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ANTHONY C. VITALE, P.A.
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Press Release
For Immediate Release December 30, 2005
5 th DISTRICT COURT OF APPEAL DECLARES FLORIDA’S MEDICAID FRAUD STATUTE 409.920(2)(A) UNCONSTITUTIONAL, IN CONFLICT WITH 3 rd DCA AND SEVERLY LIMITS PROSECUTOR’S USE OF THE FLORIDA’S PATIENT BROKERING STATUTE §817.505
Court Decision on Florida's Patient Brokering Statute 817.505
In an opinion issued on December 30, 2005 Florida’s 5 th DCA affirmed the dismissal of 129 counts against the defendants and declared the Medicaid Fraud statute, False Claim section 409.920(2)(a) unconstitutional, (in conflict with State v. Wolland , 3 rd DCA) dismissing counts 3-55; affirmed the striking of the patient brokering incidents from counts 1, 2 and 130 as they do not relate to fraud and therefore cannot be a basis for RICO §895.02, F.S. or White Collar Crime Victim Protection Act §775.0844 F.S.; affirmed the dismissal of Patient Brokering counts 56-129 as multiplicitous and upheld the constitutionality of §817.505, F.S..
The case deals with two very important subjects: The ability of healthcare providers to market using practice management companies as well as reaffirming the principle in Florida that one cannot be criminally liable for filing a false claim by accident, error or negligence.
Facts
In 2001, two Miami dentists contracted with a dental management company to open a dental office in Orlando, Florida. The management company agreed to provide a turn-key dental facility. In addition, the dental management company would manage the business and marketing aspects of the practice including marketing the dental practice to Medicaid eligible recipients. In return, the management company was paid between 42% and 43% of the compensation received by the dentists for their services.
In 2003, the state filed a 130 count Information against appellees Sonia Guzman and Ana Maria Mendez and three co-defendants; John Rubio, Ileana Martin-Fernandez and Gustavo Fernandez. Counts 1 and 2 charged all defendants with racketeering and conspiracy to commit racketeering in violation of §895.03, Florida Statutes. Counts 3-55 charged various defendants with Medicaid Provider Fraud in violation of §409.920(2)(a), Florida Statutes. Counts 56-129 charged various defendants with patient brokering by engaging in a split-fee arrangement in violation of §817.505, Florida Statutes. Count 130 charged all defendants with violating the White Collar Crime Victim Protection Act, §775.0844, Florida Statutes.
On February 1, 2005 Judge Thomas B. Smith, Circuit Court Judge in Florida’s Ninth Judicial Circuit, Orange County Florida, found Florida’s Patient Brokering Law §817.505, Florida Statutes unconstitutional[1] and declared the Medicaid Fraud statute, False Claim section 409.920(2)(a) unconstitutional, State of Florida v. Sonia Bonilla Guzman, DDS, Ana Maria Bonilla Mendez, DDS, and John Anthony Rubio , (Case No. 48-2003-CF-13501-O).
The Patient Brokering Statute (§817.505, F.S.)
The Law enacted in 1996 prohibits paying for patient referrals. However, this statute also criminalized, for the first time, “ any illegal fee-split arrangement in any form whatsoever ” to induce the referral of patients to a healthcare provider (previously just a medical licensure violation). The statute does not define what an illegal fee-split is and is devoid of an intent standard. Patient brokering is a criminal statute carrying a potential sentence of 5 years in prison. The Law was enacted in response to unnecessary referrals to costly psychiatric and substance abuse residential facilities. Nevertheless, the State used this statute in quite a different way: to target the marketing arrangement between a dental management company and their dental group employer.
The State’s theory of criminal liability is that the payment from a dental group practice to a management company for business and marketing services is an illegal fee-split and violates the statute when the management company fee is based in part on the referral of Medicaid patients. What the state called anillegal fee-split, the defense called a legitimate dental practice management fee.
“State prosecutors cannot continue to overcharge using multiple counts of Patient Brokering and charging Racketeering by using Patient Brokering as a predicate offense”
“This ruling has implications for all practice management companies operating or contemplating operating in the state of Florida”
“We believe that the State abused its discretion in bringing this case under the Patient Brokering Statute.”
“We believe that the use of this statute to prosecute dentists for an alleged ‘illegal fee split arrangement’ is in conflict with existing dental laws and rules.”
“This ruling should prompt defendants charged or convicted of Patient Brokering under this statute to file motions to dismiss or appellate remedies citing similar grounds.”
- Anthony C. Vitale, Esq.
Defense Counsel
Anthony C. Vitale, Esq ., of The Health Law Offices of Anthony C. Vitale, P.A.,
Richard Strafer, P.A., and Jose Quinon, P.A. argued the case .
The Health Law Offices of Anthony C. Vitale, P.A.
Anthony C. Vitale is the President of the law firm bearing his name. The firm was established in 1982 and is recognized statewide as a leader in healthcare law and consultation. The firm is located in Miami, Florida, with offices in Tampa, Florida. The firm concentrates in criminal, civil and administrative representation of health care providers, including physicians, dentists, other licensees, pharmacies, clinics, home health agencies, laboratories, durable medical equipment suppliers, CORF, CMHC/PHP, billing agents and other health care providers.
Anthony Vitale has represented clients under investigation by the Office of the Inspector General, the Department of Justice, Office of the Attorney General Statewide Prosecutor and Medicaid Fraud Control Unit, and other investigatory bodies. His representation also includes defense services to clients facing allegations of fraud and abuse, compliance counseling and the defense of civil, administrative and criminal health care fraud, including internal/defense investigations; False Claims Act litigation; Settlement Negotiations; Withholding of Medicaid/Medicare Payments; Overpayments; Exclusion From Participation in Medicare/Medicaid Programs; Licensure and Certification; Anti-kickback violations; Medical Necessity Issues; Qui Tam Investigations, Prosecutions and Defense; Health Care Contracts, physician self-referral (Stark) and Safe Harbor issues.
In January 2003, Anthony C. Vitale and Richard Strafer were successful in having the anti-kickback prong of Florida’s Medicaid Fraud statute declared unconstitutional in the matter of State of Florida v. Gabriel R. Harden , (Case No. S00-38785).
Richard Strafer, P.A. is dedicated to providing the highest quality, appellate representation to clients charged with complex criminal offenses. Richard Strafer holds an LL.M. from Georgetown Law School in Appellate Advocacy and previously taught in Georgetown's Appellate Litigation Clinic 1981-83. He has published numerous law review articles on a variety of white collar topics. His practice is exclusively appellate and he provides litigation support in complex criminal cases.
Jose Quinon, P.A. is a highly regarded and experienced criminal trial attorney.
For additional information including copies of the Motion to Dismiss and Court Orders contact:
Anthony C. Vitale
799 Brickell Plaza, Suite 700
Miami, Florida 33131
(305) 358-4500 Office
(305) 358-5113 Fax
avitale@vitalehealthlaw.com
[1] The Court also found that the State’s theory of false claim criminal liability under the Medicaid Fraud Statute (409.920) was preempted by Federal law, and that the intent or “knowingly” standard in the statute is unconstitutional under principles of preemption because it conflicts with the willfulness standard under federal law.
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