, or fellows.

• The PMC does not prescribe or dispense controlled substances for the treatment of pain.

• The clinic is owned by a corporate entity exempt from federal taxation under 26 U.S.C. s. 501(C)(3).

Any analysis of these exceptions should take statutory definitions, and other statutory references, into account before a privately-owned PMC relies on an exception under this section.

Registration Requirements
One requirement for registration under the new law is the designation of a responsible doctor to oversee the operation of the PMC and ensure compliance with the new requirements. This designated physician must have a full, active and unencumbered license and must practice at the clinic location for which he/she has assumed responsibility. Furthermore, the DOH will deny registration to any PMC owned by, or with any contractual or employment relationship with, any doctor:

• whose Drug Enforcement Administration number has ever been revoked;

• whose application for a license to prescribe, dispense, or administer a controlled substance has been denied by any jurisdiction; or

• who has been convicted of or plead guilty or nolo contendere to regardless of adjudication, an offense that constitutes a felony for receipt of illicit and diverted drugs, including a controlled substance listed in Schedule I, II, III, IV, or V of section 893.03, in this state, any other state or the United States

It is important to note that each clinic location must be separately registered, regardless of whether the clinic is operated under the same business name or management as another clinic and these requirements apply to each clinic individually.

The DOH has taken the position (as posted on its website) that any PMC that submits an application for registration with the DOH after January 4, 2010, may not operate until the registration has been issued and the clinic has been assigned a registration number. If you are required to register with the Agency for Health Care Administration (AHCA), you will not receive your PMC registration from the DOH until the AHCA registration has been approved.

Physician Responsibilities
A doctor who provides professional services in a PMC must be licensed under chapter 458 or 459, and practicing in a registered PMC. The physician must perform a physical examination of the patient on the same day that he or she dispenses or prescribes a controlled substance at the PMC. If the doctor prescribes or dispenses more than a 72-hour dose of controlled substances for the treatment of chronic nonmalignant pain, the doctor must document in the patient’s record the reason for prescribing or dispensing that quantity.

In another section of the new law, the dispensing restriction goes even further: for any patient who pays for medication by cash, check, or credit card in a clinic registered under chapters 458 or 459, a doctor may not dispense more than a 72-hour supply of a controlled substance listed in Schedule II, III, IV or V of section 893.03. Practitioners in violation of this dispensing restriction commit a felony of the third degree. Of course, there are some exceptions, including doctors dispensing medication to a workers’ compensation patient or an insured patient who pays by cash, check or credit card to cover a co-payment or deductible.

The doctor authorized to prescribe controlled substances who practices at a PMC is responsible for maintaining the control and security of his or her prescription blanks and any other method used for prescribing controlled substance pain medication. The physician shall comply with the requirements for counterfeit-resistant prescription blanks as set forth in section 893.065, Florida Statutes. Any theft or loss of a prescription blank or breach of any other method for prescribing pain medication must be reported in writing to the DOH within 24 hours by the prescribing physician.

The designated physician of a PMC must notify the applicable board at the DOH, in writing, of any employment termination within 10 days after terminating his or her employment with a PMC that is required to be registered under the new law.

Inspection of PMCs
Florida PMCs are subject to an annual inspection by the DOH to ensure compliance under the new law. Each inspection includes a review of the clinic’s patient records. (Note: PMCs accredited by a nationally-recognized accrediting agency approved by the Board of Medicine are exempt from the inspection requirements.)

During any onsite inspection, DOH personnel is obligated to make a "reasonable attempt to discuss" any alleged violation with the owner or designated physician of the PMC before issuing a formal written notification. Any action to correct a violation must be submitted to the DOH in writing by the owner or designated physician of the PMC, and verified by the DOH by follow-up visits to the clinic.

Once DOH Revokes Registration of PMC
While parties affected by Agency action may request a formal administrative hearing on the merits of a revocation, the new PMC law requires certain affirmative acts to take place once DOH registration revocation has occurred. As of the effective date of any revocation or suspension of a PMC’s registration:

• The PMC must cease all operations as a pain management clinic.

• All signs and symbols identifying the business as a PMC must be removed.

• The designated physician must advise the DOH of the disposition of all medicinal drugs located on the premises.

Additionally, any person named in the registration documents of the PMC may not (either individually or as part of a group) apply to operate a PMC for 5 years after date of revocation.

Penalties and Enforcement
PMCs in violation of the new requirements may be fined up to $5,000 per violation. In determining the amount to be imposed, the department must consider certain enumerated factors, such as the gravity of the violation, the potential harm to a patient, any corrective action taken by the designated physician, previous violations and any financial benefits derived from the violation.

In the case of any alleged knowing or intentional misrepresentation of corrective actions taken by the designated physician of an owner-operated PMC, the DOH may impose a fine as well as revoke the clinic’s registration.

Any change of ownership of a registered PMC requires submission of a new registration application. A new owner that operates the clinic without re-registering the PMC with the DOH is subject to a $5,000 fine.

Rules for the Administration and Inspection Procedures, Forms and Fees
The new law requires that the DOH adopt rules necessary to administer the registration and inspection of PMCs and set forth specific requirements, procedures, forms and fees. It also requires the Board of Medicine to adopt rules establishing the maximum number of prescriptions for certain controlled substances within a 24-hour period and standards of practice for physicians primarily engaged in the prescribing and dispensing of such medications at privately-owned PMCs. No such rules have been adopted to date.

Because of another rulemaking law which was originally vetoed by Governor Crist, then overridden by the Legislature during the 2010 Special Session, any proposed agency rule must be submitted to the Legislature with a Statement of Estimated Regulatory Costs (SERC) if the proposed rule is expected to reach a certain level of adverse economic impact (i.e., cost $200,000 or more to administer per year, or $1 million to businesses over a 5-year period). The Board of Osteopathic Medicine standards of practice for DO physicians practicing in PMCs, Rules 64B15-14.0051 and 64B15-14.0052, Florida Administrative Code, are in effect now and are not impacted by the new legislation. However, proposed Rules 64B 8-9.0131 and 9.0132, Florida Administrative Code, the Board of Medicine’s proposed rules on standards of practice for MD physicians practicing in PMCs, are affected by the new rulemaking legislation and have not yet been reviewed or ratified by the Legislature.

Rights of Privately-Owned PMCs Affected by New Law
Under Chapter 120, Florida Statutes, any person or entity affected by an agency’s action has the right to seek a formal administrative hearing to challenge the agency’s action to resolve disputed issues of fact. There are other statutory rights that can be pursued on behalf of affected parties, including the right to participate in rule development proceedings, challenge agency decisions which are not based on statute or rule, challenge the validity of rules or proposed rules, and the right to seek a waiver or variance of a rule once rules are adopted.

For questions regarding the new PMC law and how it may affect your pain PMC, please feel free to contact any of the attorneys at Smith & Associates.

Who Pays the Hospital Bill When Workers Get Injured?

The scenario is typical: a worker is injured on the job and immediately transported to the nearest emergency room for care. The worker’s injuries are catastrophic and he remains in the hospital for several days, before he is stabilized and released to the care of a physical therapist or some other specialist. The question the hospital is left with: Who pays the bill? The short answer is the patient’s employer or the employer’s work-comp carrier. However, getting the bill paid can be a daunting task for a Florida hospital.

Under Florida law, a health care provider may not collect or receive a fee from an injured employee. Because hospitals have a mandatory obligation to provide emergency services regardless of a patient’s ability to pay, it is not uncommon for hospitals to get left with significant unpaid bills for workplace injuries and accidents. As a result, many hospitals simply “write off” the costs of providing such emergency medical services to injured workers.

Fortunately, case and statutory law has provided some recourse to hospitals. In Florida, most employers are required to carry workers’ compensation insurance to cover medical expenses associated with workplace injuries. Those hospitals lucky enough to have documented the patient’s employer and/or the employer’s insurance carrier during the admissions process can forward the bill to the proper party for payment. However, submitting the bill to the proper party does not guarantee payment. Many hospitals find that the bill is grossly discounted by one of the many third-party “medical review companies” employed by the insurance carrier. Worse, the patient’s employer or insurance carrier may contest the compensability of the patient’s injuries and refuse to pay the bill outright. The next question becomes: How does the hospital enforce payment of its bills for care rendered to injured workers? The answer depends, in part, on whether the hospital has followed the mandates under the Florida Worker’ s Compensation statute.

Once Emergency Medical Care is Rendered by the Hospital or Health Care Provider

The hospital’s success in having its bill paid by the insurance carrier depends on whether there is clear compensability under the worker’s compensation statute. The key rule is: Emergency care rendered by a hospital is payable by the employer/carrier only if the injury requiring emergency care arose as a result of a work-related accident. A hospital is in no position to determine the legal parameters of what constitutes a “work-related accident” and, therefore, it is prudent that hospitals cover their bases in the event compensability is later challenged.

The statutes place strict notice requirements on hospitals seeking reimbursement for medical care rendered to an injured worker. In order to be compensated, a hospital must notify the carrier of emergency care rendered to an injured employee by the close of the third business day. This deadline should not discourage those hospitals who don’ t know the identity of the carrier responsible for payment. Courts are likely to find that the three-day grace period begins once the hospital or health care provider knows, or reasonably should know, the identity of the employer/carrier responsible for payment of medical care. If emergency medical care results in the admission of the employee to a health care facility, the health care provider must notify the carrier by telephone within 24 hours after initial treatment. A health care provider is prohibited from referring the employee to another health care provider, diagnostic facility, therapy center, or other facility without prior authorization from the carrier, except when emergency care is rendered. If a carrier does not respond to a request for authorization by the close of the third business day after receipt of a request, such carrier is deemed to have consented to the medical necessity for such treatment. It is important to note that the statute specifically requires all such requests be made to the carrier. Notice to the employer, alone, is not sufficient.

When the Carrier Refuses to Pay the Hospital’ s Bill

If a hospital or health care provider receives a notice of non-payment (also called “disallowance of payment”), or an adjusted payment that grossly reduces the amount of the hospital’s charges, it must file a petition with the Department of Financial Services (DFS) within 30 days to resolve the dispute. In doing so, the hospital must also serve a copy of the petition to the carrier and all other affected parties by certified mail. The petition must include all supporting documents and records to avoid dismissal. In response, the carrier must submit to the DFS all of its documentation substantiating the carrier’s disallowance or adjustment within 10 days. Failure of the carrier to timely submit such documentation constitutes a waiver of all objections or challenges to the petition. In the consolidated case of Fairpay Solutions v. AHCA, et al, 969 So. 2d 455 (Fla. 1st DCA 2007), two hospitals separately billed insurance carriers for medical services provided to their insureds. The carriers paid substantially less than the amounts charged by the hospitals, after a third-party “medical review company” discounted the bills. Unsatisfied with the discounted payments, the hospitals filed petitions for reimbursement under 440.13(7)(a) to the Agency for Health Care Administration (the Legislature transferred jurisdiction to the DFS after 2007). Because the carriers failed to timely submit a response to the petitions within 10 days, AHCA issued a ruling in favor of the hospitals. The carriers then petitioned for an administrative hearing under the Administrative Procedure Act. AHCA denied the requests and the carriers appealed to the First DCA. Upon review, the court ruled that the agency’ s decision in favor of the hospitals under section 440.13(7)(b) does not violate the carriers’ rights under the APA because the carriers had 10 days in which to challenge the medical providers’ petitions seeking higher reimbursement. They simply failed to do so in a timely manner.

When the Underlying Injury is in Dispute

A work-comp insurance carrier may refuse to pay a hospital bill because it challenges whether the underlying injury giving rise to the medical treatment is covered by worker’s compensation. The injured worker, now faced with the responsibility of paying the hospital bills himself, will have to file a petition in the Office of Judge of Compensation Claims (OJCC) to get a ruling on the compensability issue. However, injured workers who find themselves involved in a coverage dispute with their employer oftentimes engage in little effort to ensure that a medical provider is sufficiently compensated for services provided. Likewise, employers and carriers disputing the compensability of an accident or injury will do little to involve the medical provider in the coverage dispute on the assumed basis that the medical provider has no legal interest in the dispute between the employer and the employee.

If compensability is disputed by the insurance carrier, the hospital or health care provider would be best served by filing petitions for a claim of unpaid services with both the DFS and the OJCC where the employer is located. A recent case suggests that DFS has sole jurisdiction of any dispute between medical care provider and carrier. In a recent court opinion, Bryan LGH Medical Center v. Florida Beauty Florida, Inc., et al, the First DCA upheld a decision by a Judge of Compensation Claims (JCC) dismissing for lack of jurisdiction a claim for payment against the employer/carrier for emergency medical services furnished to an alleged employee. The First DCA stated that the hospital has independent standing to bring a claim for payment for medical services against the employer/carrier, however, that such jurisdiction solely rests with the DFS.

Limitations on Jurisdiction of the Department of Financial Services

It should be noted that the Bryan LGH case does not address whether the jurisdiction of the DFS is limited to disputes as to the amount of compensability, the compensability itself, or both. Section 440.13(11)(c) provides that the DFS has exclusive jurisdiction to decide any matter concerning reimbursement, to resolve any overutilization dispute under subsection (7) and to decide any question concerning overutilization under subsection (8), which question or dispute arises after January 1, 1994. However, questions of compensability of the employee’s work-related injury often requires a full evidentiary hearing that is better suited for a JCC. Indeed, case law decided prior to Bryan LGH states that the proper forum for hospitals and health care providers to assert claims for medical services where compensability is in dispute is with the JCC. See, e.g., Rebich v. Burdines, 417 So. 2d 284 (Fla. 1st DCA 1982). Therefore, the prudent course of action for the hospital or health care provider would be to file petitions in both jurisdictions to ensure all rights to compensation are preserved.

Conclusion

Florida statutory and case law has created a clear "point of entry” for hospitals to collect on unpaid medical bills arising from emergency care provided to injured employees. There are several avenues for reimbursement depending on the nature of the dispute. Hospitals who provide emergency care to injured workers should consider retaining legal counsel to address disputes over obtaining full reimbursement for such claims and to develop policies and protocols to maximize the ability to recover full reimbursement for medical services to injured workers.

Emergency Only PCI Programs

In 2004, the Florida Legislature dramatically changed the landscape for regulation of cardiovascular services in Florida. Gone are the days of CON review and protracted litigation over the right to implement an open heart surgery program, or an interventional cardiology program offering Percutaneous Coronary Interventions (PCI). Today, these programs are managed through the simple filing of an “Attestation” to meet either Level I requirements (adult cardiovascular and interventional PCI without onsite open heart surgery backup) or Level II requirements (adult cardiovascular and interventional PCI with onsite open heart surgery). In either instance, the hospital CEO simply attests that certain volume thresholds have been met to qualify for the license, and that the hospital will follow the applicable licensure and rule standards.

  For Level I programs the volume thresholds are:

    a) 300 adult inpatient and outpatient diagnostic caths performed in past 12 months, or

    b) discharge or transfer of 300 inpatients with principal diagnosis of ischemic heart disease

  For Level II programs the volume thresholds are:

    a) 1100 adult inpatient and outpatient diagnostic caths performed in past 12 months, or

    b) 800 patients with principal diagnosis of ischemic heart disease discharged in past 12 months

While these volume thresholds are adequate for hospitals that have a well-established diagnostic cardiac cath lab program, there are some hospitals with new or lower volume diagnostic cardiac cath programs that do not meet the volume threshold for a Level I program.

A possible stepping stone for a diagnostic cardiac catheterization program that is new, or is seeking to increase its volume is to obtain approval for an “emergency only” PCI program under the CON exemption criteria contained in Section 408.036(3)(n), Florida Statutes. While this provision of law has not been utilized since the final adoption of new licensure rules, it remains a valid avenue that can result in increased utilization of a diagnostic cath lab. Many county EMS programs direct all patients suffering from ST segment elevated acute myocardial infarctions (STEMI) only to hospitals with approved PCI programs. The bypassing of hospitals without PCI programs can also be extended by cautious EMS programs to all types of chest pain or suspected cardiac patients. The approval of an “emergency only” PCI exemption allows the hospital to capture back some of the ambulance traffic that bypasses the hospital with only a diagnostic cath lab. This not only allows for the faster treatment of STEMI patients at a closer hospital, but also allows the hospital to increase its diagnostic cath volume as more patients use the ER as an access point for cardiac related emergencies.

While an “emergency only” approval can increase cath lab volumes, history has shown that such programs are expensive to operate, as hospitals must assure 24/7 call coverage with experienced and qualified staff in the cath lab. This added expense will need to be considered by the hospital in deciding whether to seek to use an “emergency only” program as a stepping stone to a full Level I PCI program that allows for performance of a full range of both emergency and elective PCI procedures. Once the volume of 300 diagnostic caths is reached for a rolling 12 month period, the hospital can “step up” to the Level I program. For some hospitals, the right choice may be to wait until the volume of diagnostic caths is sufficient to warrant a full Level I program. However, other hospitals may find that an emergency only PCI program will give the added volume that is needed to meet the volume threshold as a Level I program.

If you would like more information about how to apply for an emergency only PCI program, please call Geoff Smith at 850-297-2006.

New Legislation Made Debut on July 1st

Numerous bills which passed during the 2010 Legislative Session and approved by the governor will be going into effect on July 1, 2010.  A preview of the most prominent bills relating to health care administration, land-use and environmental issues are summarized and listed below.  As always, if you have any questions relating to these or any other bills as they take effect, please feel free to contact any of the attorneys at Smith & Associates.

Health Care

HJR 37 – Proposed Constitutional Amendment – Legislators passed a joint resolution asking voters to decide on a constitutional amendment regarding the federal government’s national health care overhaul.  Specifically, the constitutional amendment will make clear that no state or federal health care mandates, including one that requires you to buy insurance, apply in Florida. The proposal must pass with 60 percent of the voters to become a constitutional amendment.

SB 2176 – Medicaid Supplement Policies – Revises provisions related to unfair methods of competition and unfair or deceptive acts to provide that this section does not prohibit a Medicare supplement insurer from providing a premium credit to an insured for using an in-network inpatient facility. An insurer offering Medicare supplement policy is expressly not prohibited from entering into an agreement through a network with inpatient facilities that agree to waive the Medicare Part A deductible in whole or part. The insurer’s network agreement would not be subject to the approval of the Office of Insurance Regulation (OIR) and the insurer would not be required to file a copy of the agreement with the OIR. Further, the amendment requires an insurer to factor such a waiver of the Medicare Part A deductible and premium credit into the insurer’s loss-ratio calculation and policy premium.

SB 1484 – Medicaid Reform Waiver – Authorizes the Agency for Health Care Administration to seek a three-year extension of an existing federal Medicaid Reform waiver obtained under section 1115 of the Social Security Act and to preserve the Low Income Pool provisions of the waiver by no later than July 1, 2010.  Requires that certain changes of terms and conditions relating to the Low Income Pool be approved by the Legislative Budget Commission.  Requires that the agency develop a methodology for intergovernmental transfers in any expansion of prepaid managed care in the Medicaid program. Establishes the “Medicaid and Public Assistance Fraud Strike Force” within the Department of Financial Services and expands the responsibilities of the CFO to crack down on Medicaid fraud by transferring all public assistance fraud and abuse personnel from the Department of Law Enforcement to the CFO’s office.

HB 5301- Medicaid – This is a comprehensive bill that includes provisions relating to the following:
            Nursing homes: Revises the method by which the Agency for Health Care Administration shall assess fees used for nursing home Medicaid underpayments and overpayments.  Modifies the nursing home staffing requirements to allow for a combined direct care staffing requirement of 3.9 hours per resident per day.  
            Meds-AD: Extends the sunset date for the Medicaid Aged and Disabled (Meds-AD) and Medically Needy programs to June 30, 2011.
            Cross-over providers: Authorizes the agency to enroll Medicare cross-over providers for payment and claims purposes only.  
            Quality assessments: Clarifies the use of the quality assessment on nursing home facilities and authorizes the use of quality assessments to restore rate reductions as specified in the General Appropriations Act.  Clarifies the use of the quality assessment on privately operated intermediate care facilities for the developmentally disabled and authorizes the use of quality assessments to restore rate reductions as specified in the General Appropriations Act.
            Disproportionate Share Program: Revises the years of audited data used in determining Medicaid and charity care days for each hospital in the Disproportionate Share program from 2003, 2004, and 2005 to 2004, 2005, and 2006; to change the fiscal year that the audited data is used to distribute funding through the Disproportionate Share program from Fiscal Year 2009-2010 to Fiscal Year 2010-2011; and provides the formula for the distribution of disproportionate share dollars to provider service network hospitals.  Continues the prohibition of the distribution of funds through the Regional Prenatal Intensive Care Disproportionate Share program in Fiscal Year 2010-2011.
            Authorizes disproportionate share payments to statutorily defined teaching hospitals and family practice teaching hospitals in Fiscal Year 2010-2011; and allows the distribution of funds for statutorily defined teaching hospitals to be distributed as provided in the General Appropriations Act.  Continues the prohibition of the distribution of funds through the Primary Care Disproportionate Share program in Fiscal Year 2010-2011. PACE services: Authorizes the agency in consultation with the Department of Elder Affairs to accept and forward an application for the expansion of Program of All-inclusive Care for the Elderly (PACE) services to the Centers for Medicare and Medicaid Services for a site to provide comprehensive services including hospice and palliative care services to frail and elderly persons residing in Polk, Highlands, Hardee, and Hillsborough counties.  Authorizes the agency in consultation with the Department of Elder Affairs to accept and forward an application for the expansion of Program of All-inclusive Care for the Elderly (PACE) services to the Centers for Medicare and Medicaid Services for a site to provide comprehensive services to frail and elderly persons residing in Southwest Miami-Dade.
            Hospital readmissions of non-Medicare population: Authorizes the agency to develop and implement a program to reduce the number of hospital readmissions among the non-Medicare population eligible in agency areas 9, 10, and 11.

HB 5303 – Agency for Persons with Disabilities – Directs the agency to develop and implement a comprehensive redesign of the home and community-based services delivery system. The system created in section 393.0662, Florida Statutes, develops individual budgets (iBudgets), a system designed to improve the financial management of waiver services. Includes a new assessment instrument (the Department of Children and Family Services’ “Individual Cost Guidelines”) for use when assigning individuals to waiver tiers. Includes age as a characteristic for the purpose of tier assignment. In addition, the amendment specifies that individuals enrolled in tier four on July 1, 2007, are assigned to tier four without the need for further assessment. Establishes an expenditure cap on tier 1 at $150,000 per client each year with some exceptions for individuals who need intensive behavioral services or special medical home care as identified in the Developmental Disabilities Waiver Services Coverage and Limitations Handbook. Reduces the expenditure caps on home and community based waiver tiers 2, 3, and 4 by 2.5 percent and reduces service provider rates by a corresponding 2.5 percent.
            Directs Medicaid administrative hearings requested by clients or their representatives, who have any substantial interest determined by the agency, to be conducted by the Department of Children and Family Services pursuant to s. 409.285, F.S. Establishes the Services for Children with Developmental Disabilities Task Force to make recommendations and develop a plan for the creation of, and enrollment in, the Developmental Disabilities Savings Program.

HB 5307 – Mental Health and Substance Abuse – Repeals provisions establishing Substance Abuse and Mental Health Corporation.

HB 341 – Revises provisions establishing the H. Lee Moffitt Cancer Center and Research Institute and specifies primary responsibilities, use of facilities, sovereign immunity issues, use for teaching and research programs conducted by state universities and the control and sharing of certain income.

HB 491 – Teaching Nursing Homes – Revises the term “teaching nursing home” as it relates to the implementation of a teaching nursing home pilot project.  It also revises the requirements to be designated as a teaching nursing home.

HB 573 – Physician Assistants – Deletes requirements that physician assistants file evidence of certain clinical experience before prescribing or dispensing medication.  The bill also authorizes electronic submission of physician assistant license applications and other required documentation.

HB 0945 – Automated External Defibrillators in ALFs – Requires licensed ALFs with 17 beds or more to possess a functioning automated external defibrillator; encourages location registration; provides immunity from liability under Good Samaritan Act & Cardiac Arrest Survival Act; authorizes DEA to adopt rules relating to use of automated external defibrillators.

HB 1253 – Continuing Care Facilities – Continuing Care Retirement Communities (CCRCs) are retirement facilities that furnish residents with shelter and health care for an entrance fee and monthly payments. In Florida, CCRCs are regulated by the Department of Financial Services, the Agency for Health Care Administration and the Office of Insurance Regulation (OIR). This bill clarifies and updates several provisions in chapter 651, F.S., many of which are reflective of current practices in CCRCs. Among its key provisions, the bill: Increases allowable provider cancellation processing fees; adds new content requirements for annual reports; clarifies that a provider may assess a non-refundable application processing fee; clarifies that the taxes and insurance that must be factored into the escrow account as a debt service reserve pertain to “property”; clarifies that if a prospective resident signs a contract but delays moving into the community, he or she is considered to have occupied a unit in the facility when he or she pays an entrance fee, or any portion thereof, and has begun paying a monthly fee. The bill also changes OIR inspections from “at least once every 3 years” to “at least once every 5 years” and requires the Continuing Care Advisory Council to report to the Governor and the Commissioner of OIR. Requires OIR to disclose to Council members specified information regarding complaints filed with DFS and to notify the Council regarding rule changes and scheduled rule workshops/hearings. Repeals current law regarding provisional certificates issued under prior law.

 HB 1337 – Nursing – Authorizes disclosure of certain confidential information required of nursing license applicants to certain persons; provides and revises definitions; revises requirements for graduation from certain nursing education programs for nursing license applicants seeking to take licensing examination; revises restrictions on nursing graduates who may use certain titles and abbreviations, etc.

HB 5311 – Department of Health – Revises provisions for the administration and use of funds in the Administrative Trust Fund and the Emergency Medical Services Trust Fund. Provides that funds collected from the disposition of certain motor vehicle infractions shall be deposited into Emergency Medical Services Trust Fund and removes provisions for the deposit of such funds into the Administrative Trust Fund; provides for use of such funds; amends provisions relating to reimbursement of trauma centers, etc.

    This bill also provides direction to the DOH related to organizational changes, requires a comprehensive DOH evaluation and justification review, and establishes the following program limitations:

    1. Removes the authority for the DOH division directors to appoint ad hoc advisory committees.

     2. Prohibits the DOH from creating new programs without the express consent of the Legislative Budget Commission or the Legislature.

     3. Requires the DOH to notify the Governor and the Legislature before applying for any continuation or new federal or private grants for an amount of $50,000 or greater.

     4. Identifies the role of the DOH in an emergency by listing its specific responsibilities.

     5. Decreases the DOH’s environmental health food service responsibilities over facilities that are licensed and inspected by other agencies.

     6. Specifies the types of entities having food service inspections administered by the DOH.

     7. Repeals the Children’s Early Investment Program which has not been operational for many years. (sections 411.23, 411.231, and 411.232, Florida Statutes).

     8. Exempts medical device manufacturers that are registered by the Federal Drug Administration from regulation by the DOH to eliminate duplicative regulation.

     9. Provides a definition for a “medical convenience kit” and exempts the wholesale distribution of medical convenience kits that contain prescription drugs from the pedigree paper requirements in certain circumstances.

     10. Requires the DOH to develop a plan to treat contagious Tuberculocis in private and nonstate public hospitals. The DOH must submit the plan to the Governor and Legislature by November 1, 2010.

     11. Requires the DOH to submit a report to the Legislature by January 1, 2011, that includes a rationale for each of its divisions, the return on investment for each division, and federal funding associated with each division.

     12. Transfers the administration of chapter 499, Florida Statutes, relating to the regulation of drugs, devices, cosmetics, and household products, from the DOH to the Department of Business and Professional Regulation on October 1, 2011.

     13. Modifies the section of law that establishes responsibility for physician workforce development; creates a Physician Workforce Advisory Council.

Additional provisions: Authorizes the Board of Medicine and Board of Osteopathic Medicine to issue a temporary certificate in areas of critical need under certain circumstances; Allows any city, county, or other entity designated in a state emergency management plan under section 252.35 (2) (a), Florida Statutes, during a public health emergency to deposit funds into the DOH Grants and Donations Trust Fund for the department to purchase necessary licensable products made available under the United States Department of Health and Human Services contract on behalf of any city, county or public entity in Florida;  Allows the DOH to submit budget amendments requesting additional Grants and Donations Trust Fund budget authority for the Florida Center for Nursing to make expenditures supported by grants and donations.

HB 7069 – Background screening requirements – Revises exemption from screening requirements for volunteers who assist providers under contract with DCFS; revises background screening requirements for Guardian Ad Litem Program, mental health personnel, nursing home personnel, home health agency personnel, nurse registry personnel, companions & homemakers, hospice personnel, personnel at homes for special services, & transitional living facility personnel, etc.  (NOTE: the effective date is 8/01/2010.)

SB 2272 – Pain-management clinics – Provides that pain-management clinics that are required to be registered with the DOH are business establishments. Requires all privately owned pain-management clinics, or offices that primarily engage in the treatment of pain by prescribing or dispensing controlled substance medications or by employing a physician who is primarily engaged in the same, to register with the DOH, etc.  (Note: the effective date is 10/01/2010.)

Budget changes – The state budget included a change in how the state’s Low Income pool for hospitals is evaluated, resulting in additional federal funds for the LIP program.  The change allows additional hospitals getting added to the list.

Environmental and Land-Use

SB 550 – Septic Tanks – The legislature passed a water quality bill that, among other things, requires the Florida Department of Health to establish a statewide septic tank utilities by January 1, 2016, and mandates septic tank inspections every five years. Also, the bill reduces the frequency of compliance reports during the term of a consumptive use permit.

HB 0569 – Solid Waste Disposal – Authorizes yard waste to by dumped in certain landfills that collect landfill gas for electricity and other beneficial purposes.

HB 0981 – Pesticides – Clarifies that land classified as agricultural retains that classification when offered for sale.  The bill also affects use of pesticides, including but not limited to: authorizes the FWCC to enter into agreement with the DEP for uniform regulation of pesticides applied to waters in Florida, revises exemptions from water pollution permits and provides permits for applying pesticides to waters.
 
HB 7243 – Recycling – Environmental Control: Requires Enterprise Florida, Inc., to provide technical assistance to DEP in creation of Recycling Business Assistance Center; provides that financial responsibility for mitigation for wetlands & other surface waters required by permit for activities associated with extraction of limestone are subject to approval by DEP as part of permit application review; provides for creation of voluntary recyclers certification program, etc. Benchmarks for meeting a 75-percent recycling goal by 2020.  It requires state agencies and schools to report their recycling rates and directs DEP to establish a recycling business assistance center with Enterprise Florida.

HB 1013 – Citrus Canker Eradication – Repeals provisions relating to citrus canker eradication program and payment of compensation to eligible homeowners whose citrus trees have been removed under the program.

SB 1118 – Docks – Authorizes the placement of roofs on certain residential single-family docks. Authorizes the DEP to adopt rules that include special criteria for approving certain docking facilities in shellfish harvesting waters. Authorizes the department to maintain a list of projects or activities for applicants to consider when developing proposals in order to meet mitigation or public interest requirements, etc.

SB 1640 – Florida Forever Program – Re-creates said trust fund within the Department of Community Affairs. Reenacts and amends a specified provision relating to said trust fund. Provides for sources of funds and purposes. Provides for the annual carryforward of funds. Provides for future review and termination or re-creation of the trust fund.

Budget changes – Lawmakers included $15 million in the budget to continue the Florida Forever Program after it received nothing last year.  Also included in the budget: $50 million for Everglades restoration, the bulk of which depends on federal matching money not yet approved by Congress.

Miscellaneous

SB 2386 – State Financial Matters – Provides that each agency is responsible for exercising due diligence in securing payment for all accounts receivable and other claims due the state. Authorizes the CFO to adopt rules requiring that payments made by the state for goods, services, or anything of value be made by electronic means. Revises contractual services and commodities that are not subject to competitive-solicitation requirements, etc.

SB 1752 – Economic Development – Requires an agency or entity that receives county funds for economic development purposes pursuant to a contract to submit a report on the use of the funds. Authorizes counties and municipalities to extend economic development ad valorem tax exemptions under certain circumstances. Provides an exemption from the use tax for an aircraft that temporarily enters the state or is temporarily in the state for certain purposes, etc.

HB 451 – Space Florida – Revises provisions for the governing board of Space Florida to terminate the existing board and replace it with a new board meeting the requirements of this section; provides for membership, organization, meetings and actions of the board; provides for reimbursement of expenses; requires members to file disclosure of financial interests, etc.

Hospitals: Know Your Rights

RE: To Collect for Medical Services Provided to Injured Workers

ISSUE: What recourse is available to Florida hospitals seeking reimbursement for medical services provided to injured employees?

Most employers in Florida are required to carry workers’ compensation insurance to cover the medical expenses associated with workplace injuries suffered by employees. Nevertheless, hospitals are often burdened with unpaid or underpaid bills for emergency care rendered to injured employees covered by workers’ compensation insurance. In Florida, the very industries which give rise to the greatest frequency of catastrophic injuries requiring costly emergency medical care (construction, agriculture, and trucking) are the same industries most susceptible to coverage disputes that can leave hospitals caught in the middle with unpaid claims for emergency care services. Because Florida hospitals have a mandatory obligation to provide emergency services regardless of a patient’s ability to pay, it is not uncommon for hospitals to get left with significant unpaid bills for workplace injuries and accidents that should otherwise be covered by a workers’ compensation policy. Injured workers who find themselves involved in a coverage dispute with their employer will oftentimes engage in little effort to ensure that a medical provider is sufficiently compensated for services provided following an otherwise compensable injury. Likewise, employers and carriers disputing the compensability of an accident or injury will do little to involve the medical provider in the coverage dispute (avoiding financial responsibility) on the assumed basis that the medical provider has no legal interest in the dispute between the employer and the employee.

Florida statutory and case law, however, clearly provides hospitals with an independent legal right to seek reimbursement from Florida employers and their insurance carriers for medical services provided to an employee injured during the course and scope of employment. Nevertheless, under the Workers’ Compensation statutes, there are strict deadlines and compliance requirements for hospitals and other health care providers seeking reimbursement.

Once Emergency Medical Care is Rendered by the Hospital or Health Care Provider

An employee who seeks emergency medical treatment for a work-related injury is generally not liable for payment for medical treatment or services. F.S. 440.13(3)(g). Emergency care rendered by a hospital is payable by the employer/carrier only if the injury are very strict parameters for hospitals seeking reimbursement by the employer/carrier for medical care rendered to an injured employee. To be compensated by the employer/carrier, a health care provider who renders emergency care must notify the carrier by the close of the third business day after it has rendered such care. F.S. 440.13(3)(b). This strict deadline should not discourage the hospital that is "left in the dark” as to the carrier responsible for payment. Courts are likely to find that the three-day grace period begins once the hospital or health care provider knows, or reasonably should know, the identity of the employer/carrier responsible for payment of medical care. If emergency medical care results in the admission of the employee to a health care facility, the health care provider must notify the carrier by telephone within 24 hours after initial treatment. A health care provider is prohibited from referring the employee to another health care provider, diagnostic facility, therapy center, or other facility without prior authorization from the carrier, except when emergency care is rendered. If a carrier does not respond to a request for authorization by the close of the third business day after receipt of a request, such carrier is deemed to have consented to the medical necessity for such treatment. It is important to note that the statute specifically requires all such requests be made to the carrier. Notice to the employer alone is not sufficient.

Once Payment or Notice of Non-Payment is Received from the Carrier

A hospital or health care provider who receives notice of non-payment, or “disallowance” of payment, or an adjustment of payment that grossly reduces the amount of the charges must file a petition with the Department of Financial Services (DFS) within 30 days to resolve the dispute. The hospital must serve a copy of the petition to the carrier and all other affected parties by certified mail. The petition must include all supporting documents and records to avoid dismissal. Sec. 440.13(7)(a), Fla. Stat. (2009). Within 10 days of filing the petition, the carrier must submit to DFS all documentation substantiating the carrier’s disallowance or adjustment. Failure to timely submit such documentation constitutes a waiver of all objections to the petition. 440.13(7)(b). In Fairpay Solutions v. AHCA, et al, 969 So. 2d 455 (Fla. 1st DCA 2007), two hospitals billed the carriers for medical services provided to their insureds. The carriers paid substantially less than the amounts charged by the hospitals, after a third-party “medical review company” discounted the bills. The hospitals filed petitions for reimbursement under 440.13(7)(a) to the Agency for Health Care Administration (the Legislature transferred jurisdiction to the DFS after 2007). The carriers failed to timely submit a response to the petition within 10 days and AHCA issued a ruling in favor of the hospitals. In response, the carriers filed a petition for administrative hearing, arguing that despite their failure to file a response, they were entitled to a formal hearing under the Administrative Procedure Act. The First DCA ruled that section 440.13(7)(b) does not violate the carriers’ rights under the APA because the carriers had 10 days in which to challenge the medical providers’ petitions seeking higher reimbursement.

If Carrier Denies Payment to Hospital or Health Care Provider Based on Non-Compensability of Claim

The hospital or health care provider would be best served by filing petitions for a claim of unpaid services with both the DFS and the Office of Judge of Compensation Claims (OJCC) where the employer is located. A recent case suggests that DFS has sole jurisdiction of any dispute between medical care provider and carrier. Bryan LGH Medical Center v. Florida Beauty Florida, Inc. and Associated Industries Insurance Company, an opinion by the First DCA on May 20, 2010 (Case No. 1D09-3181), upheld a decision by a Judge of Compensation Claims (JCC) to dismiss for lack of jurisdiction a claim for payment against the employer/carrier for emergency medical services furnished to an alleged employee. The First DCA stated that the hospital has independent standing to bring a claim for payment for medical services it alleges are due from the employer/carrier, however, that such jurisdiction solely rests with the DFS. It should be noted that the opinion does not address whether the jurisdiction of the DFS is limited to disputes as to the amount of compensability, the compensability itself, or both. Section 440.13(11)(c) states that the DFS has exclusive jurisdiction to decide any matter concerning reimbursement, to resolve any overutilization dispute under subsection (7) and to decide any question concerning overutilization under subsection (8), which question or dispute arises after January 1, 1994. However, questions of compensability of the employee’s work-related injury often requires a full evidentiary hearing that is better suited for a JCC. Indeed, case law decided prior to Bryan LGH states that the proper forum for hospitals and health care providers to assert claims for medical services where compensability is in dispute is with the JCC. See, eg, Rebich v. Burdines, 417 So.2d 284 (Fla. 1st DCA 1982). Therefore, the prudent course of action for the hospital or health care provider would be to file petitions in both jurisdictions to ensure all rights to compensation are preserved.

CONCLUSION

The Florida Legislature has created an independent “point of entry” for hospitals to collect unpaid, or underpaid, medical bills arising from emergency care provided to injured employees. There are several avenues for reimbursement depending on the nature of the dispute. Hospitals who provide emergency care to injured workers should consider retaining legal counsel to address disputes over obtaining full reimbursement for such claims and to develop policies and protocols to maximize the ability to recover reimbursement for medical services to injured workers.

Alternate-Site Testing in Hospitals

The Agency on Health Care Administration (AHCA) will be holding a public meeting on Tuesday, May 25, 2010, at its Tallahassee headquarters to discuss current practices and requirements under the “ Alternate-Site Testing” rule (Rule 59A-7.034, Florida Administrative Code).  Simply stated, the alternate-site testing rule allows for certain laboratory tests to be performed by designated hospital personnel at sites other than the hospital’ s licensed clinical laboratory.  Examples of alternate sites are the patient’ s bedside, emergency room, or nurses’ station.  Hospitals must have approval from AHCA to conduct alternate-site tests.

Navigating through Rule 59A-7.034 can be a daunting task for a hospital seeking approval for alternate-site testing.  At this time, there is no standard application form to submit for approval to test at alternate sites. Therefore, careful attention to each requirement in the rule is necessary to ensure that the hospital’ s alternate-site testing is approved. This article will provide a brief overview of the rule’ s requirements.

History of Alternate-Site Testing
The alternate-site statute was signed into law in 1993.  Section 483.051(9), Florida Statutes, required AHCA, DOH and the Board of Clinical Laboratory Personnel to adopt criteria for alternate-site testing performed under the supervision of a clinical laboratory director.   In 1995, Rule 59A-7.034, Florida Administrative Code, was adopted.  The rule was amended in 2009 to further specify the parameters for tests performed at alternate test sites within hospitals.

Overview of Laboratory Testing at Alternate Sites
Generally, clinical laboratory testing may be done at a hospital’ s main or central laboratory or satellite laboratories, which are licensed clinical laboratories established on the same or adjoining grounds of a hospital licensed under Chapter 395. Testing at satellite labs must be done by licensed clinical laboratory personnel.  However, the legislature created a limited exception to this requirement under Section 483.051(9), Florida Statutes, which allows for alternate-site testing. The term "alternate-site testing" means any laboratory testing done under the administrative control of a hospital, but performed out of the physical or administrative confines of the central laboratory. Section 483.051(9), Florida Statutes.

Alternate-site testing provides two distinct advantages for hospitals with a licensed clinical laboratory on site.  First, certain lab tests can be performed bedside, at a nurse station, operating room, ER or anywhere else under the administrative control of a hospital.  Second, alternate-site testing can be performed by non-clinical laboratory personnel if agency approval is granted under Rule 59A-7.034.

If hospital staff (other than licensed clinical laboratory personnel) will be performing the tests at alternate sites, then an
internal needs assessment must be submitted for agency approval of alternate-site testing. The assessment must be completed by the laboratory director and contain specific information relating to the patient benefits and criteria for testing, proposed methodologies for tests, and other information and protocols to insure the accuracy and integrity of the tests being performed at the alternate site.   The internal needs assessment – along with a list of the clinical tests and testing locations where they are to be performed – must be submitted with each biennial laboratory licensure renewal application.

Who can perform tests at alternate sites?
Licensed clinical laboratory personnel can always perform certain tests at alternate sites as long as the laboratory director is responsible for the testing.  If a laboratory clinician is not performing the test, there are specific personnel requirements for the tester. Testers must have a high school diploma, have met the HIV/AIDS educational requirements, and be one of the following (with designated certifications or exemptions): RN, LPN, radiologic technologist, respiratory care practitioner certified in critical care services, respiratory therapist, nationally-certified phlebotomist, physician’ s assistant, perfusionist, cardiovascular technician, or any licensed director, supervisor technologist or technician under Chapter 483.  The laboratory director is responsible for training, evaluating for competency and documenting necessary qualifications of all personnel to perform alternate-site testing.

What tests can be performed under alternate-site rule?
Any test the supervising director and laboratory personnel are qualified to conduct can be documented in the internal needs assessment for approval from AHCA.  However, certain restrictions apply.  In general, the tests performed at alternate sites must not exceed “ moderately complex” test procedures.  Further, they must employ whole blood specimens that require no processing of any kind and use automated test systems in which a specimen is directly introduced into the system.

Where can alternate-site tests be conducted?
Alternate-site testing can only be conducted at those sites where the laboratory director has established and documented as necessary for the proper care and treatment of patients in the internal needs assessment.  Each test site must have a procedure manual that specifically addresses the testing done at that location and shall be noted on all laboratory licensure applications submitted to the agency.

Violations
AHCA may revoke the approval for any alternate-testing site where the agency determines that said sites have operated in violation of Chapter 483, Part 1, of the Florida Statutes or the provisions of Rule 59A-7.  Further, it may even revoke the license of the laboratory maintaining the alternate-site testing in the event of a violation.

Conclusion
Hospital laboratories must assess what tests will be performed at alternate sites and who will be performing them before applying to AHCA for alternate-site testing approval.  Because AHCA has not yet developed a standardized application for alternate-site approval, hospitals must create a letter-form application that carefully addresses each requirement under Rule 59A-7.034.  If you need assistance with obtaining approval for alternate-site testing, please feel free to contact us.

New “Get Tough” Health Care Fraud Policies

In the 2009 regular session of the Florida Legislature, a health care regulation bill was passed as legislators sought to “get tough” on alleged perpetrators of health care fraud. The new bill provisions are contained in CS/CS/SB 1986 which is now codified as Ch. 2009-223, Laws of Florida. While every reasonable person can agree that health care fraud should not be tolerated, the new bill raises significant issues for health care providers, especially licensed home health agencies who may be affected by some of the bill’s more draconian measures. This article provides a summary of the bill’s key provisions, as well as a discussion of possible legal defenses to those who may be affected by this sweeping effort to crack down on abuses in the health care reimbursement system.

The Background to the New Bill

In 2007, the US Department of Health and Human Services and the US Department of Justice Health Care Fraud and Abuse Control Program Annual Report described recent federal efforts to crack down on health care fraud in Florida. This included criminal prosecutions with indictments against 120 defendants who were charged with overbilling the federal Medicare program more than $400 million primarily for durable medical equipment (DME) and infusion therapy services for HIV patients. A recent report of the US Government Accountability Office (GAO) finds that Florida has one of the highest growth rates for home health spending (over 90% increase from 2002-2006), while the number of Medicare beneficiaries grew by only 28% during the same time frame. The GAO report concludes Miami-Dade County in particular shows evidence of fraudulent upcoding of Medicare home health claims based upon an abnormally high number of outlier cases.

Florida’s Office of Program Policy Analysis and Government Accountability published reports in 2004, 2006, and 2008 pointing to the rising problems of Medicaid fraud and abuse and recommending legislative action to bring Medicaid fraud under control.

Recent years also saw an explosion of new home health agency licensure particularly in Miami-Dade County. In 2007, there were 431 new licensure applications for home health agencies, with 58.5% of those applications in Miami-Dade County. In 2008-2009 another 331 applications were received by AHCA. From 1999 to March of 2009 the number of licensed home health agencies in Miami-Dade County increased from 216 to 895 or 75% increase in licenses. Florida’s Medicaid Fraud Control Unit, reported that between 2005 and 2007, questionable practices of home health agencies in Miami-Dade County were documented including:

  • Home health aides reporting that they worked 20-25 hour days
  • Patient brokering by aides
  • Alteration of medical records
  • Billing for skilled nursing services that were not provided
  • Payment made to physicians for referrals
  • Payments to patients
  • Patients receiving services that were not medically necessary
  • Physicians holding financial investment interests in the home health agency to which they refer patients
    The Legislative Response and the 2008 Bill Changes
The legislative reaction to these reports culminated in significant changes to home health agency licensing, and overall health care facility licensing that passed in 2008. Some of the key provisions in the 2008 bill included:
  • AHCA cannot issue an initial or change of ownership license to an applicant for a home health agency that shares common controlling interests with another home health agency that is located within 10 miles of the applicant in the same county.
  • Applications for licensure cannot be transferred to a new entity before the license is issued.
  • An applicant must submit proof of application for accreditation from the Joint Commission, CHAP, or ACHC, and must pass a survey by one of these accrediting organizations.

While these measures slowed the pace of new home health agency licenses, continued reports of possible Medicare fraud resulted in the sweeping changes ushered in by the 2009 Legislature.

The 2009 Legislative Response

The 2009 Legislature adopted a broad range of new measures to curb perceived abuses in the health care reimbursement system. Some of these changes may be subject to constitutional challenges, as the new laws in some instances appear to impose new penalties for past violations of law that were resolved through settlement or otherwise through an adjudicatory process. It is beyond the scope of this article to provide a detailed legal analysis of the merits of such constitutional attacks on these new provisions of law; however, the application of new penalties for acts already taken and adjudicated clearly raises constitutional issues of ex post facto application of law, and due process rights of individuals or entities that resolved past allegations of wrongful conduct. Any person facing the non-renewal, suspension, or revocation of their license should seek legal counsel to further investigate the constitutionality of applying the new laws on the basis of past conduct.

The following is a section-by-section analysis of the provisions of Chapter 2009-223, Laws of Florida, as adopted by the Legislature and effective as of July 1, 2009.

Section 1: In an unprecedented move, the Legislature has officially designated Miami-Dade County as a health care fraud crisis area for purposes of implementing increased scrutiny of home health agencies, home medical equipment providers, health care clinics, and other health care providers in Miami-Dade County.

Section 2: This section of the bill amends existing Florida law on “Qui Tam” actions commonly known as Whistleblower suits. Under current law, a person who reports fraud may receive an award from any recovery of funds that is based on the reported fraudulent activity. The new provision in the law requires that 10% of any funds recovered through Qui Tam lawsuits that are related to the State Medicaid program, shall be placed into the State’s Legal Affairs Revolving Trust Fund to be earmarked for funding rewards for persons who report and provide information related to fraud.

Section 3: This law change makes it more difficult for a health care provider accused of fraud in a “Qui Tam” or whistleblower action to recover attorney fees and costs if the accused provider proves that the claim of fraud is not warranted, and is found not liable for the alleged fraudulent activities. Under prior Florida law, a defendant was entitled to recovery of reasonable attorney fees from the person bringing the unfounded charge of fraud. Under the new law, the Court may award fees only if the Court finds that the action was clearly frivolous, clearly vexatious, or brought primarily for the purpose of harassment. Thus, the new law will encourage potential “whistleblowers” to bring allegations of fraud against health care providers without fear of having to pay attorney fees if the claims cannot be proven.

Section 4: This section of the bill is unrelated to the general topic of health care fraud. The provision allows licensed children’s hospitals to provide open heart and interventional cardiology services to adults with congenital heart defects.

Section 5. This change in law places Miami-Dade home health agencies squarely in the legislative cross-hairs, and provides that AHCA shall not issue a renewal license for any home health agency that has been administratively sanctioned in the past two years for various offenses. On its face, the bill applies to any county that has more than one home health agency per 5000 persons – but it has been acknowledged by AHCA that this population criterion is only met in Miami-Dade County. The offenses that will result in non-renewal of home health agency license include:

  • An intentional act or negligent act that materially affects the health or safety of a client.
  • Knowingly providing home health services in an unlicensed ALF (unless the home health agency reports the ALF within 72 hours.
  • Preparing or maintaining fraudulent patient records (e.g. recording vital signs or symptoms not personally taken at the time indicated; borrowing patient records from other HHAs to pass a survey; falsifying signatures).
  • Failing to provide at least 1 service for a period of 60 days.
  • A “pattern” (at least 3 instances) of falsifying documents related to the training of home health aides or CNAs, or falsifying health statements for staff who provide direct care.
  • A “pattern” (3 instances) of failing to provide a service specified in the plan of care or agreement with client (unless reduction was required by Medicare or Medicaid).
  • Payment of any kind of remuneration (cash, in kind, etc.) for patient referrals to discharge planners, case managers, facility staff from hospital or nursing homes or others who refer patients.
  • Payment of cash or equivalent to a Medicare or Medicaid beneficiary.
  • A pattern (at least 2 instances) of providing services that were not medically necessary as determined in a final order.
  • Providing services to residents in ALFs for which the home health agency does not receive fair market value remuneration.
  • Providing staffing to an ALF if the home health agency does not receive fair market value remuneration.

This section of the new bill further prohibits AHCA from approving any new applications for home health agencies in Miami-Dade or Broward Counties. The bill is written to apply to any county with fewer than 1,200 persons age 65 and over per home health agency, but AHCA has acknowledged that only Broward and Miami-Dade meet this criterion.

This section of the Bill is potentially devastating to existing and planned home health agency providers in Broward and Miami-Dade. Possible legal options for home health agencies affected by these new provisions include:

  • Seeking a declaratory judgment from a circuit court that the bill is unconstitutional as applied to the extent it is imposing a new penalty of license forfeiture for past conduct that was resolved. This is especially egregious in instances where a home health agency provider may have resolved an alleged prior violation by stipulation to pay a minor penalty – and is now faced with licensure non-renewal as an unknown additional penalty and consequence.
  • Seeking a declaratory judgment that this section of the bill is unconstitutional on its face because the bill: a) violates equal protection of laws by singling out Miami-Dade and Broward County for treatment that is different from other similarly situated counties; b) sets arbitrary and capricious population thresholds; c) is a local law that was not properly adopted using state constitutional notice provisions applicable to such local law adoption; d) amounts to an impairment of existing contractual rights; d) results in an improper taking of property rights without compensation; e) denies applicants due process rights.
  • Pursuing a formal administrative hearing under Section 120.57, Florida Statutes, to challenge the factual underpinnings of any decision by AHCA to refuse to renew a license based on alleged prior violations.

Each of these legal avenues will need to be thoroughly researched by competent legal counsel prior to initiation of any lawsuit. However, given the high stakes involved, including the possible loss of an established business, such legal strategies may be warranted.

Section 6: This section of the bill amends the existing law on Administrative Penalties applicable to home health agencies, and allows AHCA to impose a fine of $5,000 for various violations. This section also adds a new violation to the list of violations that may be a basis for AHCA fines: a “pattern” (at least two instances) of billing Medicaid for services that are medically unnecessary as determined in a final order.

Based on these new sanctions for violations, home health agencies faced with an Administrative Complaint should consider exercising their rights to a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes. While in the past many violations were resolved through a simple entry of an admission and minimal fine, the new provisions on non-renewal and suspension of license for such violations may force a greater need to contest even minor proposed fines.

One positive feature of this section of the bill is incorporation of the federal stark “safe harbor” provisions. In the 2008 legislative changes, there was an effort to impose a complete prohibition on any type of financial remuneration for physicians other than a single medical director. The incorporation of the federal safe harbors will allow for such arrangements as renting office space from physicians for fair market value, and contracts with physicians for consulting or medical director services. This raises a potential problem, however, as AHCA seeks to enforce the strong anti-fraud tone of the new bill, but still apply and interpret the federal safe harbors in a reasonable manner. Any provider who is accused of violation of state anti-kickback provisions due to financial arrangements with physicians or other providers should consult legal counsel on possible applicability of safe harbor provisions. Moreover, proactive planning and review of such ongoing relationships and contracts with physicians and others who make referrals is advisable for home health agencies seeking to ensure ongoing compliance.

Section 7: This section applies only to Nurse Registries and provides an exemption from anti-kickback provisions for Nurse Registries that do not participate in Medicaid or Medicare programs.

Section 8: This section of the bill includes enhanced licensure requirements for home health agencies, DME or home medical equipment providers, and health care clinics. These include for initial and change of ownership (CHOW) applications, the following:

  • A demonstration of financial ability to operate, including independent evidence of start up and working capital funds, and contingency financing.
  • Pro formas financial projections to demonstrate sufficient revenues to support financially feasible operations.
  • Statement of estimated project costs, and source of funds, through breakeven point, showing at least 3 months average expenses to cover startup costs, working capital and contingency financing. Contingency funding must be available for at least 1 month’s average expenses.
  • All such documentation must be signed by a CPA.

This section also imposes a $500,000 surety bond requirement for any license application by a home health agency, DME or health care clinic where the controlling interest is a nonimmigrant alien.

Finally this section of the bill makes it a criminal third degree felony to offer services that require licensure without obtaining a license, to submit false or misleading information in a license application, or to otherwise violate the licensure requirements for home health agencies.

Section 9: This section imposes a mandatory obligation on all types of health care providers regulated by AHCA to report to AHCA changes in any information contained in a licensure application, or changes in provider’s required insurance or bonds.

This section also requires all AHCA regulated health care providers to give a written notice to all clients/patients that includes an AHCA description of Medicaid fraud and the right to report fraud at a toll free number.

Section 10: This section mandates that AHCA shall deny a license application or renewal license for any regulated entity (not limited to home health agencies) if the applicant or any controlling interest in the applicant has been:

  • Convicted or plead no contest to any felony under Florida law related to Medicaid (chapter 409, Fla. Stat), Fraudulent Practices (Chapter 817, Florida Statutes) or Drug Prevention and Control (Chapter 893, Florida Statutes), unless the sentence or probation for such violation ended more than 15 years before the application for license was submitted.
  • Convicted of federal felonies under 21 USC ss. 801-970) (pertaining to offenses including possession, sale, or trafficking in drugs or controlled substances) or 42 USC ss. 1395-1396 (pertaining to Medicare fraud regulation) unless the sentence and prohibition period ended more than 15 years prior to the license application.
  • Terminated for cause from the Florida Medicaid program unless the applicant has been in good standing for past
    5 years.
  • Terminated from federal Medicare or another State’s Medicaid program, unless the applicant has been in good standing for past 5 years and the conviction or plea was at least 20 years prior to the Florida license application.

These provisions may have a significant effect on facilities where the controlling interest of the applicant has a prior drug offense. Again, this type of new penalty for past conduct may raise constitutional issues that deserve investigation by a party affected by these new provisions.

Section 11: This section creates another new provision aimed at home health agencies, and mandates that AHCA require prior authorization of services from Medicaid for visits not associated with a skilled nursing visit, where the home health agency’s billing rates exceed the state average by 50%. Thus, the home health agency would be required to submit the plan of care and documentation to support the requested service prior to providing the service in order to be eligible for Medicaid reimbursement. This section also prohibits AHCA/Medicaid from paying for home health services, unless the services are medically necessary, and:

  • Services are ordered by a physician.
  • There is a written prescription prior to developing a plan of care and before any request requiring prior authorization.
  • The physician is not employed, or under contract with the home health agency (there is an exemption for certain agencies associated with certain retirement communities and for fragile children).
  • The physician ordering the service has examined the recipient within 30 days prior to the request for service, and biannually thereafter.
  • The written prescription includes the acute or chronic condition or diagnosis, the home health services required, and frequency and duration of services.
  • The physician’s national provider identifier, Medicaid ID number, or Medical Practitioner license number must be on the written prescription, the claim for home health reimbursement, and any prior authorization request.

Section 12: This section is unrelated to the health care fraud initiative, and simply authorizes AHCA to enter Medicaid provider agreements with providers who are located outside of Florida but within 50 miles of the State line.

Sections 13, 14 15: These sections are unrelated to the health care fraud initiative.

Section 16: This section requires that AHCA track Medicaid provider prescription and billing patterns and evaluate claims for Medical necessity. AHCA is mandated to conduct review of claims to detect any abnormal increases in billing or payment of claims. Providers that are determined to have a pattern of submitting claims for unnecessary services shall be referred to the Medicaid Program Integrity office for investigation. AHCA must file an annual report on these efforts to control over-utilization.

Section 17: This section is not related specifically to the health care fraud initiative. The section establishes a new “Medical Home Pilot Project” to provide a continuum of care to Medicaid recipients including primary care, coordinated services to control chronic illness, pharmacy services, specialty services, and hospital inpatient and outpatient services. The new bill calls for AHCA to implement such pilot projects in at least two geographic areas in the state and evaluate the effectiveness for cost savings and quality of care.

Section 18: This section includes multiple amendments to the Medicaid provisions of Chapter 409, Florida Statutes, that are designed to sharpen AHCA’s efforts to detect and prosecute Medicaid fraud through mandatory termination of providers when the provider or the controlling interest in the providers is found to have been engaged in criminal misconduct related to delivery of health care, health care professional standards, or physical abuse of neglect of patients, or has been terminated from Medicare or another state’s Medicaid program.

The section also requires annual notification by all types of health care providers to all Medicaid recipients on how to report Medicaid fraud, and an explanation of the rewards available for reporting and successful prosecution of Medicaid fraud. AHCA is also mandated to post on its website a list of all providers that have been terminated or sanctioned by the Medicaid program. AHCA is to make use of information technology and resources in its anti-fraud efforts.

Section 19: The section expands Medicaid provider fraud provisions to extend to Managed Care Plans. Thus, the making of any false statements to a Managed Care Plan in order to seek payment for claims is made illegal, and punishable by AHCA or by criminal prosecution. The section imposes new felony criminal penalties for violations of Medicaid fraud provisions (including false statement to Managed Care Plans). In addition to any other criminal sanctions, the person convicted of such Medicaid fraud violations shall pay a fine equal to 5 times the amount improperly gained or unlawfully received, or the loss incurred by the Medicaid program or managed care program.

A person who reports fraud is provided with immunity from civil lawsuits unless the person acted with knowledge the claim of fraud was false or acted in reckless disregard for the truth or falsity of the claim of fraud.

Section 20: This section of the bill provides new rewards to persons who report fraud, not to exceed the lesser of 25% of the amount recovered in a lawsuit, with a maximum of $500,000 in a single case. (The person reporting the fraud however cannot “double dip” and also receive an award in a Qui Tam or whistleblower type action.)

Section 21: This section mandates that the Department of Health assist AHCA in the anti-fraud campaign by prosecuting health care practitioners who did not remit Medicaid overpayments to AHCA.

Section 22: The Department of Health is also required to publish the fact of any physician or ARNP who is terminated from the state Medicaid program or who is sanctioned for Medicaid violations.

Section 23: This section adds “sleep clinics” to the list of health services that are exempted from the prohibition that physicians may not “self refer” patients to facilities in which the physician holds an investment interest. Thus, physicians may hold a financial interest in a sleep clinic to which the physician makes referrals.

Section 24: This provision applies to any health care professional or practitioner regulated by a professional Board with the Department of Health. No initial or renewal license may be issued to any health care professional if the applicant, or any principle, officer, agent, managing employee, or affiliated person of the applicant has been:

  • Convicted or plead no contest to any felony under Florida law related to Medicaid (chapter 409, Fla. Stat), Fraudulent Practices (Chapter 817, Florida Statutes), or Drug Prevention and Control (Chapter 893, Florida Statutes), unless the sentence or probation for such violation ended more than 15 years before the application for license was submitted.
  • Convicted of federal felonies under 21 USC ss. 801-970) (pertaining to offenses including possession, sale, or trafficking in drugs or controlled substances) or 42 USC ss. 1395-1396 (pertaining to Medicare fraud regulation) unless the sentence and prohibition period ended more than 15 years prior to the license application.
  • Terminated for cause from the Florida Medicaid program unless the applicant has been in good standing for past
    5 years
  • Terminated from federal Medicare or another State’s Medicaid program, unless the applicant has been in good standing for past 5 years and the conviction or plea was at least 20 years prior to the license application.

This provision is reportedly already having an affect on renewal of licenses for health care professionals that have prior plea agreements or convictions for charges for which they have already served the sentence imposed. Such health care professionals affected by this new license non-renewal provision should consider whether to challenge the constitutionality of the new law. The deprivation of a person’s livelihood based on past conduct that was already adjudicated raises serious constitutional questions.

Section 25: This section makes Medicaid or Medicare fraud in any state a basis for disciplinary action against a Florida health care professional. It further makes failure of a health care professional to remit an overpayment to Medicaid a basis for disciplinary action, such as imposition of additional fines, suspension or revocation of license.

Section 26: This section adds federal misdemeanors and felonies related to the Medicare and Medicaid programs as a basis for immediate suspension of a health practitioner’s license.

Section 27-28: These sections amend existing laws with respect to pharmacy permits and disciplinary actions, and include the following among other provisions:

  • Fingerprint card requirement for each person with 5% or more ownership interest and any person who directly or indirectly manages, oversees, or controls the operations, including officers, and members of the board of an applicant that is a corporation.
  • For pharmacies having more than $100 million of business taxable assets, the fingerprint card requirement also applies to the prescription department manager.

A pharmacy permit shall be denied for any applicant that has:

  • Obtained a permit by misrepresentation or fraud.
  • Been convicted or entered a no contest plea to any crime involving ability to practice in the profession of pharmacy.
  • Been convicted or plead no contest to any crime related to health care fraud.
  • Been terminated from the federal Medicare or another state’s Medicaid program, unless the applicant has been in good standing for past 5 years and termination was at least 20 year ago.
  • Dispensed medication based on a prescription that the pharmacist knows is not based on a valid practitioner-patient relationship.
  • Disciplinary sanctions against any licensed pharmacy are authorized for any of the above violations.
  • There is enhanced authority for revoking and other sanctions related to prior disciplinary action, convictions, or plea agreements.

This section of the bill could potentially have devastating impact on existing and planned pharmacies. Possible legal options include:

  • Seeking a declaratory judgment from a circuit court that the bill is unconstitutional as applied to the extent it is imposing a new penalty of license forfeiture for past conduct that was resolved.
  • Pursuing a formal administrative hearing under Section 120.57, Florida Statutes, to challenge the factual underpinnings of any decision by AHCA to refuse to renew a license based on alleged prior violations.

Section 29: This section enhances existing laws to protect against elder abuse by adding breach of fiduciary duty to the definition of exploitation of an elderly person.

Section 30: This section adds Medicaid fraud as a Level 7 criminal offense for criminal sentencing purposes.

Section 31: This section of the bill creates a new Pilot Project to monitor home health services in Miami-Dade County. It requires that AHCA implement the Pilot Project by contracting with a vendor to verify utilization and delivery of home health services. The Pilot Project will use “voice biometrics” and will audit the veracity of claims by contacting patients to determine what services were delivered.

Section 32: This section creates another Pilot Project to monitor home health services. This Section requires AHCA to implement a comprehensive care management project, including face to face assessments by a licensed nurse, consultation with physicians ordering home health services, and on site or desk reviews of recipient’s medical records in Miami-Dade County.

Sections 33-44: These sections repeal obsolete provisions of law; make minor “glitch” amendments to existing laws; and make some minor modifications to existing laws related to licensure of nursing homes.

Section 45: This section of the bill applies to clinics that provide magnetic resonance imaging services, and provides for a 1 year period after equipment replacement to obtain accreditation.

Section 46: This section makes minor amendments to the administrative penalty process for health care clinics.

Section 47: This section makes some amendments to AHCA’s “core licensure process.” The Section includes a minor amendment to the definition of “change of ownership,” commonly referred to as a CHOW to expressly include a change in FEI number or taxpayer number as evidence of a CHOW; and amends the percentage ownership change that constitutes a CHOW from 45% to 51%. The section also clarifies that a request for license renewal must be submitted at least 60 days prior to license expiration but no more than 120 days prior to license expiration.

Section 48: This section makes minor changes to information that must be provided as part of the application process.

Section 49: This section allows AHCA to issue a provisional license to an applicant applying for a CHOW, for a period not to exceed 12 months.

Section 50: This section adds numerous additional offenses that must be included in background screening for persons who are required by law to undergo a Level I or Level II background screening. These offenses include Medicaid fraud; domestic violence; felony assault, battery or culpable negligence; burglary; fraudulent acts through mail, wire, radio, etc; false and fraudulent insurance claims; patient brokering; criminal use of personal identification; obtaining a credit card through fraud; fraudulent use of credit cards (felony level); forgery; uttering forged instruments; forging bank bills, checks, drafts or promissory notes; fraud in obtaining medicinal drugs; sale manufacture, delivery or possession with intent to sell counterfeit controlled substances.

Section 51: This section amends the Inspection provisions for health care providers, clarifying that AHCA may accept survey results of an accrediting organization; that deficiencies identified must be corrected within 30 days unless another time is specified by AHCA; and that a plan of correction must be provided with AHCA within 10 days after notification unless a different time frame is specified.

Section 52: This section amends AHCA’s Administrative Fine authority against all types of providers regulated by AHCA. The Section establishes four classes of violations based on the nature of the violation and the gravity of its probable effect on clients. The scope of the violation may be cited as:

  • Isolated – affecting one or very limited number of clients, or occurred only occasionally or in very limited number of locations.
  • Patterned – more than a very limited number of clients involved; or occurred in several locations; or same clients affected by the same deficient practice; but not pervasive.
  • Widespread – problems are pervasive and represent systematic failure to comply.

The four classes of violations are:

  • Class I – Imminent danger to clients; substantial probability of death or serious physical or emotional harm. Such violations shall be abated or eliminated within 24 hours, unless another time is stated by AHCA. AHCA shall impose a fine, notwithstanding correction.
  • Class II – Violations that directly threaten physical or emotional health, safety or security, other than Class I violations. AHCA shall impose a fine notwithstanding correction of the violation.
  • Class III – Violations are determined to indirectly or potentially threaten the physical or emotional health, safety and security of clients, other than Class I or Class II. AHCA must specify time frame for correction and if corrected in the time stated, then a fine may not be imposed.
  • Class IV – Violations are those conditions or occurrences related to required report, forms or documents that do not have the potential of negatively affecting clients. Do not threaten patient or client health or safety or security. AHCA must specify a time for correction and if corrected in a timely manner, no fine may be imposed.

Section 53: Makes amendments to exemption provisions applicable to certain licensure requirements.

Sections 54 and 55: These sections amend and reorganize emergency management provisions of health care facility laws, and requires appointment of a safety liaison to serve as primary contact for emergency operations. Facilities that are damaged in an emergency can obtain inactive licenses during repair period. Facilities serving as a “receiving provider” during an emergency may exceed licensed capacity for the emergency period. AHCA may adopt rules related to emergency management communications and operations.

Section 56: Amends some provisions for the Florida 211 Network that serves as the point of coordination for information and referral for health and human services. Providers in the 211 Network must be fully accredited by the National Alliance of Information and Referral Services.

Sections 57-73: These provisions are not related to the health care fraud initiative, and are primarily reorganization of existing provisions of law, repeal of obsolete provisions and minor amendments. Section 68 clarifies that clinical labs that perform only “waived tests” under CLIAA, do not need to have separate state licensure.

Conclusion

Chapter 2009-223 is a massive revision to Florida health care law. Its primary focus is on stepping up enforcement and sanctions against providers suspected of being involved in health care fraud. The main target is home health care providers, and particularly those providers in Miami-Dade and Broward Counties. However, other health care professionals and providers are also caught up in the broad sweep of the law, particularly with respect to provisions that will prohibit license renewal for persons who may have been convicted of an offense in the past – and now find that offense coming back to haunt them unexpectedly. For those persons, a challenge to the constitutionality of the law may be the only recourse. For providers accused of violation of Medicaid rules or regulations, or facility and operational standards, careful consideration must now be given to whether the provider should exercise the right to a formal hearing to contest allegations and proposed fines that may be the basis later for non-renewal of suspension of the provider’s license.

For further information, please contact Geoff Smith at 850-297-2006 or Geoff@smithlawtlh.com.