A recently enacted House Bill aimed to tackle the perceived, rampant fraud plaguing substance abuse treatment in Florida may have significant, unintended consequences for health care providers who conduct business in the state.

On June 27, Gov. Ron DeSantis signed House Bill 369 (the bill) into law, which became effective July 1. The bill implements certain requirements with respect to recovery residences, substance use disorder treatment providers and their personnel, and lead generators/marketers. However, the bill inadvertently created an ambiguity in Florida's Patient Brokering Act (PBA), a criminal statute that carries significant penalties, including the imposition of criminal fines and civil and administrative actions.

The PBA, Section 817.505, Florida Statutes, makes it unlawful for any person, including any health care provider or facility, to offer or pay, or to solicit or receive, a commission, benefit, bonus, rebate, kickback or bribe to induce the referral of, or in return for referring, a patient to or from a health care provider or facility. Any person, including attorneys, who aid, abet or otherwise participate in the prohibited conduct, are also subject to penalties under the statute.

Changes to the Antikickback Statute Exception

Until July 1, the PBA contained an exception that provided that it does not apply to "any discount, payment, waiver of payment, or payment practice not prohibited by 42 U.S.C. s. 1320a-7b(b) [the federal Antikickback Statute (AKS)] or regulations promulgated thereunder" (the AKS exception).

The AKS is a federal statute that similarly prohibits a person from knowingly and willfully offering or paying any "remuneration" to any person to induce such person to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a federal health care program. The AKS regulatory "safe harbors" specifically exclude certain types of otherwise potentially improper practices and arrangements from the definition of "remuneration" for purposes of the AKS (the AKS Safe Harbors).

Prior to the passage of the bill, the AKS exception was a heavily relied-upon exception allowing health care providers and facilities in Florida to structure arrangements that fit within an AKS Safe Harbor without running afoul of the PBA. However, nestled within the bill was a "minor" revision to the PBA, which, according to the bill's summary analysis, was intended to "clarify" the application of the PBA to certain payment practices.

The AKS exception now provides that the PBA does not apply to any payment practice "expressly authorized" by the AKS or its regulations. However, because the AKS is a criminal statute, it does not "expressly authorize" any particular conduct. Instead, the AKS carves out specific types of payment practices and arrangements that do not constitute "remuneration," and are therefore not prohibited, under the statute.

The revision to the AKS exception has created significant uncertainties for health care providers who continue to operate under the assumption that a certain payment practice or arrangement may be compliant under Florida law because it has been structured to fit within an AKS safe harbor. There is a reasonable argument that conduct fitting within an AKS safe harbor is not akin to conduct being "expressly authorized" by the AKS. As a result, Florida prosecutors now have the potential ability to take advantage of this ambiguity to prosecute conduct under the PBA that may otherwise be permissible under an AKS safe harbor.

Ambiguity Creates Risks for Health Care Industry

The bill's legislative history raises additional concerns. The Florida House of Representatives staff analysis references a recent decision from the Fifteenth Judicial Circuit Court, in which the judge noted that the AKS exception specifically incorporates the AKS, which is a federal statute that criminalizes conduct affecting federally funded health care programs. Therefore, the AKS exception could only apply to conduct affecting federal programs.

Based on this, the staff analysis questioned the reach of the AKS exception to conduct affecting private insurance, and how courts may interpret this exception in the future. If courts begin to narrow this exception to only apply to federal programs, health care providers who relied upon the AKS exception to structure arrangements protecting private insurance-related conduct are now at a greater risk for prosecution under the PBA.

The amendment also raises the potential for federal prosecutors to take advantage of the statute's ambiguities. The Travel Act makes it a federal crime to travel or use the mail or any facility in interstate commerce with the intent to engage in "unlawful activity" under state law. The Department of Justice has recently utilized the Travel Act as a vehicle for health care fraud enforcement, indicting providers for engaging in fraudulent, health-care related schemes in contravention of state law.

A health care provider in Florida alleged to have violated the Travel Act based on a violation of the PBA may have been able to rely on the AKS safe harbors as a defense prior to enactment of the bill. Health care providers who operated under the assumption that certain conduct was compliant with the PBA because it fit within an AKS Safe Harbor are now potentially at a greater risk for prosecution under the Travel Act if the conduct is not re-examined and possibly amended.

Unless and until legislation is passed to correct the ambiguity, health care providers, and those who advise them, will have to be cognizant of how the revised AKS exception affects ongoing and future payment practices.

Jamie Gelfman is an attorney in Nelson Mullins Broad and Cassel's Fort Lauderdale office, where she focuses her practice in health law, representing health care providers and suppliers in a variety of regulatory, compliance, reimbursement, and licensure matters. She is certified in Healthcare Compliance by the Compliance Certification Board. Contact her via email, [email protected].