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Hello everyone. This is Michael Miscoe with Misco health law with, uh, on behalf of ChiroSecure for this week’s Facebook live presentation with what I hope will be a, another riveting riveting law Alliance topics, the oxymorons. But today we’re going to talk about modern disciplinary practice risks. Um, when you think about multi disciplinary practice, um, many, uh, providers are being, uh, approached, uh, or no providers that are multidisciplinary practice and they seem to be doing well. Um, and, uh, they approach it from, um, a hopefully, uh, for the benefit of the patient to offer services that they can’t offer, uh, within the scope of their chiropractic license. Uh, but let’s be fair. There’s always a financial motive involved. Um, it’s important as you approach this, that to understand through significant compliance risk. This doesn’t mean that I’m suggesting that you shouldn’t get involved in a multidisciplinary practice, but you need to know what risks you’re taking on going in.
And the first thing that you have to understand if your multidisciplinary practice is going to bill third party payers, especially Medicare, is that the government and most commercial payer SIU units, there are fundamental perception of a chiropractically, uh, own controlled managed. A multidisciplinary practice is that it is a criminal enterprise. Um, and that that’s her fundamental perception. And the reason is, uh, going back to, uh, some of the more notable convictions. I won’t mention any names, but, uh, going back more than 10 years, uh, there’ve been some, some significant criminal issues, uh, as well as, uh, healthcare fraud, false claims act issues brought against multidisciplinary practices for what I consider fundamental compliance mistakes, not recognizing the risks that they’re taking in engaging in this type of practice, understand that a medically owned a multidisciplinary practice, let’s say, uh, I have a client who’s an orthopedic practice.
Uh, they do spine knees, you know, a variety of orthopedic, uh, types of surgery. Uh, rather large practice they’ve hired a chiropractor. They offer conservative care in house. Uh, they also hire PTs and, and all of the compliance risks that I would normally attribute to a chiropractically under managed, uh, multidisciplinary practice go away because the medical doctors are actually in control of the practice in a chiropractically owned, um, practice. And the corporate practice of medicine laws vary from state to state in terms of whether the chiropractor can own any of it, if so, how much they can own and what the share distribution is. One of the most significant problems is that the medical doctor, the government, uh, determines is what they call a sham owner. They’re granted their stock. They have no, buy-in, they’re not a real owner. They don’t get, um, K one distributions at the end of the year.
Um, you know, so they’re pretty much an employed medical doctor. Sometimes they’re a medical director only. They don’t actually come to the practice except occasionally, or as often as they need to, to establish supervision over the middle levels. Uh, and all the carers rendered through mid-levels, which you know, is fine. But when you’re a medical director, you’re sharing it with a number of other multidisciplinary practices. That’s easy for a payer to ascertain or the government to ascertain. And they recognize that your medical doctor, owner, um, is more or less a placeholder to permit, uh, the performance of, of medical care in what is essentially a chiropractic office. Um, and that leads to some problems that we’ll discuss. So understanding that perception, there’s a couple of things that you can do, um, you know, to convince the government that you’re not like that. Okay. One have a real medical doctor, owner, a partner, um, that’s going to share cost, share risk, share profit, um, absent that, uh, what most of these structures do is they set up a legitimate medical corporation with legitimate medical or with medical doctor ownership, at least on paper.
And then they set up a collateral management company, and then rather than execute fair market value contracts for the services that the management company’s actually going to provide equipment that it’s actually going to lease. And it’s a fixed expense, uh, regardless of volume or value, uh, what essentially the management corporation does is its fee each month is essentially the profit. So after the medical doctor, PA, uh, medical corporation pays the medical doctor in any other fixed expenses that it has, then the rest of the profit is swept out as a management fee, uh, which is not fair market value. Number one, it’s not a management fee that you would pay to another management company and an, what we call an arms length transaction. And therefore, uh, the government, uh, looks at it as money laundering. And I’ll explain how that ties in with their fundamental theory, fraud theories relative to these, these corporations.
So, uh, step number one, one, um, find a yeah. Doctor that you want to partner with. Yeah. And, and, uh, um, and establish that is an actual business venture that is multinational on Larry. Um, and that is the easiest way, um, to deflate some of the risks. Second thing, um, is that the medical well doctors have to control medical care. Um, I see in pain management, uh, multidisciplinary practices, protocols of injections that you would never see in any pain management practice that was run medically. Um, these protocols are derived for one thing and one thing only predominantly, uh, to make a lot of money. Um, and unfortunately I call them pin cushion protocols because patient comes in, they’re getting tendon sheath, injections, trigger point injections for set injections, major joint injections. Um, and they’re spacing them out playing jumping areas this month, we’re doing this knee next month.
We’re doing that knee and, and they move around, uh, and the patient gets a consistent series of injections, which generally it’s a lot of income. Unfortunately it also generates a very abnormal profile, um, which we’ll start a payer looking at your, at your entity. The other mistake that a lot of multidisciplinary practices make is they will, um, do medical and conservative care, whether it be chiropractic or PT on the same day and chiropractic and medical, especially as problematic. You know, my advice is that if you’re going to offer chiropractic services within that entity wound, meaning the entity is going to employ the chiropractor. Um, and you’re going to provide, uh, chiropractic services. And that structure eliminates a lot of the stark, Indiana kickback problems relative to referrals from a chiropractic, uh, entity to a medical entity that the chiropractor has a direct or indirect interest in.
Um, those go away when it’s all in house, but, you know, treat the patient conservatively, you know, get whatever benefit you’re going to get. And if the recovery is incomplete, then you’re affirmed the medical and you stay away from that patient. And the reason is, is because the most common fraud theory that brings down, uh, uh, multiple the disciplinary entities and usually the chiropractor, because the chiropractors, the big cheese, usually in these, in these cases is what they call a fraudulent identification of the provider service. You build the services medically under an NP or an MD whoever’s there. Uh, but in reality, the government argues and they’ve argued this successfully. The chiropractor’s really in control of the care, uh, when they put the arm on your medical staff, uh, whether it’s a nurse practitioner or a medical doctor, DL, whatever it is, a physician assistant they’re going to flip, and they’re going to say, Hey, I just did what doctor so-and-so told me to do.
Um, and some people, you know, you have angry ex medical staff that were uncomfortable with the structure, uh, and that’s what leads to the investigation. Sometimes it’s the billing profile, uh, but that generates enormous amount of risk. And essentially what the government argues is that the chiropractor was controlling medical care, which he wasn’t licensed to do. They misrepresented who was controlling the care on the claim form to get it paid, meaning you were billing under a medical provider. And that’s the only reason, uh, the government or the payer paid it. And as a result, um, all the money goes back and that’s the fraud theory. Uh, then they’ll toss in money laundering if you have this management situation going on at the same time. Um, and if it’s Medicare, um, you know, they have an enormous amount of power. Let’s assume you’re doing everything perfectly.
They’re going to flip your medical doctor anyway, because they’re going to threaten them with exclusion, which means that medical doctors, medical careers over, uh, because most medical doctors don’t have the option to run a cash practice. Um, the, the misrepresentation theory is, is especially problematic. And it’s been a winner consistently, um, only because, um, you know, the protocols aren’t medically sourced the medical doctor, uh, regardless of what’s really going on, you have structure, you have agreements that they’re entirely responsible for medical care and all of that stuff existed in every case where, where a chiropractor was prosecuted under a fraud theory under this provider, misidentification identification approach. The other thing that, that creates a lot of risk for multidisciplinary practices. And unfortunately there are some consultants out there. Um, you know, you need to read these contracts very carefully. If they say they’re not responsible for anything that you bill and you’re entirely responsible in their land, all the, the risk on you, then I wouldn’t give a lot of credibility to what they’re telling you.
Um, there have been a number of things, our cath testing piece stems, uh, aunts assist these, uh, uh, electroacupuncture devices in any number of other things that have brought practices, uh, bankrupted them. I mean, it’s an end of practice event because of the amount of money that it generated in the amount of time payers pick up on it. They come in, they want it all back. Uh, I’ve seen, um, lab related, uh, services. Like for example, I had a number of clients out in California that were, they were advised to do this lab testing thing. They were upcharging, uh, on the lab service, which is illegal under the medical practice. And, you know, they were given the opportunity to just pay back the amount of the overpayment. Those that did, they were fine. Those that didn’t the medical die. A doctor was prosecuted, flipped on the chiropractor, and then it ended up being a criminal situation for the chiropractors involved.
And once you get down that road, there’s no walking it back. Other things like, um, uh, STEM cells, uh, where they’re trying to bill Medicare for this stuff, those are statutorily not, uh, covered because they’re not FDA approved. I know some represent that they are, but they’re not. Um, they have FDA what’s called section three 61 or three 51 registration, which is not an approval, uh, for marketing for a particular use. Um, there have been some, uh, that have been approved for wound care, and I’ve seen all kinds of crazy theories that injections inside a knees is really a wound and it’s not true. So, I mean, multidisciplinary practice is much safer on the cash side. I mean, you can do all this stuff for cash. You just have to be cautious with your marketing, uh, so that you don’t get challenged by your, your state licensure board for deceptive marketing.
But the key to it is, is make sure you understand what you’re doing and get independent advice from somebody that’s willing to back it up, um, with, you know, appropriate research of the relevant statutes, regulations, medical policies, whatever it is, your provider contracts, to make sure that you’re doing this stuff correctly. And then even running a multidisciplinary practice entire way, legal, there are certain things like co management that you won’t do. Not because it’s illegal, but because it doesn’t make sense. And the reason it doesn’t make sense if you’re treating a patient conservatively, it has to be because you have an expectation that it’s going to work, but then collaterally you’re treating the patient medically, you know, which is premised on the fact that conservative care was ineffective. So you have two treatment plans, uh, beaten against each other, same thing with mixing Chiro and PT at the same time, because they’re separate treatment plans extensively to achieve the same result in which case under what’s called the most, uh, cost-effective at least costly setting approach, a component of most medical necessity policies.
If one’s going to work according to its treatment plan, then I don’t need the other one. And then they’ll pick the cheaper one and ask you to pay back the more expensive one, um, you know, multiple ENMs on the same visit. I mean, those, uh, they’re technically permissible, but they don’t make a lot of sense. And yes, there are exceptions for when a chiropractor’s evaluating a completely separate and distinct problem from the medical doctor. Uh, but in most cases, multidisciplinary practices are not set up for the medical doctors going to do family care like primary medicine, and the chiropractor is going to do traditional neuromusculoskeletal care. Usually they’re into the same pot, um, in which case there’s overlap in the conditions. And, uh, and that causes, uh, you know, a data profile or a billing profile that makes you a target. Once they start looking, uh, in a lot of cases, the best you can hope for is that you only have to pay the money back, uh, went a little long today, but, uh, to conclude, um, if you’re looking at that, call me, call somebody, um, that has no vested interest one way or another, you know, and, and get them to evaluate what you want to do, walk through the risks for you.
And, and, and I’ll leave you with a thought process. Most chiropractors get in multidisciplinary practice scenarios have to choose between continuing to practice or running a business. Because when you get into that, you know, managing the compliance risk, making sure that the medical staff are doing their documentation appropriately, and they’re not setting you up for post payment liability on that front, there’s no upcoding going on all this other stuff, managing your contracts. You’re going to become a business manager. Uh, and if that’s not your cup of tea, you might look at another way to make money. Um, if you’re, uh, getting involved with this and you’re going to keep a cash, it’s a lot safer, uh, easier to manage, uh, and you pretty much just have to watch your marketing, so get help and, you know, use consultants. Sure. But when they’re disclaiming any obligation for what they’re telling you, you better get an independent, uh, analysis and be very, very cautious about things that pay a lot of money, because those are the first things that you’re going to get challenged on and probably have to refund. Uh, so make sure he recalibrate your it’s too good to be true alarm before you go, uh, tripping the light, fantastic into what is a very, very dangerous, uh, and risky practice model, uh, that, uh, could turn out not so fun down the road. That’s all we have time for today. Thanks for your attention. And we’ll see you next time.
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