Good Doctors Get Sued Too; Protect Yourself
No matter how diligent physicians are, good physicians get sued for malpractice. Malpractice suits result in a great deal of stress and anguish, even when no wrongful act is committed. To provent a serious impact to a physician’s practice, personal finances and potentially his/her family, physicians should have an asset protection plan (APP) in place.
Most physicians have a trusted legal advisor who can help establish an APP. The APP should be in place from the very first day the physician begins treating patients. You should also do regular updates to the plan at least annually. The rise in lawsuits on questionable claims and liability for partner’s errors may require revisiting your plan strategy and coverage limits.
At a minimum any asset protection plan (APP) should have the following components:
- Put your estate plan in order before your first day of practice. Good estate planners develop a plan that will help navigate your way from where you are today to where you want to be in the future. Protect what you have currently, your equity in your home, your retirement plan, etc. If you wait until a claim gets made, you are too late.
- Educate yourself on your state’s laws regarding malpractice insurance. This way you know your level of exposure. Understand your exposure for the acts of others.
- Take Malpractice 101. This is not a real course but a really good malpractice sales person will be happy to educate you on how malpractice works. A bad sales person will simply try to convince you that he knows best. Run from the bad sales people. Understand every line in your policy. Know your policy details inside and out, be clear about what is covered and where coverage ends.
- Review your personal insurance coverage(s). Consider all types of potential liability; life, disability, accidental death, lost wages insurance, etc. It is not uncommon for surgeons to carry coverage specifically for loss of work due to a hand injury. Professional liability is not the only risk to your assets. Consider the employee who gets in an automobile accident while driving to the work and kills a carload of engineers.
- Structure your professional corporation in such a way as to make insuring the corporation straight forward and affordable. A knowledgeable attoerney can advise you on the benefits of the specific forms of incorporation. Your attorney can also advise you on the best way to maximum your liability protection.
- Consult a Certified Public Accountant (CPA) to insure that you are following the letter of the law when it comes to your tax liability. Your CPA will also provide the tax benefits of the different forms of incorporation.
The best way to develop and maintain your asset protection plan is to seek the help of your three trusted advisors; your attorney, your CPA and your practice manager. These people are professionals that have been down this road many times and can be invaluable in developing and maintaining the protection that you need to sleep soundly at night.
Medicare to Intensify Audits in all 50 States
The Centers for Medicare & Medicaid Services (CMS) recently confirmed that the Recovery Audit Contractors (RACs) will operate in all 50 states by the end of this year. RACs identify over payments and under payments by CMS to Medicare providers.
The RAC program evolved from the three-year RAC demonstration project stipulated by the Medicare Modernization Act (MMA) of 2003. The Tax Relief and Health Care Act (TRHCA) of 2006 made the RAC program permanent and authorized CMS to expand it to all 50 states by 2010. The permanent RAC program limits the medical record review period to three years and prohibits audits on claims paid before Oct. 1, 2007. The program requires RACs to have a physician medical director and certified coders available to discuss denials with providers. CMS also announced the number of medical records RACs may request per National Provider Identifier (NPI) for 2009. CMS will likely adjust these limits each year.
Medical Record Limits for 2009 are:
- 10 medical records per 45-day period for solo practitioners;
- 20 medical records per 45-day period for 2 to 5 provider offices;
- 30 medical records per 45-day period for groups of 6 to 15 providers; and
- 50 medical records per 45-day period for groups of 16 or more providers.
Every group should start preparing a plan to deal with these audits. The old saying is “failure to plan, is a plan to fail”. Groups will need to develop a system for documenting each record request and track the audit of each claim to completion. As with any audit, if your group can’t provide the documentation of the services rendered, it is as if the service was never rendered. I have provided the RAC map of the four audit companies, the states they will audit and the contact numbers for each company.
- Diversified Collection Services 866-201-0580
- CGI Technologies and Solutions 877-316-7222
- Connolly Consulting, Inc. 866-360-2507
- HealthDataInsights, Inc. 866-376-2319
