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Amendment to Florida’s Patient Brokering Act Causes Uncertainty

July 22, 2019

A bill signed by Florida Gov. Ron DeSantis in late June has narrowed an exception to the state’s patient brokering statute to now apply solely to payments and practices that are authorized under federal anti-kickback laws. However, the amendment, which went into law on July 1, could have significant unintended consequences, legal experts say.

“On its face, [the amendment] potentially narrows the exception quite a bit because there are a lot of arrangements that do not satisfy one of the federal anti-kickback safe harbors or the statute itself, but could still be deemed to be compliant with the federal anti-kickback statute,” says Rick Hindmand, a member of the McDonald Hopkins law firm who specializes in healthcare law. “It potentially subjects additional arrangements to more scrutiny under this patient brokering statute.”

Florida’s Patient Brokering Act previously stated that its reach did not apply to any “discount, payment, waiver of payment, or payment practice not prohibited” by the federal Anti-Kickback Statute or its regulations. 

“That language was changed,” says Jamie Gelfman, of counsel at the law firm Nelson Mullins Riley & Scarborough. “The exception now states that the Patient Brokering Act does not apply to any payment practice ‘expressly authorized’ by the Anti-Kickback Statute or its regulations. Why is that a problem? The Anti-Kickback Statute is a criminal statute, so it doesn’t expressly authorize any behavior. Instead, it carves out certain practices that are not considered remuneration, and therefore are prohibited, for the purposes of the Anti-Kickback Statute. It tells you what can’t do and what types of practices fall under the realm of what’s prohibited in that statute, but it’s definitely not going to ‘expressly authorize’ certain types of practices.”

A second problem, Gelfman says, is that there has long been uncertainty over whether this exception in the Patient Brokering Act applies to activities involving private insurance. By its nature, the federal Anti-Kickback Statute applies to federal payers, such as Medicare. “It has always been a little unclear if this exception in the Patient Brokering Act applies to conduct related to private insurance,” Gelfman says.

“If you look at the federal Anti-Kickback Statute, that obviously applies to federal conduct—such as Medicare—but the Patient Brokering Act also applies to conduct related to private insurance, and the exception has been heavily relied upon with respect to private insurance as well up to this point.”

In the legislative history of the amendment, Gelfman notes, the state House of Representatives Staff Analysis references a decision from the 15th Judicial Circuit Court in which the judge on the case noted the incorporation of the federal Anti-Kickback Statute exception into the Patient Brokering Act means that the exception only applies to conduct related to federal programs.

“If judges rely on this going forward in future case law, this is a problem for people who have been using the regulatory safe harbors in the federal Anti-Kickback Statute to protect payment arrangements that affect conduct related to private insurance here in Florida,” Gelfman says. “We’re not sure yet how that is going to be interpreted in the future.”

So, does the bill signed in late June potentially create more problems than it solves?

“I would agree with that,” Gelfman says. “I don’t think this was necessarily the intent. I’m not quite sure if the individuals who drafted the bill had healthcare regulatory knowledge versus trying to tackle legitimate concerns with respect to healthcare fraud. But unfortunately for people who work with these statutes on a daily basis, it will create uncertainty as far as how we proceed going forward, even with respect as to how we advise our own clients from a legal perspective.”

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