June 29, 2023

Florida Legislature Shrinks Supervision Requirements Under Florida Mini-Stark Law

Holland & Knight Healthcare Blog
Nathaniel Adam Gardner | Shannon Britton Hartsfield
Healthcare Blog

New Florida legislation, Senate Bill 768 (2023), amending the Patient Self-Referral Act of 1992 (the Act), also known as the Florida "mini-Stark law," has been signed by Gov. Ron DeSantis and is set to take effect on July 1, 2023. Codified at Section 456.053, Florida Statutes, the Act has drawn attention for imposing supervision requirements on physicians and physician groups that go beyond Medicare's requirements, and these new statutory changes should ease those additional burdens to some extent by removing the physician "direct supervision" language in one of the Act's statutory exceptions.


The Act is designed to address potential conflicts of interest by prohibiting certain referrals when the physician has an ownership interest in the entity to which the physician is referring. But the Act differs from the federal Stark Law in several key areas. For one, as noted above, it applies only to physician investment interests, rather than the broader "financial interests" covered by the Stark Law. In other respects the Act is broader: It applies to all sources of healthcare payment, not just Medicare and Medicaid, and the referral prohibition applies to both designated health services (DHS), which, under the Act, includes clinical laboratory services, physical therapy services, comprehensive rehabilitative services, diagnostic-imaging services and radiation therapy services, as well as other healthcare items and services. In this regard, referrals for the provision of healthcare items or services other than DHS are prohibited unless the investment interest is in certain publicly traded securities or, for investments in entities that are not publicly traded, certain requirements are met, such as a limitation on the percentage of ownership held by investors in a position to make referrals.

The Act includes several exceptions for specific types of arrangements that do not constitute "referrals" under the Act. One such exception commonly relied upon relates to referrals within a sole provider's practice or a group practice, which, under the pre-July 1, 2023, version of the statute, were subject to a stringent supervision requirement. Specifically, the referred item or services must have been provided or performed by or under the direct supervision of the referring healthcare provider or group practice. This supervision requirement applied to orders, recommendations or plans of care from a physician (or from a physician member of a qualifying group practice) that, with limited exception, were provided solely for patients of the referring physician or group practice. Situated within the definition of "direct supervision" was the requirement that the supervising physician be "present in the office suite," meaning that the physician was required to be actually, physically present and available to provide assistance and direction while the services were being performed.  

New Legislation and Considerations

The new legislation removes the "direct supervision" requirement from the referral exception, and replaces it with the requirement that the healthcare item or service be subject to "supervision" of the referring physician or physician group member "if such supervision complies with all applicable Medicare payment and coverage rules for services."

For example, many imaging services for which the Act previously would have required a referring physician, or a member of the physician's group practice, to be physically present in the office suite where the imaging procedure was performed may now be performed under Medicare's less demanding "general supervision" requirement, which does not require a physician to be onsite. Each Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) code in the Medicare Physician Fee Schedule Database is assigned a numerical level that indicates which, if any, level of physician supervision is required by Medicare.

Despite this change, individual payers or payment programs may require a higher level of supervision than the Medicare program. For example, a Florida Medicaid program rule, at Rule 59G-4.033, Florida Administrative Code, requires direct physician supervision for noninvasive vascular studies.

Physicians and physician groups may wish to evaluate their investment and supervision arrangements in light of the changes to the Act, and consider whether any changes could be permitted.

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