Florida Regulatory Laws Health Care Investors Must Know
Florida Regulatory Laws Health Care Investors Must Know
As an investor buying into a health care facility or business or a seller looking for a buyer of your facility, there are important regulatory warning signs to avoid.
In general, regulatory frameworks are meant to set basic standards and protect all parties. But there are complex issues at play with licensed health care facilities both buyers and sellers need to be aware of to protect themselves, their livelihood, and the vendors or partners involved.
Under the Sherman Anti-Trust Act, monopolistic business practices were outlawed. This presents a legal challenge for investors or buyers entering into agreements or ownerships of an accountable care organization (ACO).
ACOs must agree to cooperate with other competing hospital systems by sharing pricing information with them. This act alone isn’t of concern, but where it does get challenging and could be seen as illegal is when it appears you are raising prices relative to this access to shared pricing information.
The Stark Law & Anti-Kickback Statute
Two important laws in the State of Florida work to prevent the misuse of referrals for business. And while it can behoove your health care facility to attract referrals, the legal structuring of those compensation agreements should be crafted and counseled on by attorneys experienced in regulatory law to avoid violating these laws.
Consider first the Stark Law which focuses primarily on preventing doctors from profiting on the referral of patients to other services which might be reimbursed by federal health care programs such as Medicare.
A recent example involved a chiropractic practice that worked closely with assisted living facilities’ patients. To expand the patient referrals coming from assisted living facilities, the chiropractic practice worked to structure a compensation agreement that allowed them legally obtain referrals and avoid running afoul with this law.
Florida’s Anti-Kickback Statute regulates the financial relationships a hospital has with licensed physicians. Especially with health care organizations, this statute is meant to prevent physicians from profiting from the referral to unnecessary medical products or services for patients.
Violations of Anti-Kickback laws result in millions of dollars of settlements and can be avoided with experienced legal consultation.
Cyber Security and Data Breaches
Now more than ever cyber security and electronic data breaches are at an all-time danger high. When it comes to the health care industry and the privacy of patient information, the liabilities and exposure can be crushing.
In the State of Florida, the Florida Information Protection Act of 2014 (the “FIPA”), governs the important issues of cybersecurity and electronic data breaches. For organizations, including government organizations, there are strict guidelines about collecting personal information and the timely notification to the Florida Department of Legal Affairs if your entity has experienced a data breach that impacts more than 500 individuals in the State.
The notification letter to the Department must be provided quickly and no later than 30 days after the determination of the breach is believed to have occurred. Howell, Buchan, & Strong works with clients who have experienced a data breach to prepare the proper letters and inclusion for the Florida Department of Legal Affairs.
Health Insurance Portability and Accountability Act of 1996 (HIPAA) is another regulatory control. In 2003, the HIPAA Privacy Rule went into effect to create a federal standard for protecting the privacy of health information. For the State of Florida, that Privacy Rule also requires the Department of Health (DOH) to comply with Florida laws that provide greater protection to patients. Overall, the goal of HIPAA is to streamline the process to exchange information and make health information more readily accessible to patients.
In general, HIPAA prohibits the use and disclosure of health information without written permission from the patient. In recent years it has been expanded to include HITECH which addresses the privacy and security concerns associated with the electronic transmission of health information or electronic protected health information (ePHI), in part, through several provisions that increase the liability for non-compliance of the HIPAA rules.
Being found non-compliant with either of these data breach laws can result in steep fines.
Avoiding Regulatory Concerns
Our legal team at Howell, Buchan & Strong has experienced clients who failed to do thorough research of an organization or facility before getting financially involved resulting in adopted legal woes as well as costly non-compliance and regulatory fines.
The success of your buy or sell agreement hinges on performing audits and research and preparing purchase agreements that protect your interests.
Our Team of Health Care Facility Transaction Attorneys
We’re proud to have a full-scope legal team experienced in all aspects of health care facility licensing, buying and selling, and change of ownership applications. Each attorney brings a unique level of competence and experience to these transactions that buyers and sellers lean on before entering into any discussions or agreements.
Have questions about your need for legal representation with buying or selling health care facilities? Contact the law firm of Howell, Buchan & Strong at 850-877-7776 to set up a FREE, no-obligation consultation. Our firm represents physicians, nurses, psychologists, and other licensed professionals statewide.
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