Presenting a live 90-minute webinar with interactive Q&A
Urgent Care Centers: Key Legal and Business Considerations Complying With Corporate Practice of Medicine Laws, State Licensure Requirements, EMTALA Mandates, and Reimbursement Laws
WEDNESDAY, SEPTEMBER 21, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
Today’s faculty features:
Jon M. Sundock, General Counsel and Chief Administrative Officer, CareSpot Express Healthcare, Brentwood, Tenn.
David F. Lewis, Esq., Butler Snow, Nashville, Tenn.
The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. Tips for Optimal Quality FOR LIVE EVENT ONLY
Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection.
If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-927-5568 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail [email protected] immediately so we can address the problem.
If you dialed in and have any difficulties during the call, press *0 for assistance.
Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.
Continuing Education Credits FOR LIVE EVENT ONLY
In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar.
A link to the Attendance Affirmation/Evaluation will be in the thank you email that you will receive immediately following the program.
For additional information about continuing education, call us at 1-800-926-7926 ext. 35. Program Materials FOR LIVE EVENT ONLY
If you have not printed the conference materials for this program, please complete the following steps: • Click on the ^ symbol next to “Conference Materials” in the middle of the left- hand column on your screen. • Click on the tab labeled “Handouts” that appears, and there you will see a PDF of the slides for today's program. • Double click on the PDF and a separate page will open. • Print the slides by clicking on the printer icon.
Forming Urgent Care Centers: Addressing Complex Legal Challenges September 21, 2016
David F. Lewis Jon Sundock Butler Snow CareSpot and MedPost
5 What is an Urgent Care Center?
• No universal definition
• Provide services that fall in between primary care and emergency department
• Can also include some primary care services and could branch into other areas, e.g., weight loss, allergy care, wellness, etc.
• Urgent Care Association of America:
• The delivery of ambulatory medical care outside of a hospital emergency department on a walk-in basis, without a scheduled appointment
• Generally focused on episodic, acute care rather than on long-term management of chronic illness or preventive care
6 Common Features of Urgent Care Centers
Retail healthcare High focus on customer convenience No appointments required and short wait times Extended hours, including weekends and evenings Broad list of services beyond primary care offices X-ray EKG Onsite lab for CLIA waived testing Ability to perform minor procedures like laceration repair and splints
7 Why the Growth in Urgent Care Centers?
• Growth spurt began in mid-1990s and has continued • Since 2008, the number of urgent care centers has increased from 8,000 to more than 11,000
• Why the continued growth? • Acceptance by the public • Lack of access to primary care (no access or delayed access) • Overcrowding in Emergency Departments (ED) • Affordable Care Act has not slowed growth in ED visits • Long wait times at other providers (EDs especially) • Convenience of longer hours and walk-ins • Emphasis on high-quality care • Increased healthcare consumerism spurred by high-deductible plans 8
Current State of Urgent Care Centers
Over 150 million patient visits to urgent care centers each year in the United States
By 2018, total urgent care industry revenue is projected to exceed $18 billion
There have been significant transactions in the urgent care industry
Tenet Healthcare’s purchase of CareSpot Express Healthcare
Wellpoint’s purchase of Physicians Immediate Care
Dignity Health’s purchase of US Healthworks
9 Current State of Urgent Care Centers
Would anticipate additional consolidation in the industry More health systems acquiring urgent care centers and developing additional urgent care centers Continued interest by private equity players in having interests in urgent care companies Various strategies remain viable:
Urban focus Rural focus
Pure play urgent care Hybrid models primary care focused Telemedicine
10 Current State of Urgent Care Centers
2015 UCAOA Benchmark Report Nearly 90% of urgent care centers saw an increase in the number of patient visits from 2013 to 2014 Nearly 25% of all urgent care centers are owned by hospitals or health systems Approximately 20% of urgent care centers are owned by two or more physicians About 27% of all emergency room visits could take place in urgent care centers (with approximate cost savings of $4.4 billion) By 2019, large metropolitan areas could support two to three times the number of current urgent care centers
11 Current Distribution of Urgent Care Centers
12 Key Legal Considerations
Corporate Practice of Medicine
Staffing Models
State Licensure and Permits
Documentation and Coding
Other Focus Areas
Medical Director
Accreditation
EMTALA
Other Compliance Matters 13 Corporate Practice of Medicine
The corporate practice of medicine doctrine prohibits employment of clinical personnel by corporations
Purpose is to protect the integrity of medical profession by keeping it separate from corporate interests
State laws vary on the doctrine
Strict prohibitions
Some Limitations
No prohibitions
14 Corporate Practice of Medicine
Certain states are very strict - any corporation employing a licensed physician to treat patients and receive fees for those services is unlawfully engaged in the practice of medicine
Texas, New York, California, and Illinois are examples of states with strict corporate practice of medicine perspectives
Employee-physician subject to disciplinary action or license revocation
In strict states, structuring arrangements carefully is very important.
15 Strict Prohibition Against Corporate Practice of Medicine
Narrow exceptions could apply:
Professional corporations formed by physicians – this is a common permitted corporate structure in states
Texas utilizes the “501(a)” structure as a unique exception
California permits the use of a “foundation” model
The “Friendly PC Model” is commonly used in strict corporate practice of medicine states
Physician owned professional corporation is managed by a corporate entity for a fair market value management fee.
16 Less Strict Approach to Corporate Practice of Medicine
Permits physician employment as long as the terms of relationship do not violate statutory requirements: “Entity does not direct or control independent medical acts, decisions, or judgment of the licensed physician” Most physician-entity employment relationships permitted as long as physician’s professional medical discretion is preserved Indiana and Florida are examples of states with this approach.
17 Urgent Care Staffing Models
Common staffing models for urgent care centers: Physician-only staffing Primarily physician staffing supplemented on a limited basis by mid-level providers Primarily mid-level staffing with supervision provided by physicians most often through “indirect supervision” Considerations for choice of staffing models: Economic considerations Public perception considerations Availability of staffing to meet needs
18 Urgent Care Staffing Models
Here are some 2014 statistics on staffing models used at urgent care centers: 11% are physician only
Will this percentage decrease over time? 29% have a physician and midlevel working together 54% have physician supervision with the physician not onsite 4% have no physician supervision (permitted by state regulation) For non-clinicians, over half of the urgent care centers use medical assistants (40% used RNs) and nearly all urgent care centers (93%) use X-Ray Technicians
19 Urgent Care Staffing Models
Direct Supervision versus Indirect Supervision Direct supervision - when the physician is working at the same time in the same building with the mid-level provider Indirect supervision – when the physician and the mid-level provider are not working at the same time but the physician is available for consultation State requirements impact supervision arrangements Scope of practice for nurse practitioners and physician assistants may not be the same Supervision requirements for NPs and PAs may not be same State requirements may be harder to satisfy
20 Urgent Care Staffing Models
Items to Consider when Exploring Indirect Supervision Can PAs and NPs perform the same scope of services? What written agreement is required? With what agencies are forms or agreements to be submitted? What requirements must the supervising physician fulfill?
Chart reviews – a certain percentage each month, other charts? Availability? Regular meetings? Periodic reviews of protocols? Clinical quality assessments? What are the legal consequences for the supervising physician?
21 Urgent Care Staffing Models
Additional considerations for indirect supervision: Limits on the number of mid-levels that may be supervised at any one time Prescription pad requirements vary widely by state Prescribing controlled substances How do you document that supervision requirements are met? Key to indirect supervision – follow the rules and do more than simply “check the box” in satisfying the state requirements
22 State Licensure
Facility licensing varies greatly from state to state
The general rule is that most states do not have an urgent care license or any state licensure for urgent care centers
Will that remain the case?
Some states do have license requirements for urgent care centers:
Florida
Massachusetts
Arizona
States with urgent care licensure require pre-opening surveys and periodic surveys thereafter
23 State Licensure (continued)
Case Study: Massachusetts State license process is very involved, complicated and lengthy Massachusetts has many requirements with respect to the physical layout of the urgent care center, for example The application is substantial and the review process is very detailed. At the inspection, multiple inspectors took three days to complete the review Case Study – Florida While not as involved as Massachusetts, Florida has an application and physical space review requirement prior to opening 24 State Licensure (continued)
Even if a state does not have an urgent care license, patient complaints may lead to an inspection or survey Urgent care centers should have documented policies and procedures in place and a way to confirm that those policies and procedures are consistently followed An example of a key policy and procedure is a triage policy: Front desk staff need to understand what to do when an emergent patient comes into the center and requires immediate attention
25 State Licensure (continued)
These licenses and permits are commonly required:
CLIA Certificate
Necessary if the center offers certain clinical laboratory testing
Make sure the correct level of CLIA certificate is obtained (i.e, waived versus provider performed microscopy)
X-ray permit
Watch out for extra requirements (Texas, for example)
Pharmacy license - in some states, highly restrictive pharmacy provisions have led urgent care centers to forego offering prescription medications
Other licenses and requirements depend on the location
City or county business permits or special signage requirements 26 State Licensure (continued)
Be aware of additional requirements that may come with licenses and permits Annual inspection of the lab Inspection of the X-ray equipment and other diagnostic equipment not located in the lab Proper storage of medicines and supplies Signage requirements:
Notice to patient requirements X-Ray notices Posting of provider licenses Notification to patients if a mid-level provider is on duty
27 Documentation and Coding
Not unlike other areas of healthcare, a key area of compliance for urgent care is appropriate documentation and coding of claims for services
Expectation is that proper training and oversight is maintained for clinician documentation and coding
Evaluation and Management (E/M) coding is a key aspect of urgent care coding:
New patients (99201 – 99205)
Established patients (99212 – 99215)
1995 versus 1997 Guidelines
28
Documentation and Coding
If using an electronic health record system: Does the system suggest an E/M code?
If so, then need to understand how the system determines Is it entirely up to the provider to determine the E/M code? Does the system have one check box that results in multiple boxes being checked? Is “copy – paste” features available to clinicians? Who is responsible for completing the Review of Systems and Past Family and Social History? Medical Decision Making
Do providers understand the elements in deciding the proper level? How much time they spend with the patient is not a factor 29
Documentation and Coding
Even if an electronic medical record system is used, the urgent care center should have a paper process for documentation available with related policies and procedures for proper completion A paper documentation process is necessary when the electronic medical record system is not available When locum tenens are used, they may need to document on paper because they are not trained on the electronic system Do you give the regular clinicians the option to document on paper when the center is busy or when they are still new in using the electronic system?
30 Documentation and Coding
Beyond E/M coding, other aspects of documentation are important to consider
Is a modifier, like the 25 modifier, appropriate to use? Are procedures, like fracture care and laceration repair, properly documented to support the charge for the procedure? Does the documentation contain all of the elements to establish not only the results of testing but what action the provider takes in response to testing results? The “hindsight test” is a good way to evaluate documentation – would the documentation in a professional liability case stand up to scrutiny if challenged by the patient?
31 Documentation and Coding
How do you properly monitor documentation and coding? No financial incentive for providers with respect to coding Monitoring programs should be implemented, followed and documented
Random claims reviews Statistical analyses should also be performed to detect outliers Particular focus paid to high coding – 99205/99215 Proper documentation also avoids malpractice issues
Does the electronic medical record system prompt clinicians at all? Balancing complete documentation and need for efficiency is a constant effort
32 Other Areas of Focus
Medical Directorship Requirements Some states require urgent care centers have a medical director
Florida requires a “market medical director” (maximum of 5 locations per medical director) Massachusetts requires a “professional services director” for each urgent care center Those states with required medical directors, applicable statutes spell out the duties of those medical directors Florida requires medical directors review charts to ensure proper documentation and coding Most states have no medical director requirement
How does an urgent care center ensure proper provision of medical services to patients without medical directors?
33 Other Areas of Focus
Case Study – Allstate Ins. Co. v. Vizcay (No. 14-13947 (11th Cir, June 23, 2016) Company was accused of violating False Claims Act because medical director did not review documentation and coding as required by Florida statute spelling out medical director duties Court found medical director did not fulfill the statutory duties and permitted claims to go out for services not provided and incorrectly documented and coded “The plain meaning of the statutory language shows that the Florida legislature intended to establish, not eschew, a principal- agent relationship between a clinic and its medical director.”
34 Other Areas of Focus
Accreditation There is no regulatory requirement that urgent care centers seek and obtain accreditation Two organizations will provide urgent care accreditation:
Joint Commission Urgent Care Association of America Benefits of Accreditation
Forces operational discipline and consistency across locations
Establishes minimum requirements, particularly for states which do not license urgent care centers Creates perception of quality to patients May differentiate urgent care centers with payors
35 Other Areas of Focus
EMTALA
Emergency Medical Treatment & Labor Act
Treatment obligations of EMTALA do not apply unless the urgent care center is owned by a hospital or in a joint venture with a hospital AND services provided are billed as a department of the hospital
No obligation to treat patients who arrive at the center
Triage policy – stabilize and transport
36 Other Areas of Focus
Additional Compliance Focus Areas Regular and consistent compliance training HIPAA privacy requirements
Small spaces and thin walls
Front desk personnel – critical staff member Medical records requests HIPAA security requirements Agreements with providers
Compensation and bonus arrangements
37 Other Areas of Focus
Liability Risks Malpractice risk for urgent care centers generally falls between that of primary care practitioners and emergency departments Risk factors for UCCs
Lack of long-term, well established patient relationships
Target for drug seekers
Discharge management—patient follow-up plan
Potential for underdiagnosing patients
Rely on patients to correctly self-triage and select appropriate facility for care
Example of risk area – pulmonary embolism
38 Key Business Considerations
Location, management, and services
Issues in buying or selling an Urgent Care Center
Partnering with hospitals and investors
39 Location
Volume key to financial success
One study showed that a population of 20,000 to 30,000 was needed to sustain an urgent care center
Currently, urgent care centers are concentrated in urban areas
Convenience for patients
Population demographics, e.g., age, average income
Free-standing v. hospital-associated 40 Management of Urgent Care Centers
How will the urgent care center be managed?
Physician managed
Management company
Customer service oriented management improves financial success of urgent care centers
Leadership with a healthcare background is key
41 Services Provided
Target population
Know the community’s demographic in order to tailor services to community’s needs
Specialty v. General
For example, some urgent care centers focus specifically on pediatric care
One stop shop
All services within the urgent care center or nearby referral locations
Goes back to the convenience factor
42 Buying or Selling an Urgent Care Center
Buying an existing urgent care center Location Competition Reputation Property—leased or owned Valuation Due Diligence Exclusivity Agreement Employment & Non-Compete Agreements 43
Buying or Selling Urgent Care Centers
Due Diligence – areas of focus Documentation and coding Policies and procedures Training for staff Marketing Lines of business Patient satisfaction Turnover rates Litigation experience Operational audit results
44 Buying or Selling an Urgent Care Center
Governing and Ownership Agreements
Voting
Officers
Compensation
Decision making—Management and Control
Retirement
Sale of Ownership Interest
Tax Considerations
45 Partnering with Hospitals and Investors
Possible Ownership Models
Physician or group of physicians
Hospital
Corporation
Non-physician individual
Franchise
With the wide range of services offered and extended service hours, integration is key to the successful growth of an urgent care center 46
Management Company Model
Provides the facilities, office space, equipment, non- physician personnel, and non-professional services to an existing practice or other healthcare services provider
Must be commercially reasonable and reflect fair market value payment for the goods and services
Do you obtain a third party fair market valuation?
Does state law permit a percentage-based management fee or is a flat fee required?
May the fee be adjusted and how?
47
Investor Model
Private equity firm or investor group provides equity funding for the business Investors typically own a majority of the equity in the company Management holds a minority stake Board of Directors is dominated by the investors Ultimate fate of the company’s control is up to the investors Timing and consideration for when and to whom to sell may not be what management anticipates Timing to achieve center-level profitability and completing beneficial acquisitions are very important 48 Joint Venture Model
Hospital or health system and company jointly own urgent care centers Proper structure is very important Operating agreement describes key business terms How are decisions made on important decisions What decisions may the manager make without Board participation How are the centers branded Do each of the members to the joint venture have the same goals in mind for the jointly owned locations
49 David F. Lewis Jon M. Sundock Butler Snow CareSpot Express Healthcare The Pinnacle at Symphony Place MedPost 150 3rd Avenue South, Suite 1600 115 East Park Drive, Suite 300 Nashville, TN 37201 Brentwood, TN 37027 [email protected] [email protected]
50