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Press Release

For Immediate Release February 8, 2005

CIRCUIT COURT JUDGE IN NINTH JUDICIAL CIRCUIT
HOLDS FLORIDA’S PATIENT BROKERING STATUTE 817.505 UNCONSTITUTIONAL

Court Decision on Florida's Patient Brokering Statute 817.505

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]

In a carefully reasoned decision that may affect health care practice management contracts and healthcare marketing arrangements, the Court dismissed 72 counts against two dentists and the owner of their practice management company in the case of State of Florida vs. Sonia Bonilla Guzman, DDS, Anamaria Bonilla Mendez, DDS, and John Anthony Rubio, (Case No. 48-2003-CF-13501-O).

The Patient Brokering Statute (F.S. 817.505)

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 an illegal fee split, the defense called a legitimate dental practice management fee. The Court dismissed all 72 counts of the Patient Brokering statute as unconstitutional and dismissed all “patient brokering incidents” as predicates for the Racketeering, Conspiracy to Commit Racketeering and White Collar Victim Protection Act violations.[2]

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 2003 two dentists, Sonia Bonilla Guzman and Anamaria Bonilla Mendez and John Anthony Rubio the owner of the dental practice management company and two other management company employees were arrested for Racketeering, Conspiracy to Commit Racketeering, (56 Counts) Medicaid Provider Fraud, Split Fee Patient Brokering and White Collar Crime Victim Protection Act (72 Counts).

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 health care 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 inMedicare/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 vs. 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 Order contact:

Anthony C. Vitale or Robert S. Bluni
799 Brickell Plaza, Suite 700
Miami, Florida 33131
(305) 358-4500 Office
(305) 358-5113 Fax
avitale@vitalehealthlaw.com
rbluni@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.

[2] The Court found that violations of the Patient Brokering Statute 817.505(1)(a) does not qualify as a predicate for racketeering and white collar crime and that based upon a plain reading of the language chosen by the Legislature, charging each fee-splitting instance as 72 separate and distinct crimes results in an impermissibly multiplicitous information.