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August 2009 - Volume 6 - Issue 2
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New Anti-Fraud Legislation Targets Home Health Agencies and Others

For the second year in a row, new legislation aimed at fighting fraud in the health care industry targets home health agencies (HHAs) in particular. The 2009 legislature passed several new laws aimed at reducing health care fraud. This year’s most extensive new law became effective July 1, 2009, and is of particular importance to home health agencies operating in Miami-Dade and Broward Counties. Although the law eases some of the stringent prohibitions on certain physician arrangements that went into effect last year, it also adds some new fraud-fighting measures, such as licensure restrictions, and designates Miami-Dade as a "health care fraud crisis area."

The new law is aimed in part at bringing what the legislature perceived to be rampant kickback practices in the industry to an end. This trend started in the 2008, when the legislature passed a law that prohibited HHAs from having more than one medical director, and from paying any remuneration to referring physicians, their families and staff, discharge planners, and anyone involved in the discharge planning process of a facility from whom the home health agency receives referrals.

The 2009 law eases these remuneration restrictions, and it appears that HHAs are no longer prohibited from providing remuneration to multiple referring physicians, their families and staff, and those involved in the discharge planning process, so long as the arrangements are permitted under federal laws like the Stark law and the Anti-Kickback statute. Many state-wide organizations lobbied actively for this reversal, because the 2008 law prohibited marketing and contractual practices, such as hiring referring physicians as consultants and providing office staff with lunches and other perks, which were arguably legal under federal law.

However, the inartful language in the law leaves many questions about the extent to which it limits the scope of last year’s restrictions. The Agency for Health Care Administration (AHCA) has yet to issue any official guidance on how it will enforce the new law and under what circumstances HHAs may provide remuneration to physicians and discharge planners without such actions resulting in sanctions. This lack of guidance has left the industry in a quandary.

Among other new restrictions that took effect this July is a one-year moratorium on new home health agency licenses and change of ownership (CHOW) licenses. AHCA will not be permitted to issue any initial or change of ownership licenses to any applicant in any county that has at least one actively licensed HHA and a population of persons over 65 years of age or older of fewer than 1,200 per home health agency until July 2010.

Based on historical population data, this moratorium on HHAs would presently apply to Miami-Dade and Broward Counties, but new population data expected to be published in June could expand the number of affected counties. There is a grandfather provision for certain new HHA applications filed with AHCA prior to July 1, 2009, and a separate bill also recently passed into law extends the grandfather exception for CHOW applications filed with AHCA prior to October 1, 2009.

Other licensure restrictions include a prohibition on licensure renewal for Miami-Dade County HHAs that commit any one of a number of listed infractions during the two years prior to the submission of the renewal application. The law also incorporates stricter licensing requirements for certain types of facilities. Owners of home health agencies, home medical equipment providers, and health care clinics must now submit extensive documentation that demonstrates financial ability to operate prior to obtaining initial, renewal, or CHOW licenses. Owners who have not been residents of the United States for at least five years must also pay a $500,000 bond.

Finally, an expanded background screening requirement affects numerous types of facilities in addition to home health agencies, including hospitals, assisted living facilities, nurse registries, hospices, and others. Although background screening of certain personnel at these facilities has long been required under Florida law, the new law significantly enlarges the list of disqualifying offenses.

For industry professionals, this new piece of legislation incites more questions than it does answers, highlighting the need for owners and operators of HHAs and other affected facilities, as well as entities doing business with them, such as hospitals, to remain abreast of new developments with these and other new laws in the health care arena.

Attorneys Anne Novick Branan, and Barbara Viota-Sawisch are members of the Health Law Practice Group of the statewide law firm Broad and Cassel. They may be reached at (954) 764-7606, through www.broadandcassel.com or at abranan@broadandcassel.com or bviota@broadandcassel.com.
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