By: Jeff Cohen
I’d run out of fingers and toes if i had to recount the rash of remarkably bad legal guidance given to well meaning chiropractors looking to integrate various medical services to their practice. They hook up with an experienced business firm, a Management Company, that specializes in that area, but then get advice from a buddy or a lawyer who simply doesn’t have the depth of experience to correctly advise them. The Management Company is happy because they don’t know the lawyer is oversimplifying things, which has the effect of a stream of chiropractor clients rolling into the Management Company. Well done, except it’s often not!
Want some examples? Ok, how about this—
Physical therapist and physician were a Management Company client. The Management Company sent them to a lawyer they like who advised the physical therapist and the physician that what the Management Company advised (from a business perspective) was “totally doable.” They came in for a second opinion and discovered that the model (from another state) completely violated not only state law, but would have caused both parties to harm their core businesses by violating federal law! We asked the Management Company clients whether they’d been advised about the specific laws that apply to them (e.g. the Stark Law, the “group practice” requirements, the application to designated health services, the incident to services rule). What was the answer? Blank stares.
What about the chiropractor Management Company client who was told by the lawyer “I’ll review the contract for just $1,000.” Very appealing. Makes terrific sense to ask a lawyer to review a contract on a flat fee basis. But what if this is the lawyer who routinely reviews contracts proposed by the Management Company and who doesn’t advise about the laws or nuances, who oversimplifies the laws in such a way that keeps the Management Company happy because they get a flow of clients who are uneducated and have no questions. What if there was a business incentive for the relationship between the Management Company and the lawyer they refer routinely refer to that wasn’t in the best interests of the chiropractor or physician?
And, in fairness, what if the chiropractor client was just interested in rushing through and “getting it done,” not “getting it right.” The truth is that it seems, in the rush to “get it done,” everyone (Management Company, the lawyer they flow business to and the chiropractor) are getting just what they want. The problem is the client is not getting what he or she needs. And that’s completely the responsibility of the lawyer!
Any meaningful evaluative process of a chiropractic medical integration opportunity has to involve a detailed discussion between the client and lawyer of at least—
- How “designated health services” (DHS) factor in
- The impact of also providing services for which compensation is made by a State or federal healthcare program
- The “group practice” requirements of state and federal law
- How the 75% Rule impacts the ability to provide DHS to the integrated practice AND ALSO the core businesses of the chiropractor and physician
- State and federal supervision requirements
- Medicare regs applicable to “incident to services” and “commingling” your business assets to provide services to Medicare beneficiaries and other insureds
- The impact of the integrated practice on any other healthcare practice owned or operated by the chiropractor or physician
- The way regulators view integrated practices
- Past prosecutions of integrated practices for improper “patient channeling,” standing orders and such
- The way pertinent healthcare laws distinguish between physicians, nurse practitioners and physician assistants
The truth is that anyone who doesn’t cover these issues with you is either uninformed or motivated to flow uninformed Management Company clients back to the Management Company. The process isn’t as simple as just reviewing a contract. The process isn’t as simple as “having had someone review it.” And anyone who tries to convince you otherwise is simply doing you a disservice.
There is a process of education that is absolutely necessary for all business relationships in the the healthcare space. And lawyers who have the integrity to make sure you understand EVERYTHING you need to understand, who take the time to ask a lot of questions and then educate you, are not deal killers or enriching themselves unjustly. The process takes maybe 60-90 minutes!
Better yet, have the lawyer validate not only the integration model but also the impact of the integrated practice on any other related healthcare businesses outside the integration model. Get a written opinion you can rely on instead of just “Looks good. These are really good guys.”
Take a breath and make whatever adjustment you need to make to get it right!