Anthony Vitale.

A bill signed into law by Florida Gov. Ron DeSantis, that was intended to clarify Florida's Patient Brokering Act (PBA) may likely cause even more confusion in the provider community.

The PBA is Florida's primary anti-kickback law. It is an all payer felony statute, meaning it reaches both private insurance as well as the Florida Medicaid program. Violations are punishable by up to five years in prison and fines between $50,000 and $500,000 per violation.

The PBA prohibits the offer, payment, solicitation or receipt of any payments, bonus, commission rebate, fee split arrangements or benefits to induce or reward referrals to or from a health care provider or facility. There are exceptions to what is prohibited. The PBA adopted payment arrangements expressly authorized by the federal Anti-Kickback Statute (AKS) and federal safe harbor regulations, 42 C.F.R, 1001.952. The safe harbor regulations were enacted based upon the broad language of the AKS. Concerns arose that some relatively innocuous commercial arrangements would be prohibited by the anti-kickback law. Safe harbor regulations immunize from criminal and civil prosecution certain payment and business practices that are implicated by the AKS.

Although the primary focus of the new amendment to the PBA, HB 369, which took effect July 1, relates to fraud in the substance abuse industry, one provision, subsection 817.505(3)(a) Florida Statutes, amends the PBA in a way that may conflict with federal law and could subject certain payment and health care marketing arrangements to additional scrutiny.

As originally enacted, the PBA adoption of the federal safe harbor and exceptions allowed for discount, payment, waiver of payment or payment practice "not prohibited" by the federal Anti-Kickback Statute 42 U.S.C.1320a-7b(b).

The new amendment, HB 369, states that the Patient Brokering Act does not apply to any payment practice "expressly authorized" by the AKS. Therein lies the problem.

By changing the wording from "not prohibited" to "expressly authorized" the Florida Legislature may have set itself up for legal challenges and has placed into jeopardy many of those business arrangements that were considered to comply with the law.

The AKS and safe harbor regulations do not expressly authorize business or payment practices. One interpretation is that HB 369 now requires that the payment arrangement meet the federal anti-kickback statute exception or safe harbor. However, this interpretation conflicts with federal safe harbor guidance. The Office of Inspector General (OIG) which promulgated the federal safe harbors, stated that failure to meet a federal anti-kickback statute safe harbor does not render an arrangement per se illegal. The analysis of any arrangement requires a review of the "totality of the facts and circumstances and the intent of the parties to determine whether or not the arrangement poses a risk of fraud and abuse."

The PBA's legislative history states the law was amended because it created uncertainty as to whether the PBA's exceptions apply to private insurance-related patient brokering since at least one court recently interpreted the PBA incorporation by reference of the AKS and the safe harbors to apply only to federally funded programs. The PBA amendment did not clarify the issue, but rather created additional uncertainty.

This isn't the first time state lawmakers missed the mark. Florida has a long history of defective anti-kickback laws which have created unnecessary risk and exposure for health care marketing and professional arrangements.

In 2006, the Health Law Offices of Anthony C. Vitale and Richard Strafer had declared unconstitutional the anti-kickback section of the Florida Medicaid Provider Fraud Statutes 409.920(e), Florida Statute. In State v. Harden, 938 So.2d 480(Fla. 2006), a case that involved dental marketing by employees, the Florida Supreme Court found Florida's Anti-Kickback Statute unconstitutional because it did not contain exceptions and safe harbors to the prohibitions and the knowing and willful mens rea intent standard. The statute criminalized conduct that federal law specifically intended to be lawful. See, https://caselaw.findlaw.com/fl-supreme-court/1426401.html

The Supreme Court reasoned: "There is clear congressional intent to exempt compensation paid by employers to bona fide employees (employee safe harbor) for providing covered items or services from those remunerations that constitute prohibited kickbacks under the federal statute. The heightened mens rea of the federal statute also indicates a clear intent that negligent or inadvertent behavior does not subject an individual to prosecution under the federal statute."

In response to the Harden decision, the Florida Legislature changed the Medicaid Provider Fraud Statute FS 409.920 and incorporated important elements to protect the health care industry marketing and give clear guidance for health care marketing, business planning and professional relationships. The amendment specifically incorporated the heightened mens rea requirement:

"Knowingly" means that the act was done voluntarily and intentionally and not because of mistake or accident. As used in this section, the term "knowingly" also includes the word "willfully" or "willful" which, as used in this section, means that the act was committed voluntarily and purposely, with the specific intent to do something that the law forbids and that the act was committed with bad purpose either to disobey or disregard the law.

The Florida PBA is another example of a defective, confusing and poorly drafted statute including its recent amendment. The law requires clarification and revision. For example, the PBA does not contain the heightened knowing and willful mens rea requirement that was enacted in response to the Harden decision. This omission increases the risk for health care marketing, as well as reducing the protection against negligent or inadvertent conduct being subject to criminal prosecutions. The PBA and the Medicaid Provider Fraud Statute (FS 409.920) are now in conflict. The concern is that providers treating patients under both private insurance and federally funded programs may be immune from criminal prosecution under federal law, but subject to prosecution under the PBA for the same payment arrangement.

Additionally, the AKS  has an advisory opinion mechanism. The PBA does not. The purpose of the advisory opinion is to provide advice on the application of the anti-kickback statute to specific factual situations or payment arrangement. Parties who are uncertain whether their current or intended business arrangement violates the anti-kickback statute or qualifies for safe harbor protection may request an advisory opinion

In addition to the defects in the PBA statute, a recent Florida 4^th District Court of Appeals decision, State v. Kigar, No.4 D19-0600 (Fla. 4^th DCA Aug. 7, 2019), has compounded the problem. The court held that the PBA is a "general intent crime" and therefore the good faith reliance on the "advice of counsel" defense cannot be raised for those accused of patient brokering. This means that in Florida, if you seek out an attorney for an opinion regarding the legality of your business arrangement and are assured that no laws have been broken, these facts can no longer be utilized as a valid legal defense. Additionally, prosecutors are not required to prove the defendant had a specific intent to violate the statute. All that is required is to prove the intent to commit the act itself.

Based on existing case law, we anticipate HB 369 will be the subject of further legal challenges. Until such time, clients would be well advised to review their existing professional arrangements and consult legal counsel to assure compliance with the Florida Patient Brokering Act.

Anthony C. Vitale is the president of the law firm bearing his name. Established in 1982 the Miami-based firm, the Health Law Offices of Anthony C. Vitale, is recognized as a leader in health care law and consultation. His practice focuses on Medicare defense litigation, criminal, civil, regulatory, qui tam/whistleblower, administrative and licensure representation of health care providers, including physicians, other licensees, pharmacies, clinics, home health agencies, laboratories, durable medical equipment suppliers, CORF, CMHC/PHP, billing agents, wholesalers and other health care providers and suppliers.