Aside from studying for tests, this page is seriously important if you’re looking into opening your own business, chiropractic or otherwise.
Principles and philosophy
Walter Wardwell: studied the chiropractic profession; member of congressionally appointed committee to determine whether chiropractic should be included under Medicare, authored Chiropractic: History and Evolution of a New Profession
Without Drugs or Knives
Introduction to Chiropractic by Sportelli
Attributes of a Profession (as distinguished from commerce)
1. specialized body of knowledge
2. specialized education
3. code of ethics
4. selectivity in licensure
5. an effective means of self-regulation
6. the importance of the work of the group to society (Dr. Wolf’s corollary: the degree of responsibility to which society assigns the group–>malpractice)
5. an effective means of self-regulation
1975: 2 U.S. Supreme Court decisions that affected professions
Arizona bar association code of ethics stated it is unethical to advertise on billboards, which personal injury lawyers did.
Lawyers stated they had a first amendment right to advertise.
Supreme Court ruled that prohibition of advertisement was unconstitutional.
Virginia bar association: licensure was conditioned on membership of bar association
Goldfarb advertised that he would do a simple will for $35.
Virginia bar association stated a minimum fee of $50 for a simple will.
Goldfarb argued that this was price-fixing and that he had a freedom not to associate.
Supreme Court ruled in favor of Goldfarb.
critically low membership–>critically slow movement of legislature
diminished relevance of associations
Wilk vs. AMA
anti-trust: alleged that organizations engaged in illegal boycotting activity against chiropractors
Canon 3 of AMA Code of Ethics stated that it was unethical for a physician to voluntarily associate professionally with an unscientific* practitioner.
JCAHO code of ethics principle 10 adopted canon 3 of AMA code of ethics.
illegal, but hugely effective means of self-regulation
13 May 2015 (19)
Regulation of chiropractic practice
Statute = law
Administrative rule = government regulation
Common law = judge-made law
Legislature (House, Senate)
Government agencies (chiro boards)
Protect the public
Only appellate courts have authority to interpret laws
Protect patients; protect public; protect profession
Lobby legislature; challenge statute in appellate court
Challenge rule in an appellate court
Challenge opinion in higher court; lobby legislature
Show up on the ethics committee of any state association
West Publishing owns organization of annotated statutes.
Law student has free west law access.
Or go to a law school law library. Ask for the annotated statutes and administrative rules governing chiropractic.
Acquire state and national association membership
“Early to bed, early to rise, work like hell and advertise.” ~B.J. Palmer
-free speech right vs. compelling state interest
-individual advertising must bear the name of the licensee or licensees (names of doctors)
-institution advertising are not within the purview of this prohibition
-testimonial advertising: statements made by patients that are improbable are not permissible
-no cure or guarantee to cure
-all advertising must use the word “chiropractor or “chiropractic”
-professional designations: any other title or letters that leads the public to believe the person who uses the title or letters is engaged in the practice of chiropractic
-diplomate vs. diplomat
-a technique cannot be patented, but a tool that goes along with it can be
A chiropractor is not a bus.
Proof: Rule IX: With the exception of emergencies, DCs are free to choose the patients they will serve, just as patients are free to choose who will provide healthcare services for them.
A chiropractor is like an airplane.
Once we have a patient, we can’t get rid of them unless we take some steps.
Proof: Rule XIII: DCs should never neglect nor abandon a patient.
To do so: give notice (you can tell them why or not) to allow patient to obtain substitute care IF NECESSARY
If the notice is due to poor conduct on the part of the patient, give notice to secure subsequent chiropractic care.
If patient needs additional care, give notice 14 days off.
Certified letter to patient with a copy to file
Assure the patient that you will transfer their records to another provider upon their written authorization to do so.
Get rid of patients who are red flags.
If during consultation, tell them then that you don’t think you can help them.
Has been in multiple car accidents
Have lied about any material fact
Won’t get involved in own case (won’t do doctor’s orders)
Brags about malpractice/ethics complaints against other professionals
Has seen multiple doctors, especially multiple DCs, before coming to you
Is carrying a _____ [box, container] and wants you to look at what’s inside
In sex cases
are determinative: did you provide any service that requires a license?
are NOT determinative: did money change hands, location of services, didn’t keep records
if you offer chiropractic care as an employee benefit, have your employees go to another chiropractor, NOT you (treat down the street)
Consultation and Communication with Other Providers
1. risk management
m/c is injury
failure to refer/diagnosis
never make a referral without doing it in writing
also make the appt
most importantly, state the reason for referral (clinical indication for referral)
if patient doesn’t follow through, you have CYOB
avoiding fraud allegations
referring for unnecessary services, e.g. every single automobile accident patient is referred to an MRI facility that charges twice as much for the imaging
in order to prove fraud, one must prove intent unless there is a pattern of conduct
so, document clinical indication for the referral
beware of imaging facilities that want your business badly (a car accident is never sufficient clinical indication for a referral for imaging)
2. practice management
cc patient (patients like this)
letter from referred doctor to referring doctor
thanks for the referral
acknowledge appropriate referral
confident that you can help
will update the referring doctor (actually have to do this)
goes into patient file
Rule VII: DCs should willingly consult when such consultation would benefit their patients or when the patients ask for consultation.
4. case control
tell consultant why they are there (not giving up, just want recommendation)
Consent (Rule V)
-negligent non-disclosure: failure to obtain informed consent before some treatment procedure
-in order to win, plaintiff must prove all of the elements of negligent non-disclosure
1. doctor knew or should have known of risk of proposed treatment
2. a reasonable _____ (patient) would have _____ (wanted to know) (MN: consumer friendly)
a reasonable _____ (doctor) would have _____ (disclosed) (IA: doctor friendly)
3. doctor failed to disclose risk
4. undisclosed risk materialized
5. a reasonable patient would not have consented had risk been disclosed (unfriendly to chiropractors, plastic surgeons doing elective work)
-board/disciplinary action avoidance
-informed consent is a process, not a form
-jury has to believe that a discussion took place
-informed consent cannot be signed before the patient meets the doctor
-patient should never see the informed consent form before meeting the doctor
-patient meets doctor
-doctor gives patient the informed consent form and asks them to read it
-doctor leaves the room and comes back in 5 minutes
-doctor asks if patient has any questions
-both parties sign
-the law disfavors contracts of adhesion
-professionals cannot limit their responsibilities: an architect cannot say that he cannot be sued if the building he designs falls over
-describe what you are about to do (side posture, occipital lift)
Conflict of interest (Rule VI)
-doctors putting financial interest over the patient’s well-being
-doctors putting sexual gratification over the patient’s well-being
-contemporarily: sales of stuff
-multilevel marketing: unethical b/c exploitation of trust and dependency
-sale of supplements, Foot Levelers
-charge for the service, i.e. nutritional consultation
Ratting on your friends (XII)
DC shall report incidents of unprofessional, illegal, incompetent, unethical acts to appropriate authorities and should stand ready to testify in courts of law and in administrative hearings.
In other words, thou shalt rat on thy friends.
Self-reporting (only state law, code says nothing on this matter): MN requires you to rat on yourself. (Fifth Amendment violation? No, because this is administrative law.)
Extra penalty if you don’t rat on yourself
If 90-day suspension of license, you have to sell interest in your practice and cannot hire someone to cover your time.
No layperson can own any interest/shares in chiropractic practices in most states in America.
Employee vs. independent contractor vs. landlord/tenant (landlord cannot get a cut of tenant’s practice; if this is the case, then it is not a landlord/tenant relationship)
DCs cannot hire another DC as an independent contractor UNLESS it’s practice relief.
Invoke 5th Amendment, construed as failure to submit contradictory evidence, you lose.
Hearsay is admissible in administrative hearing.
No right to confront your witnesses.
Resolution pyramid from least to most serious:
1. complaint–>discuss with board staff–>resolution
2. educational meeting with complaint panel–>allegation(s), if true, do NOT warrant discipline
3. conference w/ complaint panel: allegation(s), if true, DO warrant discipline
4. administrative suspension: allegation(s) constitute GRAVE DANGER to public
5. TRIAL before administrative law judge (some of your constitutional rights return)
If you argue a fact, court will uphold the board if there is “one iota” of evidence against you.
If you think the board misapplied the law, court will not give deference to the board because the board cannot interpret the law (de novo).
Inside or outside (Rule X) (will not be tested on final)
Confidentiality (Rule IV)
-encourage patient to disclose sufficient information to make diagnosis
-the fact that someone is your patient is confidential (explain this to your staff)
-cannot advertise on bulletin board or TV screen that so and so referred these # of people to the clinic
-but ask if name can be displayed
Competence and impairment
Most complaints come from impairment (illness 5%, substance abuse 95%)
Matter of public safety
No ethics rule
HPSP (Health Professions Services Program)
-portion of license renewal fee goes to fund this organization
-purpose: test and monitor
1. ordered by licensing board, which is disciplinary action (you will lose your credentialing with many third-party payers)
2. voluntarily sign participation agreement
-as long as you don’t have a positive test, your licensing board cannot take disciplinary action on you so long as you live up to the terms of the participation agreement
-HPSP allows practitioner to maintain license, but wards power over the practitioner (such as a stop-work order)
-if one is able to live up to the terms of the participation agreement, then the board cannot take action against the doctor
-if positive test, HPSP lets the board know, and the board can take disciplinary action
Err on the side of disclosure when applying for a license
The appearance of impropriety
Does it pass the smell test? (don’t do things that stinks)
“Aspirational rule”: no counterpart in the law or in administrative rule
B.J. Palmer: don’t let the TOR be bigger than the TIC (chiropractor < chiropractic)
Argument made by someone who doesn’t understand this notion: b/c it’s not illegal, it’s okay
Example: “Ramsey County’s only principled chiropractor”; “won’t ‘play doctor'” (e.g. exams, X-rays)
British Chiropractic Association v Singh
BCA approached NWHSU to provide research supporting colic, feeding problems, ear infections, asthma. NWHSU could not provide such research.
No clinical evidence to support claims
BCA dropped the suit and changed the way in which they advertise.
Truthfulness (Rule III)
Chiropractic and children: insurance will not pay if chiropractor bills for treatment for asthma; insurance may not pay if chiropractor bills for treatment of spinal subluxation, then see that the records indicate the adjustment was directed toward treatment of asthma
Chiropractic belongs to humanity (no longer a rule, no test question) as opposed to “owners.”
-school incorporated in 1935
-students signed a contract stating that they would never divulge the techniques of Logan Basic or be subject to liquidated damages (fine)
-NWHSU becomes involved b/c some students did not think this was ethical
-NWHSU sent faculty to Logan to learn Logan Basic and came back to NWHSU to teach Logan Basic as part of diversified
-NWHSU was never sued but became unpopular
-eventually all technique peddlers dropped the secrecy clauses
-if you want income, invent a technique and make sure it involves a patented tool
-Network Spinal Analysis is a technique that doesn’t have a tool
-Upper cervical is another
Regulation of chiropractic practice review
statute = law = act
legislature = comprised of legislators = lawmakers = House and Senate
commonlaw = written opinion of appellate court = interpretation of the law
appellate court = appeals court = court with authority to interpret the law = judicial precedent = supreme court of a jurisdiction (likely state)
administrative rule = rules = administrative regulations = regulations = administrative code (made by government agency)
government agency = chiropractic board = board of examiners = chiropractic examining board = state agency
ethics rules = code of ethics = canons of ethics (made by chiropractic associations)
chiropractic associations e.g. ACA, ICA, state chiropractic associations = professional association = “trade” association
Torts: civil wrong against another
1. Intentional torts: not covered by insurance
a. Assault: does the person fear imminent bodily harm
b. Battery: deliberate harmful or offensive contact with another person
c. Conversion: stealing (convert someone else’s property to one’s own purposes
e. Trespass to chattels: chattels is the refrigerator of a house (it can be removed, and so is not part of the house, but the chandelier is part of the house because it cannot be removed); borrow someone’s stuff and return it in worse condition
f. False imprisonment
g. Intentional infliction of emotional distress
a. Ordinary negligence: doing something a reasonable person would not do under the same or similar circumstances or the converse, failing to do something a reasonable person would do under the same or similar circumstances
I. The proxy for the reasonable person is the jury.
II. Elements of ordinary negligence claim (final exam question): things the plaintiff must prove in order to win; the plaintiff must prove all four elements
1) duty: the defendant owed the plaintiff duty
2) breach: the defendant breached the duty
3) causation: was the defendant’s breach of duty to proximate cause of damage to plaintiff
b. Professional negligence (malpractice)
I. Elements of a professional negligence claim (final exam question)
0) existence of professional relationship between plaintiff and defendant (doctor/patient)
a) adverse medical examiner (no liability): plaintiff cannot sue the AME because there is not a doctor/patient relationship b/c the person is seen at the behest of the insurer, not for diagnosis and treatment
b) sports teams (may have liability): varies by jurisdiction but at the highest level of sports, the doctors at the sidelines have no doctor/patient relationship with the athletes b/c they are there to make decisions on whether the player can continue to play for the benefit of the professional team or owner of the professional team; however at the lowest levels of sports, i.e. middle school, there is a greater likelihood that there is a doctor/patient relationship
c) pre-employment screening (no liability): doctor determines of prospective employee is physically able to perform the job; doctor fails to realize a red flag; no doctor/patient relationship b/c doctor is performing the exam for the benefit of the employer, not for the benefit of the employee
d) Good Samaritan (generally no liability)
i) creates duty to render assistance at the scene of an emergency, but there is no requirement to put yourself in harm’s way
ii) immune from liability if you screw up, UNLESS conduct is WILLFUL and WANTON or RECKLESS
e) is the existence of a doctor/patient relationship a subjective or an objective test?
i) in MN, it is a subjective test: would a reasonable person in the plaintiff’s position believe there was a doctor/patient relationship b/c if so, then there was a doctor/patient relationship (pro-consumer legal view) (Togstad vs. lawyer)
ii) objective test: does the doctor have a file on you?
f) sex cases (sex between doctor and patient)
i) place has no bearing on the existence of a doctor/patient relationship
ii) money changing hands has no bearing on the existence of a doctor/patient relationship
iii) lack of records has no bearing on the existence of a doctor/patient relationship
1) duty: the existence of a doctor/patient relationship proves there was duty
2) breach: did the doctor live up to the standard of care
a) description of duty owed by the doctor to the patient)
b) “universal” standard of care (final exam question)
i) A _____ must exercise the degree of skill and knowledge of a reasonable _____, in good standing (with an unencumbered license), in the same or similar circumstances.
ii) The jury will make this determination. The jury is assisted in making this determination through expert testimony.
iii) “School” rule: Generally, expert witnesses in chiropractic malpractice cases will be chiropractors.
1. Exceptions to the “school” rule
a. Where fields overlap
b. Where chiropractors are not licensed at all
c. As to causation, damages
d. Res ipsa loguitor
e. Where DC exceeds scope; invades scope of other profession
iv) “Locality” rule (final exam question): A DC must exercise the degree of skill and knowledge of a reasonable DC, in good standing, in the same or similar locality.
v) Rosenberg v. Cahill
1. Cahill = DC; Rosenberg = patient
2. Cahill failed to see tumor on X-ray
3. Rosenberg states he would have had a better prognosis if the tumor had been recognized on the X-ray
4. Cahill tried to defend himself by stating he is a straight chiropractor
5. The judge was angered by the argument and stated that it was disingenuous. He states that the expert witness will be a MD radiologist b/c New Jersey law states that a DC must have hundreds of hours of diagnostic imaging.
6. The NJ Supreme Court upheld the judge’s decision.
7. Public policy (Seton Hall Law Review): Chiropractors who claim not to diagnose should not be licensed. This raises the question of tiered licensure.
vi) Mostrom v. Pettibon (final exam question): followed by a few states such as Wisconsin, DC has 3-part duty to patient
1. Diagnosis: is this a chiropractic problem or a non-chiropractic problem?
2. Refrain: refrain from treatment if it is not helping
3. Refer: if DC is to refer, this implies that DC must know what MD will do (this aspect has been removed from the interpretation of this case)
I. Theories of recovery of damages from defendant
1) prove all four elements
2) Res ipsa loguitor
a) “The thing speaks for itself.” The classic example is the surgeon who leaves something in the patient.
b) alternative theory of recovery in that if the plaintiff proves the elements of res ipsa loguitor, then that shifts the burden of proof to the defendant (the burden of proof is usually on the plaintiff)
i) instrumentality that caused harm in sole control of defendant
ii) no other likely explanation
iii) plaintiff not contributorily negligent
iv) this doesn’t ordinarily occur absent negligence
d) if res ipsa loguitor is proven, the judge stops the trial and alerts the jury that they will presume the defendant is negligent
e) utilized during rib fractures from an adjustment
i) acknowledge it immediately
ii) let patient know how to care for a non-displaced rib fracture
iii) give the patient your malpractice insurance
iv) call your malpractice insurance immediately after patient leaves
v) settlement, will never go to jury
f) other circumstance wherein burden of proof shifts onto defendant: where plaintiff can prove that defendant doctor ALTERED or DESTROYED RECORDS
3) negligent non-disclosure
a) failure to obtain informed consent
b) elements (final exam question)
i) doctor knew or should have known of RISK of proposed treatment or of alternatives to the proposed treatment
ii) doctor failed to disclose the risk or alternatives
iii) a reasonable _____ would have _____ (depends on state)
1. A reasonable patient would have wanted to know of the risk. (MN)
2. A reasonable doctor would have disclosed the risk. (Iowa)
iv) undisclosed risk materialized
v) reasonable patient would not have consented had the risk been disclosed (or had alternative been disclosed)
c) does the jury believe that the informed consent process occurred (final exam question)
i) the form is not the process
ii) the process is the doctor and the patient have a conversation with questions and answers
How do you know you’re being sued
-served summons of complaint
-medical records request from law firm that is unfamiliar to you
-immediately contact your malpractice insurer
-your contract states that you must notify them immediately
-if you don’t let them know right away, they may cut you loose and refuse to pay
-claims people will talk you down (calm you down)
Malpractice insurance’s duty to you
a. Hire you a lawyer
b. Pay the lawyer
2. Indemnify to extent of coverage
Industry standard is $1 million single limits, which is sometimes expressed as 1 M/1 M ($1 million per incident, $1 million aggregate).
Chiropractors pay on average $3,000 per year for $1 million coverage.
An obstetrician in Cook County, IL (most litigious area in America) pays $100,000 for $1 million coverage.
Discovery: trading documents, written questions under oath, depositions (occurs pre-trial)
In medical malpractice, cases that go to trial results in a verdict for the defendant 85% of the time.
Most will settle.
Consent to settle: you, the insured, give the consent to settle; only insurance that allows this
Material misrepresentation: application of malpractice insurance w/o letting them know that you were going to work with sports teams
Let them know if you have an associate.
Types of coverage (final exam question)
1. Claims made coverage
a. Concerned with the date on which the claim is made (served w/ summons of complaint)
b. Covered only if you have insurance when the claim is made, regardless of when the event occurred
c. Cheaper in short run, more expensive on long run b/c you have to buy a “tail” (2/3x more than original premium)
2. Occurrence coverage
a. Concerned with the date on which the alleged negligence occurred
b. Will be covered for the rest of your life for the period when you bought the insurance
c. Much better deal even though more expensive
Defense of the case
1. Absolute defense = statute of limitations
a. Exceptions (vary by jurisdiction) (final exam question)
I. Minors (all jurisdictions): a minor does not lose the right to sue b/c his/her parents choose not to exercise the right to sue (statute of limitations plus 18 years)
II. Insanity (some jurisdictions) on the part of the plaintiff may toll or suspend the running of the clock until they regain sanity
III. Fraudulent concealment: DC knows they screwed up and they fraudulently concealed it. This tolls statute of limitations indefinitely.
IV. Continuing treatment role (some jurisdictions): clock doesn’t start ticking until the last treatment, regardless of date of alleged negligent act
V. Discovery rule (some jurisdictions): clock doesn’t start until the plaintiff discovers or should have discovered the negligence
1st line of defense = RECORDS
5% of DCs are defendant in a malpractice case at any given time.
Most common claim against DCs is direct injury, e.g. DC broke my rib, DC burned me with PT unit.
The second most common is failure to diagnose and failure to refer.
A sliver is the stroke cases.
The third most common is “other.”
Records do not help you with direct injury cases, but help with failure to diagnose and failure to refer.
Boundaries are the responsibility of the doctor (they cannot be delegated to someone else)
Professional boundaries: the expected and accepted psychological and social distance between practitioner and patient
Boundary crossing: transgression that may or may not be experienced as harmful (minor)
Boundary violation: harmful transgression of a boundary
Boundary violations rarely, if ever, occur w/o there first having been a series of boundary crossings. Thus, whenever you look back in time from a boundary violations you’ll see a series of boundary crossings.
The ability to recognize boundary crossings is an invaluable tool in preventing boundary violations.
Characteristics of boundaries
-boundaries make the relationship professional, safe for the patient, set parameters for treatment
-power differential exists: expertise for clinical problems, disclosure of personal information, patient inherent willingness to cooperate, do what doctor says
-doctor responsible for maintaining boundaries: doctor is accountable for violations
-dual and overlapping relationships
-other kinds of relationships coexist w/ the doctor patient relationship
-contaminate physician’s ability to focus
-patients can transfer feelings from other relationships onto the clinician
-giving or receiving gifts
-doctor’s child injured while patient is babysitting
-clinician dissatisfied w/ the quality of work – painting, filing
-gift giving may be a conscious or unconscious bribe
-maintaining established conventions
-examination and treatment procedures
Appointment – time and duration
-scheduling extra time w/ patients that are fascinating, charming, attractive
-doctor’s own needs
-disregard for other patients
-literature support for sexual misconduct occurring w/ patient scheduled at last appointment
-patient dignity is essential
-can become too familiar w/ the way we speak to patients
-clinician discloses personal problems to the patient
-satisfies clinician’s need for comfort or sympathy
-confuses the patient w/ respect to roles and expectations
-procedures performed inappropriately
-patients tend to do what the doctor says to do
-anterior chest auscultation, lower abdominal examination, palpation in the inguinal region, genitalia, breast, SLR in a gown, many muscle tests
-consider another person in the room
The only independent contractor in chiropractic practice are practice relief doctors. (Final exam question)
IRS, office of the attorney general, department of labor and industry care very deeply about this distinction.
Office share: arrangement between two independent business owners
-multiple doctors/health care providers sharing office space and select overhead expenses
-purpose: reduce overhead expenses for all parties by sharing common expenses
-the relationship is very similar to renting an apartment with a few additional services added
-at the end of the arrangement, the parties can take their respective businesses and go their separate ways
-no covenant not to compete agreement
Who uses office share agreements?
-formerly and incorrectly known as independent contractor agreements
-doctors who are looking to reduce their overhead are opening their doors to experienced doctors and new graduates
-may be a very cost effective way of opening a new practice or moving your existing patient base
How does it work?
-identify what the existing doctor is offering
-how much space
-use of staff receptionist; billing/collections; therapy
-hours available to you to treat patients
-how they see the arrangement working on a day-to-day basis
Itemize the current expenses associated w/ operating the clinic
-obtain a copy of the doctor’s profit/loss statement for the most recent 12 month period
-if the doctor is not willing to give you financial information, schedule an appointment with use in career services and bring him/her along. Suggest that the doctor bring financials to the meeting
-walk through the financial statement and identify those expenses that will be shared
-identify those expenses that will remain as an individual expense to each doctor
-determine what percent of the shared expenses each doctor will pay
-it will vary in each situation depending upon: size of the practices; hours of practice; space allocation
-goal: each doctor pays his/her proportionate share of the shared expenses, i.e. two doctors would pay 1/2 each, three doctors would pay 1/3 each of the shared expenses
-set a minimum amount per month the incoming doctor will pay to share the space
-establish a maximum amount the incoming doctor will pay to share the space
-typically reflected as a percent of total shared expenses
Identify those expenses that will not be shared by the parties
-payroll and social security taxes (FICA)
-letterhead; business cards
Discuss how you want to handle nutritional supplements; orthotics; orthopedic pillows; etc.
Legal and Contract Terms
-separate business entities
-do not operate under the same business name
-have your own tax ID number
-do not bill out under the same insurance providers hip numbers
-have different phone numbers
-use different letterhead; envelopes; business cards
-ownership of property
-each doctor owns his/her respective office equipment
-have at least one significant piece of equipment, i.e. chiropractic table; therapy unit)
-shared office expenses
-be specific – put together an itemized list
-set out very clearly how much the incoming doctor must pay each month
Discuss how you want to handle walk-in patients and patients who choose to switch from one doctor to the other
-put together an itemized list
-amount paid to existing doctor to use his/her existing equipment and furnishings
-typically a fixed amount each monthly – may increase as the incoming doctor’s practice grows
Termination of agreement
-may be immediately terminated by existing doctor for specific cause, i.e. loss of chiropractic license or malpractice insurance; felony or criminal offense; failure to comply with the agreement
-incoming doctor may not terminate the agreement prior to its expiration or may be liable for his/her portion of the shared expenses through the full term of the agreement
-each doctor owns his/her respective patient files
-if either doctor leaves, they can take their patient files and records with them
-must be specifically stated in the written agreement
-neither doctor may solicit the patients of the other doctor
-the incoming doctor may not solicit the staff of the existing doctor
-there is no non-compete provision
Term of the agreement
-typically one year – w/ an automatic renewal provision
Death/disability or termination of business by the incoming doctor
-agreement terminates if the incoming doctors dies or becomes totally incapacitated
-agreement continues even if the incoming doctor ceases doing business-the existing doctor can sue for the balance due on the agreement
-protects each party should the other party incur a lawsuit
-must be carefully drafted to assure protection from liability
Steps to implementing an office share agreement
-identify an office that may be a candidate for an office share arrangement
-type of practice
-language should not include the royal we
-size of the office space
-availability of staff
-compatibility of fee schedules and patient management techniques, i.e. cash practice; waiting list practice; “free exam and consultation”)
-visit the office and talk to the staff
-find out why the doctor is interested in an office share arrangement
-discuss how he/she envisions the arrangement working
-meet with Jerry or Kathy to discuss the opportunity and proposed terms
-have a professional office share agreement drafted and signed by all parties
What do I watch out for?
-language that sounds like “employer/employee” language
-limitations on use of space; equipment; staff and time for patient care
-controlling language regarding patient management; practice management
-unlimited liability for shared expenses (“incoming doctor shall be 50% of collections toward shared expenses”)
-language that gives the existing doctor control over your fees when collected
Choice of entity
-how choice of entity impacts you and your business
-selection of the appropriate business entity is very important
-liability ramifications (increased in sole proprietorship and partnerships, decreased in LLC and corporations)
-shield from personal liability for business debts of corporation
-estate planning ramifications
-2 or more people carrying on a business venture for profit
-all partners share equally in profit and loss
-all partners are personally liable for the debts of the partnership (100% of the debts of the partnership)
-each partner has the actual authority to bind the partnership (which is why the above is true)
-each partner has the ability to enter into binding agreements
-apparent authority: if you give the outside world the appearance of partnership; be careful of this in an office share environment; have separate names, separate bills, separate phone numbers, separate stationery, maybe even separate addresses
-separate legal entity owned by one or more shareholders
-shareholders elect a board of directors
-corporation is responsible for debts and obligations of the entity–generally not the shareholders
-may be C-corporation (a chiropractor cannot be a C-corporation) or S-corporation
-C-corporation: reports its income and expenses on a corporate tax return and is taxed at a corporate rate on the profit of the corporation. The money is then taxed at the individual shareholders personal income tax rate when it is paid to the shareholders as dividends.
-S-corporation: income and expenses pass through to the shareholders in proportion to their ownership interest and profits are taxed at the shareholder’s individual tax rates (75 days)
-may be one member LLC
-members are generally no personally liable for debts and obligations of the LLC
-taxed like a general partnership–unless not properly structured in which case it is taxed as a corporation
-LLC or S corp are the most popular choices
-you cannot shield yourself from your own malpractice claim by forming an entity (final exam question)
-ultra vires: your corporation cannot do anything outside of the scope of practice of your corporation (this is illegal)
-no shield where the corporation doesn’t observe its formalities
-you can hire a PT or an acupuncturist, but a PT or an acupuncturist cannot hire you because they are not a professional as defined by 319B (Minnesota)
-business formation process
-consult with an attorney regarding the type of entity you should form
-consult w/ your accountant regarding the type of entity you should form
-select the type of entity you want to form
-meet with your attorney to prepare the organizational documents (skip this step if you are a sole proprietorship)
-how to find a reliable accountant and attorney: talk to people
Lease has to have the name of your legal entity and cannot be signed until your entity can be formed.
A corporation cannot protect you from your own malpractice.
A corporation may be liable for malpractice of the associate if the corporation negligently hired (background check), trained or supervised.
This is why NCMIC tries to sell you corporate coverage. You do not need corporate coverage unless you have an associate because if it’s just you, the corporation cannot engage in malpractice. You need corporate coverage the day before you hire an associate.
1. Shareholder agreement: rights of the individual shareholders
-voting: by majority vote of the directors
2. Purchaser agreement: how the purchase of the shares look
3. Employee agreement: b/c the shareholder is an employee
If doctors work under the same roof, they are either an employee (associate), office share, tenant, or partner.
Non-compete agreement (final exam question)
-part of employment agreement
-in partnership or associateship
-if you leave, for any reason, you agree not to practice within X miles for Y years, or else consequences (liquidated damages, such as owing the doctor $25,000)
-generally, yes, unless term(s) is/are unreasonable
-however, just b/c terms are unreasonable, the non-compete agreement may still be enforceable (the court will simply rewrite the term, the judicial blue pencil)
-distance: varies with population density
-time: always going to be less than 2 years (but 1 year is fine, as is 6 months)
-isn’t capitalization driven on competition? Yes, which is why courts generally frown upon non-compete
-courts also frown on liquidated damages b/c they want the hiring doctor to prove actual damages (final exam question)
If low population density, size of radius of non-compete can be larger. (Final exam question)
Employment Law for Chiropractors
Minnesota is an employment at will state
-Employee can be fired at any time for any reason or no reason EXCEPT for an illegal reason.
-illegal reason = protected class, i.e. age, race, religion, pregnancy, disability
-adverse employment action = fired, worse shift, pay is cut, part time
-if employee can show adverse employment action and protected class = prima facie case of employment discrimination
-may be rebutted by showing legitimate nondiscriminatory basis for action
-sexual harassment claim (Dr. S?)
-quid pro quo
-hostile work environment
-porn star name: true
-“hooker and closer”
-asked on boat: but everyone was asked on boat
-bikini woman on doctor’s computer: doctor’s daughter
-A chiropractor can generally avoid a sexual harassment claim if (final exam question)
-you have a policy against sexual harassment in your employee handbook
-channels for complaint
-all complaints investigated
-if evidence of harassment, there must be action
-patient is harasser: must be investigated
-exception = contract employment
-criminal background check
Vicarious liability: employers are responsible for the actions of employees unless
-act is unforseeable
-outside scope of employment
If employer knows of propensity for , the employer is liable.
The law of government agencies
-chiropractic board has no jurisdiction over the chiropractor unless you are a licensee
-chiropractic board’s primary motive is to protect the public from chiropractors by
-assure at least minimal competency
-conduct disciplinary actions
-rule making: quasi-legislative (limited in scope and limited to people governed by the agency)
-notice and comment
-to appeal, take to court if exceeded authority or if unconstitutional
-affects one person
-notice and hearing
-to appeal, challenge in court as to findings of fact, but the court will uphold the agency’s findings of fact if there is one iota of evidence; as to conclusions of law, the court will review de novo (anew, fresh)
Whither my constitutional rights
-administrative and constitutional can conflict
-right to confront accuser, but not so in an administrative proceedings; the only person who has to testify is someone who has a license to practice, i.e. another chiropractor accuses a chiropractor of something
-hearsay is admissible in an administrative proceeding
-to take the fifth (not to testify), but in an administrative proceeding, the evidence put forth is considered, so the chiropractor who refuses to respond loses
The Minnesota complaint process
1. Complaint is made
2. Triaged by board staff
a. Dismissed out of hand b/c no violation of rules
c. Referred to attorney general’s office for investigation (always done with any sex case)
3. Whoever investigates the complaint reports back to the board
b. Educational meeting with the complaint panel: allegations, if true, do not warrant disciplinary action (still need a lawyer, NCMIC pays for your lawyer)
c. Conference with complaint panel: allegations, if true, do warrant disciplinary action
d. Summary suspension: only occurs if the chiropractor presents an immediate danger to patient, the public, or the self
e. Hearing before administrative law judge: sexual allegations or other serious cases
a–>e least to most severe
a. Disciplinary action: suspension, revocation, probation, conditions (public)
b. Agreement for corrective action: non-public, not disciplinary action
c. Informal agreement: telephone conversation
a–>c most to least severe
Complaint–>resolution can range from one month to 24 months
In the states of Minnesota and Wisconsin, it is illegal to form a professional organization prior to having a license. (Final exam question)
Go to the bank 90 days prior to closing on the buying of a practice. In other words, you get the money in 90 days after you apply for a loan. You will not close on the buying of a practice until you have a license (1), have a federal tax ID (3), and form an entity (2).
Bank you get a loan to must be one who is a preferred lender from the SBA. The person you talk to is ultimately the decision-maker.
If not a preferred lender from the SBA, there is a two-tiered approval process. The loan is approved internally, then sent to the SBA for approval. If the SBA does not approve the loan, you cannot take the loan package to any other lender b/c the SBA has directly turned it down.
If you build a practice from scratch and you want a $100,000 loan, you need to put down $30,000 or 30%. Bank will need to see bank statements, checking account statements, investment statements 90 days prior to closing to demonstrate where the 30% has been.
On the application, put your name without a DC if you are not licensed yet and put down “entity to be formed” if it has not been yet.
If you default on your SBA loan, the federal government will support the bank to 75% of what they loaned.
If you have a conventional loan, you have to put down more than 30% and you have to demonstrate that you have 100% of collateral.
Profit/loss statements to value a business NOT how many active/inactive patient files
Prior 12 months of collections minus prior 12 months of expenses
-employment arrangement vs. independent business owner
-employer maintains control of management of the business
-employee provides a services in exchange for compensation
-ownership of all business assets remain with the employer
-restrictions are placed on the employee to prevent harm to the employer should the employee leave the business
General contract provisions
-nature of the agreement: employer and employee
-expectations of both parties
-employer hires; fires; buys and maintains equipment; pays payroll taxes and wages; pays clinic expenses
-employee may buy some personal equipment; pay some expenses associated w/ the employment, i.e. malpractice insurance, continuing education, license fees
-ownership of business assets remains w/ employer
-employer directs the services to be provided by employee
-patient care; marketing; insurance paperwork; staff development
-exclusivity of agreement: employee may not work in the capacity of a chiropractor at any other office
-form of compensation is a reflection of employer’s expectations
-3 typical forms of compensation
-base salary only
-employer has high patient visit volume
-employee represents another set of hands
-no expectation of new patient development
-treat the patients and go home
-pros: usually a high base salary; stable compensation
-cons: no incentive to grow; employee becomes bored; limited ability to learn how to run a business
-percentage of collections only (35-50% most likely)
-employer is adding an associate doctor to grow the business
-very high expectation of new patient
-employee’s compensation is a direct reflection of how he/she performs
-most of the employee’s time is spent marketing and developing new patients
-typically the highest percent compensation of any compensation method
-base plus percentage of collections
-most common form of compensation
-lower base salary than base salary only
-lower percentage of collections than percentage of collections only (20-25% most likely)
-employee is expected to care for existing patients of the practice and to provide other services as directed by employer
-employer pays payroll tax
-patient files, records, X-rays
-employer typically maintains ownership of all patient files at the end of the associate agreement
-do not rely on verbal agreements – put it in the contract
-typically one year – automatically renew for additional one year terms unless either party elects to terminate the contract
-base salary only: no future compensation after last date of employment
-employee is typically given one week of paid vacation during the first year of employment
-unusual for employer to provide “sick day” compensation to employee
-if employee is disabled for a period of time, i.e. more than 2 weeks, there is usually an adjustment to compensation paid to the employee or the employer may elect to terminate the employee
-covenant not to compete/restrictive covenants
-virtually all associate agreements have a covenant not to compete
-covenant not to compete prohibits the employee from working, in any capacity, as a chiropractor without X number of miles of employer’s practice for X number of years after employee’s employment ends
-doesn’t matter whether the employee quits, is fired or the associate agreement expires at the end of the one year term – the covenant not to compete goes into effect
-enforceable provided that the restrictions are reasonable as to time and distance
-reasonableness test varies based upon location of the practice, i.e. metro area vs. rural, and possibly the type of practice, i.e. functional medicine, holistic
-employee is prohibited from:
-using or disclosing confidential information that is proprietary to employer, i.e. business plans; marketing material)
-employer may sue employee and obtain injunctive relief (make you stop doing with at you’re doing) and damages and attorney fees/expenses
Remember the following when considering an associateship
-put everything that you have agreed to in writing
-do not write your own associate agreement
-have any agreement you are given reviewed by an attorney
-make sure that you completely understand the compensation provisions
-just assume that the covenant not to compete will be enforced – can you live with it?
-ask yourself if you truly want to work for this person(s) or are you just settling to have something to do
-promises to sell you part or all of the practice in the future are not worth anything unless the promise is put in writing
-run the numbers – see if you can pay your monthly bills and put some money away each month
1. Layperson Floridians moving to Minnesota and setting up chiropractic clinics
Be wary of Floridians moving to another no-fault state (Minnesota)
2. Do not work for a chiropractor not licensed in your jurisdiction
3. Under the current version of the false claims act, one can be charged with fraud without proof of intent.
4. Buy an EHR; the best ones require you to answer some data are the best; the worst require the most pointing and clicking; the ones that have voice recognition are the fastest
When your’e looking at billing systems, make sure your system can show payments by more than one entity, i.e. can show that patient has paid with work comp and cash
5. Don’t use someone else’s code set, at least go through it before using it yourself
6. Don’t use someone else’s fee schedule
7. Never allow someone else to code your work, especially true with the AT modifier
8. Don’t believe what a practice management consultant tells you about the law in your state (don’t take legal advice from non-lawyers)
9. Don’t get involved with anything mobile, like mobile imaging, chiropractor gets kickback by allowing mobile imaging unit to park outside their office
10. If there’s something where you keep either the professional or technical component, do not do it (mobile needle EMG technician codes for one component, chiropractor code for another component)
11. Do not have sex with patients
12. CPT codes are time based
13. Do not use a travel card
14. Do not ignore state statutes or administrative rules
Don’t ignore Medicare rules; cannot opt out of Medicare
15. If you take prepayment of funds, those funds are not yours until you have provided services
16. Do not get behind on records–>equated with falsifying records
17. Do not use drugs or alcohol
18. Do not treat people who don’t speak the same language as you–>raises many questions and eyebrows
19. Don’t give anything of value in exchange for referrals. T-shirts, coffee mugs, etc. are okay but not $1,000. In other words, you can’t use Groupon because that is equivalent to paying for referrals.
20. Do not create multiple corporate entities to run your practice. You may consider a separate corporate if you own the building of your practice and the building has other businesses than your practice.
21. Laypeople cannot own shares of your professional corporation. You cannot pay the layperson a percentage of your collections. They can, however, get interest at or above market value.
22. Document the clinical indication for referrals; car accident is not necessarily clinical indication for referrals
23. Practice straight chiropractic (non-diagnostic) chiropractic in a jurisdiction that requires diagnosis
24. Do not alter or destroy records
25. Dual roles: chiropractor named Randy Miland who took tens of thousands of dollars from patients and claimed that he was investing it; he used the money on strippers and cocaine; he went to prison, got into a boot camp program, got out in months; federal government tries him and he goes to federal prison; he got his license back eventually and started taking money from patients again
Keep your patients out of your house; don’t have your patients do landscaping for you; do not cross boundaries