The Unknown Dangers Non-Physicians Need to Be Prepared For

Many non-physician practitioners think that regulatory laws, medical corporation requirements, managed service organization arrangements, and other healthcare laws and legal issues only apply to physicians. That false assumption can lead to loss of licenses and certification, the end of a career, civil consequences, and even criminal charges and penalties. There is a broad array of laws that affect all medical practices. Some are targeted to individual practices. Many laws regulate relationships between non-physicians and physicians such as the propriety of referrals.

Many laws such as the Anti-Kickback Law, the False Claims Act, and Stark Law are federal. Federal laws are especially likely to apply if the health provider has patients whose bills are paid through Medicare or Medicaid. Other laws are state-focused and apply to state agency services such as California’s Medi-Cal program.

Any non-physician who provides healthcare should understand what federal and state laws apply to their practice. Each practice type is different. Each business and medical relationship is different. Before starting a practice, expanding a practice, offering new services, or entering in new business relationships – non-physicians should consult with experienced healthcare lawyers.

Some of the many medical practice areas that non-physicians need to think about are these:

Do Online Discount Coupons Violate Stark, Anti-Kickback and Fee-Splitting Laws?

Many businesses, medical and non-medical, are using the Internet to promote their businesses and obtain new customers. With each opportunity comes risk. For example, everyone likes to get a discount for services. But there is a danger that the federal or state government will see the discount as improper or illegal because the company that arranges the discounts is getting a percentage or a cut.

A few initial items your healthcare law attorney will review are:

• Understanding who your patients are and how they pay your bills
• Can the coupon arrangement be considered a self-referral? Many referrals between doctors or from a patient (for a relative or friend) to a doctor don’t violate the Stark Physician Stark-referral law. Stark generally applies to referral of Medicare/Medicaid patients to an entity that provides “designated health services” – but only if the physician making the referral has a financial interest in the designated health service. State self-referral laws are different from the federal law. Each state law needs to be reviewed depending on where a practice is located.
• Can the coupon arrangement be considered a kickback or fee splitting?
• Does the arrangement with the company that facilitates the coupon constitute the illegal practice of medicine because the facilitating company, such as Groupon, is not legally licensed to practice medicine?
• Which state laws such as California’s Physician Ownership Referral Act (PORA) may apply

As an example, Groupon is generally set up so that the health practitioners who provide discounts to new patients give Groupon a portion of the revenue for the service provided. The patient pays his/her fee directly to Groupon. Groupon, in return, gives the health provider a percentage of this fee. Even if the arrangement doesn’t violate Stark or state self-referral laws, the transactions raise the appearance of splitting a fee with someone who is not a health provider.

Generally, a chiropractor, dentists, psychologist, or other non-physician health provider can’t split a fee or offer a kickback. Some states allow for “safe harbor” exceptions such as for marketing – but only if the fee is:

• Set in advance
• Is the fair market value for services rendered
• Is not based on the value of the referrals or the volume of referrals

Other states require that discounts can’t be targeted to just new patients but must be offered to existing patients too.

Managed Service Organization Concerns

Managed service organizations (MSOs) are designed to manage the administrative side of a medical practice. Often; they handle payroll, human resources, health and retirement benefits. They can also manage office space, staff education, and other matters. Many health professionals including chiropractors, acupuncturists, and other non-physicians see MSOs as a way to do more than just manage their administrative chores. They see MSOs as a way to develop relations with other non-doctor practitioners and physicians.

As with many online healthcare business relationship; the three main concerns a non-physician healthcare attorney reviews are self-referrals, kickbacks, and fee-splitting. Self-referral laws generally don’t apply if a designated health facility is not involved.

Common examples of non-physicians using MSOs to expand their working relationships include:

• “Chiropractors or acupuncturists wanting to create a multidisciplinary healthcare care, such as a holistic health care or center for integrative medicine, or simply a collaboration with practicing physicians.
• RNs, NPs, or PAs seeking to create a medical spa or model of care that integrates esthetic treatments with aesthetic medicine treatments.”

The non-physician needs to be careful how the relationship with the MSO works. Payment should be based on effort, not results.

Understanding if the therapy you provide might be considered an FDA-regulated device?

Some entrepreneurs think they are just buying software, a machine, or a methodology that helps people. So, why not market the product and sell it? The answer is because what looks like smart technology or a business method may be considered chiropractic, physical therapy, nutritional and dietetic, or some other medical services. Offering the product may be considered an unauthorized practice of medicine or offering the public an FDA-regulated medical device. The entrepreneur can face civil and criminal charges and may land in jail if he/she doesn’t understand the laws and how to comply with those laws.

Before entering into a license agreement or any other financial arrangement, anyone who is thinking of making money improving someone’s health needs to review their ideas with an experienced healthcare lawyer.

Can doctors hire chiropractors, psychologists, nurses or other non-physician health providers – and then give them percentage or cut of the patient revenues?

The healthcare lawyer will begin by reviewing if the fee arrangement violates Stark, the anti-kickback statutes or fee -splitting laws.

Non-physicians who hire others to work for them (such as a chiropractor who hires another chiropractor) are at less legal risk if the new chiropractor is hired as an employee. If the new chiropractor works as an independent contractor, as many do, then payment should be for the fair market value of the services rendered, compensation should be set in advance, and the fee arrangement shouldn’t be based on volume or the value of the referrals.

For example, you’re a chiropractor. You need to hire a second chiropractor. Can you enter into an independent contractor arrangement where you pay the second chiropractor 40% of the amount the patient pays for the chiropractor services performed by the second chiropractor?

Here’s how California law might apply:

• California Business & Professions Code 650. The percentage might be legal if the consideration is “commensurate with the value of the services furnished or with the fair rental value of any premises or equipment leased or provided by the recipient to the payer.”
• California’s anti-kickback law may apply. The state law includes more than goods and services billed through Medicare and Medicaid. It includes billing through private insurance services and worker’s compensation.

The Physician Ownership and Referral Act and other California laws may also apply

Legal risks in offering dental, psychological, chiropractor, or other services through telemedicine

One intriguing possibility the Internet offers is to reach clients without the need for them to visit you personally. Some medical services such as psychology generally don’t require hands-on work. While services like dental services still require a personal hands-on touch (robots haven’t taken over dentistry yet), dentists may be tempted to offer consultations based on reviews of X-Rays and other diagnostic images. Software through an independent company may allow the patient to upload the image, have the image managed by the software company, and help choose a dentist to review the image.

Some of the legal concerns for medical providers who offer services through telemedicine are:

• The advertising must be true. It can’t mislead the patient. It can’t deceive in any way. The Federal Trade Commission regulates digital marketing. It recently enacted new online advertising rules that every company including non-physician practices must follow.
• The standard of care – the evaluation of the image should be the same as if the patient was in the office
• The state’s law should allow that face to face visits aren’t required and that the referral is to a doctor who is licensed in the state where the patient is located
• The patient should give informed consent to the evaluation
• The software transmission procedure should comply with HIPAA confidentiality requirements

An MSO agreement may be required and, if so, the agreement should comply with applicable federal and state laws. Who owns the images should be clear. Libility for poor dental advise should be clear. The agreements also shouldn’t run afoul of any corporate practice of medicine or unauthorized practice of medicine laws.

Do psychologists, non-licensed NF (neurofeedback) practitioners, or others own neurofeedback or any therapy?

“Neurofeedback has been shown effective for treating of a variety of physical and mental disorders, but can or should neurofeedback (or any promising therapy that can be self-administered, or administered by non-licensee) be regulated and relegated to a licensed monopoly?”

In a guest post, Dr. Siegried Othmer, founder of the EEG Institute, reviewed the issue. The discussion including the observation that with neurofeedback the brain is rewarded for altering its own activities to “more appropriate patterns.” Neurofeedback is also called EEG (electroencephalogram) feedback.

Neurofeedback is used for migraines, sleep disorders, behavioral problems, and other emotional problems. It’s been found useful for cerebral palsy patients, patients with autism, and others.

The issues of ownership of neurofeedback was raised by Dr. Othmer because “of the effort of the Nevada Psychology Board to extend its control over biofeedback and neurofeedback within that State. A “cease-and-desist” letter had been sent around to neurofeedback practitioners who are not psychologists. Apparently, such initiatives are underway in other states as well.”

Dr. Othemer opposes this type of regulatory capture. Psychologists and others do need to review with experienced healthcare attorneys when a state can intervene and how psychology boards can regulate biofeedback and neurofeedback.

The guest blog raises many other legal risks as well as many medical concerns such as that many states forbid psychologists to touch their patients.

Additional legal concerns for non-physician healthcare providers

Other issues that dentists, chiropractors, psychologists, registered nurses, and others should review with a healthcare lawyer include:

• The ability to offer medical services across state lines
• Employment relationships with physicians and hospitals
• Fee-splitting between medical doctors and non-medical business owners
• The corporate practice of medicine

Speak with an experienced healthcare lawyer BEFORE state or federal lawsuits and warnings begin

Non-physicians need to review whether old and new business relationships can result in civil or criminal charges. Many actions that sound legitimate can run afoul of Stark Law, fee-splitting laws, and anti-kickback statutes. Nurses, chiropractors, psychologists, dentists and other non-physician practices need to review with a skilled healthcare lawyer issues involving:

• Online advertising
• Online promotions
• Telemedicine
• Managed Service Organization agreements
• The unauthorized practice of medicine
• Many other daily activities, employment and revenue contracts, and long-term plans.

Skilled healthcare attorneys will walk you through each phases of your medical practice and examines a full range of professional and contractual relationships. They will review which federal and state laws may affect your practice and address any existing complaints. They also help non-physician practices understand their relationships with physician practices as well as reducing your risks so you can focus on treating patients.

Contact Cohen Healthcare Law Group, PC. to address any legal concerns regarding non-physician healthcare professionals. We understand non-physician health practices and physician healthcare laws. We have assisted many chiropractors, psychologists, nurses, dentists, and other healthcare providers.