MD-DC Arrangements Share Legal Issues Nationwide

Chiropractors and medical doctors (or D.O.s) have had a long and somewhat complex relationship. Though they approach healthcare issues differently, there are many instances where they share care or even work together. Such "M.D./D.C." relationships are legally complex, but often prove to be rewarding in many respects. Properly constructing the arrangements is critical, especially since government regulators and payers tend to view such arrangements with skepticism, alleging that the true reason for the combination is for chiropractors to avoid coverage restrictions.

The core legal issues the parties need to be aware of include:

Corporate practice prohibitions. Most states prohibit (or regulate) who can own a medical practice or a chiropractic practice. So called "corporate practice restrictions" for instance often prohibit a medical doctor and a chiropractor from jointly owning a clinical practice. Additionally, many states do not permit a chiropractor employing a medical doctor and vice versa. That leaves essentially two models for consideration-a direct employment model and a management type of model.

Legal structure. Getting this right is important, especially with respect to self referral restrictions. If federal patients dollars are involved (e.g. Medicare), some very complex and powerful federal laws (e.g. Stark and the Anti Kickback Statute) come into play. And many states have their own self referral restrictions. Single legal entity? Multiple legal entity? It depends on things like the payer mix, state regulation, and the type of services provided.

In office ancillary services (IOAS) or "group practice" concerns. This is closely related to self referral regulations. Both states and the federal government regulate such conduct. For instance, under applicable federal law, "designated health services" (which include physical therapy and diagnostic imaging) must be provided in the very same office where patient care is provided. Moreover, a physician (but not a chiropractor) must be physically present in the office when the DHS services are provided to patients. Additionally, to comply with the IOAS provision, the practice has to ensure that the physicians in the practice spend, on average, 75% of their total professional time working through the combined practice. MD/DC practices which don't require an M.D. often can find adhering to state and federal requirements difficult because of applicable supervision requirements.

Fee splitting. Many practices want to simply divide up income on a percentage basis, but this raises fee splitting (and kickback) issues.

These unique combined practices have to be careful to guard against the already tainted regulatory assumptions about them. Yet, there are many things conservative professionals can do to thwart successful investigations, like-

•Rules and regulations to address common risks like "patient channeling" allegations (for which many physicians have been criminally convicted);

•A compliance audit to ensure that what they are doing or planning to do complies with applicable state and federal law; and

•An annual audit to ensure continued compliance (including in areas like coding and proper documentation).

Mixed practices like M.D./D.C. relationships are not new, but the full spectrum of regulatory compliance is essential to ensure long term viability. It simply isn't sufficient to focus on one or more aspects. Getting the entity and form of compensation right is just one part of a legally complex business arrangement; and to serve physicians well requires all facets of the arrangement to be viewed and cleared.

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