A Brave New World in Regulating Treatment Providers, Housing Providers, and Marketers

May 5, 2017

We are very pleased to announce that the Florida Legislature unanimously passed House Bill 807 last night, which is now commonly referred to as the “Practices of Substance Abuse Service Providers Act”, and which legislation is being sent to Florida Governor Rick Scott for signature. This comes on the heels of Governor Scott [finally] declaring a “public health emergency” relating to the national opioid crisis (and which act allows the state to access $27 million in federal funds to address this issue).

HB 807, as first put forth by State Representative Bill Hager (R-Boca Raton) and State Senator Jeff Clemens (D-Lake Worth), and as further supported by State Representative Gayle Harrell (R-Stuart), implements the recommendations put forth by the Palm Beach County Sober Home Task Force, under the guidance and leadership of State Attorney Dave Aronberg, Chief Assistant State Attorney Al Johnson, and Assistant State Attorney Justin Chapman, as well as the concurrent findings made by the Palm Beach Grand Jury this session, which was empaneled to hear sworn testimony relating to the same issues.

HB 807 is sweeping in its scope and is groundbreaking in how it responds to those who endeavor “to perpetuate the slavery of addiction at the expense of those among us who are most in need of our protection,” as stated so eloquently by Delray Beach City Attorney Max Lohman, Esq.

The bill:

  • Expands the current prohibitions on referrals between licensed treatment providers and recovery residences that do not obtain voluntary certification from DCF;
  • Prohibits a service provider, a recovery residence operator, or a third party who provides advertising or marketing services from engaging in deceptive marketing practices and provides criminal penalties for violations;
  • Makes it unlawful for any person to knowingly and willfully make a materially false or misleading statement or provide false or misleading information about the identity, products, goods, services, or geographical location of a licensed service provider, with the intent to induce a person to seek treatment with that provider;
  • Expands the items that may not be used to induce a patient referral to include any “benefit”; and
  • Adds patient brokering to the offenses that can be investigated and prosecuted by the Office of Statewide Prosecution and to the crimes that constitute “racketeering activities.”

Additionally, the bill:

  • Creates enhanced penalties for higher volumes of patient brokering;
  • Requires entities providing substance abuse marketing services to be licensed by the Department of Agriculture and Consumer Services under the Florida Telemarketing Act; and
  • Creates a new provision for applications for disclosure of patient records for individuals receiving substance abuse services in an active criminal investigation, permitting the court, at its discretion, to enter an order authorizing the disclosure of an individual’s substance abuse treatment records without prior notice.
  1. Changes to DCF Licensing

    The bill makes several changes to DCF’s licensure program for substance abuse treatment providers in ch. 397.

    The bill revises the licensure application requirements and process, requiring providers as part of the application to provide proof that they have obtained accreditation by the 2nd renewal.

    Providers must also provide detail in the application about the clinical services they will provide.

    DCF will be significantly increasing licensure fees so as to be sufficient to fully cover the cost of regulation.

    The bill further limits DCF to issuing only one probationary license per provider (no more extensions).

    DCF is also prohibited from issuing a license if staff do not pass background screenings and subsequently fail to obtain exemptions.

    The bill increases penalties for operating without a license, making it a third-degree felony punishable by up to five years in prison.

    The bill creates s. 397.410, F.S., which requires DCF to draft rules on minimum licensure standards by January 1, 2018, that address administrative management; standards for clinical and treatment best practices; qualifications of all personnel, including staffing ratios; and service provider facility standards.

    The bill addresses the quality of substance abuse treatment by specifying that DCF must establish provider staff qualifications in rule, including what services must be provided by licensed or certified personnel.

    DCF must report to the Legislature and the Governor by December 1, 2020, on the appropriateness of licensure requirements for qualifications of personnel providing direct clinical treatment.

    The bill also creates a definition for “clinical supervisor” and requires background screening for this position.

    The bill authorizes DCF to inspect providers on an announced or unannounced basis to see if minimum requirements are met and grants DCF more flexibility in scheduling inspections.

    The bill also expands DCF’s authority to take action against a service provider; classifying violations by scope and nature; and using a tier-based system of classifying violations and issuing fines or requiring other action (similar to how AHCA regulates medical healthcare providers).

    It allows for each day a violation occurs to be considered a separate violation.

    The bill authorizes use of corrective action plans; allows moratoria or immediate license suspensions for client health, safety or welfare; requires visible posting of notice of a moratorium or suspension; and allows DCF to deny, suspend, or revoke a license due to: False representation; An act affecting client health or safety; A violation of statute or rule; A demonstrated pattern of deficient performance; or Failure to remove personnel failing background screening.

    DCF may also, at its discretion, deny an application for renewal of a regular license, if the applicant submits the renewal application fewer than 30 days before the license expires. Those who submit their applications fewer than 60 days before their licenses expire will still be subject to a $100 late fee.

  2. Clarification on Use of Recovery Residences

    The bill expands current prohibitions on referrals to address referrals from certified recovery residences to licensed service providers. Current law prohibits referrals by licensed service providers to uncertified recovery residences; the bill would prohibit referrals by uncertified recovery residences to licensed service providers.

    The bill also includes prospective patients in these referral prohibitions.

    After June 30, 2019, violators are subject to a $1,000 fine per occurrence.

    The bill removes the exemption for referrals to a recovery residence that is owned and operated by a licensed service provider or its wholly owned subsidiary on or after January 1, 2018; however, it creates exceptions for referrals by licensed treatment providers under contract with a managing entity, as defined in s. 394.9082, F.S., and for referrals by an uncertified recovery residence to a licensed servicer provider when the recovery residence does not benefit directly or indirectly from the referral.

  3. Patient Records and Conformance with 42 CFR pt. 2

    The bill creates a new provision for applications for disclosure of patient records for individuals receiving substance abuse services in an active criminal investigation. For criminal investigations, the court, at its discretion, will be able to enter an order authorizing the disclosure of an individual’s substance abuse treatment records without prior notice. Existing law would continue to apply to applications filed alone or as part of a pending civil investigation.

  4. Enhanced Penalties for Patient Brokering

    The bill adds the term “benefit” to the list of items solicited or received that may not be used to induce the referral of a patient.

    The bill also adds patient brokering to the offenses that can be investigated and prosecuted by the Office of Statewide Prosecution and to the crimes that constitute racketeering activities.

    The bill creates a $50,000 fine for patient brokering.

    Additionally, the bill creates enhanced penalties for higher volumes of patient brokering. For brokering of 10 to 19 patients, the crime is a second-degree felony punishable as provided in ss. 775.082 or 775.084, F.S., and includes a $100,000 fine. For brokering of 20 or more patients, the crime is a first-degree felony punishable as provided in ss. 775.082 or 775.084, F.S., and includes a $500,000 fine.

    The bill also adds patient brokering into the offense severity ranking chart; this will dictate the number of points that will be added to an offender’s scoresheet for sentencing purposes, meaning that minimum jail time is more likely for fewer offenses.

  5. Marketing Prohibitions and Deceptive Marketing

    The bill expands the types of deceptive actions prohibited beyond those covered under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), and provides criminal penalties. It makes a legislative finding that consumers of substance abuse treatment have disabling conditions and that such consumers and their families are vulnerable and at risk of being easily victimized by fraudulent marketing practices that adversely impact the delivery of health care. Based on this finding, the bill prohibits a service provider, an operator of a recovery residence, or a third party who provides any form of advertising or marketing services to a service provider or an operator of a recovery residence from engaging in any of the following marketing practices:

    • Making a false or misleading statement or providing false or misleading information about the provider’s, operator’s, or third party’s products, goods, services, or geographical locations in its marketing, advertising materials, or media or on its website. This is a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083, F.S.
    • Including on its website false information or electronic links, coding, or activation that provides false information or that surreptitiously directs the reader to another website. This is a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083, F.S.
    • Conduct prohibited by the patient brokering statute, s. 817.505. F.S.
    • Entering into a contract with a marketing provider who agrees to generate referrals or leads for the placement of patients with a service provider or in a recovery residence through a call center or a web-based presence, unless the service provider or the operator of the recovery residence discloses specified information to the prospective patient. This is a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083, F.S.

    The bill further makes it unlawful for any person to knowingly and willfully make a materially false or misleading statement or provide false or misleading information about the identity, products, goods, services, or geographical location of a licensed service provider, as defined in chapter 397, F.S., in marketing, advertising materials, or other media or on a website with the intent to induce another person to seek treatment with that service provider. Such fraudulent marketing is a felony of the third degree, punishable as provided in ss. 775.082, 775.083, or 775.084, F.S.132

    The bill also requires entities providing marketing services in accordance with s. 397.55, F.S., to be licensed by the State’s Division of Consumer Services under the Florida Telemarketing Act, found at Part IV of Chapter 501, Florida Statutes. These entities will be required to pay the $1,500 licensure fee, but the bill exempts them from the bond, line of credit, and certificate of deposit requirement.

    The bill only subjects the entities, and not the individuals, to licensure. But they will be regulated and subject to discipline in the same manner as commercial telephone sellers, in addition to any civil or criminal penalties for fraudulent or deceptive practices under current law, and will subject them to licensure discipline for such actions.

    Salespersons working for entities providing substance abuse marketing services will not be required to be personally licensed.

    The bill provides an effective date of July 1, 2017.

    As Florida goes, the rest of the country follows. We are very excited to have been an integral part of this process and are very optimistic that the process of healing can finally occur within a safe space.

    An enormous amount of effort was undertaken by people across the spectrum, from government officials to local grassroots recovery advocates. Hundreds of Floridians became engaged in an effort of national significance.

  6. Special thanks goes to Palm Beach County Commissioner Melissa McKinlay, who always “crosses the aisle” to advocate for what is best for all the people, no matter the cause.

    Jeffrey Lynne

    Jeffrey Lynne

    Jeffrey C. Lynne is a South Florida native, representing individuals and business entities relating to licensing, accreditation, regulatory compliance, business structure, marketing, real estate, zoning and litigation pertaining to substance abuse treatment facilities and sober living residences. Mr. Lynne has been recognized across the region as a leader in progressive public dialogue about the role that substance abuse treatment has within our communities and the fundamental need and right to provide safe and affordable housing for those who are both in treatment for addiction and alcoholism as well as those who are established in their recovery.
    Jeffrey Lynne

About Jeffrey Lynne

Jeffrey C. Lynne is a South Florida native, representing individuals and business entities relating to licensing, accreditation, regulatory compliance, business structure, marketing, real estate, zoning and litigation pertaining to substance abuse treatment facilities and sober living residences. Mr. Lynne has been recognized across the region as a leader in progressive public dialogue about the role that substance abuse treatment has within our communities and the fundamental need and right to provide safe and affordable housing for those who are both in treatment for addiction and alcoholism as well as those who are established in their recovery.

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