CHOW Denied Based on Owner's Past Employment Relationship with Medicare Excluded HHA

On October 6, 2010, a Florida appellate court upheld a Florida Agency for Health Care Administration's (AHCA) denial of a change of ownership application (CHOW) based merely on an owner's previous employment as administrator and vice president at a home health agency (HHA) excluded by Medicare. Trust Care Health Servs. v. Agency for Health Care Admin., No. 3D09-2568 (Fla. Dist. Ct. App. Oct. 6, 2010). At issue was Robert Marrero's role at All Med Network Corp., a Florida HHA terminated by Medicare in 2006. Following the Medicare termination, All Med voluntarily surrendered its AHCA issued HHA license. However, neither Medicare nor AHCA took action against Marrero personally.

Marrero subsequently purchased Trust Care Health Services, which in turn filed a CHOW. The application asked whether Trust Care or Marrero had been excluded, suspended, terminated or involuntarily withdrawn from participation in Medicare, Medicaid or any other governmental or private health care insurance program. In addition, the application asked whether Trust Care or Mr. Marrero had been found by any licensing, certifying or professional standards board to have violated the standards or conditions that relate to licensure, certification or quality of care. Trust Care and Marrero answered, "No," to both questions.

Despite answering the questions truthfully, AHCA still denied the CHOW, finding that Trust Care and Marrero made false representations and omissions of material facts given Marrero's position at All Med. Rather than providing any meaningful analysis as to whether Marrero had any true controlling interest while at All Med, the Court instead reasoned that AHCA appropriately broadened the scope of its review in the interest of protecting the public welfare.

This decision highlights some of the pitfalls in the licensing and credentialing process. Medicaid providers need to carefully review licensing and credentialing applications to ensure compliance with the law.

To learn more, please contact Ben Anderson at banderson@jeylaw.com or (404) 995-6792.