Issue 2 - January 2003

Ask Deborah Green
Is multi-discipline in your future? Walk the legal straight and narrow

Q I am thinking about expanding my practice by associating with an MD. What should I do? I don’t want any legal problems down the line.

A By now, most chiropractors know that a multi-discipline practice is simply a group practice which offers the health care consumer “one stop shopping” by making available different types of health care specialists under one roof.

All such practices should have a medical director who is either a licensed medical or osteopathic physician. He or she will make all medical decisions. Either the medical practice or a general business corporation employs the medical director. The choice depends upon the laws of the state where the practice is located. The practice may employ chiropractors, physical therapists, acupuncturists, phlebotomists, nurse practitioners, physician assistants and various other types of health care providers.

The best way to expand into a multi-disciplinary practice to make sure that it’s walking the straight and narrow is to implement a compliance program and make sure that everyone in the practice is aware of the program and abiding by it. The best compliance programs:

•Follow the government’s recommendations as proposed in its Compliance Program Guidance for Individual and Small Group Practices;

•Contain compliance protocols with respect to HIPAA; and

•Incorporate the practice’s state laws.

basic compliance program
Basic components of a compliance program include:

•The Audit. Conduct internal monitoring and auditing through the performance of periodic audits. A review of claim denials will help your practice scrutinize significant risk areas and improve cash flow by submitting correct claims that will be paid the first time they are submitted. Maintain an ongoing evaluation process to determine whether the practice’s standards and procedures are current and accurate, and whether the compliance program is working – that is, whether individuals are carrying out their responsibilities properly and claims are submitted appropriately.

•Practice Standards. Written standards and procedures are vital to any compliance program. Communicate updates to employees to keep them informed regarding the practice’s operations. Train new employees on the four major compliance areas as soon as possible. These areas – which create potential risk if violated – are:

(a) Coding and billing
(b) Reasonable and necessary services
(c) Documentation
(d) Improper inducements,
kickbacks and self-referrals

•Compliance officer or contact. Designate one or more employees with compliance-monitoring responsibilities. Describe the compliance functions for which designated employees (known as “compliance contacts”) are responsible.

For example: One employee could be responsible for preparing written standards and procedures, while another could be responsible for conducting or arranging for periodic audits and ensuring that billing questions are answered.

Instead of assigning compliance monitoring to employees, you might consider outsourcing it. If you decide to outsource these duties, make sure that the company you choose knows what it is doing and is familiar with multi-discipline practice procedures.

•Training and education. Ideally, education programs will be tailored to the practice’s needs, specialty and size and will include both general and specific training. Training may be accomplished through a variety of means, including in-person training sessions (i.e., either on-site or at outside seminars), distribution of newsletters or even a readily accessible office bulletin board.

Train all employees on how to perform their jobs in compliance with the standards of the practice and any applicable regulations and all employees must understand that compliance is a condition of continued employment. Emphasize that following the standards and procedures will not get an employee in trouble, but violating the standards and procedures may subject the employee to disciplinary measures. Train new employees as soon as possible after their start date and provide refresher training annually or more frequently as appropriate.Although there is no set formula for determining how often training sessions should occur, offer at least an annual training program. However, trai new billing and coding employees as soon as possible.

•Investigations. Develop a corrective-action plan and determine how to respond to the problem if you detect a possible violation. The practice should take appropriate corrective action, including prompt identification and repayment of any overpayment to the affected payer if overpayments are discovered. The compliance program should also provide for a full internal assessment of all reports of detected violations.

•Communication. Maintain an open line of communication with your staff. Make sure all employees know who can help them when seeking answers to questions or reporting potential instances of erroneous or fraudulent conduct. Emphasize that asking for help is good and they should never fear retribution.

•Discipline. Incorporate measures into your practice to ensure that employees understand the consequences if they behave in a non-compliant manner.

Include procedures for enforcing and disciplining individuals who violate the practice’s compliance or other practice standards. Make sure that violations of the practice’s compliance policies will result in consistent and appropriate sanctions, including the possibility of termination, against the offending individual.

Document any communication resulting in the finding of non-compliant conduct in the files by including the date of incident, name of the reporting party, name of the person responsible for taking action and the follow-up action taken.

HIPAA compliance
Do an initial audit of your current procedures to create a base. Look at privacy and security issues and transactions and code sets first. Be aware of every place (physical and electronic) that protected health information goes. Review external security such as locks on doors, file cabinets and any other place that patients’ records are stored. Make sure that unauthorized persons may not access computers.

Create policies concerning laptops, PDAs and other electronic forms of accessing health records. Have legal counsel review admission and discharge forms and plan ways to document and retain patients’ consents and authorizations. Have all business contracts reviewed and make sure that you enter into the appropriate contracts with business associates.

Inventory your software and cross-reference it with the government’s requirements to ensure that it is compatible with the new HIPAA rules. Check with your software manufacturer to find out whether its software is HIPAA compliant. If the company says that it is HIPAA compliant, make sure that you get it in writing.

Compliance with state laws
State laws are specific to where you practice so it would be impractical to try to reproduce all these laws here. Contact a healthcare lawyer to learn which state laws pertain to you. Do not simply rely on following the federal laws – if your state’s laws are more stringent than the federal laws, those will apply. Instituting an effective compliance program into a multi-discipline practice takes time, effort and money. In the long run, however, an effective compliance program will keep the practice running smoothly, efficiently and profitably.

If you require clarification on these questions or have any questions will regard to other legal health-care issues, please contact the law office of Deborah Green. Her number is 954-236-8282; fax, 954-236-6939; or e-mail, healthattorney@aol.com. She will answer questions in this column that are of interest to the broadest audience.

How to keep your practice out of a legal quagmire

Are you considering entering into a multi-discipline practice? If you are, you need to be aware of what you need to do to stay out of legal hassles. Most issues identified below are equally applicable to any chiropractic practice, not just an MD-DC multi-disciplinary practice.

Perhaps you have heard about multi-discipline practices in the Northeast, which have been sued by certain insurance companies, notably Allstate, Progressive and State Farm. Although these cases have not yet been decided by a court of law, certain problematic scenarios seem to be common to all those practices that have been sued. These include:

•Lack of proper corporate documentation. Many practices keep their corporate documentation in such a shoddy manner that the corporation’s shield against the shareholder’s personal liability is greatly compromised. To stay out of trouble: Make sure that the corporation’s books and records are properly kept, even if you are the sole shareholder. It may seem silly to hold an annual shareholder’s meeting consisting only of yourself. Do it anyway.

•Inadequate records. Inadequate record keeping has prompted the insurance companies to demand a return of money paid by them for delivered services. To stay out of trouble: Make sure your documentation can support provided services and tests.

•Verbal Agreements. Verbal contracts may not hold water. To stay out of trouble: Put all agreements, particularly management agreements, employment agreements, lease agreements and marketing agreements in writing, at fair market value, for a period of no less than one year. If these agreements are with business associates they must also comply with HIPAA requirements.

•Over-reaching management companies. Management companies bill too much or take a part of the practice’s fees. To stay out of trouble: Make sure you have a written agreement with your management company concerning their services and the amount they will bill at a pre-set rate. Management companies may not help themselves to a practice’s fees.

•“Firing” the owner of the medical practice at will. Management companies try to take complete control of the practice. To stay out of trouble: Make sure your agreement addresses control issues. Management companies are not permitted to fire the owner of the medical practice at will or control the practice.

•Fraudulent billing: Chiropractors perform adjustments then bill these adjustments as manual therapy under the name and number of a medical doctor. Or chiropractors bill for physical therapy even though they are not licensed to give PT.

To stay out of trouble: Do not bill adjustments under the name of the medical doctor and do not bill for physical therapy unless you are licensed as a physical therapist. If you have any questions whether this type of billing is acceptable, just check the back of a CMS (formerly known as HCFA) form.

•Absence of the medical shareholder: The MD does not work in the clinic. To stay out of trouble: The medical doctor that owns the practice (assuming that you are in a state that requires a medical doctor to own the shares of the practice) should work at the practice. If the practice is providing Medicare/Medicaid designated health services or if your state laws require it, the practice must be in compliance with group practice requirements in order to avoid any self-referral issues.

LEGAL DISCLAIMER
Because this column is being presented to you by an attorney, it would not be complete without a legal disclaimer. This column is provided subject to and governed expressly by the terms of this disclaimer. This column is provided for educational purposes only. The accuracy or timeliness of the information presented herein is not warranted. The information presented herein is not intended to be advice as to a specific fact pattern with which you may be presented. Accordingly, please note that the information contained herein is not being presented as legal advice with respect to any matter and that no attorney-client relationship is hereby established.