By James Anliot, Esq.

Does your chiropractic practice rely on referrals from your customers?

If you do, and if you reward your customers for their help in any way, you could be breaking a new law recently passed by the Massachusetts legislature.

The new law, which also prohibits the use of paid "runners" to solicit prospective new patients and gives the state Board of Registration of Chiropractors new enforcement powers, is one of two major new laws regulating chiropractic practices in Massachusetts.

While all but a small number of chiropractors are ethical in their business practices, almost all chiropractors in Massachusetts will be affected in some way by the new laws. Given the increasing emphasis nationwide on ethics in business, similar laws are likely to be passed in other states throughout the country.

The other new Massachusetts law gives the state Board of Registration the power to require chiropractic practices to be licensed and to inspect chiropractic offices.

Licensing Requirements

Effective April 8, 2005, the state Board of Registration was granted broad, new powers to license and regulate chiropractic practices.

As a result, all chiropractors -- except "solo practitioners" as defined by the regulations -- are now required to practice in chiropractic facilities licensed by the board. The board will begin enforcing licensing requirements in July 2005.

Solo practitioners are exempt from the licensing requirement only if they:

• Own at least 51% of the practice,
  
  
• Do not have any other owners or partners who are chiropractors, and
  
  
• Do not employ other chiropractors in their practice.

For example, a practice owned and operated by two or more chiropractors must have a facility license, even if the chiropractors are members of the same family.

If a facility license is required, the practice must develop and implement a written compliance plan. The plan must include written policies and procedures on matters such as administrative and clinical practice protocols, credentialing of personnel, staff training, employee discipline and procedures for responding to alleged regulatory violations. The plan must also include a schedule for conducting audits to identify and correct compliance problems.

Applicants for a chiropractic facility license must designate a "chiropractor of record" who can be held personally responsible by the board for ensuring that the facility operates in compliance with all applicable laws and board regulations. The "chiropractor of record" must give the board access to all requested records and documents, including treatment and billing records.

Ban on Use of "Runners"

Some chiropractic practices pay individuals, commonly known as "runners," to solicit those injured in auto accidents as new patients, then bill insurance carriers for the care provided.

Because runners are sometimes used to defraud insurance companies, auto insurers are attacking these practices as part of their effort to reduce fraud and control the cost of care for accident victims.

In addition to prohibiting the use of runners, the new law makes it a criminal act to pay runners to solicit new patients to fraudulently obtain insurance claim payments. The penalty for such use is up to five years in prison, plus a fine of up to $4,000.

You are violating the law if:

• You hire, direct or solicit someone to try to obtain new patients for your practice through direct contact with accident victims, or someone else does so on your behalf or with your knowledge.
  
  
• A person receives payment or any other item of value (e.g., TV sets or appliances, free or discounted chiropractic services, etc.) in exchange for soliciting patients. The government can show that the purpose of solicitation was to try to obtain fraudulent payment from the insurer.
  
  
• The state may be able to show this simply by demonstrating that you attempted to bill the auto insurer for services the patient did not need (i.e., overutilization).

Both the runner and the chiropractor who hires the runner can be prosecuted. Chiropractors can be prosecuted just for knowing about the arrangement -- even if they did not hire the runner. It does not matter whether the runner is an employee, an independent contractor or another patient in your practice.

The new law does allow solicitation of new patients through public media, such as newspaper or magazine advertisements, radio or television commercials, and even direct-mail or e-mail, as long as it does not involve personal contact with the prospective patient. Bona fide referrals from or to other chiropractors or other health care providers are also permitted, but patient referral practices must be carefully reviewed so that they do not violate the board's regulations on improper solicitations or referrals.

The board is required to review insurance fraud data at least annually, and to take disciplinary action against any chiropractor whose patterns of treatment suggest fraud or overutilization. The program will be financed by a 10 cent per policy surcharge on all motor vehicle insurance policies; the law prohibits insurers from passing on the surcharge to consumers.

Other New Board Powers

In separate but related legislation, the state Board of Registration also received some significant new enforcement powers.

The board can now suspend a chiropractor's license without a prior hearing, if the board believes that continued practice poses an "immediate and serious threat to public health and safety." A hearing on the need for emergency suspension of the license must be held within 10 days after the suspension is imposed. If the suspension remains in effect, a second hearing on the merits of the case must be held within 60 days after the summary suspension is imposed, unless the parties agree to a different timetable.

The board can also impose civil administrative penalties for regulatory violations, if such violations are either proven at a disciplinary hearing or acknowledged in a consent agreement. Penalties can be up to $100 for each first violation, up to $500 for each second-time violation, up to $1,500 for each third-time violation and up to $2,500 for each offense after that. The board can impose and collect the penalties directly, without court action.

Finally, the board can require supervision of a licensee's practice, and completion of supplemental education and training as part of any disciplinary order. Supervision, and education and training may be required as a condition for retaining an existing license or as a condition for obtaining reinstatement of one that was revoked or suspended.

While education and training can help prevent future violations, becoming educated about the law before any violations is a much better option.

For more information about this legislation and how Affiliated Monitors, Inc. can help, contact us at (866)201-0903 or janliot@affiliatedmonitors.com.

James Anliot, Esq. is the Director of Healthcare Compliance Services for Affiliated Monitors, Inc. (AMI), a consulting corporation that provides compliance programs to chiropractors and other healthcare professionals. He can be reached at (866)201-0903 or janliot@affiliatedmonitors.com.