Florida Clinic Licensure – Did You Know?

In 2003, the Florida Legislature enacted the Health Care Clinic Act, (the Act), in order to “prevent significant cost and harm to consumers.”[1] The Act is primarily aimed at requiring clinics that have non-physician owners that are not otherwise licensed to have a clinic license. The Act only applies to entities which seek reimbursement from third party payors, private or governmental. Cash based providers are not required to be licensed under the Act. As a general rule, every clinic must obtain a license from the Agency for Health Care Administration, (AHCA). Clinic is broadly defined as “an entity at which health care services are provided to individuals and which tenders charges for reimbursement for such services.”[2] There are a number of exceptions in the Act which exempt a number of business structures from requiring a license. The following is a sample of common entities which do not require licensure:

Hospitals licensed under Chapter 395, Birth Centers licensed under Chapter 383, Mental Health facilities licensed under Chapter 394, Substance Abuse facilities licensed under Chapter 397 among other health care entities which require separate licensure under the Florida Statutes.

501(c)(3) and 501(c)(4) tax-exempt entities.

Entities that are wholly owned by licensed health care practitioners and their spouses, parents, children or siblings.
Clinical facilities affiliated with an accredited medical school at which training is provided for medical students, residents, or fellows.

  1. The penalties imposed for operating an unlicensed clinic are severe. The Act provides that operating a clinic without a license is a third degree felony, with each day of continued operation being a separate offense. If an individual has an interest in more than one clinic and fails to obtain a license for any of the clinics, ACHA may revoke the license for all of the clinics. AHCA also has the authority to levy administrative fines of up to $5,000 per day on violators. In addition, all charges or reimbursement claims made on behalf of an unlicensed clinic are considered unlawful charges and are noncompensable and unenforceable.
  2. In order to obtain a license, an entity must file an application with AHCA and pay a $2,000 application fee. The application requires a variety of information, including, but not limited to, the name, residence and business address, phone number, social security number, and license number of the medical or clinic director. The applicant must also provide proof of compliance with the Act, including a listing of services to be provided, the number and discipline of each professional staff member to be employed and proof of financial ability to operate. Applicants must also undergo background screening.
  3. Once established, a clinic is required to appoint a medical director or clinic director, who must agree in writing to accept certain legal responsibilities on behalf of the clinic. A medical director must be a physician with a full and unencumbered license under Chapter 458, 459, 460 or 461. A clinic director, on the other hand, is a licensed practitioner who does not provide services under the above chapters. The Act provides incentives for a clinic to appoint a medical director instead of a clinic director. A medical director may supervise any services provided by the clinic, and is not subject to a scope of practice limitation. A clinic director, on the other hand, may only supervise services within the scope of his or her license.
  4. Clinics which provide MRI services face significant additional regulation. If a clinic provides MRI services, it must become accredited by an acceptable body within one year of licensure. In addition, for clinics which perform MRIs, static radiographs, computed tomography or positron emission tomography, the medical director, and the medical director’s group practice may not refer patients to the clinic. If the medical director violates this prohibition, he or she commits a third degree felony.
  5. The provisions of the Act are complex and all health care providers must be careful to ensure that their business structures comply with the Act. Health care providers should seek counsel from their experienced health law attorney to ensure that they are in compliance with the Act.
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  7. [1] 400.990(2) F.S.
  8. [2] 400.9905(4) F.S.