This article was submitted by contributing author Jordan Saint John.
I.
What is a Multi-Discipline Practice?
Healthcare in America is becoming increasingly integrated. For
instance, the American Medical Association (“AMA”) notes rapid changes in
healthcare delivery and an expanding environment of integrated modes of practice.
A strong impetus for this change was the enactment of the Affordable Care Act,
which created a broad regulatory framework for such initiatives as clinical
integration, care coordination, quality and other performance metrics, and cost
containment. However, the AMA understandably focuses on physician-led practices
that integrate several medical specialties.
By contrast, this article discusses multi-discipline practices,
which delivers non-medical modalities alongside more conventional medical
services. These non-medical modalities, such as chiropractic, naturopathy and
acupuncture, are often designated by the term “complementary and alternative
medicine” (“CAM”) and are widely accepted in the general populace.
Confusingly, such multi-discipline practices are also sometimes known as
integrated medicine.
More particularly, this article focuses on multi-discipline practices
that integrate medical services with a chiropractor-operated entity, which we
will refer to as DC/MD integrated practices. These practices are almost invariably
set up by the chiropractor, who arranges with a physician to either oversee
medical services provided by a mid-level medical practitioner, or to enter a
contractual relationship whereby the chiropractor provides administrative services
through a management service organization (“MSO”) to a medical practice, and
also offers chiropractic services to this pool of patients.
Increasing numbers of chiropractors are utilizing or
considering this model, for good reason. For one, it allows the chiropractor to
offer more healthcare services to his/her patients. A typical example is the
alleviation of chronic pain through injections that a chiropractor otherwise
could not provide. Alternatively, chiropractors seek the financial benefit of a
business relationship with a medical doctor’s practice. Meanwhile, the medical
doctor benefits either through an additional income stream for his/her
oversight role, or through handing off the administrative side of the practice,
allowing him/her to concentrate on the practice of medicine.
Despite the attractiveness of these arrangements to both
parties and the fact that if properly structured they are not per se illegal, pitfalls
abound, especially when the practice serves federal healthcare program
("FHP") beneficiaries. Along with a discussion of a typical model of
a DC/MD collaboration, this article presents some of the possible pitfalls of
these arrangements, and is meant to be a cautionary tale.
II.
Potential Pitfalls of a DC/MD Integrated
Practice
The possible pitfalls of a DC/MD integrated practice that is
either poorly structured or operated are many and potentially ruinous. As every
practitioner surely knows, active fraud in the healthcare arena can result in
criminal liability at both the federal and state level. However, even
well-intentioned practitioners can find themselves facing criminal charges,
civil penalties, licensing board sanctions and financial collapse. The
following discussion presents the greatest areas of concern.
A.
Legal Structure – the Corporate Practice of
Medicine
Most states have some form of prohibition against the corporate
practice of medicine (“CPOM”).
This doctrine generally prohibits a business corporation from practicing
medicine or employing a medical doctor to provide professional medical
services. Even where a distinct law may not exist, this doctrine is often embodied
in the prohibitions against practicing medicine without a license and against fee-splitting
between someone with a medical license and someone without. It is this doctrine
that generally disallows a chiropractor from co-owning an entity with, or employing
– even as an independent contractor – a medical doctor.
The basic public policy reason behind the prohibition
against CPOM is the conflict between the interests of a corporation and the
needs of a patient. However, most states make some exceptions to their CPOM
doctrine, such as for hospitals, health maintenance organizations, and
professional corporations. Thus, the first step in setting up a DC/MD integrated
practice is to understand the CPOM doctrine of the state where the entity will
be formed and operate, and to structure the entity or entities accordingly.
An additional source of rules and regulations concerning the
CPOM is state medical licensing boards. For example, California’s Medical Board
finds problematic a number of scenarios that are foreseeable in a DC/MD integrated
practice.
In California, the following health care decisions would constitute the
unlicensed practice of medicine if performed by an unlicensed person:
·
Determining what diagnostic tests are
appropriate for a particular condition.
·
Determining the need for referrals to, or
consultation with, another physician/specialist.
·
Responsibility for the ultimate overall care of
the patient, including treatment options available to the patient.
·
Determining how many patients a physician must
see in a given period of time or how many hours s/he must work.
Also, the following business or management decisions and
activities, resulting in control over the doctor's practice of medicine, may not
be made by an unlicensed person or entity:
·
Selection,
hiring/firing (as it relates to clinical competency or proficiency) of medical
doctors, medical assistants, and allied health staff.
·
Decisions
regarding coding and billing procedures for patient care services.
·
Approving
the selection of medical equipment and medical supplies for the medical
practice.
The Board states that
these “business” or “management” decisions and activities cannot be delegated
to an unlicensed person, “including management service organizations,” and that
while may consult with unlicensed persons in making these types of decisions,
the medical doctor retains ultimate responsibility.
Additionally, the Board
prohibits the following types of medical practice ownership and operating
structures, deeming them the unlicensed practice of medicine:
·
Non-physicians
owning or operating a business that offers patient evaluation, diagnosis, care
and/or treatment. . .
·
Management
service organizations arranging for, advertising, or providing medical services
rather than only providing administrative staff and services for a physician’s
medical practice . .
·
A
physician acting as ‘medical director’ for a business providing medical
procedures.
Nevertheless, even in states which are widely considered to
have robust CPOM laws, such as California, it is possible to set up a DC/MD integrated
practice that will not run afoul of state law.
B.
Additional Legal and Regulatory Requirements
Laws and regulations governing the healthcare arena can
apply to any healthcare entity or be specific to certain programs such as
Medicare. For example, the Health Insurance Portability and Accountability Act
(“HIPAA”) established national standards for electronic health care
transactions which apply to nearly every healthcare practice. On the other
hand, the federal Physician Self-Referral law applies specifically to Medicare
and Medicaid. However, some states have their own versions of such laws which
may be even broader than the federal version, such as applying to all
healthcare payers not just FHPs. The regulatory schemes where a DC/MD
integrated practice would most likely run afoul are briefly discussed below.
1.
Anti-Kickback and Fee-Splitting Statutes
A medical practice operating in collaboration with a
non-medical practice implicates both anti-kickback and fee-splitting
prohibitions. Anti-kickback laws prohibit any kind of remuneration for
referrals. A “safe harbor” in the federal anti-kickback statute ("AKS")
is that of referring a patient to a practitioner of another specialty in return
for an agreement to refer that patient back, as long as there is no
remuneration or splitting of a global fee for the referral other than the
compensation each practitioner receives for his/her services.
Presumably, this would protect the passing back and forth of a patient between
a medical doctor and a chiropractor in a DC/MD integrated practice. However, states
can have their own anti-kickback laws which could be broader than the AKS and
not include such a safe harbor.
Meanwhile, fee-splitting is the sharing of fees across
professions for services provided to a single healthcare consumer. Fee-splitting
is generally prohibited because it raises similar issues to that of CPOM laws,
in that financial considerations may run counter to professional judgment. It
also raises issues similar to those addressed by anti- kickback laws, in that
healthcare referrals may be made for financial reasons, rather than the
patient’s best interests.
Fee-splitting prohibitions derive from state statutes and professional
licensing boards; therefore, while prohibiting similar behavior, these laws are
state specific. In Florida, for example, it is a criminal offense for a
healthcare provider or facility to split fees, a practice known there as
“patient brokering.”
The prohibition does not apply to a group practice, but a chiropractor and
medical doctor could not form a group practice in Florida because by statutory definition,
each member of the group must provide “substantially the full range of services
which the health care provider routinely provides, including medical care,
consultation, diagnosis, or treatment.”
However, in Florida as elsewhere, DC/MD business arrangements can operate
legally and compliantly.
2.
False Claims Act
The federal False Claims Act (“FCA”) prohibits the knowing
presentation of false claims to the government.
While every healthcare practice must avoid submitting claims known to be false
to any FHP, the DC/MD integrated
practice can create particular opportunities to run afoul of this law,
especially where an chiropractor-owned MSO submits claims on behalf of the
medical doctor’s practice.
The FCA allows private persons to file a false claims suit in
their own name and in the government’s stead. This is known as a qui tam action, and is designed to bring
to light wrong-doing that only an insider would know about. The government may
decide to intervene, taking over the action as its own after examining the
complaint and supporting evidence. While a qui
tam action is a powerful tool for genuine whistleblowers, this law is sometimes
invoked in retaliation, often by a disgruntled ex-employee terminated for good
cause. Even where meritless, such actions can create big headaches for the
healthcare practice.
3.
Physician Self-Referral (“Stark”)
Self-referral is the practice of referring patients to
healthcare entities in which the referring provider has a financial interest.
Because of the inherent conflict this creates between the provider’s financial
considerations and his/her medical judgment regarding the patient, such
referrals are prohibited by most states and under federal law. The federal physician self-referral law is known
as the “Stark” law, after the bill’s initial sponsor, California congressman
Pete Stark.
It specifically prohibits
self-referral by physicians regarding eleven “designated” healthcare services
that are reimbursable by Medicare or Medicaid. However, state self-referral
laws may be even broader, perhaps applying to all healthcare providers, or
entailing even more healthcare services, or involving any healthcare payer.
A DC/MD integrated practice, unless properly structured,
could implicate federal and/or state self-referral laws. Assuming that the
collaboration is structured as two entities, if the chiropractor or medical
doctor owns an interest in both entities, there could be a self-referral
problem. Each scenario would have to be evaluated on a case by case basis, in
accordance with applicable law.
4.
Scope of Practice, Collaboration Agreements and
Supervision
Finally, states have laws governing the scope of practice
and supervision of mid-level medical practitioners. Scope of practice refers to
the services a licensed practitioner is authorized to provide. A chiropractor
looking to expand services to offer to his/her patients might choose to
develop, for example, a pain management practice. The diagnosis and treatment
of chronic pain due to causes beyond spinal subluxations would involve medical
diagnosis and treatment which could often be provided by a mid-level provider,
such as a nurse practitioner (“NP”). Depending on applicable state law, a NP
may function largely autonomously, giving injections and even prescribing
medications, but must usually have a collaboration and supervision agreement in
place with a local medical doctor. The doctor would also regularly review
patient charts.
Such an arrangement usually means that the doctor is off-site
but immediately accessible by phone or email to help with questions or concerns.
Thus, this can become a secondary income stream for the doctor, and will
usually pass regulatory muster if the doctor’s compensation for this
arrangement is fixed and reasonable. Compensation that is based on percentages
of patients seen, or beyond fair market value for the services rendered by the
doctor, can be construed as either fee-splitting or a kickback.
However, such services must be billed under the practice,
with the rendering practitioner duly noted. Where Medicare, for instance, is
billed under the doctor’s NPI for services rendered by a mid-level, this is
known as “incident to” billing, resulting in reimbursement at the doctor’s
rather than the mid-level’s rate. Proper “incident to” billing involves exacting
rules, which, if not followed, can lead to an unpleasant audit experience and
the repayment of a portion of Medicare payments received.
III.
The MSO and other DC/MD Integrated Models
Despite the regulatory risks involved in operating a DC/MD
integrated practice, many undertake this collaboration for the reasons
mentioned earlier. Some ways a
chiropractor and medical doctor collaborate include:
·
the chiropractor is employed by a medical
practice;
·
the chiropractor leases space to the medical
practice;
·
the chiropractor provides administrative
services to the medical practice (MSO);
·
the doctor becomes the "medical director"
for any medical procedures to be offered at the clinic.
Sometimes, the collaboration involves a number of these
options, often the last three, so they will be discussed as a single,
MSO-hybrid model. (The first will not be discussed, as self-explanatory). For
brevity, the MSO-hybrid model will be referred to simply as an MSO.
While the collaboration entails advantages for both parties,
as discussed earlier, it is typically the chiropractor who seeks the collaboration.
The chiropractor contacts a medical doctor to discuss a proposed arrangement.
The chiropractor offers to provide billing, accounting, marketing, and other
management services to the medical practice (MSO model). Usually, the
chiropractor also asks the medical doctor to oversee a staff of mid-level
practitioners who will provide a range of medical procedures the chiropractor
would like to offer his/her patient base, such as pain management injections
("medical director" model). The arrangement will often also include
the leasing of space by the chiropractor-owned business to the medical
practice.
To avoid the unlicensed practice of medicine, fee-splitting
or CPOM concerns, two entities either already exist or will be created: the chiropractor-owned
administrative entity and the physician-owned clinical entity. The chiropractor/MSO,
in its administrative role, often sets up the clinical entity for the doctor, usually
employing an attorney to do so. However, this attorney typically specializes in
business law and does not necessarily understanding the nuances of health law.
Despite the fact that in many states, as in California, it would be the
unlicensed practice of medicine for a person other than a medical doctor to
hire and fire medical staff based upon competency, the MSO nonetheless usually
sees to the hiring of the mid-levels as just another administrative function,
and the medical doctor provides oversight only through regular review of an
established number of medical records in return for the agreed compensation.
To expand its revenue, the practice may decide to accept,
for example, Medicare beneficiaries. The MSO either directly provides staff to
handle the Medicare billing or contracts with a third party biller. By becoming
a Medicare provider, the practice has accepted the imposition of a vast set of
regulatory requirements, and by billing Medicare, the practice has invited the
scrutiny of the Medicare contractors overseeing its jurisdiction. For several
years, the practice may submit Medicare bills and be promptly paid. This
appears to be a validation of everything that the practice is doing.
However, Medicare scrutiny includes data analysis of coding
and billing patterns which raise red flags if they fall outside the norm for
the geographical area. If so, the practice is notified, sometimes only for
educational purposes. But if medical records are requested, an audit has begun,
and the practice may soon learn, to its utter dismay, about two extremely
powerful aspects of CMS's authority to protect the Medicare trust fund: the
four-year look back period and the extrapolation of a medical review of a
statistical sample of claims into the practice's history of paid claims.
To put it simply, based upon a small but "statistically
valid" sample of claims, the denial rate, based on a medical review by the
Medicare contractor, will be projected into the four-year history of similar
paid claims and a resulting overpayment assessed. Supposing a denial rate of
80% based on a review of 100 claims comprising perhaps 20 different procedure codes,
80% of the money the practice was paid for those codes for up to a four year period
will be demanded back. The practice is faced with either a long and arduous appeal
process or the specter of immediate recoupment of the funds. Depending on the
practice's viability and the amount of the assessed overpayment, the practice
may or may not survive.
Obviously, this fate could happen to any Medicare provider
but this appears to be a special vulnerability of the DC/MD integrated practice
because in the typical, the MSO bills Medicare on the practice's behalf. The
MSO may indeed have experience in Medicare billing but it may not actually have
or retain credentialed Medicare billing expertise. Worse, the clinical protocols
and procedures, usually furnished by mid-level medical practitioners such as
NPs who are often hired by the MSO rather than the medical doctor, can
sometimes be subtly influenced by the chiropractor's ambition or judgment, who
tends to view the whole enterprise as his/her own. The medical doctor sees the
occasional patient, reviews the mid-levels' work, is often busy with other
medical offices and collaborations, and having paid for competent management, tends
to view little else about the practice as his/her responsibility. There may be
too much of a disconnect between the medical judgment and supporting records, on
the one hand, and the coding/billing function, on the other, for the medical
procedures to be reimbursed under Medicare's rules. Both the chiropractor and
medical doctor can find themselves under increasing government scrutiny, facing
financial pressure and even legal sanctions. Often, the medical doctor's
license is at risk. This is the DC/MD collaboration gone bad, especially in the
context of a FHP, and the practice will be lucky to get through intact, with merely
hundreds of thousands of dollars to repay.
IV.
Conclusion
This article is meant to be a cautionary tale. No doubt
DC/MD integrated practices operate legally and successfully in nearly every
state, and it may be that the majority, even those serving FHP beneficiaries,
never face significant problems. But for those that do, the challenges can be
daunting and sometimes insurmountable. Any chiropractor or medical doctor
contemplating such a collaboration is well advised to consult a knowledgeable
health law attorney before proceeding.
V.
Takeaways
·
Healthcare is becoming increasingly integrated,
and the American healthcare consumer expects convenience and a wide array of options
in making healthcare choices.
·
Chiropractor/doctor (DC/MD) integrated practices
are attractive to both parties because of the potential financial benefits;
however, it is the chiropractor who tends to initiate the collaboration.
·
DC/MD integrated practices are not illegal in
most states but care must be exercised to structure them in compliance with
state law and professional licensing boards.
·
The potential pitfalls of such arrangements
multiply if the practice will also serve federal healthcare program
beneficiaries.
The MSO model, or some hybrid which includes it, appears to be the most
common form of collaboration, but it comes with the risk that the MSO may not
have or retain the actual expertise in Medicare billing required to shield the
practice from serious financial and legal liability.
