Contract to refer patients is illegal & unenforceable.

Position:Nursing Law Case on Point

CASE ON POINT: Jupiter Med. Ctr., Inc. v. VNA of Florida, Inc., 4D10-1603 FLCA (9/14/2011)-FL

ISSUE: More and more nurses are interested in entering nurse-related business enterprises than ever before. However, before they do so, they should have the advice of competent legal counsel who are knowledgeable about the enterprises involved so they can best advise their clients what to do and what not to do. This was illustrated in this Florida case in which the Visiting Nurses Association of Florida got stuck in the acquisition of a small nursing agency. Caveat Emptor! Human nature, being what it is we are all usually anxious to get the business going once we have decided to embark upon a new endeavor. Often. an ounce of prevention is worth a pound of cure. All nurses contemplating entering such endeavors should make certain that they timely engage competent counsel to assist them from the earliest stage of working on a purchase and sale agreement, right through to the launching of the business enterprise and beyond, if necessary.

CASE FACTS: The Visiting Nurse Association of Florida (VNA) bought Jupiter Medical Center's (JMC) home health care agency for $639,000, which VNA paid based on an agreed appraisal. The purchase and sales (P&S) agreement contained a broad arbitration provision. VNA believed that JMC was not performing its contract obligations and filed an arbitration claim for breach of contract with the American Arbitration Association (AAA). An arbitration panel found that J MC breached the contract and awarded the VNA $1,251,213 in damages. JMC filed a motion to re-open the case, arguing that the contract, as construed by the arbitrators, violated state and federal laws prohibiting medical care providers from accepting payment in return for home care patient referrals. JMC's motion to re-open the arbitration was denied. JMC then filed a motion with the United States District Court for the Southern District of Florida seeking to vacate the award. The court denied the motion for lack of federal subject matter jurisdiction. JMC then filed a motion to vacate the arbitration award with the Palm Beach County Circuit Court. In response, VNA filed a motion to dismiss and a motion to enforce the arbitration award. The trial court refused to reach the question of whether the contract was legal. The court denied JMC's motion to vacate and entered final judgment on the arbitration award in favor of VNA. JMC appealed on the grounds of whether...

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