The Legal Map to a Multi-discipline Practice, Part II

Benefits of the Multi-discipline Practice

The multi-discipline practice eliminates the delay that occurs when a patient needs to travel to various locations to see different doctors. I am certain that there have been occasions when the patient you were treating required medical treatment. Accordingly, you referred that patient to a medical doctor. In some instances, the patient returned to you; in other instances, the patient was lost for good. In all instances, the patient was put to the inconvenience of having to make an additional appointment at another location for treatment. You and the medical doctor lost valuable time and energy playing telephone tag, and the patient lost days waiting for the new appointment when he could have been recovering.

Learn to think out of the chiropractic box. The multi-discipline practice is limited in the services that it can render only by your imagination and the ability of the practice’s providers. The services that may be offered are vast.  Do not treat the multi-discipline practice as an overgrown chiropractic practice—that is not its function.

Protocols of the Multi-Discipline Practice

In all instances there must be a medical director who is a licensed medical physician who makes all medical decisions. The medical director is employed by a medical Professional Entity in those states where the corporate practice of medicine doctrine (“the Doctrine”) is in effect; or, as discussed in an earlier issue of The American Chiropractor, in those states where the Doctrine is not in effect, the medical doctor is employed by a general business entity, such as an entity or limited liability company (“LLC”). The practice may employ chiropractors, physical therapists, acupuncturists, phlebotomists, nurse practitioners, physician assistants, and various other types of health care providers.

Corporate Compliance

The various entities need to have a series of agreements which describe the duties and obligations of each entity to the other.

After the entities have been formed and the legal documentation signed, you are required to maintain the corporate existence of all three companies. Limited personal liability and the tax benefits of doing business in the corporate form are available only when you comply with the requirements of corporate law.

The benefits of corporate operation flow from the legal recognition of the entity as an entity separate from its individual shareholders, directors and officers. To enjoy these benefits, you must operate the entity as a separate entity and in accordance with certain formal requirements.

It is essential that corporate and personal affairs be kept separate. Never mix corporate and personal funds, assets, or accounts. Do not use corporate funds or assets for personal or for another business’s use. Business should be done in the corporate name. Avoid any indication that you are dealing in a personal capacity. The corporate name should be used on the telephone, advertisements, letterheads, cards, signs, etc.

When signing documents, it should always be made clear that you are acting on behalf of the entity.

In keeping with the recognition of the entity as a separate legal entity, the formalities of corporate operation provide the mechanism by which the entity governs itself, makes decisions, and takes action. Properly held meetings of shareholders and directors are the key to formal operation. The courts consider observance of the formalities as important evidence in deciding whether or not the entity has been operated as a separate entity. The formalities are often the source of authority for those who act on behalf of the entity. Officers, directors and employees who act without authority (that is, without the proper approval of the shareholders or the directors, properly made and recorded in the corporate minutes) may be personally liable for their acts.

Initial Steps to Forming a Multi-Discipline Practice:

1. Review your lease with respect to prohibitions against sub-letting. Many leases contain clauses that prevent an existing tenant from sub-letting its space to another entity. In such a case, an addendum to your existing lease will have to be negotiated with your landlord. Your landlord may require additional security, a personal guaranty or a lump sum payment to permit you to sublet the premises to the management company (which will, then, further sublet to the Professional Entity). Make certain that you obtain the landlord’s permission for successive sub-lets in writing. You will also need to get written permission from your landlord to make the appropriate structural changes, if necessary.

2. In the event that you maintain a home office, you need to determine whether you are permitted to sublet to a third party.

3. You may wish to sell your patient list to the Professional Entity and your equipment to the Management Company. In that event, you will need to obtain a fair market value appraisal of both your patient list and equipment.

4. Retain the services of a qualified consulting firm. Before you retain such a consulting service, make sure that the firm has not been excluded by Medicare/Medicaid. You should also price the services and ask for (and follow up on) references. The first year of managing a multi-discipline practice can be very confusing. You are learning brand new procedures, and there will be an intense learning curve. Although you will require a competent lawyer to prepare your documentation, he or she is neither a coding and billing expert nor a clinician, and will probably be unqualified to provide you with all the information that you will need. In most instances, your consulting agreement should not be longer than one year. Your learning curve is steepest in the beginning—by your tenth month, you should be comfortable with what you are doing.  The eleventh and twelfth month should be for streamlining the process.

5. Bear in mind that, in most cases, your consultant is not an attorney—if you have any legal questions, ask your lawyer. Your consultant is not legally permitted to provide legal advice to you—even  if he or she does, you are not permitted to rely upon it. If something seems too good to be true, it generally is—seek professional help.

6. Consider implementing a compliance program into your practice. View it like a form of preventive care that protects against fraudulent or erroneous conduct. Compliance programs are internal controls and procedures that promote adherence to federal, state, and private health care programs and requirements that help you run your practice legally.

7. Review the existing policies and procedures currently in effect in your office. Make certain that they are appropriate to a multi-discipline practice. Make certain that all policies are written and that they are lawful. I have seen some personnel policies that violate almost every right guaranteed by the United States Constitution. Be sure that yours will not expose you to liability.

8. Make sure that you retain a qualified health care lawyer.

If you have any questions with regard to the above or with respect to any other legal heath care issues, you may FAX your questions to Deborah A. Green, Esq., at 954-971-3787 or call 954-971-7778 or e-mail [email protected]. In future issues, she will be answering those questions that are of interest to the broadest audience.

Ms. Green has been a practicing attorney since 1977. She is admitted to the practice of law in the State of New York and Florida and is a member of the American Health Lawyers Association, the New York State Bar Association Health Care System Design Committee, the New York State Bar Association Health Care Providers Committee, the American Bar Association Health Law Section and the Florida Bar Health Law Section. She has formed numerous multi-discipline practices throughout the country.


Because this column is being presented to you by an attorney, it would not be complete without a disclaimer. This column is provided subject to and governed expressly by the terms of this disclaimer. This column is provided for educational purposes only. The accuracy or timeliness of the information presented herein is not warranted. The information presented herein is not intended to be advice as to a specific fact pattern with which you may be presented.  Accordingly, please note that the information contained herein is not being presented as legal advice with respect to any matter and that no attorney-client relationship is hereby established.

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