Physicians Legal Issues Conference

CHICAGO – Accepting poor legal advice or inadvertently waiving the client-attorney privilege may result in tougher judicial scrutiny or have a direct impact the outcome of payment investigations, experts warned at a physicians’ legal issues conference held by the American Bar Association.

"While some audits are relatively minor, others can result in huge reimbursement demands or even more frightening things, including civil or criminal charges being made based on claims of fraud and abuse," said Michael E. Clark, chair of the American Bar Association’s Health Law Section. Legal advisers need to be able to guide physicians through the payment investigation process while protecting their rights.

Bad advice by a lawyer cannot be used as a court defense for a physician’s acts or oversights, health lawyer Eric C. Tostrud said. However, in some instances, poor legal advice can be used as a defense to a fraud claim.

"There are important nuances to the issue," said Mr. Tostrud, an attorney in Minneapolis. For example, a defense of "poor legal advice" depends on the accuracy and completeness of the information the doctor initially disclosed to the attorney as well as whether the physician was completely forthcoming. In addition, courts will review whether health providers disregarded one attorney’s advice for more self-seeking guidance from another lawyer.

The question of bad legal advice arose in the recent case of U.S. v. Tuomey Healthcare System, in which the South Carolina–based health system was accused of submitting Medicare claims that violated the Stark Law. This purported violation included reimbursement claims for services by physicians with whom Tuomey allegedly had financial relationships. As part of its defense, Tuomey said it had relied on attorneys to design and approve the physician contracts. But during the trial, the government presented evidence that Tuomey had dismissed adverse legal and expert opinions when entering into the contracts and had retained subsequent legal opinions that supported the arrangements. A federal jury found the system had violated Stark Law and the False Claims Act, and a federal judge in 2013 ordered Tuomey to pay $237 million in fines.

The attorney-client privilege is another complex concept that can land physicians – and their attorneys – in legal trouble. The privilege protects communications between an attorney and client that are made for the purpose of furnishing or obtaining professional legal advice or assistance. But physicians can waive the privilege by disclosing confidential information through conversations, paper documentation, or e-mails. Doctors who reveal details about such communications to colleagues thus relinquish the protection, Mr. Tostrud said.

"Doctors by their nature are very collaborative," he said in an interview. "They want to talk to other people and consult with others about issues and that includes the advice they might be getting from a lawyer. But the risk of doing that is that they will waive the privilege."

Also, not every communication from or to a lawyer is privileged. The privilege generally protects communications involving legal advice, but does not extend to underlying facts.

In the case of U.S. v. Halifax Hospital Medical Center, a federal court ruled that the Daytona Beach, Fla.–based hospital’s compliance "referral log" was not subject to the privilege even though it was prepared at the instruction of an attorney. The logs merely recorded facts and did not meet the purpose of the privilege. The court concluded also that hundreds of e-mails and other documents relating to Halifax’s compliance and audit activities were not protected. While an attorney may have been included in the e-mails, the lawyer was copied for business purposes, not for legal advice, the court said. Halifax in March agreed to pay the government $85 million to resolve False Claims Act and Stark Law violations.

"E-mail often becomes a lawyer’s nightmare because it’s permanent and clients and people generally tend to treat e-mail like a conversation," Mr. Tostrud said in an interview. "They are not thinking about the permanency of it and are not thinking of the long-term litigation consequences."

One privileged e-mail does not necessarily extend the privilege to an entire string of e-mails, he said. To be protected, each e-mail within a string must be for the purposes of legal advice.

Enlisting the help of an attorney early in an audit or payment investigation is essential, said Mr. Clark, who practices law in Houston. For instance, if it becomes necessary to retain specialized consultants to help review coding and documentation issues, an attorney can help structure a framework whereby the consultants report to the attorney, and the attorney then formulates advice to the physician client.

"Most physicians have a basic understanding about the attorney-client privilege and its scope, but don’t fully understand or appreciate how that legal protection can be lost inadvertently," Mr. Clark said. "Having an attorney on board early in the process of an audit or broader investigation is important to ensuring that the privilege is properly established and protected."

This article was updated Sept. 2, 2014.

[email protected]

On Twitter @legal_med

CHICAGO – Accepting poor legal advice or inadvertently waiving the client-attorney privilege may result in tougher judicial scrutiny or have a direct impact the outcome of payment investigations, experts warned at a physicians’ legal issues conference held by the American Bar Association.

"While some audits are relatively minor, others can result in huge reimbursement demands or even more frightening things, including civil or criminal charges being made based on claims of fraud and abuse," said Michael E. Clark, chair of the American Bar Association’s Health Law Section. Legal advisers need to be able to guide physicians through the payment investigation process while protecting their rights.

Bad advice by a lawyer cannot be used as a court defense for a physician’s acts or oversights, health lawyer Eric C. Tostrud said. However, in some instances, poor legal advice can be used as a defense to a fraud claim.

"There are important nuances to the issue," said Mr. Tostrud, an attorney in Minneapolis. For example, a defense of "poor legal advice" depends on the accuracy and completeness of the information the doctor initially disclosed to the attorney as well as whether the physician was completely forthcoming. In addition, courts will review whether health providers disregarded one attorney’s advice for more self-seeking guidance from another lawyer.

The question of bad legal advice arose in the recent case of U.S. v. Tuomey Healthcare System, in which the South Carolina–based health system was accused of submitting Medicare claims that violated the Stark Law. This purported violation included reimbursement claims for services by physicians with whom Tuomey allegedly had financial relationships. As part of its defense, Tuomey said it had relied on attorneys to design and approve the physician contracts. But during the trial, the government presented evidence that Tuomey had dismissed adverse legal and expert opinions when entering into the contracts and had retained subsequent legal opinions that supported the arrangements. A federal jury found the system had violated Stark Law and the False Claims Act, and a federal judge in 2013 ordered Tuomey to pay $237 million in fines.

The attorney-client privilege is another complex concept that can land physicians – and their attorneys – in legal trouble. The privilege protects communications between an attorney and client that are made for the purpose of furnishing or obtaining professional legal advice or assistance. But physicians can waive the privilege by disclosing confidential information through conversations, paper documentation, or e-mails. Doctors who reveal details about such communications to colleagues thus relinquish the protection, Mr. Tostrud said.

"Doctors by their nature are very collaborative," he said in an interview. "They want to talk to other people and consult with others about issues and that includes the advice they might be getting from a lawyer. But the risk of doing that is that they will waive the privilege."

Also, not every communication from or to a lawyer is privileged. The privilege generally protects communications involving legal advice, but does not extend to underlying facts.

In the case of U.S. v. Halifax Hospital Medical Center, a federal court ruled that the Daytona Beach, Fla.–based hospital’s compliance "referral log" was not subject to the privilege even though it was prepared at the instruction of an attorney. The logs merely recorded facts and did not meet the purpose of the privilege. The court concluded also that hundreds of e-mails and other documents relating to Halifax’s compliance and audit activities were not protected. While an attorney may have been included in the e-mails, the lawyer was copied for business purposes, not for legal advice, the court said. Halifax in March agreed to pay the government $85 million to resolve False Claims Act and Stark Law violations.

"E-mail often becomes a lawyer’s nightmare because it’s permanent and clients and people generally tend to treat e-mail like a conversation," Mr. Tostrud said in an interview. "They are not thinking about the permanency of it and are not thinking of the long-term litigation consequences."

One privileged e-mail does not necessarily extend the privilege to an entire string of e-mails, he said. To be protected, each e-mail within a string must be for the purposes of legal advice.

Enlisting the help of an attorney early in an audit or payment investigation is essential, said Mr. Clark, who practices law in Houston. For instance, if it becomes necessary to retain specialized consultants to help review coding and documentation issues, an attorney can help structure a framework whereby the consultants report to the attorney, and the attorney then formulates advice to the physician client.

"Most physicians have a basic understanding about the attorney-client privilege and its scope, but don’t fully understand or appreciate how that legal protection can be lost inadvertently," Mr. Clark said. "Having an attorney on board early in the process of an audit or broader investigation is important to ensuring that the privilege is properly established and protected."

This article was updated Sept. 2, 2014.

[email protected]

On Twitter @legal_med

CHICAGO – Accepting poor legal advice or inadvertently waiving the client-attorney privilege may result in tougher judicial scrutiny or have a direct impact the outcome of payment investigations, experts warned at a physicians’ legal issues conference held by the American Bar Association.

"While some audits are relatively minor, others can result in huge reimbursement demands or even more frightening things, including civil or criminal charges being made based on claims of fraud and abuse," said Michael E. Clark, chair of the American Bar Association’s Health Law Section. Legal advisers need to be able to guide physicians through the payment investigation process while protecting their rights.

Bad advice by a lawyer cannot be used as a court defense for a physician’s acts or oversights, health lawyer Eric C. Tostrud said. However, in some instances, poor legal advice can be used as a defense to a fraud claim.

"There are important nuances to the issue," said Mr. Tostrud, an attorney in Minneapolis. For example, a defense of "poor legal advice" depends on the accuracy and completeness of the information the doctor initially disclosed to the attorney as well as whether the physician was completely forthcoming. In addition, courts will review whether health providers disregarded one attorney’s advice for more self-seeking guidance from another lawyer.

The question of bad legal advice arose in the recent case of U.S. v. Tuomey Healthcare System, in which the South Carolina–based health system was accused of submitting Medicare claims that violated the Stark Law. This purported violation included reimbursement claims for services by physicians with whom Tuomey allegedly had financial relationships. As part of its defense, Tuomey said it had relied on attorneys to design and approve the physician contracts. But during the trial, the government presented evidence that Tuomey had dismissed adverse legal and expert opinions when entering into the contracts and had retained subsequent legal opinions that supported the arrangements. A federal jury found the system had violated Stark Law and the False Claims Act, and a federal judge in 2013 ordered Tuomey to pay $237 million in fines.

The attorney-client privilege is another complex concept that can land physicians – and their attorneys – in legal trouble. The privilege protects communications between an attorney and client that are made for the purpose of furnishing or obtaining professional legal advice or assistance. But physicians can waive the privilege by disclosing confidential information through conversations, paper documentation, or e-mails. Doctors who reveal details about such communications to colleagues thus relinquish the protection, Mr. Tostrud said.

"Doctors by their nature are very collaborative," he said in an interview. "They want to talk to other people and consult with others about issues and that includes the advice they might be getting from a lawyer. But the risk of doing that is that they will waive the privilege."

Also, not every communication from or to a lawyer is privileged. The privilege generally protects communications involving legal advice, but does not extend to underlying facts.

In the case of U.S. v. Halifax Hospital Medical Center, a federal court ruled that the Daytona Beach, Fla.–based hospital’s compliance "referral log" was not subject to the privilege even though it was prepared at the instruction of an attorney. The logs merely recorded facts and did not meet the purpose of the privilege. The court concluded also that hundreds of e-mails and other documents relating to Halifax’s compliance and audit activities were not protected. While an attorney may have been included in the e-mails, the lawyer was copied for business purposes, not for legal advice, the court said. Halifax in March agreed to pay the government $85 million to resolve False Claims Act and Stark Law violations.

"E-mail often becomes a lawyer’s nightmare because it’s permanent and clients and people generally tend to treat e-mail like a conversation," Mr. Tostrud said in an interview. "They are not thinking about the permanency of it and are not thinking of the long-term litigation consequences."

One privileged e-mail does not necessarily extend the privilege to an entire string of e-mails, he said. To be protected, each e-mail within a string must be for the purposes of legal advice.

Enlisting the help of an attorney early in an audit or payment investigation is essential, said Mr. Clark, who practices law in Houston. For instance, if it becomes necessary to retain specialized consultants to help review coding and documentation issues, an attorney can help structure a framework whereby the consultants report to the attorney, and the attorney then formulates advice to the physician client.

"Most physicians have a basic understanding about the attorney-client privilege and its scope, but don’t fully understand or appreciate how that legal protection can be lost inadvertently," Mr. Clark said. "Having an attorney on board early in the process of an audit or broader investigation is important to ensuring that the privilege is properly established and protected."

This article was updated Sept. 2, 2014.

[email protected]

On Twitter @legal_med

CHICAGO – Legal pitfalls lie along the path of transitioning from an independent practice to hospital employment, an accountable care organization, a medical home, or a merger to build a multispecialty group practice, legal experts warned at a physicians’ legal issues conference held by the American Bar Association.

"As a seller, you need to know what you’re getting into when you’re selling" your practice, said Hal Katz, an attorney in Austin, Tex. "Due diligence for you is just as important as it is for the buyer. The business structure you move into is going to be something you’re going to have to live with for the long term. You want to make sure it’s a good fit."

At the due-diligence stage, doctors partnering with another entity should ensure that they review a number of critical records from the other organization, such as corporate records, financial information, payer contracts, and real estate information, he said. Additionally, physician sellers should be aware of any litigation against their future partner and be knowledgeable about their affiliated entities and financial relationships.

Financial troubles or issues with federal regulation compliance are possible red flags for physician sellers. Examples include overpayments, repayments, audits, investigations, subpoenas or corporate integrity agreements.

Medicare providers changing ownership must inform federal authorities. A change of ownership (CHOW) generally happens when a Medicare provider is being purchased or leased by another entity. The CHOW results in the transfer of the former owner’s Medicare identification number and provider agreement to the new owner.

Adequately valuing the practice is another essential – albeit complex – process for physician sellers, Clinton Flome said at the ABA conference.

"Understanding price, understanding value, and most importantly understanding what physicians’ compensation is going to be going forward," are crucial, said Mr. Flome, senior manager at VMG Health in Dallas, a business valuation company. Knowing those criteria is "going to determine whether you have available" funds.

The three primary practice valuation methods include income, asset, and market approaches. The income approach examines historical financial and production information to estimate the future level of cash flows, Mr. Flome said. The asset approach takes into consideration the cost of replicating a comparable asset, security, or service with the same level of utility. The market approach estimates value by comparing the value of similar assets, securities, or services traded in a free and open market and the subject asset, security, or service.

"Everybody (should) be on the same page as to what the transaction is going to look like," Mr. Flome said. "Is this a 100% asset transaction or are you looking at some other alternatives?"

[email protected]

On Twitter @legal_med

CHICAGO – Legal pitfalls lie along the path of transitioning from an independent practice to hospital employment, an accountable care organization, a medical home, or a merger to build a multispecialty group practice, legal experts warned at a physicians’ legal issues conference held by the American Bar Association.

"As a seller, you need to know what you’re getting into when you’re selling" your practice, said Hal Katz, an attorney in Austin, Tex. "Due diligence for you is just as important as it is for the buyer. The business structure you move into is going to be something you’re going to have to live with for the long term. You want to make sure it’s a good fit."

At the due-diligence stage, doctors partnering with another entity should ensure that they review a number of critical records from the other organization, such as corporate records, financial information, payer contracts, and real estate information, he said. Additionally, physician sellers should be aware of any litigation against their future partner and be knowledgeable about their affiliated entities and financial relationships.

Financial troubles or issues with federal regulation compliance are possible red flags for physician sellers. Examples include overpayments, repayments, audits, investigations, subpoenas or corporate integrity agreements.

Medicare providers changing ownership must inform federal authorities. A change of ownership (CHOW) generally happens when a Medicare provider is being purchased or leased by another entity. The CHOW results in the transfer of the former owner’s Medicare identification number and provider agreement to the new owner.

Adequately valuing the practice is another essential – albeit complex – process for physician sellers, Clinton Flome said at the ABA conference.

"Understanding price, understanding value, and most importantly understanding what physicians’ compensation is going to be going forward," are crucial, said Mr. Flome, senior manager at VMG Health in Dallas, a business valuation company. Knowing those criteria is "going to determine whether you have available" funds.

The three primary practice valuation methods include income, asset, and market approaches. The income approach examines historical financial and production information to estimate the future level of cash flows, Mr. Flome said. The asset approach takes into consideration the cost of replicating a comparable asset, security, or service with the same level of utility. The market approach estimates value by comparing the value of similar assets, securities, or services traded in a free and open market and the subject asset, security, or service.

"Everybody (should) be on the same page as to what the transaction is going to look like," Mr. Flome said. "Is this a 100% asset transaction or are you looking at some other alternatives?"

[email protected]

On Twitter @legal_med

CHICAGO – Legal pitfalls lie along the path of transitioning from an independent practice to hospital employment, an accountable care organization, a medical home, or a merger to build a multispecialty group practice, legal experts warned at a physicians’ legal issues conference held by the American Bar Association.

"As a seller, you need to know what you’re getting into when you’re selling" your practice, said Hal Katz, an attorney in Austin, Tex. "Due diligence for you is just as important as it is for the buyer. The business structure you move into is going to be something you’re going to have to live with for the long term. You want to make sure it’s a good fit."

At the due-diligence stage, doctors partnering with another entity should ensure that they review a number of critical records from the other organization, such as corporate records, financial information, payer contracts, and real estate information, he said. Additionally, physician sellers should be aware of any litigation against their future partner and be knowledgeable about their affiliated entities and financial relationships.

Financial troubles or issues with federal regulation compliance are possible red flags for physician sellers. Examples include overpayments, repayments, audits, investigations, subpoenas or corporate integrity agreements.

Medicare providers changing ownership must inform federal authorities. A change of ownership (CHOW) generally happens when a Medicare provider is being purchased or leased by another entity. The CHOW results in the transfer of the former owner’s Medicare identification number and provider agreement to the new owner.

Adequately valuing the practice is another essential – albeit complex – process for physician sellers, Clinton Flome said at the ABA conference.

"Understanding price, understanding value, and most importantly understanding what physicians’ compensation is going to be going forward," are crucial, said Mr. Flome, senior manager at VMG Health in Dallas, a business valuation company. Knowing those criteria is "going to determine whether you have available" funds.

The three primary practice valuation methods include income, asset, and market approaches. The income approach examines historical financial and production information to estimate the future level of cash flows, Mr. Flome said. The asset approach takes into consideration the cost of replicating a comparable asset, security, or service with the same level of utility. The market approach estimates value by comparing the value of similar assets, securities, or services traded in a free and open market and the subject asset, security, or service.

"Everybody (should) be on the same page as to what the transaction is going to look like," Mr. Flome said. "Is this a 100% asset transaction or are you looking at some other alternatives?"

[email protected]

On Twitter @legal_med

CHICAGO – Buck the trend of "physician as employee" and retain your private practice through better business practices, cost control, and potential collaboration with other entities, advised Dr. Thomas Grogan, past chair of the American Academy of Orthopaedic Surgeons’ Practice Management Committee.

"You can go into employment, or you can stay and survive and maybe even thrive," Dr. Grogan said at a physicians’ legal issues conference held by the American Bar Association.

One of the first steps to stabilizing a private practice is understanding costs and improving revenue, said Dr. Grogan, a practicing orthopedic surgeon in Los Angeles. This includes knowing how much revenue is generated per patient and what each procedure, treatment, and visit costs.

"Most of us have to learn how to collaborate... it’s like learning how to play together in the sandbox."

"A lot of times doctors don’t think about costs, they just pay them," he said in an interview. "That’s one of the big problems. If you know what the revenue is per patient, you can determine the profit margin and whether you can survive."

Analyzing cost structure can help determine the best approaches for improving income sources such as the possibility of subletting part of the office or seeking lower medical malpractice insurance premiums.

Ancillary income can be another focal point for physicians who desire to stay in private practice, Dr. Grogan said. Physicians should look for ways to increase and protect the revenue that stems from services such as X-rays, supplies, imaging, and other ancillaries. For instance, physicians can ensure that contracts with payers enable them to be reimbursed for maintenance of the equipment or devices they use. Physicians should beware of contracts with insurance companies that require them to use the payer’s providers or affiliated facilities for ancillary services.

Another key is the development of new revenue streams. New technology provides excellent opportunities for independent physicians to add skills and generate additional income, Dr. Grogan said. His practice, for example, utilizes stem cell treatments to treat joint problems.

"Learning how to do these new technologies can contribute positive revenue," he said. "In order to survive in business, you have to make a profit. In order to make a profit, you have to get very good at controlling cost or be able to grow revenue. That’s how you improve your financial situation."

Collaboration is another tool for retaining independence. Collaboration models could include merging two or more physician practices, becoming a medical home, joining an accountable care organization, or participating in a super group or independent network. Super groups refer to practice entities that share a single tax ID and ancillaries but can have multiple offices. Networks can be independent practices linked via a management system such as a physician-hospital organization, management services organization, or an independent practice association.

To achieve success in collaboration, physicians must overcome challenges to operating with other practices and organizations, Dr. Grogan said. A common obstacle is integrating practice cultures and learning to work with other specialties.

"Most of us have to learn how to collaborate, and it’s like learning how to play together in the sandbox," he said. "The culture of an orthopedic surgeon is not the same as that of a pediatrician or an internist. An orthopedist is used to taking care of the problem and moving on. That’s not necessarily the case with an internist or a pediatrician."

Learning how best to communicate and work within a strong team is essential to survival of unified groups, Dr. Grogan said.

"It’s hard to exist in our own little vacuum," he said. "Somehow, we have to integrate or at least collaborate."

Strong teamwork, communication aids practice integration

When a group of seven Chicago-area pediatric practices decided to join forces, they knew unification would not be simple. In the end, strong cooperation, efficient management, and skilled advisors were required to build a successful partnership, now called PediaTrust LLC.

"It’s really important to make sure the physicians are of like mind and it’s a good fit," Kathleen McTigue, executive director of PediaTrust LLC said at the conference. "They [must] have similar views of running their businesses."

For PediaTrust, agreeing on a single vendor for each necessary service allowed for a smoother process, Ms. McTigue said. For example, each practice came to the table with its own attorney and accountant firm, so the new group needed to choose one provider for each service.

"We had great advisers," she said. "I would be concerned using advisors – attorneys, accountants, consultants – who had not worked with a company structure like ours. In the end, it turned out to be successful because we were thoughtful about that."

The new corporation faced their share of challenges, such as completing all unification tasks on a tight timeline. Investments were made in September 2012, and PediaTrust operations began in January 2013. Simultaneously, the group implemented a new electronic health record system. Another challenge was the limiting of new overhead to practices.

"While centralizing certain functions, we needed to be mindful of how to manage these costs," Ms. McTigue said. "For example, we transferred qualified billing staff from the local offices to the central billing office."

CHICAGO – Buck the trend of "physician as employee" and retain your private practice through better business practices, cost control, and potential collaboration with other entities, advised Dr. Thomas Grogan, past chair of the American Academy of Orthopaedic Surgeons’ Practice Management Committee.

"You can go into employment, or you can stay and survive and maybe even thrive," Dr. Grogan said at a physicians’ legal issues conference held by the American Bar Association.

One of the first steps to stabilizing a private practice is understanding costs and improving revenue, said Dr. Grogan, a practicing orthopedic surgeon in Los Angeles. This includes knowing how much revenue is generated per patient and what each procedure, treatment, and visit costs.

"Most of us have to learn how to collaborate... it’s like learning how to play together in the sandbox."

"A lot of times doctors don’t think about costs, they just pay them," he said in an interview. "That’s one of the big problems. If you know what the revenue is per patient, you can determine the profit margin and whether you can survive."

Analyzing cost structure can help determine the best approaches for improving income sources such as the possibility of subletting part of the office or seeking lower medical malpractice insurance premiums.

Ancillary income can be another focal point for physicians who desire to stay in private practice, Dr. Grogan said. Physicians should look for ways to increase and protect the revenue that stems from services such as X-rays, supplies, imaging, and other ancillaries. For instance, physicians can ensure that contracts with payers enable them to be reimbursed for maintenance of the equipment or devices they use. Physicians should beware of contracts with insurance companies that require them to use the payer’s providers or affiliated facilities for ancillary services.

Another key is the development of new revenue streams. New technology provides excellent opportunities for independent physicians to add skills and generate additional income, Dr. Grogan said. His practice, for example, utilizes stem cell treatments to treat joint problems.

"Learning how to do these new technologies can contribute positive revenue," he said. "In order to survive in business, you have to make a profit. In order to make a profit, you have to get very good at controlling cost or be able to grow revenue. That’s how you improve your financial situation."

Collaboration is another tool for retaining independence. Collaboration models could include merging two or more physician practices, becoming a medical home, joining an accountable care organization, or participating in a super group or independent network. Super groups refer to practice entities that share a single tax ID and ancillaries but can have multiple offices. Networks can be independent practices linked via a management system such as a physician-hospital organization, management services organization, or an independent practice association.

To achieve success in collaboration, physicians must overcome challenges to operating with other practices and organizations, Dr. Grogan said. A common obstacle is integrating practice cultures and learning to work with other specialties.

"Most of us have to learn how to collaborate, and it’s like learning how to play together in the sandbox," he said. "The culture of an orthopedic surgeon is not the same as that of a pediatrician or an internist. An orthopedist is used to taking care of the problem and moving on. That’s not necessarily the case with an internist or a pediatrician."

Learning how best to communicate and work within a strong team is essential to survival of unified groups, Dr. Grogan said.

"It’s hard to exist in our own little vacuum," he said. "Somehow, we have to integrate or at least collaborate."

Strong teamwork, communication aids practice integration

When a group of seven Chicago-area pediatric practices decided to join forces, they knew unification would not be simple. In the end, strong cooperation, efficient management, and skilled advisors were required to build a successful partnership, now called PediaTrust LLC.

"It’s really important to make sure the physicians are of like mind and it’s a good fit," Kathleen McTigue, executive director of PediaTrust LLC said at the conference. "They [must] have similar views of running their businesses."

For PediaTrust, agreeing on a single vendor for each necessary service allowed for a smoother process, Ms. McTigue said. For example, each practice came to the table with its own attorney and accountant firm, so the new group needed to choose one provider for each service.

"We had great advisers," she said. "I would be concerned using advisors – attorneys, accountants, consultants – who had not worked with a company structure like ours. In the end, it turned out to be successful because we were thoughtful about that."

The new corporation faced their share of challenges, such as completing all unification tasks on a tight timeline. Investments were made in September 2012, and PediaTrust operations began in January 2013. Simultaneously, the group implemented a new electronic health record system. Another challenge was the limiting of new overhead to practices.

"While centralizing certain functions, we needed to be mindful of how to manage these costs," Ms. McTigue said. "For example, we transferred qualified billing staff from the local offices to the central billing office."

CHICAGO – Buck the trend of "physician as employee" and retain your private practice through better business practices, cost control, and potential collaboration with other entities, advised Dr. Thomas Grogan, past chair of the American Academy of Orthopaedic Surgeons’ Practice Management Committee.

"You can go into employment, or you can stay and survive and maybe even thrive," Dr. Grogan said at a physicians’ legal issues conference held by the American Bar Association.

One of the first steps to stabilizing a private practice is understanding costs and improving revenue, said Dr. Grogan, a practicing orthopedic surgeon in Los Angeles. This includes knowing how much revenue is generated per patient and what each procedure, treatment, and visit costs.

"Most of us have to learn how to collaborate... it’s like learning how to play together in the sandbox."

"A lot of times doctors don’t think about costs, they just pay them," he said in an interview. "That’s one of the big problems. If you know what the revenue is per patient, you can determine the profit margin and whether you can survive."

Analyzing cost structure can help determine the best approaches for improving income sources such as the possibility of subletting part of the office or seeking lower medical malpractice insurance premiums.

Ancillary income can be another focal point for physicians who desire to stay in private practice, Dr. Grogan said. Physicians should look for ways to increase and protect the revenue that stems from services such as X-rays, supplies, imaging, and other ancillaries. For instance, physicians can ensure that contracts with payers enable them to be reimbursed for maintenance of the equipment or devices they use. Physicians should beware of contracts with insurance companies that require them to use the payer’s providers or affiliated facilities for ancillary services.

Another key is the development of new revenue streams. New technology provides excellent opportunities for independent physicians to add skills and generate additional income, Dr. Grogan said. His practice, for example, utilizes stem cell treatments to treat joint problems.

"Learning how to do these new technologies can contribute positive revenue," he said. "In order to survive in business, you have to make a profit. In order to make a profit, you have to get very good at controlling cost or be able to grow revenue. That’s how you improve your financial situation."

Collaboration is another tool for retaining independence. Collaboration models could include merging two or more physician practices, becoming a medical home, joining an accountable care organization, or participating in a super group or independent network. Super groups refer to practice entities that share a single tax ID and ancillaries but can have multiple offices. Networks can be independent practices linked via a management system such as a physician-hospital organization, management services organization, or an independent practice association.

To achieve success in collaboration, physicians must overcome challenges to operating with other practices and organizations, Dr. Grogan said. A common obstacle is integrating practice cultures and learning to work with other specialties.

"Most of us have to learn how to collaborate, and it’s like learning how to play together in the sandbox," he said. "The culture of an orthopedic surgeon is not the same as that of a pediatrician or an internist. An orthopedist is used to taking care of the problem and moving on. That’s not necessarily the case with an internist or a pediatrician."

Learning how best to communicate and work within a strong team is essential to survival of unified groups, Dr. Grogan said.

"It’s hard to exist in our own little vacuum," he said. "Somehow, we have to integrate or at least collaborate."

Strong teamwork, communication aids practice integration

When a group of seven Chicago-area pediatric practices decided to join forces, they knew unification would not be simple. In the end, strong cooperation, efficient management, and skilled advisors were required to build a successful partnership, now called PediaTrust LLC.

"It’s really important to make sure the physicians are of like mind and it’s a good fit," Kathleen McTigue, executive director of PediaTrust LLC said at the conference. "They [must] have similar views of running their businesses."

For PediaTrust, agreeing on a single vendor for each necessary service allowed for a smoother process, Ms. McTigue said. For example, each practice came to the table with its own attorney and accountant firm, so the new group needed to choose one provider for each service.

"We had great advisers," she said. "I would be concerned using advisors – attorneys, accountants, consultants – who had not worked with a company structure like ours. In the end, it turned out to be successful because we were thoughtful about that."

The new corporation faced their share of challenges, such as completing all unification tasks on a tight timeline. Investments were made in September 2012, and PediaTrust operations began in January 2013. Simultaneously, the group implemented a new electronic health record system. Another challenge was the limiting of new overhead to practices.

"While centralizing certain functions, we needed to be mindful of how to manage these costs," Ms. McTigue said. "For example, we transferred qualified billing staff from the local offices to the central billing office."

CHICAGO – Buck the trend of "physician as employee" and retain your private practice through better business practices, cost control, and potential collaboration with other entities, advised Dr. Thomas Grogan, past chair of the American Academy of Orthopaedic Surgeons’ Practice Management Committee.

"You can go into employment, or you can stay and survive and maybe even thrive," Dr. Grogan said at a physicians’ legal issues conference held by the American Bar Association.

One of the first steps to stabilizing a private practice is understanding costs and improving revenue, said Dr. Grogan, a practicing orthopedic surgeon in Los Angeles. This includes knowing how much revenue is generated per patient and what each procedure, treatment, and visit costs.

"Most of us have to learn how to collaborate... it’s like learning how to play together in the sandbox."

"A lot of times doctors don’t think about costs, they just pay them," he said in an interview. "That’s one of the big problems. If you know what the revenue is per patient, you can determine the profit margin and whether you can survive."

Analyzing cost structure can help determine the best approaches for improving income sources such as the possibility of subletting part of the office or seeking lower medical malpractice insurance premiums.

Ancillary income can be another focal point for physicians who desire to stay in private practice, Dr. Grogan said. Physicians should look for ways to increase and protect the revenue that stems from services such as X-rays, supplies, imaging, and other ancillaries. For instance, physicians can ensure that contracts with payers enable them to be reimbursed for maintenance of the equipment or devices they use. Physicians should beware of contracts with insurance companies that require them to use the payer’s providers or affiliated facilities for ancillary services.

Another key is the development of new revenue streams. New technology provides excellent opportunities for independent physicians to add skills and generate additional income, Dr. Grogan said. His practice, for example, utilizes stem cell treatments to treat joint problems.

"Learning how to do these new technologies can contribute positive revenue," he said. "In order to survive in business, you have to make a profit. In order to make a profit, you have to get very good at controlling cost or be able to grow revenue. That’s how you improve your financial situation."

Collaboration is another tool for retaining independence. Collaboration models could include merging two or more physician practices, becoming a medical home, joining an accountable care organization, or participating in a super group or independent network. Super groups refer to practice entities that share a single tax ID and ancillaries but can have multiple offices. Networks can be independent practices linked via a management system such as a physician-hospital organization, management services organization, or an independent practice association.

To achieve success in collaboration, physicians must overcome challenges to operating with other practices and organizations, Dr. Grogan said. A common obstacle is integrating practice cultures and learning to work with other specialties.

"Most of us have to learn how to collaborate, and it’s like learning how to play together in the sandbox," he said. "The culture of an orthopedic surgeon is not the same as that of a pediatrician or an internist. An orthopedist is used to taking care of the problem and moving on. That’s not necessarily the case with an internist or a pediatrician."

Learning how best to communicate and work within a strong team is essential to survival of unified groups, Dr. Grogan said.

"It’s hard to exist in our own little vacuum," he said. "Somehow, we have to integrate or at least collaborate."

Strong teamwork, communication aids practice integration

When a group of seven Chicago-area pediatric practices decided to join forces, they knew unification would not be simple. In the end, strong cooperation, efficient management, and skilled advisors were required to build a successful partnership, now called PediaTrust LLC.

"It’s really important to make sure the physicians are of like mind and it’s a good fit," Kathleen McTigue, executive director of PediaTrust LLC said at the conference. "They [must] have similar views of running their businesses."

For PediaTrust, agreeing on a single vendor for each necessary service allowed for a smoother process, Ms. McTigue said. For example, each practice came to the table with its own attorney and accountant firm, so the new group needed to choose one provider for each service.

"We had great advisers," she said. "I would be concerned using advisors – attorneys, accountants, consultants – who had not worked with a company structure like ours. In the end, it turned out to be successful because we were thoughtful about that."

The new corporation faced their share of challenges, such as completing all unification tasks on a tight timeline. Investments were made in September 2012, and PediaTrust operations began in January 2013. Simultaneously, the group implemented a new electronic health record system. Another challenge was the limiting of new overhead to practices.

"While centralizing certain functions, we needed to be mindful of how to manage these costs," Ms. McTigue said. "For example, we transferred qualified billing staff from the local offices to the central billing office."

CHICAGO – Buck the trend of "physician as employee" and retain your private practice through better business practices, cost control, and potential collaboration with other entities, advised Dr. Thomas Grogan, past chair of the American Academy of Orthopaedic Surgeons’ Practice Management Committee.

"You can go into employment, or you can stay and survive and maybe even thrive," Dr. Grogan said at a physicians’ legal issues conference held by the American Bar Association.

One of the first steps to stabilizing a private practice is understanding costs and improving revenue, said Dr. Grogan, a practicing orthopedic surgeon in Los Angeles. This includes knowing how much revenue is generated per patient and what each procedure, treatment, and visit costs.

"Most of us have to learn how to collaborate... it’s like learning how to play together in the sandbox."

"A lot of times doctors don’t think about costs, they just pay them," he said in an interview. "That’s one of the big problems. If you know what the revenue is per patient, you can determine the profit margin and whether you can survive."

Analyzing cost structure can help determine the best approaches for improving income sources such as the possibility of subletting part of the office or seeking lower medical malpractice insurance premiums.

Ancillary income can be another focal point for physicians who desire to stay in private practice, Dr. Grogan said. Physicians should look for ways to increase and protect the revenue that stems from services such as X-rays, supplies, imaging, and other ancillaries. For instance, physicians can ensure that contracts with payers enable them to be reimbursed for maintenance of the equipment or devices they use. Physicians should beware of contracts with insurance companies that require them to use the payer’s providers or affiliated facilities for ancillary services.

Another key is the development of new revenue streams. New technology provides excellent opportunities for independent physicians to add skills and generate additional income, Dr. Grogan said. His practice, for example, utilizes stem cell treatments to treat joint problems.

"Learning how to do these new technologies can contribute positive revenue," he said. "In order to survive in business, you have to make a profit. In order to make a profit, you have to get very good at controlling cost or be able to grow revenue. That’s how you improve your financial situation."

Collaboration is another tool for retaining independence. Collaboration models could include merging two or more physician practices, becoming a medical home, joining an accountable care organization, or participating in a super group or independent network. Super groups refer to practice entities that share a single tax ID and ancillaries but can have multiple offices. Networks can be independent practices linked via a management system such as a physician-hospital organization, management services organization, or an independent practice association.

To achieve success in collaboration, physicians must overcome challenges to operating with other practices and organizations, Dr. Grogan said. A common obstacle is integrating practice cultures and learning to work with other specialties.

"Most of us have to learn how to collaborate, and it’s like learning how to play together in the sandbox," he said. "The culture of an orthopedic surgeon is not the same as that of a pediatrician or an internist. An orthopedist is used to taking care of the problem and moving on. That’s not necessarily the case with an internist or a pediatrician."

Learning how best to communicate and work within a strong team is essential to survival of unified groups, Dr. Grogan said.

"It’s hard to exist in our own little vacuum," he said. "Somehow, we have to integrate or at least collaborate."

Strong teamwork, communication aids practice integration

When a group of seven Chicago-area pediatric practices decided to join forces, they knew unification would not be simple. In the end, strong cooperation, efficient management, and skilled advisors were required to build a successful partnership, now called PediaTrust LLC.

"It’s really important to make sure the physicians are of like mind and it’s a good fit," Kathleen McTigue, executive director of PediaTrust LLC said at the conference. "They [must] have similar views of running their businesses."

For PediaTrust, agreeing on a single vendor for each necessary service allowed for a smoother process, Ms. McTigue said. For example, each practice came to the table with its own attorney and accountant firm, so the new group needed to choose one provider for each service.

"We had great advisers," she said. "I would be concerned using advisors – attorneys, accountants, consultants – who had not worked with a company structure like ours. In the end, it turned out to be successful because we were thoughtful about that."

The new corporation faced their share of challenges, such as completing all unification tasks on a tight timeline. Investments were made in September 2012, and PediaTrust operations began in January 2013. Simultaneously, the group implemented a new electronic health record system. Another challenge was the limiting of new overhead to practices.

"While centralizing certain functions, we needed to be mindful of how to manage these costs," Ms. McTigue said. "For example, we transferred qualified billing staff from the local offices to the central billing office."

CHICAGO – Buck the trend of "physician as employee" and retain your private practice through better business practices, cost control, and potential collaboration with other entities, advised Dr. Thomas Grogan, past chair of the American Academy of Orthopaedic Surgeons’ Practice Management Committee.

"You can go into employment, or you can stay and survive and maybe even thrive," Dr. Grogan said at a physicians’ legal issues conference held by the American Bar Association.

One of the first steps to stabilizing a private practice is understanding costs and improving revenue, said Dr. Grogan, a practicing orthopedic surgeon in Los Angeles. This includes knowing how much revenue is generated per patient and what each procedure, treatment, and visit costs.

"Most of us have to learn how to collaborate... it’s like learning how to play together in the sandbox."

"A lot of times doctors don’t think about costs, they just pay them," he said in an interview. "That’s one of the big problems. If you know what the revenue is per patient, you can determine the profit margin and whether you can survive."

Analyzing cost structure can help determine the best approaches for improving income sources such as the possibility of subletting part of the office or seeking lower medical malpractice insurance premiums.

Ancillary income can be another focal point for physicians who desire to stay in private practice, Dr. Grogan said. Physicians should look for ways to increase and protect the revenue that stems from services such as X-rays, supplies, imaging, and other ancillaries. For instance, physicians can ensure that contracts with payers enable them to be reimbursed for maintenance of the equipment or devices they use. Physicians should beware of contracts with insurance companies that require them to use the payer’s providers or affiliated facilities for ancillary services.

Another key is the development of new revenue streams. New technology provides excellent opportunities for independent physicians to add skills and generate additional income, Dr. Grogan said. His practice, for example, utilizes stem cell treatments to treat joint problems.

"Learning how to do these new technologies can contribute positive revenue," he said. "In order to survive in business, you have to make a profit. In order to make a profit, you have to get very good at controlling cost or be able to grow revenue. That’s how you improve your financial situation."

Collaboration is another tool for retaining independence. Collaboration models could include merging two or more physician practices, becoming a medical home, joining an accountable care organization, or participating in a super group or independent network. Super groups refer to practice entities that share a single tax ID and ancillaries but can have multiple offices. Networks can be independent practices linked via a management system such as a physician-hospital organization, management services organization, or an independent practice association.

To achieve success in collaboration, physicians must overcome challenges to operating with other practices and organizations, Dr. Grogan said. A common obstacle is integrating practice cultures and learning to work with other specialties.

"Most of us have to learn how to collaborate, and it’s like learning how to play together in the sandbox," he said. "The culture of an orthopedic surgeon is not the same as that of a pediatrician or an internist. An orthopedist is used to taking care of the problem and moving on. That’s not necessarily the case with an internist or a pediatrician."

Learning how best to communicate and work within a strong team is essential to survival of unified groups, Dr. Grogan said.

"It’s hard to exist in our own little vacuum," he said. "Somehow, we have to integrate or at least collaborate."

Strong teamwork, communication aids practice integration

When a group of seven Chicago-area pediatric practices decided to join forces, they knew unification would not be simple. In the end, strong cooperation, efficient management, and skilled advisors were required to build a successful partnership, now called PediaTrust LLC.

"It’s really important to make sure the physicians are of like mind and it’s a good fit," Kathleen McTigue, executive director of PediaTrust LLC said at the conference. "They [must] have similar views of running their businesses."

For PediaTrust, agreeing on a single vendor for each necessary service allowed for a smoother process, Ms. McTigue said. For example, each practice came to the table with its own attorney and accountant firm, so the new group needed to choose one provider for each service.

"We had great advisers," she said. "I would be concerned using advisors – attorneys, accountants, consultants – who had not worked with a company structure like ours. In the end, it turned out to be successful because we were thoughtful about that."

The new corporation faced their share of challenges, such as completing all unification tasks on a tight timeline. Investments were made in September 2012, and PediaTrust operations began in January 2013. Simultaneously, the group implemented a new electronic health record system. Another challenge was the limiting of new overhead to practices.

"While centralizing certain functions, we needed to be mindful of how to manage these costs," Ms. McTigue said. "For example, we transferred qualified billing staff from the local offices to the central billing office."

CHICAGO – Despite more resources than in the past, physicians who are depressed, burned out, or stressed still find it difficult to reach out for help.

"Show me a physician, and I’ll show you a physician under stress," health law attorney Julian Rivera said at a physicians’ legal issues conference held by the American Bar Association. "Show me a physician, and I’ll show you a physician who is suffering. It is endemic."

One of the first steps to mitigating physicians’ feelings of depression and stress is recognizing the problem early and overcoming the stigma associated with getting help, Dr. Luis Sanchez said at the conference.

"In order to be a good physician, the physician must be a good patient," said Dr. Sanchez, director emeritus of Physician Health Services in Waltham, Mass., a referral program for physicians with substance abuse and behavioral health conditions. "That means we have to be able to take care of ourselves and have someone who is a doctor take care of us ... We need to have our illnesses diagnosed, we need to have them treated, and we need to have a support system."

Better self-awareness among physicians is essential, said Mr. Rivera, a partner in Husch Blackwell’s Healthcare, Life Sciences & Pharmaceuticals business unit in Austin, Tex.

"Suffering physicians generally have very low awareness of how they are functioning in their social, business, and clinical environments," he said in an interview. "Increasing self-awareness, developing coping mechanisms, and adoption of a strong social and professional support network are keys to reducing stress and avoiding burnout."

Frequently, a suffering, stressed physician becomes a disruptive physician, thus creating additional concerns for employers, peers, and patient care, Mr. Rivera added.

He recommends that physician leaders, administrators, and colleagues work together to identify when physicians are afflicted and schedule business meetings with the doctors to address the issue. Mr. Rivera emphasizes that the meetings should be "business like" and not adversarial or casual.

"Dealing with suffering physicians in a compassionate, business-like environment where physicians leaders and anyone else in the enterprise who can be helpful communicate openly with the physician in a plain, organized, and well-facilitated manner is invaluable to connecting with afflicted physicians," he said. "The goal of those meetings should be to hear everyone’s perspective, reach agreement about the challenges faced, and agree on action terms."

For their part, suffering physicians should make the most of available programs and resources such as physician health programs, forensic and clinical psychiatrists, treatment centers, and practice consultants, Mr. Rivera said. Fellow physicians, supervisors, and administrators should be vigilant in referring doctors to treatment, when necessary.

No longer will the physician culture accept and ignore physicians with unhealthy behaviors, Mr. Rivera said.

There has been a "revolution in the last 20 years," he said. "Now we have programs, we have thoughtful analysis, and we have conferences like this where we’re trying to approach [the issues] in a more conscientiousness way."

CHICAGO – Despite more resources than in the past, physicians who are depressed, burned out, or stressed still find it difficult to reach out for help.

"Show me a physician, and I’ll show you a physician under stress," health law attorney Julian Rivera said at a physicians’ legal issues conference held by the American Bar Association. "Show me a physician, and I’ll show you a physician who is suffering. It is endemic."

One of the first steps to mitigating physicians’ feelings of depression and stress is recognizing the problem early and overcoming the stigma associated with getting help, Dr. Luis Sanchez said at the conference.

"In order to be a good physician, the physician must be a good patient," said Dr. Sanchez, director emeritus of Physician Health Services in Waltham, Mass., a referral program for physicians with substance abuse and behavioral health conditions. "That means we have to be able to take care of ourselves and have someone who is a doctor take care of us ... We need to have our illnesses diagnosed, we need to have them treated, and we need to have a support system."

Better self-awareness among physicians is essential, said Mr. Rivera, a partner in Husch Blackwell’s Healthcare, Life Sciences & Pharmaceuticals business unit in Austin, Tex.

"Suffering physicians generally have very low awareness of how they are functioning in their social, business, and clinical environments," he said in an interview. "Increasing self-awareness, developing coping mechanisms, and adoption of a strong social and professional support network are keys to reducing stress and avoiding burnout."

Frequently, a suffering, stressed physician becomes a disruptive physician, thus creating additional concerns for employers, peers, and patient care, Mr. Rivera added.

He recommends that physician leaders, administrators, and colleagues work together to identify when physicians are afflicted and schedule business meetings with the doctors to address the issue. Mr. Rivera emphasizes that the meetings should be "business like" and not adversarial or casual.

"Dealing with suffering physicians in a compassionate, business-like environment where physicians leaders and anyone else in the enterprise who can be helpful communicate openly with the physician in a plain, organized, and well-facilitated manner is invaluable to connecting with afflicted physicians," he said. "The goal of those meetings should be to hear everyone’s perspective, reach agreement about the challenges faced, and agree on action terms."

For their part, suffering physicians should make the most of available programs and resources such as physician health programs, forensic and clinical psychiatrists, treatment centers, and practice consultants, Mr. Rivera said. Fellow physicians, supervisors, and administrators should be vigilant in referring doctors to treatment, when necessary.

No longer will the physician culture accept and ignore physicians with unhealthy behaviors, Mr. Rivera said.

There has been a "revolution in the last 20 years," he said. "Now we have programs, we have thoughtful analysis, and we have conferences like this where we’re trying to approach [the issues] in a more conscientiousness way."

CHICAGO – Despite more resources than in the past, physicians who are depressed, burned out, or stressed still find it difficult to reach out for help.

"Show me a physician, and I’ll show you a physician under stress," health law attorney Julian Rivera said at a physicians’ legal issues conference held by the American Bar Association. "Show me a physician, and I’ll show you a physician who is suffering. It is endemic."

One of the first steps to mitigating physicians’ feelings of depression and stress is recognizing the problem early and overcoming the stigma associated with getting help, Dr. Luis Sanchez said at the conference.

"In order to be a good physician, the physician must be a good patient," said Dr. Sanchez, director emeritus of Physician Health Services in Waltham, Mass., a referral program for physicians with substance abuse and behavioral health conditions. "That means we have to be able to take care of ourselves and have someone who is a doctor take care of us ... We need to have our illnesses diagnosed, we need to have them treated, and we need to have a support system."

Better self-awareness among physicians is essential, said Mr. Rivera, a partner in Husch Blackwell’s Healthcare, Life Sciences & Pharmaceuticals business unit in Austin, Tex.

"Suffering physicians generally have very low awareness of how they are functioning in their social, business, and clinical environments," he said in an interview. "Increasing self-awareness, developing coping mechanisms, and adoption of a strong social and professional support network are keys to reducing stress and avoiding burnout."

Frequently, a suffering, stressed physician becomes a disruptive physician, thus creating additional concerns for employers, peers, and patient care, Mr. Rivera added.

He recommends that physician leaders, administrators, and colleagues work together to identify when physicians are afflicted and schedule business meetings with the doctors to address the issue. Mr. Rivera emphasizes that the meetings should be "business like" and not adversarial or casual.

"Dealing with suffering physicians in a compassionate, business-like environment where physicians leaders and anyone else in the enterprise who can be helpful communicate openly with the physician in a plain, organized, and well-facilitated manner is invaluable to connecting with afflicted physicians," he said. "The goal of those meetings should be to hear everyone’s perspective, reach agreement about the challenges faced, and agree on action terms."

For their part, suffering physicians should make the most of available programs and resources such as physician health programs, forensic and clinical psychiatrists, treatment centers, and practice consultants, Mr. Rivera said. Fellow physicians, supervisors, and administrators should be vigilant in referring doctors to treatment, when necessary.

No longer will the physician culture accept and ignore physicians with unhealthy behaviors, Mr. Rivera said.

There has been a "revolution in the last 20 years," he said. "Now we have programs, we have thoughtful analysis, and we have conferences like this where we’re trying to approach [the issues] in a more conscientiousness way."

CHICAGO – A new HIPAA rule means physicians face broader liability for protected health information breaches by their business associates.

The final omnibus rule on the Health Insurance Portability and Accountability Act broadens the definition of who and what is considered a business associate and places more responsibility on doctors for protected health information (PHI) acts or omissions by such associates.

About "28%-49% of breaches in the health care industry are associated with business associates and how they’re using data," health law attorney Clinton R. Mikel said at a physicians’ legal issues conference held by the American Bar Association.

"It’s important to know who your business associates are, how you’re [interacting] with them and what they’re doing with your data."

The final HIPAA omnibus rule went into effect in September 2013, but allowed covered entities and businesses to continue operating under some existing contracts for up to 1 year. Grandfathered business agreements must be revised to meet the new HIPAA requirements by Sept. 22, 2014.

Under the omnibus rule, a business associate is defined as any person or entity that creates, receives, maintains, or transmits PHI on behalf of a covered entity. The regulation means that business associates now include patient safety organizations, data transmission organizations, personal health record vendors, entities that transmit and need routine access to PHI, and data storage vendors – paper based and cloud based.

On physicians’ immediate checklist of things to be reviewed and updated is their existing business-associate agreement template, said Mr. Mikel, a partner at The Health Law Partners, PC, in Southfield, Mich. The revised agreement should ensure that associates comply with all measures of the Security Rule for electronic PHI and that business associates report any breach of unsecured PHI.

In addition, business associates should enter into contracts only with subcontractors that comply with such agreements and restrict subcontractors from disclosing PHI in an inappropriate manner.

Distribute the new template as soon as possible for all new contracts and evaluate outstanding business associate relationships, Mr. Mikel advised.

Proper data security from cloud-based vendors is especially important in light of the new HIPAA rule, said Hemant Pathak, assistant general counsel for Microsoft. Make certain they are told where and how their data is stored in "the cloud" and have clear data maps and geographic boundary information.

Vendors should be "transparent about what their operations are, have a breach procedure, and be willing to share" their policies, Mr. Pathak added. "It should not be something that is obtuse. It should be something that is clear and transparent."

Under the omnibus rule, both the doctor and vendor are on the hook if PHI is exposed.

"It’s important for both of us in protecting our reputations and understanding what the needs are from a compliance" standpoint, Mr. Pathak said.

CHICAGO – A new HIPAA rule means physicians face broader liability for protected health information breaches by their business associates.

The final omnibus rule on the Health Insurance Portability and Accountability Act broadens the definition of who and what is considered a business associate and places more responsibility on doctors for protected health information (PHI) acts or omissions by such associates.

About "28%-49% of breaches in the health care industry are associated with business associates and how they’re using data," health law attorney Clinton R. Mikel said at a physicians’ legal issues conference held by the American Bar Association.

"It’s important to know who your business associates are, how you’re [interacting] with them and what they’re doing with your data."

The final HIPAA omnibus rule went into effect in September 2013, but allowed covered entities and businesses to continue operating under some existing contracts for up to 1 year. Grandfathered business agreements must be revised to meet the new HIPAA requirements by Sept. 22, 2014.

Under the omnibus rule, a business associate is defined as any person or entity that creates, receives, maintains, or transmits PHI on behalf of a covered entity. The regulation means that business associates now include patient safety organizations, data transmission organizations, personal health record vendors, entities that transmit and need routine access to PHI, and data storage vendors – paper based and cloud based.

On physicians’ immediate checklist of things to be reviewed and updated is their existing business-associate agreement template, said Mr. Mikel, a partner at The Health Law Partners, PC, in Southfield, Mich. The revised agreement should ensure that associates comply with all measures of the Security Rule for electronic PHI and that business associates report any breach of unsecured PHI.

In addition, business associates should enter into contracts only with subcontractors that comply with such agreements and restrict subcontractors from disclosing PHI in an inappropriate manner.

Distribute the new template as soon as possible for all new contracts and evaluate outstanding business associate relationships, Mr. Mikel advised.

Proper data security from cloud-based vendors is especially important in light of the new HIPAA rule, said Hemant Pathak, assistant general counsel for Microsoft. Make certain they are told where and how their data is stored in "the cloud" and have clear data maps and geographic boundary information.

Vendors should be "transparent about what their operations are, have a breach procedure, and be willing to share" their policies, Mr. Pathak added. "It should not be something that is obtuse. It should be something that is clear and transparent."

Under the omnibus rule, both the doctor and vendor are on the hook if PHI is exposed.

"It’s important for both of us in protecting our reputations and understanding what the needs are from a compliance" standpoint, Mr. Pathak said.

CHICAGO – A new HIPAA rule means physicians face broader liability for protected health information breaches by their business associates.

The final omnibus rule on the Health Insurance Portability and Accountability Act broadens the definition of who and what is considered a business associate and places more responsibility on doctors for protected health information (PHI) acts or omissions by such associates.

About "28%-49% of breaches in the health care industry are associated with business associates and how they’re using data," health law attorney Clinton R. Mikel said at a physicians’ legal issues conference held by the American Bar Association.

"It’s important to know who your business associates are, how you’re [interacting] with them and what they’re doing with your data."

The final HIPAA omnibus rule went into effect in September 2013, but allowed covered entities and businesses to continue operating under some existing contracts for up to 1 year. Grandfathered business agreements must be revised to meet the new HIPAA requirements by Sept. 22, 2014.

Under the omnibus rule, a business associate is defined as any person or entity that creates, receives, maintains, or transmits PHI on behalf of a covered entity. The regulation means that business associates now include patient safety organizations, data transmission organizations, personal health record vendors, entities that transmit and need routine access to PHI, and data storage vendors – paper based and cloud based.

On physicians’ immediate checklist of things to be reviewed and updated is their existing business-associate agreement template, said Mr. Mikel, a partner at The Health Law Partners, PC, in Southfield, Mich. The revised agreement should ensure that associates comply with all measures of the Security Rule for electronic PHI and that business associates report any breach of unsecured PHI.

In addition, business associates should enter into contracts only with subcontractors that comply with such agreements and restrict subcontractors from disclosing PHI in an inappropriate manner.

Distribute the new template as soon as possible for all new contracts and evaluate outstanding business associate relationships, Mr. Mikel advised.

Proper data security from cloud-based vendors is especially important in light of the new HIPAA rule, said Hemant Pathak, assistant general counsel for Microsoft. Make certain they are told where and how their data is stored in "the cloud" and have clear data maps and geographic boundary information.

Vendors should be "transparent about what their operations are, have a breach procedure, and be willing to share" their policies, Mr. Pathak added. "It should not be something that is obtuse. It should be something that is clear and transparent."

Under the omnibus rule, both the doctor and vendor are on the hook if PHI is exposed.

"It’s important for both of us in protecting our reputations and understanding what the needs are from a compliance" standpoint, Mr. Pathak said.