physician contingency plan
TRANSCRIPT
Physician Contingency Plan
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TABLE OF CONTENTS
1. INTRODUCTION 2. CLINICAL ISSUES
I. Notifications of Physician Illness/Death A. Notifications to Patients B. Notifications to Colleagues C. Notifications to Local Pharmacies D. Notifications to the DEA E. Notifications to State Licensing Board(s) F. Notifications to Liability Insurers G. Notifications to Insurance Groups
i. Medicare and TennCare ii. Commercial Insurance Companies
H. Notifications to Membership Organizations I. Notifications Checklist J. TMA Law Guide/Resources to Consult Regarding this Topic
II. Patient Care: Office Visits A. Generally B. Categorization of Patients C. TMA Law Guide/Resources to Consult Regarding this Topic
III. Prescription Refills A. New, Unfilled Prescription Written by a Deceased Physician B. Refill of Prescription Written by a Deceased Physician that has been
Previously Filled C. Patient’s Request for Further Refills D. TMA Law Guide/Resources to Consult Regarding this Topic
IV. Specialist Consults/Referrals A. Generally
V. Call/Rounds A. Practice Call B. Hospital Call C. Hospital Rounds D. Hospice E. Nursing Home F. TMA Law Guide/Resources to Consult Regarding this Topic
VI. Pending Labs/Imaging/Etc. A. Imaging/CAT/MRI, etc. B. Lab Results C. TMA Law Guide/Resources to Consult Regarding this Topic
VII. Miscellaneous A. Pending Patient Forms B. Pending Dictations C. TMA Law Guide/Resources to Consult Regarding this Topic
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3. OPERATIONAL ISSUES I. Medical Records
A. Patient Access to Medical Records i. Retention of Original Medical Records ii. HIPAA Compliance iii. Patients Requesting Copies of their Medical Records iv. Requests for Records from Payers
B. Storage of Medical Records C. Destruction of Medical Records D. Issues to Address with Medical Records if the Practice is Sold After the
Death of a Physician E. Medical Record Action Checklist F. TMA Law Guide Topics/Resources to Consult Regarding this Topic
II. Human Resource Issues A. Secondary Check Signer B. Retentions and Terminations C. Severance and Other Contracts D. Taxes E. Notifications and Working with the Estate F. Special Note on Disposition of Copy Machines G. Human Resources Checklist H. TMA Law Guide Topics/Resources to Consult Regarding this Topic
III. Clinical Staffing and Operations A. Supervision of Midlevel Practitioners
i. Physician Assistants ii. Advanced Practice Nurses
B. Continuation or Closing of the Practice in the Event of the Physician’s Death
i. Continuation of the Practice ii. Closing of the Practice
C. Sale of the Practice i. Medical Practice Valuation ii. Business Associate Contracts iii. Laws Implicated
D. Disposition of Supplies, Samples, and Equipment i. Disposition of Controlled Substances ii. Disposition of Unused DEA Order Forms iii. Disposition of Drugs that are Not Classified as Controlled
Substances iv. Disposition of Equipment
E. TMA Law Guide Topics/Resources to Consult Regarding this Topic IV. Miscellaneous
A. Mortgages, Debts, and Priority of Liens B. Real Estate/Office Space
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C. Audits D. Estate Planning E. TMA Law Guide Topics/Resources to Consult Regarding this Topic
4. INSURANCE ISSUES I. Billing Policy II. Billing Procedures III. Outstanding Claims IV. Notifying Health Insurers of the Death of a Physician V. TMA Law Guide Topics/Resources to Consult Regarding this Topic
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INTRODUCTION
Closing or suspending operations of a medical practice can be a complicated process, and it is important that the physician make plans ahead of time for whatever circumstances might arise to cause a cessation of practice. If a physician is suddenly and unexpectedly unable to practice, it often falls to his family, estate, and/or practice staff to determine what steps to take in wrapping up the practice and protecting the interests of the physician and his or her patients. The best way to ensure that the issues that accompany the closing or suspension of a medical practice are handled as the physician desires is through proper advance planning.
With that in mind, the Tennessee Medical Association has prepared this Physician Contingency Plan – to help physicians anticipate and plan for the intricacies of suspending or closing a medical practice, be it under unexpected circumstances or under careful planning and plenty of notice.
The TMA has attempted to cover many of the topics associated with the closing or suspension of a medical practice, but this publication should not be taken to address every possible issue that could arise. This publication should not be construed as legal advice or representation by the TMA. This unwarranted material is provided for informational purposes only. It is quite likely that you will require legal representation when navigating the closing or suspension of a medical practice, and for such representation you should contact your personal attorney.
Throughout this document references will be made to the TMA Law Guide, with links to the various subjects providing further information appearing at the end of the various sections of this Contingency Plan. We urge you to utilize the Law Guide as a supplement to the information provided herein.
If you have further questions, or suggestions, please do not hesitate to contact the Tennessee Medical Association’s Legal Department at 615‐385‐2100 or toll free at 800‐659‐1862, or e‐mail [email protected].
This Physician Contingency Plan was produced in part by material and/or ideas adapted from the Illinois State Medical Society, the California Medical Association, the Ohio State Medical Society, the Massachusetts Medical Society, and Connecticut State Dental Association. The Tennessee Medical Association would like to thank these groups for their assistance and contributions.
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CLINICAL ISSUES
As the proper handling of clinical and patient care issues will vary based on a practice’s makeup, this section divides each heading into recommendations for solo practitioners and recommendations for practices with multiple physicians and/or at least one (supervised) midlevel provider.
I. Notifications of Physician Illness/Death
A. Notifications to Patients
It is important to notify patients of the cessation of a physician’s practice so that they do not continue to believe that the physician’s services will be available.
Board of Medical Examiners (BME) Rule 0880‐2‐.15(4)(e) requires notification to patients when a physician dies while in practice. All patients seen by the physician within the previous thirty‐six (36) months must be notified of the physician’s status. Technically, this requirement does not apply to patients who have been seen only once in the immediately preceding eighteen (18) months. However, BME Rule 0880‐2‐.15(4)(b) states that this notice may be accomplished by public notice, which should be published in the local paper as soon as possible, but absolutely no later than thirty (30) days after the event leading to cessation of the physician’s practice.
While the BME Rules allow patient notification to be accomplished via public notice, the practice may also wish to provide notice by sending a letter of notification to each patient. For example, if a practice decides to publish a notice in the local paper, it might be prudent to call acute patients and send a letter to chronic patients. A sample letter to the local paper can be found in Appendix A of this publication, and a sample letter to patients can be found in Appendix B.
B. Notifications to Colleagues
As a matter of courtesy, the practice should notify other physicians who were closely associated with the physician or the practice and let them know that the physician will no longer be practicing.
C. Notifications to Local Pharmacies
It is important to contact local pharmacies to let them know that the physician will no longer be prescribing to ensure that no one can use the physician’s name to obtain drugs illegally.
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D. Notifications to the DEA
Upon a physician’s death or cessation of practice, the practice must notify the DEA Administrator immediately, and must immediately return for cancellation the registrant’s certificate of registration to the Registration Unit of the DEA. The letter accompanying the certificate of registration must state the physician’s name, address, and date of death, and should also include a copy of the physician’s death certificate, if applicable. The mailing address for the DEA Registration Unit is:
Drug Enforcement Administration Attn: Registration Section/ODR P.O. Box 2639 Springfield, VA 22152‐2639
E. Notifications to the State Licensing Board(s) State License(s) to Practice Medicine
Notify all state licensing boards with which the physician is licensed of the physician’s death or retirement. The contact information for the Tennessee Board of Medical Examiners is as follows:
Tennessee Department of Health Division of Health Related Boards 227 French Landing, Suite 300 Heritage Place, MetroCenter Nashville, TN 37243 Phone: (615) 741‐8402
F. Notifications to Liability Insurers
Notify the physician’s professional liability insurance carrier of the physician’s change in status. If the physician does not already have it, consider purchasing a “tail” policy in case of claims that are filed after coverage ends.
G. Notifications to Insurance Plans
i. Notifying Medicare and TennCare
Send written notification of the physician’s death or retirement to all government health insurance contractors by registered mail. Retain a copy of such letter, as well as proof that is was sent by registered mail.
ii. Notifying Commercial Insurance Companies
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Follow the specific contractual requirements set forth in the individual contracts. If none are specified, send written notification to the company via registered mail, retaining a copy for the practice’s records along with proof that it was sent.
H. Notifications to Membership Organizations
As a courtesy, contact county medical societies, specialty societies, TMA , the AMA, and any other professional organizations to which the physician belonged to let them know of the physician’s circumstances.
The Tennessee Medical Association’s address is:
Tennessee Medical Association Attn: Membership Department 2301 2st Avenue South Nashville, TN 37212
I. Notification to TN Department of Revenue Re: Professional Privilege Taxes
Notifications should be made to the Tennessee Department of Revenue that the physician has ceased practice. Penalties could be assessed against the physician if the state does not know that the doctor is no longer practicing.
Contact information for the Tennessee Department of Revenue is as follows:
Tennessee Department of Revenue Andrew Jackson Building 500 Deaderick St. Nashville, TN 37242 Phone: (800) 397‐8395 E‐Mail: [email protected]
J. TMA Law Guide/Resources to Consult Regarding this Topic
• Board of Medical Examiners • Closing a Medical Practice • Malpractice • Patient Abandonment
II. Patient Care: Office Visits
A. Generally
i. Solo Practice
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In the case of a solo practitioner, it will be helpful to compile a list of local physicians (by specialty) ahead of time so that the practice can refer patients if immediate health care is needed. The list should include contact information for each physician to be used as a referral source, as well as directions to the physician’s office. A staff member should be designated ahead of time to cancel or reschedule all previously scheduled appointments and to coordinate the notification to patients of pending lab or other test results.
ii. Practice with Multiple Physicians and/or Midlevel Providers
If the physician was not a solo practitioner, the partner(s) and/or mid‐level provider(s) could cover already scheduled appointments. It will be necessary to make all partners or mid‐level providers aware of this protocol in advance. The schedule should be reviewed and the patients triaged, if necessary, with the most urgent being seen first and others being seen as fits the covering partner or mid‐level provider’s schedule. Again, a staff member should be designated to reschedule or cancel previously scheduled appointments, if necessary.
B. Categorization of Patients
i. Solo Practice
The practice should place each patient in a category to determine who will need immediate medical assistance. It would be helpful for physicians and practices reading this publication in anticipation of a need for a contingency plan to make a habit of categorizing each patient as they are seen to eliminate staff guesswork should the need arise.
• Acute Patients: As mentioned above, it will be necessary to refer these patients out to other physicians immediately.
• Chronic Patients: Contact these patients as soon as possible to inform them of the physician’s status, and, if the physician will no longer be practicing, be prepared to refer these patients to other physicians.
• In‐Patient: As will be further discussed in Section V(B) of this publication, which
deals with hospital rounds, coverage arrangements should have been made with local physicians in advance should a physician be unable to provide scheduled coverage, unless the hospital specifically arranges for coverage of hospital patients in such circumstances.
ii. Practice with Multiple Physicians and/or Midlevel Providers
If there is a physician partner, the partner will likely be able to cover patient visits and absorb into his or her schedule the other physician’s patients. Of course, some appointments may need to be rescheduled to accommodate the immediate needs of the most urgent patients first. A plan should be in place to rearrange the schedule on a short‐term basis. This plan should include an agreement as to how long the partner can cover and whether or not a locum tenens will be brought in to handle patient care.
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If there is a mid‐level provider, the provider will also be able to cover patient visits and absorb the former supervising physician’s patients into his or her schedule. The back‐up supervising physician will need to be notified immediately of the change in the physician’s status, and of the fact that he or she is now the active supervising physician. As will be covered in Section ***, a prior arrangement should already have been in place with the back‐up physician for situations such as this. Again, some appointments may need to be rescheduled in order to ensure that the most urgent patients are seen first. As with a physician partner, a plan for such rescheduling should be in place that includes an agreement as to how long the mid‐level provider can cover and whether or not the practice will hire a locum tenens to see patients.
C. TMA Law Guide/Resources to Consult Regarding this Topic
• Patient Abandonment • Physician‐Patient Relationship
III. Prescription Refills
A. New, Unfilled Prescription Written by a Deceased Physician
A new, unfilled prescription written by an authorized provider who is now deceased may be filled based on the pharmacist’s judgment along with the following caveats:
• The prescription must be filled no later than 90 days after the prescriber’s death; and
• Schedule II drugs may not be filled.
B. Refill of Prescription written by a Deceased Physician that has been Previously Filled
A prescription written by an authorized provider who is now deceased may be refilled based on the pharmacist’s judgment along with the following caveats:
• A Schedule III, IV, or V drug may be refilled no later than 90 days from the date of the prescriber’s death, as long as federal law and the DEA allows it1;
• Non‐Scheduled drugs may be refilled no later than 180 days from the date of prescriber’s death; and
• Schedule II drugs may not be refilled.
1 See pages 35&61 of the Drug Enforcement Administration’s Pharmacist’s Manual, available at http://www.deadiversion.usdoj.gov/pubs/manuals/pharm2/pharm_manual.pdf.
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C. Patient’s Request for Further Refills
A patient may request the practice to order a refill of a previously prescribed drug. Under BME Rule 0880‐02‐.14(b), a covering physician or currently supervised midlevel provider can potentially order refills for patients that they have not personally seen under three different circumstances, at the prescribing provider’s discretion:
• “For a patient of another physician for whom the prescriber is taking calls or for whom the prescriber has verified the appropriateness of the medication”, or
• “For continuation medications on a short‐term basis for a new patient prior to the patient’s first appointment”, or
• “For established patients who, based on sound medical practices, the physician feels do not require a new physical examination before issuing new prescriptions.”2
D. TMA Law Guide/Resources to Consult Regarding this Topic
• Prescription Matrix • Prescriptions
IV. Specialist Consults/Referrals
A. Generally
i. Solo Practice
When patients are referred to a specialist or a consult is requested, the specialist may send a letter back regarding the visit and anticipated care plan. In case of a contingency plan implementation, these letters will need to be reviewed to determine if action is immediately required or can wait until the office is staffed by a physician. If the practice will be shutting down, these letters will need to be forwarded on to the patient’s new physician.
ii. Practice with Multiple Physicians and/or Midlevel Providers
The partner or mid‐level provider will need to review any and all letters from specialists or other physicians to whom patients have been referred and take appropriate action.
V. Call/Rounds
The physician’s monthly/quarterly call schedule (practice, hospital, and nursing home/hospice, if applicable) should be posted in the office or maintained by a staff member on a regular basis.
2 TN BME Rule 0880‐02‐.14(b)(2‐4)
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A. Practice Call
i. Solo Practice
Coverage arrangements for night/weekend call for patients of the practice should be made with local physician(s) in advance to ensure seamless coverage should a physician illness or death occur. Many managed care contracts require this anyway. The physician could meet with other local solo practitioners, with each agreeing to cover for one of the group if an emergency occurs.
The physician’s answering service will need to be notified of any changes to the contact person for call.
ii. Practice with Multiple Physicians and/or Midlevel Providers
The partner and/or mid‐level provider should be on notice that it may be necessary for him or her to cover call on a short‐term basis. Coverage arrangements for a longer period than a few nights for night/weekend call for patients of the physician should be made with local physicians in advance to ensure seamless coverage should a physician illness or death occur.
The practice’s answering service will need to be notified of any changes to the contact person for call.
B. Hospital Call
A list of all hospitals where the physician has call duties should be maintained and readily available to staff.
i. Solo Practice
Contact each hospital at which the physician has call responsibilities to determine what the hospital’s protocol will be in the event of the physician’s illness or death: the hospital may arrange for coverage of hospital patients internally. Call coverage is the responsibility of the hospital, but if some reason the hospital has no such protocol, it will be necessary to have a standing agreement with local physicians to provide coverage for hospital patients.
It will be necessary to notify all hospitals at which the physician maintains call duties of changes to the physician on call.
ii. Practice with Multiple Physicians and/or Midlevel Providers
Contact each hospital at which the physician has call responsibilities to determine what the hospital’s protocol will be in the event of the physician’s illness or death: the hospital may arrange for coverage of hospital patients internally. Call coverage is the responsibility of the hospital, but if for some reason the hospital has no such protocol, arrangements could be made ahead of time for the partner physician or mid‐level provider—if the mid‐level provider has hospital privileges—to cover the physician’s hospital call until other arrangements can be made. It may also be prudent to make arrangements with other local physicians to cover the
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call responsibilities to ensure that the partners and/or mid‐level providers are not faced with more call responsibilities than can be handled.
Again, it will be necessary to notify all hospitals at which the physician maintains call duties of changes to the physician on call.
C. Hospital Rounds
A list of all hospitals where the physician has privileges should be maintained and readily available to staff.
i. Solo Practice
As in the case of call responsibilities, contact every hospital at which the physician conducts rounds to determine what its protocol will be in the event of the physician’s illness or death: hospitals may want to make their own coverage arrangements. If the hospital has no such protocol, arrangements should be made ahead of time with local physicians to cover hospital rounds should a contingency plan need to be implemented.
It will also be important to inform each patient or legal guardian of a patient in the hospital of the physician’s status, as well as of the name and contact information of the provider who will be covering for the physician until the patient or legal guardian arranges for a new physician.
ii. Practice with Multiple Physicians and/or Midlevel Providers
Hospital administration should be contacted as soon as possible to help find replacements for the physician’s already‐scheduled rounds. Arrangements could be made ahead of time for the partner or mid‐level provider –if the mid‐level provider has hospital privileges—to cover the physician’s call for a specified time period.
D. Hospice
i. Solo Practice
Coverage arrangements for hospice patients should be made ahead of time with local physicians in the event of enactment of a contingency plan.
A list of each hospice that the physician may have patients at should be maintained. In the event of the physician’s illness or death, it should be determined whether current patients of the practice are at any of those facilities. The covering physician should be contacted as soon as possible and fully informed of the patient’s condition and treatment, and asked to take over patient care.
It will be necessary to notify the hospice(s) of any changes of the person caring for the patients, as well as his or her contact information.
ii. Practice with Multiple Physicians and/or Midlevel Providers
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Arrangements could be made ahead of time for the partner or mid‐level provider—if the mid‐level provider has hospice privileges—to cover hospice visits for a certain period of time.
Practices may want to consider arranging for hospice patient coverage with local physicians should a contingency plan be enacted, depending on whether the physician’s partner and/or mid‐level provider can take on the additional duties.
It will be necessary to notify the hospice(s) of any changes to the person caring for the patients, as well as his or her contact information.
E. Nursing Home
i. Solo Practice
Contact each nursing home to determine whether it will arrange for coverage of patients in the facility should a physician illness or death occur. If it will not arrange for coverage, coverage arrangements for nursing home patients should be made ahead of time with local physicians in the event of enactment of a contingency plan.
Each patient or legal guardian in the nursing home should be informed of the physician’s status and of the identity and contact information of the provider who will be covering for the physician until the patient or guardian arranges for a new physician.
It will be necessary to notify the nursing home(s) of any changes to the person caring for patients, as well as contact information should a situation arise.
ii. Practice with Multiple Physicians and/or Midlevel Providers
As with a solo practice, contact each nursing home to determine whether it will arrange for coverage of patients in the facility should a physician illness or death occur. If the facility does not arrange for coverage internally, arrangements could be made with the physician’s partner or mid‐level provider—if the mid‐level provider has nursing home privileges—to cover nursing home visits for a certain time period. The practice might also want to consider the alternative of pre‐arranging for coverage of nursing home patients with a local physician should a contingency event occur, should the partner or mid‐level provider be unable to assume the duties of the incapacitated physician.
It will be necessary to notify the nursing home(s) of any changes to the person caring for patients, as well as contact information should a situation arise.
F. TMA Law Guide/Resources to Consult Regarding this Topic
• Nursing Homes – Physician Requirements • On Call Physicians
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VI. Pending Labs/Imaging/Etc.
A. X‐Rays or Other Imaging (CAT Scans, MRIs, Etc.)
i. Solo Practice
Coverage arrangements for reviewing x‐rays or other imaging, or reports, should be made in advance with local physicians should an illness or death occur.
It will be necessary to review results as soon as practicable (to be determined by the practice) by a local physician. Information from the patient’s medical records will need to be provided along with the results so that the covering physician can provide the patient with the best care possible. The practice should consider copying the patient’s medical records and forwarding the copy with the x‐rays, other imaging, and/or reports to be reviewed by the covering physician.
ii. Practice with Multiple Physicians and/or Midlevel Providers
If the partner or mid‐level provider is competent to review the x‐rays or other imaging, arrangements could be made ahead of time for him or her to make the initial review of the x‐rays. Practices might also want to consider making arrangements to send the x‐rays or other materials to a radiologist for an over‐read if the partner or mid‐level provider does not review such materials on a regular basis.
B. Lab Results
i. Solo Practice
Coverage arrangements for reviewing lab results should be made with local physicians in advance.
Results need to be reviewed within as soon as practicable (to be determined by the practice) by a physician. Information from the patient’s medical records should be provided along with the results to ensure that the covering physician will be able to provide the best care possible. The practice should consider copying the patient’s medical records and forwarding the copy with the lab results to be reviewed by the covering physician.
ii. Practice with Multiple Physicians and/or Midlevel Providers
The partner or mid‐level provider could review the lab results.
C. TMA Law Guide/Resources to Consult Regarding this Topic
• CLIA • Medical Laboratories, Tennessee Law
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VII. Miscellaneous
A. Pending Patient Forms
i. Solo Practice
If the practice has outstanding patient forms that have been left with the physician for completion, it will be necessary to contact these patients as soon as possible. These patients should be advised to pick up the form and take it to another physician for completion. The practice might want to compile a list of similar specialty physicians in the area that the patient could contact for assistance.
ii. Practice with Multiple Physicians and/or Midlevel Providers
The partner or mid‐level provider should be able to complete the forms after a review of the patient’s medical records. The office staff may want to consider notifying these patients of the change in status of the physician and inform them that there may be a delay in completion of the forms.
B. Pending Dictations
i. Solo Practice
Arrangements could be made with local physicians ahead of time for review and approval of an incapacitated physician’s recent dictations. Portions of the patient’s medical record may need to be copied and accompany the dictation. The practice should consider the importance of handling these dictations as soon as possible so that the information will be in the patient’s chart should it be copied for the patient to transfer to another physician.
ii. Practice with Multiple Physicians and/or Midlevel Providers
The partner or mid‐level provider should be able to review and approve recent dictations.
C. TMA Law Guide/Resources to Consult Regarding this Topic
• Form Completion Charges
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OPERATIONAL ISSUES
I. Medical Records
A. Patient Access to Medical Records
If a physician death occurs, once patients have been notified about the death of their physician, the practice can expect many of the deceased physician’s former patients to contact the practice requesting access to their medical records. These requests may be either for copies or transfers of records, and the requests may come from the patient or from another physician who is assuming the care of the patient.
A written, HIPAA compliant release, signed by the patient or the patient’s authorized representative, should accompany all requests to transfer or copy medical records. Best practice would be to retain these releases in the file along with copies of the records.
i. Retention of Original Medical Records
The TMA recommends that medical practices retain original medical records and provide copies of the records to the requesting patients. The primary reason for our position is that in case a medical malpractice lawsuit is filed against the estate of the deceased physician, the estate will be able to adequately defend the physician. Retention of original medical records reduces the chance of disputes over whether the entire medical record set is available for review by an expert or for production as evidence, should either or both be required. State law at T.C.A. §63‐2‐101 protects the practice’s right to retain original medical records.
The medical records of the deceased physician should be kept in a cool, dry location to avoid damage or destruction due to flooding or other natural disasters. The records should be retained for the appropriate regulatory periods.
Tennessee BME Rule 0880‐02‐.15(f) dictates the required amount of time that medical records should be retained—physicians and their staff should be familiar with this rule.
It is also important to note that BME Rule 0880‐02‐.15(e) addresses the transfer of medical records and notice to the patient if the practice is sold.
ii. HIPAA Compliance
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Staff should continue to follow the practice’s HIPAA and breach notification policies. This requires that staff continue, for example, to account for disclosures of patient protected information (PHI).
iii. Patients Requesting Copies of the Their Medical Records
• Retaining an Employee to Handle Notices/Copying Duties If the physician is engaged in a solo practice, the physician should pre‐designate the individual(s) or position(s) who will be retained on active duty should a contingency plan be enacted. One of this employee’s duties would be to handle the patient notice requirement under BME Rule 0880‐2‐.15 upon the physician’s incapacity or death. Another of this employee’s duties would be to respond to patient requests for copies of medical records. The employee designated for this role should be familiar with the law and practice policy applicable to all aspects of medical record copying, charges, retention, destruction, release to minors, release to non‐custodial parents, compliance with subpoenas and court orders, etc.
• Requirement of Written Request for Copies T.C.A. §63‐2‐101 requires that requests for copies of medical records from patients or their authorized representatives must be in writing and furnished within ten (10) working days of the request. T.C.A. §63‐2‐102 states that the physician may require payment for the copying charges before furnishing the records. The law goes on to state that once payment is received, the records should be provided without delay.
• What to Include in Copies Given to Patients and Others a. Definition of “medical record”: The term “medical record” is defined in state law at T.C.A. §63‐2‐101(c)(4), which states that “’medical records’ means all medical histories, records, reports and summaries, diagnoses, prognoses, records of treatment and medication ordered and given, X‐ray and radiology interpretations, physical therapy charts and notes and lab reports.” b. Psychiatric Records: If your practice is a psychiatry group, the psychiatrist’s notes, sometimes called “psychotherapy notes”, are not medical records and should not be copied to the patient. They should, however, be retained by the practice in case of a medical malpractice lawsuit. d. Records from Other Providers: These records may be turned over to the patient if they were part of the treatment records maintained for the treatment of the patient.
• Producing and Charging for Copies of Paper Records Tennessee law at T.C.A. §63‐2‐102 allows physicians to charge fees for copying, notarizing, and mailing non‐workers compensation medical records. The law states as follows:
For other than records involving workers’ compensation cases…reasonable costs shall not exceed twenty dollars
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($20.00) for medical records five (5) pages or less in length and fifty cents (50¢) per page for each page copied after the first five (5) pages and the actual cost of mailing.
Tennessee law at T.C.A. §50‐6‐204 allows for workers compensation medical records to be copied. The law states that:
No medical provider shall charge more than ten dollars ($10.00) for the first twenty (2) pages or less and twenty five cents (25¢) per page for each page after the first twenty (20) pages for any medical reports, medical records or documents pertaining to medical treatment or hospitalization of the employee…
Note that state law prohibits charging amounts over the statutory limits for impairment ratings. There are caps in both statutes as to how much can be charged, so staff should consult this law in order to comply with these requirements. Note that you cannot withhold copies of medical records from patients with an unpaid medical bill.
• Producing and Charging for Copies of Electronic Records The American Recovery and Reinvestment Act of 2009 (ARRA), enacted in February of 2009, requires a provider who “maintains” an electronic health record (EHR) to produce a copy of a patient’s PHI in electronic format upon an individual patient’s request, and, if the patient so chooses, to transmit the copy directly to an entity or person designated by the individual patient. A fee for such service may not be greater than the covered entity’s labor costs in responding to the request for the copy.3 Again, note that you cannot withhold copies of medical records from patients with an unpaid medical bill.
• Fees for Reproducing Records for Certain Entities a. Department of Health Investigators: No fee may be charged to the Tennessee Department of Health Investigators for copying of records. b. OIG/Medicaid Fraud Unit: Medical records must be available for copying by the close of business of the next business day upon request by the Tennessee Office of Inspector General or Medicaid Fraud Unit. OIG or MFU personnel will make their own copies of the records. The exception to the next business day rule is if OIG or MFU believes there is a reasonable belief that the records will be altered or destroyed.
3 Ohio State Medical Association, Closing a Practice Packet.
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c. Tennessee Department of Human Services: No fee may be charged to the Tennessee Department of Human Services for copying of medical records. d. Non‐Custodial Parent: T.C.A §36‐6‐103 addresses release of a child’s medical records to a non‐custodial parent. It allows the practice to release the records to the child’s non‐custodial parent.
iv. Payer Requests for Medical Records
This is a matter of contract law. Most payers indicate in their contracts or associated policy manuals the protocol for handling requests for copies of patient medical records. Most payers specify that the plan cannot be charged for copying medical records requested by it.
B. Storage of Medical Records
i. Paper Medical Records
Paper records should be stored in a cool, dry location and retained for the period required under BME Rule 0880‐2‐.15.
ii. Electronic Medical Records
Electronic records should continue to be stored with back‐up capabilities according to practice policy and retained for the period required under BME Rule 0880‐2‐.15.
C. Destruction of Medical Records
i. How Long to Wait to Destroy Medical Records
This issue is addressed in BME Rule 0880‐2‐.15
ii. How to Destroy Medical Records
The requirements for destruction of medical records can be found in BME Rule 0080‐2‐.15
D. Issues to Address with Medical Records if the Practice is Sold
i. Caveat to Selling Medical Records as Part of Sale of the Practice
T.C.A. § 63‐2‐101(b)(2) provides in part that “[t]he name and address and other identifying information shall not be sold for any purpose.” Violation of this statute is considered an invasion of patient privacy. As such, it is doubtful that medical records may be sold as part of the sale of the practice as part of the “goodwill” valuation of the practice under Tennessee law as has been a commonly accepted practice.
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ii. Estate’s Access to Originals in Case of Medical Malpractice Lawsuit
Although it is doubtful that the medical records could be sold as part of the sale of the medical practice, TMA does not recommend disposing with original records for several years after the death of the physician in case a medical malpractice case is filed against the physician’s estate. Records should be retained for the amount of time prescribed – which will depend on the type of record – by BME Rule 0880‐2‐.15. It is best to preserve original records rather than having custodial disputes or suggestions of record alterations if a lawsuit is filed. If for some reason original records are indeed transferred, it is best to have some agreement in the transfer instrument allowing the estate access to the original records in the event of a filing of a medical malpractice case.
iii. Responsibility for Notifying Patients of the Location of their Medical Records
T.C.A. § 63‐2‐101 allows patients to have a copy or summary of their medical records. If records are transferred for some reason pursuant to the sale of a practice, there should be reasonable notice to the patients as to where they can access copies of their records. Again, BME Rule 0880‐2‐.15 applies in the case of the death of a physician.
E. Medical Record Action Checklist
i. Knowledgeable staff member(s) retained to handle patient notice and medical record requests (custodian of records)
ii. Policies pertaining to medical records, HIPAA, and breach notification updated and accessible to custodian of records
iii. Appointment of custodian of records and arrangements for him/her to remain on staff for a period after the physician’s death
iv. Arrangements for storage of records if the practice will close; clear understanding of who the owner of the records is after the physician’s death
v. Procedure as to how patients can access records
F. TMA Law Guide Topics/Resources to Consult Regarding this Topic
i. Law Guide Topics:
• Child Abuse, Neglect, or Child Sex Abuse • Closing a Medical Practice • Confidentiality • HIPAA – Authorization Form Required Elements • HIPAA – Breach Notification Rules • HIPAA – Guide to Communicating with Patient’s Family, Friends, Etc. • HIPAA – Minor’s PHI and Access • HIPAA – Request to Amend Medical Record
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• HIPAA – Requests by Health Insurers for Entire Medical Record • HIPAA Medical Records FAQs • Medical Records • Patient Owes Practice Money – Medical Records or Appointments • Red Flag Rules and Breach Notification Template • Subpoena • Subpoena Response Letter to Attorney • Workers’ Compensation • Workers’ Compensation – Communicating Medical Information on a Workers’
Comp Patient
II. Human Resource Issues
Human resource issues will depend heavily on whether there is a surviving physician in the practice. If the practice is a solo practice, will the practice close or be sold? This topic will address solo practices primarily since it is assumed that operations of a multi‐physician practice will continue so long as there is a physician in the practice to see patients.
Below are some of the Human Resource considerations if a physician in solo practice dies or is otherwise unable to practice. The more that can be anticipated and planned for ahead of time, the less operations will be interrupted in the event of the physician’s death. So, plan now for all contingencies.
A. Secondary Check Signer
If the operations of a solo practice depends on the physician signing all checks, payroll and other payment responsibilities would be interrupted in the event of a physician’s death or incapacity. At least two persons should have concurrent check signing authority.
B. Employee Retentions and Terminations
Obviously, if the physician in solo practice dies, the practice’s income stream stops unless there is someone else who can lawfully assume patient care. Since accounts receivable will be limited primarily to outstanding balances, decisions must be made quickly as to what personnel should be maintained. Caregivers such as nurses, PAs, and nurse practitioners for whom lawful supervision cannot be obtained should be at the top of the list. A person (or multiple people, if necessary) responsible for immediately managing patient care coverage, dealing with outstanding claims, notifying patients and health plans of the death of the physician and how to access medical records, donating or destroying inventoried medications, and copying and distributing medical records should be kept in the practice’s employ for as long as payroll will allow.
One challenge will be to manage accrued vacation and other leave time that employees might wish to take immediately or at key times when the practice is being sold or shut down. Keep in mind that office rent, utilities, and other practice expenses must be budgeted for when making
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these decisions. In the case of office space lease, it is imperative that the practice carefully complies with termination notice provisions.
C. Severance and Other Contracts
Some employment contracts call for severance pay if a long‐time employee is let go. The person responsible for payroll needs to be aware of the practice’s contractual obligations so that he or she can budget for them and work with the estate administrator to honor them. These clauses in contracts of employment in solo practices can be financial concerns. Terms in independent contractor contracts and any other contracts in effect must be factored in as well. These might include the payment of employee health insurance premiums or other insurance which will lapse if not timely paid. The health insurance plans with which the deceased physician has contracts should be notified in the manner provided for in the contracts.
D. Taxes
A factor often overlooked in the responsibility for payment of sales taxes and applicable taxes on inventory if products or taxable goods are sold or kept at the practice. Good record‐keeping is especially essential here.
E. Notifications and Working with the Estate
Remaining staff will need to coordinate with the family and/or the executor of the estate of the deceased physician on issues like notification of the physician’s life insurer and decisions related to settlement of the claim. There are many other notifications to be made and it is best to coordinate those with the physician’s family. Practice staff is usually in the best position to notify patients, professional organizations to which the deceased physician belonged, the DEA, and the state licensing board. The DEA requests that its notification be made by letter from a family member that states the physician’s name, address, and date of death. The DEA also requests a copy of the death certificate to be submitted along with the notification letter. If the practice is a professional corporation, there might be wind‐down requirements that must be coordinated with the family. If the practice is not being sold, practice staff will need to coordinate with the family as to the disposition of other inventory, office equipment, and furniture.
F. Special Note on Disposition of Copy Machines
HIPAA privacy laws may be invoked with the return, sale, or disposal of the practice’s copy machine. Private patient data is saved unencrypted on the machine’s hard drive. This data can be easily accessed and breached by parties obtaining possession of the machine. It is important to take steps to make sure information on the hard drive cannot be accessed. This might mean negotiating a provision ahead of time in your copy machine lease that calls for destruction of the hard drive.
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G. Human Resources Action Checklist
i. Secondary check signer
ii. Plan for employee retention/termination
iii. Plan for management of payroll, accounts payable, and accounts receivable
iv. Coordinate notifications with family
H. TMA Law Guide Topics/Resources to Consult Regarding this Topic
• Contract – Sample Employment • Professional Privilege Tax • Sales Tax on Product Sold in Physician Office • Tax – Sales and Use Tax on Prescriptions
III. Clinical Staffing and Operations
A. Supervision of Midlevel Practitioners
i. Physician Assistants
In Tennessee, physicians who supervise physician assistants must make arrangements for the availability of a substitute supervisory physician meeting the criteria for a supervisory physician set forth in BME Rule 0880‐02‐.18 in case of the primary supervising physician’s inability to provide proper supervision. Such an arrangement should address whether the substitute physician will take over supervisory duties permanently in the event of the primary supervisory physician’s death or inability to continue in his or her role.
ii. Advanced Practice Nurses
Physicians who supervise nurse practitioners or other advanced practice nurses must also make arrangements for the availability of a substitute supervisory physician in the event of the primary supervising physician’s inability to provide proper supervision. The criteria for supervision of advanced practice nurses can be found in BME Rule 0880‐06‐.02. Again, such an arrangement should address whether the substitute physician will take over supervisory duties permanently if need be.
B. Continuation or Closing of the Practice in the Event of the Physician’s Death
The physician should decide whether he or she would like the practice to close immediately upon his or her death, or whether it will be necessary to keep the practice open for a period of time—either in order to wrap up the practice or to provide continuation of care within the practice in anticipation of sale of the practice.
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i. Continuation of the Practice
If the physician wishes to keep the practice open and providing patient care, rather than refer patients out to other physicians, it will likely be necessary to contract with a locum tenens, unless a properly supervised midlevel practitioner is able to handle patient care. For reasons discussed below, engaging a substitute physician in a reciprocal relationship is not a good alternative.
The Substitute Physician Option
Use of a substitute physician with which the physician has a reciprocal agreement is not a good alternative, as the billing structure for reciprocal billing is different from that for locum tenens arrangements.
• Work performed by a substitute physician in a reciprocal relationship with another physician must be billed for Medicare purposes under the Q5 modifier.4
• CMS states that these services must be provided on an “occasional reciprocal basis”—a requirement that may be impossible to conform to if one party to the agreement in deceased, and therefore unable to reciprocate.
The Locum Tenens Option
Should the physician opt to hire a locum tenens, there are a number of considerations:
a. Function and Nature of the Locum Tenens
A locum tenens is a physician who has no permanent practice of his or her own, and instead takes contract positions, filling in when a physician will be absent from a practice. The locum tenens is almost always paid a fixed, per diem amount for all services—for which the practice can then bill Medicare as if the substituted‐for physician had performed the services. In most instances, the locum tenens maintains his or her own malpractice insurance—although this of course should not be assumed to be the case, and a physician or practice hiring a locum tenens must ensure ahead of time that it will not need to handle or pay for the locum tenens’ malpractice insurance. It is of note that the temporary nature of the locum tenens’ tenure is required by the Medicare rules: Medicare will not allow a practice to bill for the services of a locum tenens beyond a period of sixty (60) days.5 Therefore, in the case of a physician’s death, the locum tenens should be conceived as providing a transitional service between the time of the physician’s death and the time of the sale or closing of the practice.
4 CMS Medicare Claims Processing Manual, Rev. 1987, May 11, 2010, p. 66. Located at: http://www.cms.gov/manuals/downloads/clm104c01.pdf 5 CMS Medicare Claims Processing Manual, supra note 5.
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b. Hiring a Locum Tenens
Hiring Through an Agency
There are a number of agencies that provide locum tenens staffing services. Indeed, utilizing an agency in the hiring process is the most popular option. It is important to ensure that the agency you choose to work with is reputable. Specifically, only complete and valid referrals should be considered in order to ensure that the physician and practice have all of the information necessary to make the right decision for the practice’s needs.
Although the TMA does not endorse the Nation Association of Locum Tenens Organizations (NALTO), the standards of practice set forth by NALTO are demonstrative of the type of information and resources a staffing agency should provide during the locum tenens hiring process:
• The client should receive the curriculum vitae of any and all candidates. • The client should have assurances that the candidate has been fully apprised of the
position sought to be filled, and that the candidate has given permission to have his or her CV forwarded to the client.
• The client should be furnished with any and all credentialing information necessary for locum tenens practice in the State of Tennessee.
• The agency should arrange for a telephone interview with candidate(s) selected for further review by the client.6
Contracting with a Locum Tenens Individually
While the majority of physicians choose to go through an agency, there is nothing wrong with contracting individually with a physician to serve as a locum tenens. The agreement would amount to a contractual obligation on the part of the anticipated locum tenens to step in and run the practice upon the death or disability of the physician. This would differ from a reciprocal, substitute‐physician relationship for purposes of the contract and for billing, as mentioned above.
If you choose to contract privately with a locum tenens, make sure that you conduct a thorough background check, as no other entity will share responsibility in the case of misconduct, etc.
It will be necessary to work with an attorney in drafting the private locum tenens contract, to ensure that all bases are covered.
There is a trend toward medical residents choosing to take locum tenens positions in order to gain experience. While some of these new physicians will contract with
6 National Association of Locum Tenens Organizations Standards of Practice & Procedures, p. 2. Located at: http://www.nalto.org/documents/NALTO_standards‐of‐practice.pdf.
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staffing agencies, others are open to contracting directly with physicians and practices. Contact local medical schools and/or residency programs for more information.
It is important to note that before a locum tenens is hired, a registry check is performed to be in compliance with the 2010 law that requires physician practices to perform registry checks on new employees that will provide direct patient care. For more information on the registry check law, see the TMA Law Guide Topic entitled Registry Checks—Employees and Independent Contractors.
c. Timing
Whether the physician chooses to hire a locum tenens through an agency or through an individual contract, it is important that either the agency or the individual the physician has chosen to serve as the locum tenens is aware that the start of the tenure will be nearly impossible to predict—if it comes to pass at all. For this reason, it may be difficult to have a completely effective agreement with an individual physician, whose own schedule will almost certainly not be entirely predictable either. d. Familiarizing the Locum Tenens with the Practice • Designation of a Point Person to Orient the Locum Tenens
Due to the nature of the work, it will likely be necessary to ensure that one employee is designated as the point person to orient the locum tenens and provide answers to any questions that arise. This would likely be the practice manager, but in a smaller practice may be another trusted employee. Specifying such a role ahead of time will minimize confusion and provide leadership from within the organization during the locum tenens’ tenure.
• Provision of a Patient List
In order to ensure that no patients are overlooked, it is helpful to have a continuously updated patient list available to the locum tenens. The list should include those patients who are chronic, under hospice care, hospitalized, recently discharged from the hospital, in a nursing home, and drug seekers, as well as any other patients with special circumstances of which the incoming locum tenens should be aware.
ii. Closing of the Practice
If the physician wishes to have the practice closed immediately upon his or her death or permanent disability, it will be necessary to notify all current patients, and make referrals for all patients with outstanding appointments to ensure continuity of care.
C. Sale of the Practice
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If the physician chooses to sell his or her medical practice, there are a number of things that must be taken into consideration. In truth, the details involved in selling a medical practice are so complex, and can be so difficult to navigate, that it is imperative that you work with a lawyer experienced in these transactions. The following information is provided by TMA merely to familiarize you with some of the considerations that must be taken into account in preparation for sale of a medical practice.
i. Medical Practice Valuation
Medical practice valuation is an inexact science – there is no set formula for determining a market price for a medical practice. Because of the nature of a medical practice, individual estimations of the financial value of a medical practice can vary greatly from appraiser to appraiser and from seller to various potential buyers. The intricacies of medical practice appraisal are beyond the scope of this publication. Suffice it to say that it will be necessary to consult with an attorney to assist with the sale of the practice, as well as perhaps to assist in locating a qualified practice broker.
Note that T.C.A. § 63‐2‐101(b)(2) provides in part that “[t]he name and address and other identifying information shall not be sold for any purpose.” Violation of this statute is considered an invasion of patient privacy. As such, it is doubtful that medical records may be sold as part of the sale of the practice as part of the “goodwill” valuation of the practice under Tennessee law as has been a commonly‐accepted practice.
ii. Business Associate Contracts
If the practice is to be sold, a determination must be made as to how to handle the practice’s business associate contracts. HIPAA requires that, at the termination of a business associate contract, the business associate return or destroy all protected health information and retain no copies, if feasible. If it is not feasible for the business associate to return or destroy all protected health information, the business associate must “limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible.” (45 CFR 164.504(e)(2)(ii)(I).
iii. Laws Implicated
The information below is intended to serve as an overview of the legal considerations that must be taken into account as you work with an attorney in the sale of your practice. You should not take the summaries provided here as legal advice, nor should you rely on them as your primary source of information when structuring the sale of your practice.
Federal Anti‐Kickback Law
The sale of a medical practice is covered by one of the safe harbors within the anti‐kickback statute, and thus protected from enforcement action under this law. However, TMA advises that members seek the advice of an experienced health care attorney before trying to navigate the sale of a medical practice and/or the anti‐kickback law. The sanctions for making a wrong move are too consequential to go it alone.
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The danger under the federal anti‐kickback law is that the selling physician could be perceived by the government as being paid for referral patterns in the case of an overvaluation of a practice, or as being paid for future referrals if intangibles are overvalued at the time of sale. For informational purposes only, the following is an overview of the sale of practice safe harbor within the federal law, which can be found at 42 CFR §1001.952(e):
• Sale of Practice from One Practitioner to Another Practitioner 1. The period from the date of the first agreement pertaining to the sale to the completion of the sale cannot be more than one year. 2. The practitioner who is selling his or her practice must ensure that he or she will not be in a professional position to make referrals to, or otherwise generate business for, the purchasing practitioner for which payment may be made in whole or in part under Medicare, Medicaid or other federal health care programs after one (1) year from the date of the first agreement pertaining to the sale.
• Sale of Practice from Practitioner to a Hospital or Other Entity 1. The period from the date of the first agreement pertaining to the sale to the completion date of the sale cannot be more than one year. 2. The practitioner who is selling his or her practice must ensure that he or she will not be in a professional position to make referrals to, or otherwise generate business for, the purchasing hospital or other entity for which payment may be made under Medicare, Medicaid, or other federal health care programs. 3. The practice being acquired must be located in a Health Professional Shortage Area (HPSA), as defined in the Departmental regulations, for the practitioner’s specialty area. 4. Commencing at the time of the first agreement pertaining to the sale, the purchasing hospital or entity must diligently and in good faith engage in commercially reasonable recruitment activities that:
(a) May reasonably be expected to result in the recruitment of a new practitioner to take over the acquired practice within a one year period, and
(b) Will satisfy the conditions of the practitioner recruitment safe harbor in accordance with practitioner recruitment safe harbor found in 42 CFR §1001.952(n).
Stark Laws
Selling a medical practice can also implicate the Stark laws. Again, TMA advises that members seek the advice of an experienced health care lawyer before trying to navigate the sale of a medical practice and/or the laws implicated. The sanctions for making a wrong move are too
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consequential to go it alone, and there are professionals who concentrate their practice in this field.
The outright sale of a medical practice will likely fall under the “isolated transactions” exception to the Stark laws, codified in 42 CFR § 411.357(f). In order to fall under this exception, the following conditions must be met:
1. The amount of remuneration under the sale of the practice is:
(a) Consistent with the fair market value of the transaction; and
(b) Not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician or other business generated between the parties.
2. The remuneration must be provided under an agreement that would be commercially reasonable even if the physician made no referrals to the entity.
3. There must be no additional transactions between the parties for 6 months after the isolated transaction, except for transactions that are specifically excepted under the other provisions in §§ 411.355‐57 and except for commercially reasonable post‐closing adjustments that do not take into account (directly or indirectly) the volume or value of referrals or other business generated by the referring physician.
Other Potential Laws that Could be Implicated
Your attorney should also ensure that the proposed sale does not violate any of the following:
• State Fraud & Abuse Laws • IRS Rules & Regulations
D. Disposition of Supplies, Samples, and Equipment
i. Disposition of Controlled Substances
A DEA registrant’s registration terminates upon the death of the registrant or the registrant’s cessation of practice. It is imperative that the practice follow the law as set forth in 21 CFR § 1307.21 in disposing of all controlled substances that had been in the registrant’s possession.
In short, the practice must submit a letter to the Special Agent in Charge stating the following:
1. The name and address of the reporting person;
2. The name and quantity of each controlled substance to be disposed of;
3. How the person obtained the substance (state the circumstances which have led to the need to dispose of the physician’s stock of controlled substances; and
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4. The name, address, and registration number of the person who possessed the controlled substances prior to the reporting person.
The practice will then receive further instructions from the Special Agent in Charge as to how to dispose of the controlled substances. The contact information for your local DEA office can be found by visiting the DEA Office Directory online, or by calling (865) 584‐9364 in Eastern Tennessee, or (615) 736‐2559 in Central and Western Tennessee.
ii. Disposition of Unused DEA Order Forms
Upon the death or cessation of practice of the registrant, all DEA order forms in the registrant’s possession must be voided (write “VOID” in large print on the forms) and returned to the Registration Unit of the DEA. As of the writing of this manual, the address to which all such forms should be sent is:
Drug Enforcement Administration Attn: Registration Section/ODR P.O. Box 2639 Springfield, VA 22152‐2639
iii. Disposition of Drugs that are Not Classified as Controlled Substances
Prescription drugs that are not classified as controlled substances can be disposed of without involvement from the DEA. In the case of a solo practitioner, any sample or stock prescription (or over the counter) drugs must be disposed of carefully, as the practice and even the physician’s estate could potentially face liability if an individual is able to obtain drugs discarded by the practice. There has been much debate about the potential harms of flushing large amounts of drugs into the sewer system, and, as such, best practice would be to ensure that all drugs that are to be disposed of are delivered to a hazardous waste disposal company. Practices should consider contacting their current hazardous waste disposal company to determine whether they can take care of the drug disposal under the current contract or for a small fee.
Another option would be to contact your pharmaceutical representatives to determine whether the pharmaceutical companies would be willing to take back unopened, unexpired drugs.
Another option would be to work with a charitable organization to donate the drugs for medical missions or other charitable activities. There are laws related to this and reputable charitable organizations, or your lawyer, can navigate a practice through this process.
While it may be tempting to sell a stock of prescription or over the counter drugs, such a decision should not be taken lightly, and should be discussed with your lawyer.
iv. Disposition of Equipment
Copy Machines, Computers, and Other Office Machines that may contain PHI
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As mentioned above, HIPAA privacy laws may be invoked with the return, sale, or disposal of the practice’s copy machine, computers, and other machines that have stored patients’ private health information to a permanent hard drive. Private patient data is saved unencrypted on the machine’s hard drive in the case of copy machines, and can potentially be accessed in the case of computer hard drives. This data can be easily accessed and breached by parties obtaining possession of the machine. It is important to take steps to make sure information on the hard drive cannot be accessed. This might mean negotiating a provision ahead of time in your copy machine lease that calls for destruction of the hard drive, or ensuring that a machine’s hard drive has been permanently wiped before any sale. Proper and thorough documentation of all such “wipes” should be made.
Medical Equipment
Medical equipment will likely be sold as part of the medical practice. If for some reason it is not, there are a number of brokers and agencies, both online and offline, that specialize in the sale of used medical equipment.
Furniture
As with medical equipment, office furniture will likely be sold as part of the medical practice. If it is not, there are also a number of brokers and agencies, both online and offline, that specialize in the sale of used office furniture.
E. TMA Law Guide/Resources to Consult Regarding this Topic
• Advance Practice Nurse • Anti‐Kickback: Medicare and Medicaid • Certified Nurse Practitioners • Closing a Medical Practice • Controlled Substances • DEA License – Required for Each Practice Location? • DEA Number on Non‐Controlled Prescriptions • DEA: Use of DEA Numbers as Identifiers by Insurance Plans • Professional Corporations – BME Rules for Physician‐Owned • Registry Checks – Prospective Employees and Independent Contractors • Stark – Denial of Medicare Claims • Stark Law – Physician Referral Restrictions
IV. Miscellaneous
A. Mortgages, Debts, and Priority of Liens
It will be necessary to work with the family to hire a financial advisor and/or an attorney experienced in this subject. It would be advantageous to keep good records of all mortgages,
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loans, and other debts accrued by the practice and/or the physician, as well as any credit extended by the practice or physician.
B. Real Estate/Office Space
If the practice operates out of leased space, it is imperative to know the terms of the lease in advance. If possible, in a solo practice it would behoove the physician to ensure that the lease includes a term allowing for a right of termination in the event of the physician’s death or disability. If such a term does not exist, the practice will have to honor the terms of the lease. The landlord should be notified immediately of the change in circumstances, so that he or she can begin looking for a replacement tenant.
C. Audits
i. Records Currently Being Audited
All records that are currently being audited or are subject to an ongoing audit should be kept, regardless of record destruction rules stated in BME Rule 0880‐2‐.15. It will be important to know where all such records are at all times.
ii. Narcotics Ledger
The practice should retain the physician’s ledger for at least 2 years in case of a DEA audit.
D. Estate Planning
It is absolutely imperative that the physician make plans for the disposition of his or her estate well in advance. Such plans should be written, and specifically discussed with the physician’s attorney and/or estate administrator. These plans should specify the degree to which the physician wishes his or her practice staff to be directed by his family and/or estate administrator in winding down the practice.
Ideally, the estate and/or family members should be either apprised of or involved in every aspect of closing down the medical practice—but it will be up to the physician to determine how and whether such oversight should be accomplished.
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INSURANCE ISSUES
I. Billing Policy
A. Specific to Each Contracted Health Insurer
The practice should have in place a billing policy that includes specific billing information for each type of contracted health insurer (copies of all contracts should be kept in a central location). This policy should address:
1. The health insurer’s payment policies
2. Claim submission requirements
3. Appeals process
B. Addressing Patient’s Financial Responsibility
The practice should also have in place a billing policy that addresses the patient’s financial responsibility if the payment is not received from the health insurer.
II. Billing Procedures
• The billing staff should enter the codes and fees that appear on outstanding super bills/patient encounter forms and generate a paper or electronic claim.
• Each claim should be reviewed for completeness and accuracy before submitting it to the health insurer.
• If payment is not received in a reasonable amount of time, staff should follow up
with the health insurer to verify that the claim has been received and is being processed.
• Payments should be promptly posted in the accounts receivable.
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• If the health insurer does not pay the claim in accordance with the contractual
provisions, or if the claim is denied, staff should investigate why the health insurer did not pay the claim appropriately and determine whether they should appeal the claim. Be sure, however, to follow the procedures outlined in the individual health insurer contracts.
• Upon receipt of payment from the health insurer staff should either: (a) generate a
bill to the secondary health insurer and submit along with a copy of the primary EOB, or (b) generate a bill to the patient for any balance due and payable by the patient.
III. Outstanding Claims
The billing/collection staff should constantly review the outstanding claims reports to determine if claims are being paid timely and follow up with the health insurer on all claims over 60 days old. Be sure, however, to follow all procedures outlined in the individual health insurer contracts.
IV. Notifying Health Insurers of the Death of a Physician
In most cases the physician office would need to submit a formal notice on letterhead to their contract manager or provider representative, or otherwise designated party as indicated in the provider agreement.
V. TMA Law Guide/Resources to Consult Regarding this Topic
• TMA Insurance Resource Center
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Appendix A
Sample Notification Ad for Placement in Local Newspaper:
Announcing the Closing of Dr. (Name)’s Medical Practice
The medical practice of (Name), MD will be closing/has closed as of (date). Dr. (Name) has died/chosen to retire/etc., and patients will no longer be seen at his/her office.
Patients of Dr. (Name) should call Dr. (Name)’s office as soon as possible for more information and to make arrangements for the forwarding of their medical records to another physician.
(Office Phone Number)
(Office Address)
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Appendix B
Sample Notification Letter to Patients
Dear (Patient Name):
At this time it is necessary to inform you that Dr. (Name) will no longer be able to attend to you as your physician because (reason – illness/accident/death/retirement).
This letter is to advise you that Dr. (Name) will no longer provide medical services to you after (date). Dr. (Name) will provide medical services to you for the next 30 days. (If the substitute physician is in another office, provide that number/address.) An authorization to release medical records is enclosed with this letter for you to complete so that you can have your records forwarded to your new physician or any other person you designate. Please choose a new physician promptly and place yourself under his/her care. [If patient has a condition that necessitates follow up also state: Your current condition requires follow up and I encourage you to find a new physician promptly to continue this care.] Sincerely, Physician Name
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