Consider all aspects of a CORF business
By Deborah A. Green, Esq.

I have been approached by some business people about forming a CORF. What is it, what does it do, and how would it benefit me?

A CORF (comprehensive outpatient rehabilitation facility) is a non-residential healthcare provider that furnishes diagnostic, therapeutic, and restorative services under a physician's supervision, to injured, disabled, or sick people in need of rehabilitation, on an outpatient basis.

A CORF must supply, at the very least, physician services, physical therapy, and social or psychological services. It is permitted to supply other services, such as oncology, transplants, AIDs therapy, and renal dialysis.

In order to establish a CORF, the facility must have adequate space and the necessary equipment to furnish the services it elects to provide. A CORF must be able to provide all the services required by the patient, as established in the patient's treatment plan. On those days that the CORF is being operated in your office space, you are not permitted to conduct your chiropractic practice.

Private insurance companies reimburse for CORF services on a reasonable-cost basis. Medicare pays for CORF services under the physician-fee schedule. CORFs are subject to Medicare Part B co-insurance and deductible requirements. Assignment is mandatory.

Some states have their own licensure requirements for CORFs, which must be complied with in addition to the Medicare requirements.

All CORF services must be furnished to a patient who is under a physician's care. The services must be rendered on the facility's premises, except for a single, home-evaluation visit. In order for CORF services to be rendered, the patient must be referred by a physician who certifies that the patient requires skilled rehabilitation services.

Several years ago, a number of chiropractors formed CORFs and got into serious trouble for violating Stark anti-referral rules. They referred patients from their chiropractic practices to CORF facilities that they owned or in which they had a financial interest.

CORFs must comply with all Stark requirements. This means that you may not refer patients from your practice to the CORF and patients from the CORF cannot be referred to your practice. (Note: Do not try to skirt the rules by having a family member own the CORF. The amount of money you will spend in fines and legal fees will far exceed any profit you make.)

The referring doctor (who, again, must have no financial interest in the CORF) must provide the CORF with the following information concerning the patient at or before the CORF services are to begin:

• The patient's significant medical history;
• Current medical findings;
• Diagnosis(es) and contraindications to any treatment modality; and
• Rehabilitation goals, if determined.

A CORF physician must review the written plan at least every 60 days and consult with the professional personnel who furnished the services. The reviewing physician must certify or recertify that the written plan is being followed, that progress is being made, and that the treatment is not causing any harmful effects to the patient.

Running a CORF may be a profitable venture for you, but make certain that you get the advice of competent legal counsel. CORFs are highly regulated entities and you must be sure that you are operating legally.

Finally (and I cannot stress strongly enough), make sure you know your new business partners. Remember that you are the one with the professional license and that you could possibly lose it if the rules are broken.

Your non-professional partners would simply find a new business. The penalty to you could be a lot more drastic.

Deborah A. Green is a practicing health attorney, licensed in New York and Florida. If you have any questions regarding the issues addressed above or any other legal heathcare issues, please e-mail her at healthattorney@aol.com.

DISCLAIMER: This column is provided for educational purposes only. The information presented is not intended as legal advice with respect to any matter and no attorney-client relationship is established.