AVOIDING THE PROHIBITION AGAINST NON-PHYSICIAN OWNERSHIP OF MEDICAL ORGANIZATIONS
A management services organization (“MSO”) is an entity which would contract with a physician or a medical corporation owned and operated by physicians. The MSO could be owned by non-physicians. The physician or medical corporation can pay the MSO for everything. Employees would work for the MSO; the MSO would pay for the lease. The MSO would pay for all significant expenses and receive a fee for its services.
The Corporate Practice Medicine Doctrine (CPOM) is strong in California. Under this doctrine, physicians must control clinical decisions. The concern is that if business entities owned by non-physicians are permitted to control the rendering of care, they will subordinate clinical care to commercial considerations and profits. The objective, therefore, is to prevent non-physicians and non-physician-owned business entities from influencing treatment decisions.
This presents a significant constraint to physician business ventures. Specifically, if physicians or other clinical personnel work for entities other than professional medical corporations, they may be exposed to disciplinary risks, as well as to forfeiture of revenues.. For non-physician business partners, violating the CPOM may also bring both civil and, in extreme cases, potential criminal liability for engaging in medical practice without a license.
In California, the solution for avoiding violations of the CPOM in business ventures in which physicians work with businesses owned by unlicensed persons is a contractual relationship between the physician entity and the unlicensed business entity, or a “management services organization (MSO).” This is a business vehicle that permits unlicensed persons to provide services to physicians and their professional medical corporations. In its simplest form, an MSO provides basic practice support services to physicians and professional medical corporations via a contractual relationship, commonly known as a management services agreement. These services frequently include activities such as billing and collection, administrative support in certain areas, and electronic data interchange (e.g. electronic billing). Some MSO’s provide a broader set of services: the MSO may purchase many of the assets in a medical practice, such as office space or equipment. MSO’s can employ office support staff, and assist with a wide range of non-clinical functions. MSO’s can also assist in functions such as marketing. Often, MSO’s can reduce costs by bringing economies of scale and professional management experience into physician practices, thereby improving operational efficiency and reducing overhead costs.
the MSO must be carefully considered and constructed. Review and application of relevant laws and regulations is a must.
By Matt Kinley, Esq. of the Kinley Law Practice
Matt Kinley Speaks to Los Angeles County Medical Association on March 23, 2016. Contact Mr. Kinley at firstname.lastname@example.org if your interested in attending.
Posted in Accountable Care Act, Anti-kickback, Current Affairs, Healthcare Regulatory Matters, Medical Insurance, Medicare, Physician, Physician Assistant, physician compensation, telehealth, Uncategorized
Physician offices sometimes feel immune to the regulatory pressures imposed by federal and state authorities. I’ve heard expressions such as “we are such a small office” or ” we deal with such small dollars” to excuse lax or ill-informed billing practices. The solution is to create an office compliance plan, to make sure your office completes all billing correctly.
Here, from the Office of Inspector General, is a report of one small physician’s office that the OIG did investigate, resulting in a $650,000 settlement. Note the investigation arose from another investigation where a doctor was banned from all federal healthcare programs for 15-years.
“12-18-2014 OIG Enforcement Case
A Medical Practice, Doctor in New York Settle False and Fraudulent Claims Case
Jennan Comprehensive Medical, P.C. (Jennan) – a medical group practice in New York – and its owner, Henry Chen, M.D., entered into a $694,887.02 settlement agreement with the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services, effective December 18, 2014. The settlement resolves allegations that from May 15, 2008 to December 31, 2013, Jennan and Dr. Chen knowingly submitted or caused to be submitted false and/or fraudulent claims to Medicare for physical therapy services. Specifically, OIG alleged that these claims were false and/or fraudulent for one or more of the following reasons: 1) physical therapy services were not provided or supervised by the rendering provider; 2) group services were billed as one-on-one provider-patient physical therapy services; 3) services were performed by unqualified individuals; and/or 4) claims for time-based physical therapy services did not accurately reflect the actual time spent performing the services. Senior Counsels David M. Blank, Tamara T. Forys, and Lauren E. Marziani, along with Paralegal Specialist Mariel Filtz, represented OIG.
This case developed as a result of OIG’s prior investigation of Joseph A. Raia, M.D., a former Jennan employee. Dr. Raia entered into a settlement with OIG on February 11, 2014 for $1.5 million and agreed to be excluded from participating in Federal health care program for a minimum of 15 years.”
Posted by Matt Kinley, Esq.
As the need for health care has expanded, there has been an increase in demand for employees and professionals in the medical field. Therefore, there are a variety of health care jobs and careers. Two key positions in the health care field that have contributed to addressing the looming physician gap are Physician Assistants and Nurse Practitioners. Because both job descriptions have notable similarities, there can be some confusion between the differences in purpose and the roles between a Physician Assistant and Nurse Practitioner. However, there are notable differences.
In California, both Physician Assistants and Nurse Practitioners are regulated according to state regulations. The main difference between a Physician Assistant and Nurse Practitioner is the education received. Physician Assistants are trained more similarly to that of a Physician where a Nurse Practitioner skills are advanced under the nursing-centric education model. Physician Assistants get extensive training in treatment and diagnosing ailments for patients and conversely, the nursing-centric education model that Nurse Practitioners are exposed to focuses on a holistic approach to management of patients.
A Physician Assistant is a medical professional who has been authorized to practice medicine. Specifically, a Physician Assistant can conduct physical examinations, diagnose patients, provide treatment including setting broken bones, obtain medical histories, perform procedures, assist in surgery, and make regular rounds in hospitals and nursing homes. Physician Assistants must be certified to practice. Generally, masters programs for Physician Assistants are modeled on the medical school curriculum combining both classroom lectures and clinical training. Physician Assistants must be supervised by a Physician as established by Title 16 of the California Code of Regulations Section 1399.545. Moreover, a Physician Assistant may only provide medical services in which they are competent to perform and which are consistent with their education (Cal. Code Regs. tit. 16, § 1399.540).
On the other hand, a Nurse Practitioner is a registered nurse with an advanced education—usually a masters degree in nursing. A Nurse Practitioner specializes in disease prevention, promotion of health and education, and diagnosis and management of chronic diseases. Nurse Practitioners utilize a holistic approach to management of patients and overall care. Title 22 of the California Code of Regulation Section 51170.3 requires that Nurse Practitioners be licensed and certified under the Board of Registered Nursing. Moreover, Nurse Practitioners can further specialize and hold themselves out as family or pediatric Nurse Practitioners (Cal. Code Regs. tit. 22, § 51170.3). Unlike that of a Physician Assistant, in California, Nurse Practitioners do not need to be under direct supervision of a Physician.
As the demand for medical treatment grows, the importance of mid-level practitioners including Physician Assistants and Nurse Practitioners increases. It is apparent that there are overlapping skills between the two careers, however, a Physician Assistant concentrates on medical treatment whereas a Nurse Practitioner provides overall care management for patients.