Kickbacks: An Introduction

The substance abuse provider community has remained uneasy after the FBI raid of Good Decisions sober housing occurred in September, 2014. There has been very little additional information concerning the outcome of the case and the actual charges made. It would have been helpful and offered guidance to many of the providers. There are business practices occurring that might unintentionally be incorrectly administered, and we know that good providers do not want a technicality to result in a revocation of a license or more. So, this is a brief outline of state law on kickbacks. Remember, for those of you accepting federal subsidized reimbursement, such as Medicare and Medicaid, there are additional statutes controlling this subject. Also, the state legislation may soon be changing, but here is the brief summary.

Florida has several statutes related to kickbacks. These statutes are intended to prohibit referrals motivated by financial gain. This article is a summary of several Florida anti-kickback statutes, including information on what constitutes a kickback and what is prohibited. The term “kickback” is used below as shorthand for several prohibited types of compensation, including kickbacks, bonuses, commissions, rebates, and bribes.

It is important for health care providers to understand the various anti-kickback laws in the state of Florida. The consequences for failure to comply with the anti-kickback laws can be severe. If you have any additional questions, please contact a knowledgeable Florida attorney like the attorneys at Weiner & Thompson, P.A. []

Section 456.054 prohibits kickbacks, which are defined as remuneration or payment as an incentive or inducement to refer patients to a health care provider. Providers cannot offer, pay, solicit, or receive kickbacks. Violations of this section shall be considered patient brokering and shall be punishable as provided in Section 817.505 (described in the paragraph below). While the definition of “health care provider” may or may not cover the type of activity in which you are engaging, it is helpful to know that this is the thrust of the local state legislation.

Patient Brokering
Section 817.505 prohibits patient brokering, defined as to include paying a kickback to induce patient referral, soliciting a kickback in return for a patient referral, and soliciting or receiving a kickback in return for accepting treatment, among other activities. This section does not apply to certain discounts, financial arrangements within a group practice, consultation services, lawful remuneration to insurance agents, certain payments to information services, and a few other types of payments. However, do NOT expect these exceptions to apply to your circumstances. This is mostly to allow doctors to refer within their own practices.
Violation of this section is a felony of the third degree. The party bringing an action under this section may recover reasonable expenses in obtaining injunctive relief, including reasonable attorney’s fees. The provisions of this section are in addition to any other actions provided by law.

Medicaid Kickbacks
Section 409.920 prohibits Medicaid provider fraud. The section prohibits knowingly making certain false statements or false claims and knowingly paying or receiving any kickbacks, among other Medicaid-related actions prohibited. Violation of this section ranges from a felony of the third degree to a felony of the first degree depending on the dollar amount. Violators also face fines. This section also states that the Attorney General shall conduct a statewide program of Medicaid fraud control. This is in addition to Federal statutes which cover this subject.

Licensed Facility Kickbacks
Section 395.0185 makes it unlawful for any person to pay or receive kickbacks or something similar for patients referred to a licensed facility. A violation may result in a fine and recommendation of disciplinary action.

Licensed Nursing Home Kickbacks
Section 400.176 makes it unlawful to pay or receive kickbacks or something similar for residents referred to a licensed nursing home. A violation may result in a fine and a recommendation of disciplinary action.

Pharmacy Kickbacks
Section 465.185 makes it unlawful to pay or receive kickbacks or something similar for patients referred to a pharmacy. A violation may result in a fine and a recommendation of disciplinary action.

Clinical Laboratory Kickbacks
Section 483.245 makes it unlawful to pay or receive kickbacks or something similar for patients referred to a clinical laboratory. This section also prohibits a clinical laboratory from providing personnel to perform any functions in a physician’s office unless the laboratory and physician’s office are wholly owned and operated by the same entity. A violation may result in a fine and a recommendation of disciplinary action. The agency shall deny an application for a license or a license renewal to applicants with a pattern of violations.

While there can be many arguments as to why some of these state statutes do not apply to merely providing residential living, in the case of sober housing, the issues get murkier as the program becomes more comprehensive. Many of you have doctors and medical personnel on staff. Many of you are attempting to make arrangements with laboratories for testing. It is far better to assume that the statute applies than to jump to the contrary conclusion. Some of you are taking private insurance reimbursement, others are taking federal subsidized insurance reimbursement, and some of you are taking only private pay. Rules will vary, and keep in mind that this article does not discuss the application of the Federal statutes.

More guidance is necessary on this subject, and hopefully the state legislature in the next legislative session will give some direction.

About Michael Weiner