October 4, 2021

Podcast: Discussing Healthcare with Shannon Hartsfield and Eddie Williams

Florida Capital Conversations Podcast Series

In the third episode of our "Florida Capital Conversations" podcast series, Partners Shannon Hartsfield and Eddie Williams offer insights on Florida's healthcare industry, focusing on the legal roadblocks, specifically involving the Florida Agency for Health Care Administration (AHCA), for healthcare businesses looking to do business in Florida.

This Tallahassee-based podcast series takes a look at the many different aspects of state and local government through the lens of experienced legal professionals. Hosted by attorneys Nate Adams and Mia McKown, these candid conversations offer a seat at the table to everyone who listens.


Nate Adams: Welcome to our Florida Capital Conversations podcast series. Today, our subject is healthcare and our guests are Shannon Hartsfield, Eddie Williams, and even Mia McKown, my co-host today, are healthcare attorneys. My name is Nathan Adams, I'm a partner with the law firm of Holland & Knight, and Mia, she is also a partner with Holland & Knight. We're so pleased that you have joined us today to consider another important issue associated with state government affecting the business community and our daily lives as Floridians. There's none better than our guests today to kick off our discussion on healthcare, something that is in the forefront of all discussions today because of the pandemic and all the other things that are going on in Florida in the healthcare space. So let me start off by introducing Mia.

Mia McKown: Hi, Nate, I'm glad we're talking about something that is up my alley today, although I've been interested in some of the other topics that we've covered. Definitely, I think healthcare, as you mentioned, it's something that's in our face constantly, literally with a face mask and everything else. And not only do we have to live it with COVID, we have a greater appreciation, I think, for all the different entities and healthcare professionals which we regulate. Then also we deal with it from our pocketbook, everybody's health insurance costs, all the things that we pay for. I think some of the things that we're going to learn from Shannon and Eddie, with a lot of the regulations that are in place, all those things cost money and drive cost. So they all end up intertwining in all of our lives - we can't get away from healthcare no matter how we cut it. So I'm glad to be here today and so glad that Shannon and Eddie could join us.

Introducing Shannon Hartsfield and Eddie Williams, Plus Statutory Speedbumps in Florida Healthcare

Nate Adams: We are also thankful for healthcare workers and all of those who are working so diligently and throughout unbelievable hours through all this pandemic. So what a great topic to talk about today. Let me just start off with a really simple question for Shannon and Eddie, whoever wants to join in. Mia, feel free to answer this question. What tends to trip up healthcare companies that want to do business in Florida?

Eddie Williams: Well, one of the biggest issues that tends to trip up businesses, is that they assume that Florida's healthcare regulatory environment is similar to other states, and that is completely wrong, completely false. Florida is much more aggressive and much more protective than other states, and so the regulatory hurdles that companies have to go through in order to get a license to start a business in the state, in the healthcare arena, is very complex. They have to understand, you know, such things as timing, deadlines and things of that nature. And they don't really appreciate the timing factor when they're trying to build that into the business plans. For instance, if they're trying to open up an assisted living facility, and it's a new construction project, they need to understand the timing for when they have to submit their applications, which generally is 60-days prior to the proposed effective date when they want to open their doors. However, again, under the law, you have to factor in their certain regulatory inspections and things of that nature that they have to have as part of their application.

Also, with the new environment living in Florida now, everybody knows we have hurricanes. In recent years, we have a generator requirement for assisted living facilities and nursing homes and they will have to have those plans approved by the local emergency management agency - they have to have all of that as part of the application process. If they don't have it, then that's where clients tend to get in trouble, because once AHCA starts reviewing the application, 99-percent of the time they're going to issue an admission notice. Once they do that, you have 21-days to respond with the requested information. Sometimes the analysts may be generous and will give you an extension, but for the most part, if they are really backed-up, they're going to stick to the statutory requirements and issue you a notice of intent to deny that application if you don't comply with that timeframe. So that's just some of the things that clients have to be on notice about. It's not the end of the day if you do get a notice of intent to deny your application - that's when we bring Mia into the equation, as she handles a lot of our administrative proceedings on the healthcare side.

Mia McKown: Yeah, what we find so much with that is because the statute is so "ticky tacky," you have to do something by a certain timeline, and if you don't meet those dates, the agency really has no flexibility. So once you get to the Notice of Intent to Deny process, although it drives Shannon crazy and makes her nervous because she doesn't like getting those type of notices or her clients getting them, it takes the time clock off. And Eddie and I, he's got a great relationship with the folks over at AHCA, we also will meet with the people, have a conversation to make sure that we know exactly what they need. Usually, a lot of it revolves around financial information, which is highly technical but easily fixable. The agency folks over at Department of Health and Agency for Health Care Administration, where I think we're personally really lucky here in the state of Florida, is because they're all good folks and easy to work with and they work really hard. In fact, Shannon and Eddie will know who I'm talking about. I got sent an email last night to one of the attorneys over at AHCA, and he was still there at midnight working. Tom was still working there. So we're fortunate to have them. But again, it's the clients, too.

All those regulatory bodies that Eddie was talking about, what we find is they're struggling to make sure they get their CO that the building is finished, that they have all their staff in place, that they've got the generator that takes all kinds of different entities to approve. So they come to us and they're like, "OK, we want to open next week." I mean, nothing can kill a moment on a telephone call when Eddie's like, "Well, first of all, you're already late filing your application." And then when we go through the process of the rigmarole of how long it takes, and if your application isn't perfect, which they're going to find something wrong with it because it justifies their existence. It's sometimes a little shocking because I think in other states, what Eddie was referring to, it's really more of a "pay a fee and submit a written document" - and that's not how it is in Florida. You've got to be prepared. One of the best things to do, we always encourage clients, that if they're thinking of coming to Florida, it's a good idea to sit down and have a roadmap and a lay of the land of what you're going to have to do in advance, so that's always a good idea.

Shannon Hartsfield: For sure.

I have so many clients that come to me and say, "Shannon, we do business in all 50 states, we've never had a problem until we get to Florida." I mean, there's some reasons for that.

Healthcare is a huge industry in Florida. We obviously have a lot of retirees. We also, unfortunately, have a lot of healthcare fraud. We've had a lot of problems with fraud in the past. And so I think some of our regulations that people would perceive as burdensome are rooted in very good reasons. Something that people might not realize when they start doing business in Florida is that healthcare entities can be regulated by multiple state agencies. There is the Agency for Health Care Administration. There's the Department of Health. There is the Department of Elder Affairs. There is the Office of Insurance Regulation. And there's my favorite, the Department of Business and Professional Regulation, which deals with things like veterinarians and wholesale distribution of drugs. Florida is, in my view, probably the state that regulates wholesale distribution of drugs more than just about any other state. There are some very good folks in Tallahassee who make sure that our drug supply chain is safe, but we do a lot of our work in that area. So you've got to come in [to Florida] with your eyes open and you have got to come in with a commitment to compliance, because we definitely have a lot of laws and rules that you have to think about.

Mia McKown: I think that's a good thing, although you do get sometimes lost with the bureaucracy. But I think you have a really good point. It is about safety and that's what they're driven by - to make sure that the companies are doing the right thing, that they're financially stable, all of it looking to protect the consumer, which Florida is big on, contrary to what people think about in the media and how they portray Florida. Florida is very conscientious and I think does a good job in this space.

Shannon Hartsfield: Right, but there are a lot of pitfalls in Florida. We have fraud abuse laws that are different than the federal corollaries. Just because you don't bill Medicare or Medicaid doesn't mean that you're marketing arrangement is going to be fine in Florida because we have the Florida Patient Brokering Act. Just a lot of things like that. Some things are totally not intuitive. For example, your organization might need a healthcare clinic license from the Agency for Health Care Administration. And oh, by the way, it might need a healthcare clinic establishment permit from the Department of Business and Professional Regulation, which are two totally separate permits from two totally separate state agencies, they have nothing to do with each other. So it can be complicated for sure.

Eddie Williams: Yeah.

I would just want to reiterate that just because you're exempt from licensure from one agency doesn't mean that you're exempt from a similar license from another agency based upon the same business operations.

So it can be very complex.

Important Permit Considerations and the Certificate of Need Process

Nate Adams: All right, so if I want to get a permit to operate a healthcare entity in Florida, what are some of the things that I need to consider?

Eddie Williams: Well, one immediately you need to consider is whether you need a Certificate of Need for that particular healthcare facility. For example, in the state of Florida, hospice, as well as some skilled nursing facilities, you may have to have a Certificate of Need in order to operate that facility. And you have to go through the process, which Mia can tell you about. Also, if you have competitors in the market who want to contest that Certificate of Need, then you may have to go through a hearing process as well again. So the Certificate of Need process can be very complex. That's one of the initial things you need to consider, will that impact the type of business that you want to try to operate in state?

Mia McKown: 

A lot of the other things I think we touched on, they have deadlines, like you can't apply for a license and then have it sit there for two or three years before you operate. They're very specific on timing and when they will receive it. There are penalties if you miss the deadline.

Also depending on what type of entity that you are, Nate, a lot of people in some states, for example, you always talk about going to the doctor's office. You're going to go to the doctor's office, and you think that it's all the doctors in town operate together like we do as lawyers. Well in Florida, they allow businesses, the corporate practice of medicine - and Shannon can talk about this a little bit more because she helps a lot of those businesses that are corporate practice, which is a little bit different and gets into a lot of different licensing and components and insurance and Medicare and Medicaid. So there's so much.

And then the other thing and again, I want to backtrack on the Certificate of Need, which is a little bit interesting. Florida used to be highly regulated in that space - hospitals, almost any large facility that wanted to open in Florida - had to go through a Certificate of Need process. A couple of legislative setbacks, I think they started that process 1973. I know y'all weren't born, but I was in first grade. They started that highly regulated space in the state, and then two sessions ago they deregulated a lot of that. Hospitals no longer require a Certificate of Need. And the logic behind that, it does make a lot of sense. If you are going to invest the hundreds of millions of dollars that it's going to take to build a hospital, you are going to be doing the research, the analysis, whether there's a need, or you're not going to be spending that type of money. So that was some of the thought process in that. But they're is still hanging on to some components for the Certificate of Need for hospice and skilled nursing. And again, it's another very "ticky tacky" process. You have to make sure that you have applied or submitted the right documents. There are four or five different components, deadlines that you have to meet. So those are also a good thing that when you're coming to Florida, you don't just get to build a skilled nursing home, you've got to make sure you go through the process. And a lot of folks say, as Shannon said, "I do this in lots of other states" and it's just a very different beast in this state.

Nate Adams: I think this is only the second time this year that I've heard the word "ticky tacky" used, and I've heard it in this half-hour twice.

Mia McKown: It's all me because I'm originally from Imperial Polk County. So that's where that comes from.

The Corporate Practice of Medicine

Nate Adams: Very good. Shannon, tell us a little bit more about corporate practice of medicine, what that means.

Shannon Hartsfield: Well, the idea behind it is that a corporation is not a human that can go out and get a medical license. So in a lot of states, a corporation cannot practice medicine, so to speak. And you cannot just go out and start a general business corporation and employ physicians and treat patients. The general consensus is that Florida does not prohibit the corporate practice of medicine. However, if you're a corporation that's going to be hiring physicians, is going to be billing third-party payers, you have to first get a healthcare clinic license from the Agency for Health Care Administration before you can operate. So that's when I go to Eddie, and I ask him to help me get somebody licensed, because sometimes companies just come in and start operating. They have a great business model and there may or may not be a license that they needed ahead of time.

Handling Government Investigations as a Healthcare Provider, Plus COVID's Industry-Wide Impact

Nate Adams: All right, well, this question may be for Mia - if a healthcare provider in Florida gets a letter from the government about some sort of investigational problem, what do they do?

Mia McKown: I'm going to answer it and then Shannon will add to it because she is very, very diligent in this space as well. But the first thing that they should do is contact their in-house counsel. What we often find - you have a large facility and they get this letter or someone receives it and it sits on a desk. We have had many instances of blown deadlines, you were given "x" number of days to respond to this letter, but it was sitting on someone's desk. And in Florida, you statutorily have 21-days to respond If you get an administrative complaint. This administrative complaint, it could range from anywhere where they're seeking a file, or worse, revoking your license. So it's very important, I think, with these businesses, because by and large, I mean, let's face it, the day-to-day operations, these healthcare workers are working hard and the staff is working hard to treat patients and aren't necessarily nuanced to all of these things that are going on business-wise that impact their ability to treat the patients.

So if they get a letter, any type of certified mail, which it usually comes, they need to make sure that

gets sent immediately to their in-house counsel so that they can either determine if it's something that they hire, that they can handle, if they need to bring in outside counsel. Also, depending on the severity of the situation and what the allegations are, Nate, if it's something that they forgot to screen an employee for their background screening to make sure that they are eligible for employment, that's something that's usually just fine. But if in a nursing home, for example, if there has been an adverse incident that resulted in a serious injury to one of the residents or in some instances death, the agency could be seeking to revoke their license. And Shannon and I have handled on numerous occasions where we have gone down on behalf of the facility, of the corporation and interviewed all the witnesses, reviewed files. I mean, Shannon and I have spent I mean, seriously, we have gone into our client's facilities at midnight to interview and we're they are from midnight till 5:00 in the morning, interviewing the staff that work during those shifts to get to the bottom of what happened. So it can be an extremely complicated, intertwined factual situation that's going to result in complex litigation, that in the normal arena that you typically deal in, would take two years to get to trial. And it could potentially go to trial very quickly.

Once the litigation wheels get rolling, you could literally go to trial on a very complicated case in 60, 90 days. It works at warp speed. I think the most important thing, which Shannon I'll let you speak on this, we've had clients where the general counsel finds out a week later that AHCA had sent a SWAT team of investigators into the facility and was doing an investigation or what ACHA calls a "survey," which is really an investigation. They're pulling records. They don't make a copy or make a note of what records are given. And so we're at a loss trying to guess at what they've looked at or what their thoughts are. Shannon, I know you've got some real thoughts on this. What are your suggestions?

Shannon Hartsfield: We've spent a lot of time in nursing homes, haven't we? But one of the things I would say is you don't have an in-house counsel and you get this notice from some state agency that says "We're going to fine you $5,000 because you did X, Y and Z," and you say, "Well, you know, we pretty much did X, Y and Z. I don't really want to incur the costs of an outside lawyer to look at this. So I'm going to just check this box that says that I agree, I admit the deficiencies that are cited and I will pay my $5,000 and go and sin no more." Well, the problem with that is that those same facts could then be used to deny the Facilities Renewal Permit, which we've seen happen. And you've already admitted that you committed the violation. You've sort of given up any kind of defenses that could have been raised and you're in a difficult situation. We've seen that with a number of state agencies where you just sort of accept the allegations and then that's discipline against your record and then when you go to apply for another permit, it could be used against you. So you have to read your mail and make sure that you respond to it appropriately and don't sign something that you don't quite understand.

We also see situations, especially with COVID, where the agencies are sending email requests to various people and maybe it doesn't go to the right person or maybe it gets lost and the state regulators don't like being ignored. So it's very important to be as responsive as you can be. We also have situations where we get calls and they say, "Well, an inspector was just in my facility and they wanted records. And I told them that those are trade secret and they should go pound sand. I did the right thing, right?" And we're not providing records access when it's required. So you definitely need to make sure that you know what you're doing when you're dealing with the Florida regulators. And these are good people. They're not out to ruin your life. But to be honest, I don't know that Florida is super duper business friendly when it comes to healthcare sometimes.

Eddie Williams: One thing I would like to add that Mia brought up, it's a biggie as well that clients or potential clients need to consider when they want to look want to open up a business in the state healthcare business, is the background screening requirements.

Florida requires your owners who own five percent or more ownership, as well as officers and directors, as well as any worker who is going to provide personal care or have access to customers' personal health information or personal financial information, to be background screened. And that process also can take a period of time as well. So they need to be leery of that when they are applying for a particular license and make sure that everyone has completed a background screening.

And in an environment that we live in, even though COVID has gotten better, a lot of these vendors will shut down who provided that background screening service. So that was another issue that clients had to consider when they were applying for these particular licenses.

As Mia indicated, you may have an employee or board member who may have done something 20 years ago, had an arrest, and it shows up on their background screening results. And it's not the end of the world. Mia has worked with the agency in getting those issues resolved and getting those applications to continue to move forward. However, sometimes it can be very difficult when you're dealing with something that's stale like that. It happened 20 years ago, it was a mistake that an individual in their immaturity, did something and got arrested. These local courts don't have the records now that they do have readily available at this particular time. Most everything back in those days were paper. So it may be hard to try to satisfy ACHA's Background Screening Unit that this matter was just a minor and it has been resolved. Sometimes you have to get an affidavit from the court saying, you know, everything's been resolved. There's no further issues on this individual's record. So that's just something that you also have to keep in mind, take into consideration when you go into this process as well.

Mia McKown: It's interesting, too, we found out during COVID other obstacles that we hadn't even thought about. Where you have now, as our world gets smaller and smaller, you had companies that were in Canada. That's where their board members were. That's where they're located. But they have to have their fingerprinting done in the United States. Well, during COVID, they could not cross the border in the beginning stages because of the quarantining. So in order to get the fingerprints done it was going to require a 14-day quarantine. And so those were kind dovetailing back to what we were talking about before. Some of the obstacles that you face, things like that come up that are just the strangest thing. And frankly, I was just sitting here thinking we kind of covered all different kinds of topics, what we've been talking about and this and that. And that's really how it is. Literally when we take a call, oftentimes, Shannon, Eddie and I will be meeting with the client all together, and all these issues that we've talked about are the same type of analysis that we go through and advise our clients on.

All these issues somehow impact and touch upon whether you're in assisted living, a home healthcare agency, a hospice, a medical device company. There's so many pieces and parts and timing issues. Frankly, it's one of the reasons why I like practicing in healthcare. My daughter at first, when she tells people what I do, she's like "Yeah, it's healthcare," and she says, "I thought it was boring, but it's actually really not." It does touch on a lot of different pieces. One of the things that I think that we could probably have another podcast on, that we haven't even really touched on, are all the healthcare boards and the regulatory bodies that are over at the Department of Health. That's a whole other conversation.

Shannon Hartsfield: Mia has a lot of experience getting providers out of very sticky situations with their licenses.

Mia McKown: And because we know what my specialty is, that's crazy.

Nate Adams: Ticky tacky.

Shannon Hartsfield: That would be a good podcast. Speaking of your past criminal history and things like that, sometimes people forget that they had a DUI a hundred years ago or they thought their record had been expunged. And so they check a box on an application swearing that they don't have any arrests or something like that. So things can come back to haunt you for sure.

But another thing that we would be remiss if we didn't mention is that sometimes in Florida, it's easier to go and try to get the law changed than to try to comply with a particular statute. Believe it or not, it's easier than you think to go and petition the Florida legislature to try to tweak a statute that is extremely problematic for you company. Legislators are just human, and the wording of a statute might not work for your business.

There's a lot of change in health care, a lot of rapid change in terms of digital health and things like that, and a statute that was written in the 80s just might not work anymore in 2021 or 2022. And you can go and try to get it changed through the lobbying process and government relations. It's not always that difficult. So something to consider also when you're faced with an insurmountable problem.

Nate Adams: All right. Well, I want to thank our guests today. I've certainly learned a lot. I didn't know, for example, that Mia and Shannon, you worked the night shift as lawyers. I'm glad to know that. I'll keep that in mind. And, Eddie, thank you also for your informative discussion about what it takes to be licensed. Most of all, we want to thank all of you for joining us today. And we hope that you'll plan to join us for our next Florida Capital Conversations podcast. Have a great day.

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