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Paid to Order - Too good to be legal?

November 27, 2012

Question:
 
Dear Jennifer,

I've been getting your Q/A's since I've signed up for it after you visited my residency program. I find your legal advice extremely valuable. Thank you!

I was wondering if you'll find time to answer this question/dilemma that I keep coming across as well as dozens of my colleagues I'm sure.
When we are fresh, out of residency and just get our brand new squeaky clean medical licenses - for some reason we get approached by businessmen/entrepreneurs type of people who want to hire us to run physicals on Medicare patients and refer them to physical/occupational therapy places that are owned by those businessmen. They offer very competitive salaries and not asking much... just "see the patient and refer him/her to PT/OT" and continue - "they all have bad backs and necks, our therapy only helping them, you want to help your patients too, right?".
So, sounds like nothing illegal, but is it?
Please, advise me and share your opinion on legality or illegality of that type of work.

Thank you! 
Dr. V
 
Answer:
 
Dr. V, thank you for sending this question/scenario in.  Before I comment, I want to say that I welcome comments from the listserv and will be happy to publish if any practitioners wish to offer advice for this situation.  Please feel free to contribute by emailing me and I will send out advice anonymously.  Whether or not the situation referenced above – “businessmen” operating practices and recruiting, totally depends on the State you are practicing in and the practice structure.  In Florida – laypersons are authorized to have ownership interest in a practice.  In NY – only doctors can own medical practices (hospitals and ASCs have different laws).  This prohibition is called the corporate practice of medicine and other states, other than NY, have it as well, i.e., NJ has a limitation on the corporate practice of medicine.  The thought process behind such a prohibition is that non-practitioners should not be influencing care.  So, the first question you should ask when approached for such a position is whether the corporate structure is proper and legal.  Don’t just trust your potential employer, hire your own healthcare lawyer to look into the practice.  The next issue I will address is whether or not this formulaic care is appropriate.  Now, on this issue, I do not have as much standing as your colleagues, because the answer is whether or not care is appropriate is based on a reasonableness standard, and also will fall to the independent medical judgment of a practitioner, based against that reasonableness standard.  As Dr. V has opined that the care being provided is medically necessary, because all patients have “bad backs and necks” and “therapy [is] only helping them”, what is wrong with standard ordering?  That may be so, however, in patterns of repetition in ordering and excessive use of ancillary services, you may find yourself and your license in hot water.  And, as you have explained young doctors right out of training are typical targets, I presume young doctors are being preyed on, promised nice salaries for complying, and the “businessmen” are hoping the young doc won’t know enough or have enough confidence to challenge the “system”.  A typical test I tell residents and fellows to employ when choosing a job is this – if the offer doesn’t pass the smell test, pass on it.  If the offer seems to good to be true, it probably is.  Here, the work sounds pretty easy, the routine set, the pay good – my advice, look elsewhere.  Do not compromise your professional judgment and you will sleep better at night. 
 
Hope this helps.  I can’t really comment on legality for a general question.  If anyone has a specific circumstance they would like reviewed, contact me.


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