It is a well settled presumption in Florida that healthcare providers can own a medical practice without the need for obtaining a Health Care Clinic License (HCCL). However, healthcare providers who bill motor vehicle insurances for personal injury benefits (PIP) need to be aware of the regulatory requirements and how enforcement has developed. Providers may know that each insurance plan has a Special Investigation Unit “SIU”, which is dedicated to detecting, deterring, and defeating insurance fraud. Providers may not realize that most recently, some of the biggest motor vehicle insurers have started taking action by pursuing litigation against providers who are not in compliance. The charges are serious! Fraud, unjust enrichment, Florida Deceptive and Unfair Trade Practices Act “FDUTPA”, and even using the Civil Racketeer Influenced and Corrupt Organization Act “Florida RICO.” Ignorance of these underlying laws will NOT be a defense for these cases.

As such, providers need to understand the background and basis for the recent litigation. Under the Health Care Clinic Act, “Clinic” is defined as an entity that provides health care services to individuals and whereby charges for reimbursement for such services. Further, there is a list of entities and providers not to be deemed a “Clinic”, for purposes of this article, including sole entities, group entities, partnerships or corporations which are made up of various types of health care providers and are not required to be licensed as a Health Care Clinic. To further complicate things, at the end of the section in the Florida Statutes there are also exemptions.

What does this mean? Providers who bill PIP must be licensed and wholly owned by one of the following: chapter 458 “Doctor of Medicine”; chapter 459 “Doctor of Osteopathic Medicine”; chapter 466 “Dentist”; chapter 460 “Doctor of Chiropractic Medicine”; chapter 395 “licensed hospital or surgical center”; clinic facility affiliated with an accredited medical school; entity certified as an outpatient physical therapy or speech pathology; or an entity that is owned by a publicly traded corporation, either directly or indirectly through its subsidiaries, that has $250 million or more in total annual sales of health care services provided by licensed health care practitioners if one or more of the persons responsible for the operations of the entity are health care practitioners who are licensed in this state and who are responsible for supervising the business activities of the entity and the entity’s compliance with state law.

There are overlaying healthcare legal issues as well which relate to group practices owned by providers who are different types of providers, not meeting the “wholly owned” requirement, and providers who are allowed to be exempt, but bill independent contractors not licensed under the scope of the exempt entity. There are various cases that have been and are currently being brought by motor vehicle insurance companies against providers who do not adhere to these rules.

Fortunately, applying for a Health Care Clinic License is far from an impossible task when working with proper counseling and support. Here is what providers can expect when applying for an HCCL:

  • The first step is figuring out what kind of license is needed. It depends on factors such as the provider specialty and objective of the practice. It may be that a Healthcare Clinic License is fine, or the provider may require another type under the AHCA guidelines. Do not make assumptions with respect to this step!
  • Second, a provider will need to verify that they meet all the requirements to receive said license. Factors such as ownership, specialty and practice objective all factor in this step as well.
  • The third step is completing the license application, which will require certain attestations, a copy of the provider’s agreement with a medical director, a financial responsibility portion which needs to be filled out by an accountant who regularly deals with these types of applications, and level two background checks for all the employees or contractors who shall have access to the clinic. A licensing fee is also required and will need to be submitted with the documentation.
  • Fourth, AHCA typically sends back an omission letter which states issues with the application and pending items. While this can be a cause for concern for many providers, it is actually a routine response from AHCA and the agency allows 21 days for correction of the issues mentioned in the omission letter.
  • The final step is on-site inspection. Providers will need specific policies, procedures and other legally supportive documents in order to successfully pass the inspection. Providers who arrive at and pass this step are presumptively issued a healthcare clinic license.

Licensing concerns can be intimidating to correct alone, especially if providers learn of the issues from AHCA or worse, a PIP carrier raises them via a costly lawsuit. Ensuring compliance with the laws now is the best way to prevent problems later.

Attorney Carlos Arce works with the Florida Healthcare Law Firm in Delray Beach, FL. He has deep experience with bodily injury trial work and in health law. Carlos has handled multi-million-dollar healthcare transactions and serves as out-of-house counsel to various small to large types of healthcare entities. He can be reached via email at carlos@floridahealthcarelawfirm.com or by calling 561-455-7700.