Can An Independent Biller Subcontract Services Ahcccs

Many physicians believe the difference between an "employee" and an "independent contractor" is pure semantics; a stardom with little difference. Whether members of your workforce are contractors or employees impacts many facets of your practice, including: (i) type of insurance (workers' bounty insurance generally is mandated for employees just); (ii) payroll (employees are subject to payroll deductions); and, (3) compliance with healthcare regulations (complying with Stark and the Anti-Kickback Statute, for example, varies depending upon whether there is an employment human relationship between the parties).

Testing the Human relationship

Whether a medico is an independent contractor or an employee is a question of fact, not a decision to exist made by the practice group. According to the IRS, an individual is an contained contractor if the person (or practise) for whom the services are performed has the right to control or directly just the issue of the piece of work and not the ways and methods of accomplishing the result.

In the context of a medical practice, the following factors should be considered: (i) whose patients are being treated, (2) who owns the equipment being used, (iii) whether the practice exercises any control or discretion over the md or his piece of work methods, (iv) whether the physician is gratuitous to provide similar services to others, (v) who determines scheduling, (half dozen) how the physician is compensated, and (vii) what, if whatsoever, benefits the physician receives from the exercise.

If the hiring practice appears to be dictating the "way and means" by which the recruited physician performs his duties at the practice (eastward.k., hours, holidays, work days, methods of care, etc.), the IRS will consider the new medico an employee. If the contract states that the patients (and patients' charts) remain the belongings of the do, employment status is indicated.

A md working in a practice on a part-time employment footing may, in fact, be an independent contractor if the following factors are present: (i) the md brings his equipment, (ii) the practice does non exercise whatever control or discretion over the part-time physician or his work methods, (3) the role-fourth dimension doc is free to provide like services elsewhere, (four) the part-time physician is paid just for services rendered, (5) the role-time physician does not receive any employee benefits from the practice, and (six) the part-time physician controls his own schedule.

Final, if you are considering requesting an acquaintance or junior physician to sign a restrictive covenant (i.e., a non-compete clause), and so the independent contractor classification is undermined. Judges are accustomed to seeing non-compete clauses in doctor employment agreements and not independent contractor agreements. It makes sense that an employer would require such a not-compete covenant past an employee doctor before introducing the physician to the practice'southward referrers and patients, and in that location is plenty of precedent for enforcing such covenants confronting physician employees. Nevertheless, judges will certainly question a non-compete clause in an contained contractor understanding. A judge volition question the clause because independent contractors typically return services to many clients in a geographic area and therefore it makes little sense that a bona fide contained contractor would knowingly agree to a clause that potentially restricts the contractor's future provision of services in that area. Thus, utilizing independent contractor agreements may raise questions in the judge's mind as to whether the non-compete covenant is a reasonable and enforceable restriction.

Stark Law Concerns

The designation of an employee or contained contractor is critical in determining if the medical exercise is in compliance with many areas of billing for services. The Stark Law prohibits physicians from making referrals for designated health services (DHS) payable by Medicare to an entity with which the physician has a financial relationship unless an exception applies. Under the in-part coincident services exception, a do may make a referral to a member of the group if the medical practice meets the definition of a "group practice."

In order for a medical practice to institute a grouping exercise, the Stark Law requires that two or more members of the practice perform "substantially all" of the patient care services rendered by a group practice (that is, at least 70-five percent (75%) of the full patient care services of the practice) be furnished through the group and billed under a billing number assigned to the group, and that the amounts received are treated as receipts of the group. Under the Stark Constabulary, members of a group exercise include doctor employees, locum tenens physicians, and on-phone call physicians (while the physician is providing on-call services for members of the group exercise). Importantly, contained contractors are not included under the definition of a group practice md.

If your exercise engages physicians on a full-time or part-time basis, it is important to examine whether those physicians are employees or independent contractors. As a direction matter, information technology is proficient practice to have a written agreement for all engaged physicians (independent contractor agreements or employment agreements) to protect the practise and brand articulate the responsibilities and liabilities betwixt the practice and physicians. It is too disquisitional equally a compliance matter to ensure that the do's physicians are properly categorized every bit employees or independent contractors, specially if your practice intends to authorize every bit a "grouping exercise."

If your practice engages independent contractor physicians and bills for cocky-referred DHS, it is critical that you review whether you constitute a group practice based on the 75% test described above. In conjunction with that assay, yous should review the criteria for the designations of employees and independent contractors to make sure that your engaged physicians are accordingly categorized based on how they perform services for the practise.

A W-ii physician employee of a group practice readily qualifies as a "medico in the group do" for purposes of meeting the in-role ancillary services exception to Stark. Even so, it is at present harder for an independent contractor dr. to qualify as a "physician in the grouping practise" for purposes of meeting the in-office coincident services exception to Stark. An independent contractor medico will qualify as a "dr. in the grouping practice" for purposes of coming together the in-office ancillary services exception to Stark only during the time the independent contractor doctor is furnishing patient care services to the grouping practice's patients in the group do's facilities.

Thus, for instance, if the independent contractor physician is going to lodge, furnish, or supervise designated health services to be billed by the group (e.k., drugs, A and B scans), then the contained contractor physician can merely provide those designated health services in the practice'due south facilities and not at other locations such as at a infirmary, nursing home, or other out-of-role location.

Likewise, under Stark, the group's contract must be directly with the individual independent contractor physician and not with a separate legal entity such equally some other physician's practise entity or a staffing visitor.

Medicare Billing Bug

Basic Medicare reassignment rules specify that in a grouping practise billing Medicare for its physicians' services, the physician must reassign his right to Medicare payments to the group. Both a Due west-2 physician employee and an independent contractor physician can properly assign his correct to receive payment from Medicare to the group practice under the Medicare reassignment rules.

Medicare reassignment is generally done via a elementary provision in the physician's (employee's or independent contractor'southward) contract stating that all payments for the physician's services are beingness assigned to the group and are the property of the group. The physician (employee or independent contractor) is enrolled every bit a fellow member of the group via the appropriate CMS form.

A second reason to review the condition of engaged physicians is that, under the new Medicare Claims Processing Transmission, a medical practise may simply bill for employees of the medical practice unless specific steps are taken to notify Medicare and other third-party payors of the contained contractor affiliation. Medical practices may non bill Medicare or other 3rd-party payors and collect monies for independent contractors working on behalf of the medical do unless:

(i) the medical exercise has a written contractual relationship with the contained contractor; and

(two) the medical do receiving payment and the physician that furnished the service are both subject to the following program integrity safeguard requirements: (a) that the entity receiving payment and the person that furnished the service are jointly and severally responsible for whatsoever Medicare overpayment to that entity, and (b) that the person furnishing the service has unrestricted access to claims submitted by an entity for services provided past that person.

It is critical to recognize the distinction betwixt a reassignment from an employee and a reassignment from a contractor. For independent contractor reassignment, the entity accepting the reassignment must ensure that there are adequate written agreements containing the required linguistic communication in improver to the CMS 855R grade. The physician or practitioner entering into a reassignment under a contractual organisation besides must understand that there is the potential for FCA liability for claims submitted under an independent contractor reassignment.

Tax Considerations

Last, taxation deductions and withholding issues are a reason to be sure a physician is indeed an contained contractor. If the practice erroneously treats a physician equally an independent contractor (and therefore does not withhold any employment taxes), and the contractor fails to pay his federal income or social security (FICA) taxes (and even if he does pay them), the IRS may seek to concur the practice responsible for the taxes that information technology should have withheld—plus involvement and penalties.