Diagnostic Imaging Online
January 23, 2004
Florida fraud crackdown targets MRI, leads to a host of new regulations
Florida clinics and MRI centers face a host of new licensure and accreditation requirements on March 1 under a new law aimed at controlling fraud in personal injury claims.
The new law updates reforms adopted in 2001 targeting MRI brokers and unethical practices in the provision of personal injury insurance services. Amendments to the 2001 reforms include licensing, inspection, and, in some cases, accreditation requirements for all MRI centers and other providers that meet the broad definition of a "clinic" and that do not fall into a narrow list of exceptions. As a result, MRI centers and other providers are scrambling to understand how the terms of the new law will affect their business operations.
Over the past several years, the Florida legislature has sought to address concerns about the abuse of personal injury insurance coverage through payments for patient referrals, the inflation of costs through sham transactions, billing for treatment not rendered, and fraudulent claims of injury.
In the 2001 legislative session, the legislature required that all providers, including MRI centers, which meet the definition of a "clinic," register with the state. Subsequently, a Senate committee concluded that prior reforms had not gone far enough and recommended additional requirements for MRI centers and other clinics, which were enacted into law in 2003.
LICENSED RATHER THAN REGISTERED
The law defines a "clinic" as any "entity at which healthcare services are provided to individuals and which tenders charges for reimbursement for such services." Independent diagnostic testing facilities that provide MRI or PET services fall within this definition. However, the term "clinic" does not include entities otherwise licensed by Florida's Agency for Health Care Administration (AHCA) such as hospitals and ambulatory surgery centers, or medical practices that are wholly owned by licensed physicians.
Most provisions of the law went into effect Oct. 1, 2003. Each clinic must submit a completed licensure application along with fees of $2000 to the Florida AHCA by March 1, 2004. These requirements apply independently of whether bills are submitted under personal injury insurance. As part of the licensure process, clinics will be required to disclose previously confidential information and to file proof of financial ability to operate the clinic.
In addition to obtaining a license, any clinic that is performing MRI services must also be accredited within one year after obtaining its license. Potential accrediting organizations include the Joint Commission on Accreditation of Healthcare Organizations, the American College of Radiology, and the Accreditation Association for Ambulatory Health Care.
Under the new law, the AHCA can now conduct unannounced clinic inspections and has complete access to clinic premises and records. The law also requires certain owners, medical directors, and other individuals affiliated with a clinic to undergo criminal background screenings.
As does the 2001 legislation, the 2003 law requires that each clinic employ or contract with a physician to serve as the medical director. Radiologists and other physicians who serve as medical directors of MRI centers and other clinics are subject to a number of new responsibilities, including conducting reviews to ensure that billings are not fraudulent or unlawful. Each clinic needs to have a written contract with a medical director who agrees to accept legal responsibility for the medical director activities specified in the law.
If a clinic fails to obtain its license to operate or otherwise violates the law, it may be subject to criminal penalties. A person who owns or operates an unlicensed clinic may be found guilty of a felony. The law further provides that all charges or claims made by an unlicensed clinic are unlawful and thus not compensable.
TAKE ACTION NOW
If you are providing healthcare services in Florida, you should determine whether your facility constitutes a clinic under the law and whether your business is subject to the new licensure requirements. Those who operate MRI clinics should begin the process of becoming accredited.
Clinics operating outside Florida should take action to ensure that they are in compliance with their own states' laws and recognize that Florida's new law may lead to similar legislation in other states, particularly those that do not have licensure requirements for MRI centers and other clinics.
Remember, if a clinic is not licensed when it is required to be, payers may use the law to avoid paying claims or to demand return of payments made. Also, the clinic and its owners could subject themselves to criminal penalties. As long as a clinic complies with the licensure and other provisions of the new law, it should be able to avoid such a fate.
For more information from the Diagnostic Imaging archives:
Medical trends will put pressure on imaging income
MR centers sue insurance companies for payment
Jennifer Vecchio (305/347-6560) is a partner and Darren Patz (305/347-6543) is an associate in the Miami office of the Health Law Department at the law firm of McDermott, Will & Emery.
-- By By Jennifer A. Vecchio, Esq., and Darren E. Patz, Esq.
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