Multi-Discipline, Integrated Health Care Practices

Physicians sometimes team up with chiropractors, physical therapists, acupuncturists, massage therapists and other health care providers to offer integrated care.

The various health care providers should avoid any appearance of being partners; they should avoid any appearance of fee-splitting or paying for referrals; and each must comply with the legal obligations of her specialty regarding supervision, scope of practice and standard of care.

Supervision, Scope of Practice, and Standard of Care

The California Medical Board is on the lookout for no n-physicians who “rent” an MD’s license. This happens when a lower level licensee (usually a nurse) uses a physician as cover, but really provides medical services independently. Renting a license usually results in:

* the nurse providing medical services without proper supervision by the physician

* the physician failing to meet her standard of care

* the nurse exceeding her scope of practice.

Both the nurse and the physician will be liable for this. Both their licenses will be at risk, most likely for the non-physician’s unlicensed practice of medicine.

Supervision / Scope of Practice. Each mid-level provider must work within his scope of practice, and receive the required level of supervision from higher level providers. In general, the physician must examine the patient before delegating a task to a lower level provider. In turn, the lower level provider must act within his legislatively authorized scope of practice. You cannot have, for example, chiropractors providing services beyond chiropractic care, or nurses acting independently of the physician’s supervision.

The rules for supervision and scope of practice are complex. For a detailed example, consider a cosmetic practice. Registered nurses (and physician assistants) may use lasers or intense pulse light devices under a physician’s supervision. Registered nurses and vocational nurses (and physician assistants) may inject Botox under a physician’s supervision, but medical assistants may not inject Botox. A registered nurse (or PA under supervision; but not an MA) may do microdermabrasion.

Standard of Care. Each provider, including the physician, must meet her standard of care. For example, a physician may not blindly sign off on procedures recommended by another provider, to be performed by that other provider. The usual suspects are laser therapy, vitamin B12 injections, hormone therapies, weight loss, and the like. The physician must diagnose the patient and ensure that these therapies are medically appropriate for the patient. Otherwise the physician is not meeting her standard of care.

Fee-Splitting and Kickbacks

California and federal law prohibit fee-splitting and kickbacks for physicians and other health care providers. In general, physicians may not split their compensation with non-physicians, and no one may be compensated for making a patient referral. I have more articles on this subject on my website.

Corporate Practice of Medicine

California law prohibits any control by a non-physician over a physician’s provision of medical services. Only a physician may:

* Employ, hire or fire a physician

* Hire or fire other providers of medical care in the practice

* Hold ownership in a medical practice (with exceptions– for example, certain other licensed persons may own a minority share in a medical corporation)

* Select medical equipment and medical supplies

* Advertise the provision of medical services

Recommended Legal Structure

I advise clients to keep it simple. The relationship between the various health care providers should be clear-cut. Avoid any structure that looks like a partnership or combined operation, because this will violate a number of the prohibitions discussed above.

To integrate different health care specialties, my preferred structure is a simple employment or contractor relationship. The physician may hire the other health care provider, whether as an employee or a contractor. In contrast, the other health care provider may not hire the physician (see CA’s corporate practice of medicine prohibition, above). Compensation to all persons must be fair market value, and there should be no fee splitting. Certain licensed health care providers can even be minority shareholders in the physician’s medical corporation, and thereby participate in corporate dividends pro-rata based on the number of shares owned.

If the health care providers want to stay separate, they can share office space. See my website article entitled, Office Sharing Agreements. Sharing office space makes consultations and referrals between the practices more convenient for patients and the doctors. As always, no compensation may be attached to the referrals, including that the leases / subleases involved must be on fair market terms.

One final note: Never let another health care practice bill under your provider number, no matter how many rationales that other practice has for it being OK. Most likely this would constitute billing abuse.