June 14, 2018
A User’s Guide to the Florida Health Care Clinic Act, Florida Statute §§ 400.990 to 400.995
Eric V. Tourian | May 26, 2016
In an effort to provide a basic framework for analyzing a Personal Injury Protection (“PIP”) claim in light of the requirements of Florida’s Health Care Clinic Act, what follows is a brief catalogue – followed by a flowchart – which broadly outlines the parameters of how the Act can impact a health care clinic’s bills for No Fault insurance reimbursement.1 Familiarity with the provisions of the Act are important, as a clinic which violates one or more of the Act’s provisions can be considered to have “unlawfully rendered” treatment, thereby making such treatment not reimbursable for purposes of No Fault, pursuant to Florida Statute § 627.736(5)(b)1b.2
For example, shortly before Christmas 2015, the owner of an Orlando area chiropractic clinic pled guilty to the charge of operating a health care clinic without a license/insurance fraud.3 After entering his plea, the “owner” was adjudicated guilty, fingerprinted, sent to the Orange County Jail for sixty days, ordered to pay restitution to five different insurance companies, and placed on five years of felony probation.4 The presiding judge also ordered that the Defendant not be allowed to work in Health Care during the entire period of his probation in addition to other penalties.5
The clinic’s owner fraudulently represented that his clinic was “wholly owned” by a licensed physician.6 In doing so, the Defendant ran afoul of Florida’s “Health Care Clinic Act,” Florida Statute Sections 400.990 to 400.9905.7 This statute and in addition to its criminal penalties, provides for administrative penalties and injunctive enforcement.8 Since this clinic was not in compliance with the Act, as it did not “lawfully render” treatment, all of its bills for treatment were also not reimbursable under PIP insurance.9
As in the case described above, the most common violations of the Act tend to occur when a clinic owner falsely represents that his or her clinic is “wholly owned” by a health care provider. While the topic of what constitutes a “wholly owned” clinic could be the subject of another article, the interested reader can review the ownership factors outlined by Orange County Circuit Judge Munyon in her concise and lucid opinion in the case of Allstate Insurance Company v. Daniel Schleub and Global Physical Therapy Center, a/a/o Ghanshyam Budhoo, et. al., 19 Fla. L. Weekly Supp. 561b (Fla. Nov. 10, 2011).10
The Florida Health Care Clinic Act was enacted in 2003 and has undergone several amendments which now provides a comprehensive, rather complex, regulatory regime which applies to all health care providers who provide health care and submit bills to insurance companies for reimbursement.
The Florida Legislature enacted this statute with the goal of countering the following problems and achieving the following goals among others:
Motor vehicle fraud and abuse (other than in the hospital setting);”
Inappropriate medical treatments;
Solicitation of accident victims;
Falsification of records;
To address insurance fraud; and
To restore health to the PIP insurance market.11
The Florida Legislature’s goals as stated at the inception of the Act in 2003, remain unmet and unfulfilled,12 and therefore, the Florida Health Care Clinic Act remains extremely relevant.
However, anyone who has spent time litigating can attest, that enforcement of, and reference to, the Florida Health Care Clinic Act remains spotty at best. In the view of this writer, there are at least two reasons for this fact. First, the Florida Health Care Clinic Act is a “dense,” complicated statute, and second, when a health care provider’s treatments are challenged on the basis of an alleged Health Care Clinic Act violation, the providers often mount a ferocious challenge to such a claim or defense.
Just a moment’s reflection will uncover why a health care provider would not want to be found in violation of the Health Care Clinic Act – i.e. if a court were to find that a clinic was operating in violation of the Act, then, it could find that all of the treatments – in the context of a No Fault claim – which the clinic rendered during the entire time that it was in violation of the Act, constitutes unlawful treatment and that treatment modalities are therefore not reimbursable.13
A BRIEF GUIDE TO ANALYZING A NO FAULT INSURANCE CLAIM IN LIGHT OF THE HEALTH CARE CLINIC ACT14
While a comprehensive explanation of the Health Care Clinic Act as it relates to the Florida No Fault Statute is beyond the scope of this article, the following written and visual algorithms which are based upon close reading of the text of the Act and of relevant court rulings which interpret the Act, should provide a starting point for the analysis of a potential clinic violation involving the question of whether a clinic is licensed, should be licensed, or whether the medical director of a clinic is in fact performing all of his or her statutory duties.
QUESTION: Does the clinic provide health care services to individuals and then tender charges for reimbursement?15
ANSWER: If yes, then continue to step two.
If no, then stop your analysis; the Act does not apply to “cash only” facilities.16
STEP TWO, PART A
QUESTIONS: 1) Is the entity wholly owned by a licensed medical doctor or doctor of osteopathy?; or 2) is the entity wholly owned by a medical doctor or a doctor of osteopathy and the doctor’s spouse, parent, child or sibling?; or 3) is the entity wholly owned by a licensed dentist?; or 4) is the entity wholly owned by a licensed dentist and the said dentist’s spouse, parent, child or sibling?; or 5) is the entity wholly owned by a licensed chiropractor?; or 6) is the entity wholly owned by a licensed chiropractor and the chiropractor’s spouse, parent, child or sibling, AND does a licensed physician who is also an owner of the entity supervise the entity’s business activities AND is the licensed physician also responsible for the entity’s compliance with all federal and state laws AND does the physician only supervise services encompassed within the scope of his or her license?17 If yes, then stop your analysis; the Act is satisfied. If no, then proceed to Step Two, Part B.
STEP TWO, PART B
QUESTIONS: 1) Is the clinic licensed by the Florida Agency for Healthcare Administration?;18 and 2) does the clinic have a licensed M.D., D.O., D.C., or DPM as its medical director?;19 and 3) does the medical director only supervise services provided within the scope of his/her licensure?;20 and 4) does the medical director supervise a maximum of five clinics with a cumulative total of no more than 200 employees and persons under contract with the clinics at any given time?;21 and 5) are all the clinics supervised located within two hundred miles of each other?22
If yes, then has the Medical Director complied with all of the statutory requirements of the duties of a Medical Director as enumerated in Fla. Stat. §400.9935 AND has the Medical Director complied with all of the statutory requirements of his/her duties as the clinic’s Records Custodian as enumerated in Fla. Stat. § 456.057 AND has the Medical Director complied with all of the requirements of a Medical Director as outlined in Florida Administrative Code Rule 59A-33.008?
ANSWER: If yes, then the clinic may be compliant with the Health Care Clinic Act and the treatments rendered and billed-for may be lawfully rendered and otherwise reimbursable.
If no, then it is possible that the clinic may have been operating in violation of one or more terms and conditions of the Florida Health Care Clinic Act, and it is possible that the billed-for treatment may not have been lawfully rendered and are therefore not reimbursable.23
The following flowchart sets forth the above decision-making process in further detail. I would invite you to utilize the flowchart in your own analysis of a potential Health Care Clinic Act violation.
If you should have any questions about this information and/or would like a copy of the flow chart, please contact Eric V. Tourian, firstname.lastname@example.org.
1 This analysis does not apply to “cash only” clinics which are not subject to the Health Care Clinic Act per Fla. Stat. § 400.9905(4) (2015); See the statements of Florida Senator Eleanor Sobel in Tim Elfrink, Biogenesis Scandal: Florida Bill Would Regulate Booming Anti-Aging Industry Miami New Times (March 23, 2015), available at http://www.miaminewtimes.com/news/biogenesis-scandal-florida-bill-would-regulate-booming-anti-aging-industry-7549345.
2 See Fla. Stat. § 400.9935(3) (2015), § 460.4167.
3 State of Florida v. Fortunard Deiuveillant Fonrose, Orange County, 2015-CF-001919-B-O.
4 Id. at Order of Probation and Judgment, Dec.18, 2015.
5 Id. at Plea Form, Dec. 18, 2015.
6 The Pip Source, 5 Fla. Dep’t of Ins. Fraud 9, Mar. 2015 available at http://www.fldfs.com/Division/Fraud/Resources/documents/PIP_Source_Mar15.pdf.
7 Fortunard Deiuveillant Fonrose, Orange County, 2015-CF-001919-B-O (the Defendant specifically pled no contest to violating Fla. Stat. § 400.9935(4) “operating a clinic without a license” a Third Degree Felony and Fla. Stat. § 777.011 “scheme to defraud of $50,000 or more” a First Degree Felony).
8 See Y.H. Imaging, Inc., a/a/o Cesar Alonso v. Progressive Am. Ins. Co., 23 Fla. L. Weekly Supp. 563b (Fla. May 29, 2015).
9 See, e.g., Fortunard Deiuveillant Fonrose, 2015-CF-001919-B-O, at Restitution and DNA Orders, Dec. 18, 2015.
10 Other Florida cases examining violations of the HCCA are Imperial Fire & Cas. Ins. Co. v. Magic Hands Solution, Inc., Miami-Dade County, 2014-2211-CC-24(01); Progressive Am. Ins. Co. v. Best Med. Healthcare Solution, LLC, 22 Fla. L. Weekly Supp. 238b (Fla. July 29, 2014); Febre’s Med. Ctr. a/a/o Ivan Rodriguez v. MGA Ins. Co., 20 Fla. L. Weekly Supp. 1234a (Fla. Aug. 15, 2013); GEICO Gen. Ins. Co. v. United Health, 22 Fla. L. Weekly Supp. 39a (Fla. June 18, 2013); State Farm v. Advantage Med. & Charles Hirt, M.D., 15 Fla. L. Weekly Supp. 1094a (Fla. Apr. 17, 2007). Federal court cases of interest are United States v. Janio Vico, No. 15-CR-80057, 2016 WL233407 (S.D. Fla. 2016); State Farm v. B&A Diagnostic, Inc., 104 F. Supp. 3d 1366 (S.D. Fla. 2016); State Farm v. Med. Serv. Ctr. of Florida, Inc., 103 F. Supp. 3d 1343 (S.D. Fla. 2015); State Farm v. A&J Med. Ctr., 20 F. Supp. 3d 1363 (S.D. Fla. 2014); State Farm Fire & Cas. Co. v. Silver Star Health & Rehab., 739 F.3d 579 (11th Cir. 2013); State Farm Mut. Ato. Ins. Co. & State Farm Fire & Cas. Co. v. Altamonte Springs Diagnostic Imaging, Inc., et. al., No. 6:1-CV-1373, 2011 WL 6450769 (M.D. Fla. Dec. 21, 2011).
11 2003 Fla. Sess. Law Serv. 411, Sec. 1.
12 Fraudulent clinics continue to operate unabated. The Pip Source, 6 Fla. Dep’t of Ins. Fraud 8, Feb. 2016, available at http://www.myfloridacfo.com/division/fraud/resources/documents/PIP_SourceFeb16.pdf.
13 Fla. Stat. § 400.9935(3) (2015), § 460.4167, § 627.736(5)(b)1b.
14 This algorithm/decision making process can be used to analyze billing for treatments which were rendered on, and after January 1, 2013, as this is the effective date of the last sentence of Fla. Stat. § 400.9905(4)(n) which was added by 2012 Sess. Law Serv. 197, Sec. 2, and which states “Notwithstanding this subsection, an entity shall be deemed a clinic and must be licensed under this part in order to receive reimbursement under the Florida Motor Vehicle No-Fault Law, ss. 627.730-627.7405, unless exempted under s. 627.736(5)(h).” A more complicated algorithm/decision making process is required in order to analyze whether treatments rendered prior to January 1, 2012, were “lawfully rendered.” This author has also completed a flowchart analyzing such treatments, but due to its length and complexity, it is not included in this article. A copy of my flowchart analyzing the legality of pre-January 1, 2012 treatments in relation to the HCCA is available upon request.
15 Fla. Stat. § 400.9905(4) (2015).
16 Id.; Elfrink, supra note 1.
17 Fla. Stat. § 400.9905(n) (2015), § 627.736(5)(h).
18 Fla. Stat. §§ 400.9905(n) (2015), 400.991(1)(a), § 627.736(5)(h).
19 Fla. Stat. § 400.9905(5) (2015), § 627.736(5)(h).
20 Fla. Stat. § 400.9905(5) (2015).
21 Fla. Admin. Rule 59A-33.013.
23 Fla. Stat. § 400.9935(3) (2015), § 400.9935 (4)(a)-(e), § 627.736(5)(b)1b.