What You Need to Know About Corporate Medicine: Part 3

How to mitigate the likelihood of a regulatory problem.

BY MATTHEW ZIFRONY

Editor's note: This article is the last in a three-part series that seeks to help ophthalmologists who may be considering entering the world of corporate medicine. Part 1 discussed how doctor-vendor relationships vary depending on the state in which you conduct business; part 2 discussed the ins and outs of corporate-practice-of-medicine statutes and the reasons why ophthalmologists should not ignore these issues as they relate to doctor-vendor relationships; part 3 outlines steps that ophthalmologists can take to mitigate mistakes in complying with statutory regulations and ensure they are properly managing their relationships with vendors and management companies.

So you decided that you want to work for a non–physician-owned company. You've looked into the type of contract for employment that you need, and you think that you know whether it should be a professional-services arrangement or a management-services arrangement. What comes next? While the maze of regulatory compliance from state to state can be tricky, there are steps that ophthalmologists can take. This article will detail the steps to mitigate mistakes and maximize the likelihood that you have entered into a proper relationship with vendors and management companies.

Know Your State's Requirements

To begin, ophthalmologists should consider consulting with a healthcare attorney prior to signing any type of employment contract. Even if the ophthalmologist knows the type of contract that he or she must sign, state law may require the contract to include specific provisions that only an experienced and well-versed healthcare attorney will know. For example, a statute may require an ophthalmologist to have 24-hour access to his or her patient records. Another statute may require an ophthalmologist to post a sign at the medical facility informing the public that his or her practice is separate from that of the owner of the facility. In each of these instances, the ophthalmologist must understand what the applicable statutes require so that he can be certain that his contract for employment contains language that allows him to comply.

Ophthalmologists should also consider including in their employment contracts a "saving" clause that requires the ophthalmologist and the owner of the medical facility to modify their contract if a regulator determines that their contract violates state law. Just as importantly, this type of clause allows the ophthalmologist to terminate the contract if he or she cannot agree on the necessary modifications. Regulators often view the fact that an ophthalmologist has been given the ability to get out of an improper contract as confirmation of the ophthalmologist's intention to conduct his or her practice in a compliant manner.

Due Diligence in Compliance

It may also be helpful that when entering into any employment contract, ophthalmologists consider contacting state regulators to determine if there exists an approved contract form that the regulators would like an ophthalmologist to use. As part of these discussions, the ophthalmologist may be able to share his or her contract with the regulators before signing it, in the hope that the regulators will alert the ophthalmologist ahead of time to any potential problems that they may have with it. Unfortunately, ophthalmologists often find that regulators take the position that their jobs are not to point out problems with a contract ahead of time. Instead, most regulators take the position that their jobs are to investigate instances when they believe that a problem has already occurred. Even if a regulator does not prove to be helpful, an ophthalmologist's effort at reaching out to the regulator ahead of time can only assist the ophthalmologist if he or she has to confront a regulatory problem down the road.

Although there is never any way to guarantee that how an ophthalmologist practices medicine meets every regulatory requirement, my experience with regulators is that most look at the intentions of the ophthalmologist as much as they view their actions or inactions. That is why an ophthalmologist should take as many steps as possible to show his intention to practice in a compliant manner. Meeting with a healthcare attorney before entering into their contract, seeking out the advice of the regulators ahead of time and including a saving clause that allows the ophthalmologist to terminate a non-compliant contract all show these positive intentions. The likelihood that a regulator will seek to discipline an ophthalmologist in light of these steps may be significantly reduced.

Be Proactive

The world of regulations and statutory requirement is often confusing. The penalties for failing to comply can be significant, regardless of initial and best intentions. Every ophthalmologist should bear this in mind when determining how he practices medicine. Whether it is agreeing to be employed by a medical facility or hiring a management company to provide non-medical services on their behalf, every proactive attempt at compliance may go a long way toward preserving one's license to practice their profession. OM

Matthew Zifrony is a partner with the law firm of Tripp Scott, P.A. in Fort Lauderdale, Fla. Zifrony serves as outside general counsel to a national LASIK surgery company and has overseen the legal needs of ophthalmologists and optometrists throughout a good part of his legal career. He can be reached at mzz@trippscott.com.