By: Larry J. Laurent, Attorney at Law, Austin, Texas
for the Texas Chiropractic Journal
Multi-discipline medical practices have become increasingly attractive to doctors of chiropractic over the past several years as a means of maintaining or increasing revenues which have otherwise been (or might be) reduced through the belt tightening practices by insurance companies in the areas of personal injury and worker compensation and exclusion from health maintenance plans (HMOs, PPOs, etc.).
The “multi-discipline” practice concept involves integration of a medical practice into the practice maintained by a doctor of chiropractic. This type of combined practice can become a very effective means of expanding a chiropractor’s patient base and production of additional revenue, but can also become a serious potential legal liability.
There are a number of reasons why a doctor of chiropractic may be interested in integrating his/her practice with the practice of a medical doctor. Two big advantages afforded chiropractors through the DC-MD integration of practices are the expanded patient marketing capabilities made available to the chiropractor and the doctor’s ability to offer more health care services and opportunities to his/her patients. Of equal, or perhaps greater, interest to most DCs electing to integrate their chiropractic practice with that of a medical doctor is the opportunity to obtain additional financial benefit through a business relationship with the medical doctor’s practice. The business relationship which is created through a multi-discipline practice whether it be by a simple office-sharing arrangement or a carefully constructed management service arrangement utilizing lease agreements and management service contracts ultimately promotes superior, in-depth, health care analysis and provider response capability. In many, if not most, combined practice arrangements, the doctor of chiropractic is also able to increase his/her income by providing administrative services to the physician’s medical practice and thereby indirectly participate in the revenues generated by the medical practice.
The principal impediment to a combined DC-MD practice is the long standing Texas prohibition against the corporate practice of medicine (currently there exists no prohibition against the corporate practice of chiropractic). While it is against the law for an MD or a DC to “split fees” in the form of a “kick back” for the referral of a health care patient, because there exists no limitation on the corporate practice of chiropractic, a doctor of chiropractic can legally “share” fees he/she earns through his/her professional practice with a non-chiropractor. Not so with the medical doctor.
A medical doctor may only associate, or “share” fees earned through his/her medical practice, with another medical doctor; to do otherwise violates the prohibition against the corporate practice of medicine by subjecting a physician’s medical judgment to control by a non-physician. Thus, while a chiropractor entering into an integrated practice arrangement with a medical doctor may be able to jointly treat patients and co-market the practice with the physician, he/she cannot own any interest in the physician’s professional association (medical practice) or directly participate in the revenues generated through the medical practice. A properly crafted DC-MD multi-discipline “integrated” practice provides a means to lawfully achieve these otherwise unattainable ends.
In the DC-MD multi-discipline practice, ownership of the physician’s professional association (the medical practice) may be maintained by an “absentee” owner-physician who employs a worker-physician on-site at the practice’s clinic or by the “on-site” worker-physician, himself. Both ownership formats impose unique legal considerations in the formation of the multi-discipline practice. While an “absentee” owner-physician may provide more assurance that the physician with whom the DC has chosen to integrate his/her practice may not someday walk off with the successful integrated practice, organizations utilizing this format generally attract closer regulatory scrutiny. At least one Texas DC has gone to jail because of the “unauthorized” use of a an “absentee” owner-physician’s medical provider number for patient billing. The “on-site” worker-physician format should provide a more stable and legally secure operating/working environment but may afford the DC with less protection from a greedy “owner” physician should the integrated relationship begin to sour.
In order to create a means by which the DC may legally derive some financial benefit through the revenues generated by the associated medical practice, a third factor must be introduced — the formation of a management service company (“MSO”). Since ownership in an MSO is not restricted to licensed professionals anyone may possess an ownership interest and, thus, share in the profits of the MSO’s management enterprise. The MSO may be owned in toto, or in part, by the participating DC (ownership may also include the physician, though this is not, generally, a good idea). Integration with the physician’s practice is accomplished through a series of interlocking contracts between the MSO and the physician’s professional association (the medical practice). This contractual relationship typically includes a management services contract, a premises lease
agreement and equipment leases, as necessary. Through these contractual relationships various administrative services are provided by the MSO to the physician’s practice. While the contractual relationship may not, in any way, delegate any degree of control or responsibility over the physician’s medical practice to the MSO, it does enable the owners of the MSO to “share” in a portion of the revenues generated by the medical practice through the payment of service “fees” for the management services provided. All management services provided by the MSO must be services which are necessary to the operation of the medical practice. The fees charged for the management services must reflect actual market value for similar services rendered in the specific locale of the practice. While the total “fee package” paid by the medical practice to the MSO may not be based entirely on an aggregate percentage of the medical practice’s gross or net collections (thereby violating the prohibitions against fee-splitting), the “fee package” may incorporate a specific percentage of the medical practice’s collections (generally in the 15% – 25% range), with the balance of the service charges calculated on a per unit or cost plus basis. Periodic adjustments of the service charges may done to properly update the appropriate administrative services rendered as the medical practice grows.
Any DC-MD multi-discipline program must include employment contracts between the professionals and the participating entities. These employment arrangements may also take different formats. The worker-physician and DC may elect either employee or independent contractor status with the medical clinic. Should the DC elect to become an employee of the medical clinic, the Texas Medical Practices Act affords the physician the right to delegate the provision of those professional services within the scope of the DC’s license to the DC. Supervision by the physician is required under this relationship and the physician maintains ultimately responsibility for the doctor-patient relationship. While some multi-discipline program promoters construe this type of employment relationship to authorize the physician to bill those professional services rendered by the DC as physician services, a highly cautionary approach to this methodology is advised. The Texas Board of Chiropractic Examiners maintains that any service provided by a licensed DC, whether in association with a medical doctor or not, should reflect the treating DC as the “physician” rendering the health care service and should utilize the DC’s provider number and appropriate chiropractic CPT code. This is the safest and most prudent approach and should not affect the multi-discipline practice’s ability to recover appropriate fees for services rendered. Interested DC multi-discipline practitioners should note that insurance billing discrepancies are the quickest way to invite regulatory oversight and investigations.
Should the DC elect to serve the medical practice as an independent contractor he/she will be able to provide the same type of professional services but must also assume responsibility for the doctor-patient relationship established through the DC treatment. Under this type of association all DC professional services must be coded and billed independently as chiropractic services. Any bill purporting to reflect an independent contractor DC’s services as physician services may be construed to constitute insurance fraud. Thus, any DC contemplating an integrated, multi-discipline, practice with a medical doctor must give careful consideration to the type of employment relationships he/she wishes to maintain in the practice relationship. The DC should also be aware that the Texas Board of Chiropractic Examiners requires any integrated medical practice employing a DC to register as a Chiropractic Facility.
Two additional areas which may cause problems in an “integrated” practice are Medicare/Medicaid and the use of Physician Standing Orders. Any DC contemplating an integrated, multi-discipline, practice is advised to avoid both areas of practice, if possible. If the DC is determined to treat Medicare patients, he/she must be extremely careful to properly document all treatment notes and ensure proper coding of all billings by the medical practice. Be aware that under Medicare guidelines a supervising physician must be on site during patient treatment and patient referral relationships will be more closely scrutinized. Interested DCs should be aware that several multi-discipline programs utilize Physician Standing Orders as a means to circumvent the employment of an on-site “worker” physician. While Physician Standing Orders are acceptable with the medical community in appropriate circumstances, use of Physician Standing Orders to avoid an attending physician’s regular attendance at the medical clinic will be a red flag to government regulators.
The DC-MD multi-discipline practice can become a very useful tool in expanding the DC’s practice. Any DC who is interested in pursuing the multi-discipline type of practice is advised to carefully review the legal structure of the program he/she is interested in utilizing with an experienced attorney. A carefully thought out, well considered, approach prior to commencing such an undertaking should include proper compliance with all aspects of Texas and federal legal guidelines. Approaching integration of your practice in this manner will ensure enjoyment of the long term benefit offered through a multi-discipline type practice.