Posted by: Robert Markette
May 26, 2006

The Florida Supreme Court issued an opinion last week that I found rather interesting.  In the opinion the Florida Supreme Court ruled that the federal anti-kickback statute “pre-empted” the “anti-kickback provision Florida’s Medicaid fraud statue. (Pre-emption is a legal concept that boils down to the Federal law overrides the State law.)  

In the case, a Medicaid provider was prosecuted under Florida’s anti-kickback statute for paying commissions to “bona-fide” employees for soliciting and driving Medicaid-eligible children for dental treatment.  The provider filed a motion to dismiss the charges.  The defendant argued that paying commissions of any form to “bona-fide” employees was legal under the federal anti-kickback statute, which meant the state of Florida could not make the same conduct illegal.  (For those of you who do not practice in Florida, Florida is one of the states whose state anti-kickback provisions are much more draconian than even the federal anti-kickback statutes.)

The trial court and the court of appeals both ruled in the defendants favor.  They held that the state anti-kickback statute violated the Supremacy Clause of the United States Constitution, because it attempted to criminalize conduct Congress had intended to allow under the Medicare and Medicaid programs.  The Florida Supreme Court reviewed the history of the Federal Anti-Kickback provisions and the Florida State provision in making its decision.

The Florida Supreme Court noted that the State statute could be violated even by negligent behavior, even though the federal law requires the defendant to know his conduct violates the law.  The other important difference was that the Florida law did not provide any safe harbors.  Because Congress was concerned for the breadth of conduct criminalized by the Anti-Kickback statute, it enacted a number of safe harbor provisions which specifically shielded certain conduct from prosecution.  One such safe harbor is for payments to bona-fide employees.

The Florida Supreme Court found that this resulted in a conflict between Florida law and federal law.  The Florida law criminalized conduct that the Congress intended to shield.  As such, the Florida law interfered with the purposes of the Federal anti-kickback statute.  Therefore, the Florida law was preempted or overruled by the federal anti-kickback statute.

While this case is great news for those of you in Florida, it also raises questions for those of you outside of Florida.  According to the Florida Supreme Court, this is only the second case that addressed the preemption issue.  This issue has apparently not come up much in the past, because OIG has repeatedly stated that the state and federal anti-kickback provisions are independent.  However, the Florida Supreme Court did not find that commentary persuasive.  This opens the possibility that in other states, if the state anti-kickback law criminalizes conduct that federal law allows, the state law may be pre-empted by the federal anti-kickback statute.

News

Health Care

[08/15] Catalyst Pharmaceutical Partners Reports Second Quarter 2008 Financial Results
[08/15] Salmonella outbreak winds down; questions remain
[08/15] 6 get Legionnaires' disease in upstate NY; 1 dies
[08/15] NYC heroes lift bus off pregnant woman; baby saved
[08/15] NYC heroes lift bus off pregnant woman; baby saved
[08/15] Former half-ton man endures hard times in Nebraska
[08/15] AP Interview: Doctor behind executions speaks out
[08/14] University Hospitals Receives $22.6 Million Donation from Harrington and McLaughlin Families
[08/14] The National Kidney Foundation's 7th Annual Ronald D. Paul Companies Kidney Walk to be Held on Saturday, September 20
[08/14] Best Practice Database adds Research on New Product Launch
Read More

Web Resources

FindLaw
Thomson West
U.S. Courts
Westlaw
United States Chamber of Commerce
FirstGov
Legislative Branch
Library of Congress
White House
Internal Revenue Service
National Weather Service
Yahoo!Maps
YellowPages.com
New York Times
Newspapers Online
USA Today
Wall Street Journal
AOL
Google
Yahoo!Legal Blog Directory