Disclaimer: Answers to questions frequently asked of the California Academy of Family Physicians are provided for informational purposes only and are not intended to substitute for qualified legal advice. For more information about your specific situation, contact a qualified health care attorney.

One of the primary reason physicians need to keep medical records on hand is to protect themselves in the event of a malpractice lawsuit. While statutes of limitations exist for malpractice and wrongful death claims, there are numerous ways of getting around such time limitations. Thus, the ideal is to keep medical records in perpetuity.

If maintaining records indefinitely is not practical, your practice should establish a consistent policy on records maintenance that outlines how long you maintain records. Some of the rules of thumb that you might want to follow for maintaining records include:

• Routine records: 8 to 10 years after the date of last service
• Records of deceased patients: 8 years beyond date of death
• Records of minor patients: until patient reaches at least 19 years of age

Records should be maintained for additional years when a patient:
• has experienced significant surgical complications;
• was treated for cancer or heart disease;
• had traumatic injuries that did or could result in a disability;
• was followed for a pregnancy.

In general, you know your patients. The safest way to proceed is to maintain the charts of patients with complicated medical histories indefinitely. If you have any questions about medical records maintenance, contact your liability carrier.

Special thanks to Judy Huerta, Loss Prevention Manager at MIEC Group, www.miec.com, for her assistance answering this question.

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I left my old practice and am having a difficult time getting patient records to my new practice. What should I do?

Patient record issues in fee for service settings, where patient lives aren’t assigned, are sometimes just as tricky as transferring managed care panels. If you are setting up a new practice and patients need their medical records, you may request that they be transferred from the old practice to the new. The practice is under no obligation to you, the physician, to provide patient records, however.

When a practice is not being forthcoming with medical record transfers, it is best to have patients request their own records. According to §123100 of the Health and Safety Code, physicians are obligated to provide patients with access to their medical records. Patients must be granted review of their medical records within five days of receipt of written notice, and medical record copies must be furnished within 15 days. (Practices may charge $.25/page for furnishing copies.) Failure to provide patients with their medical records amounts to unprofessional conduct. For more information on patients obtaining their medical records, including forms they can download to request records, visit www.cmanet.org/publicdoc.cfm/21/4. To view a succinct summary of the issue, visit www.medbd.ca.gov/Patientaccess.htm.

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Can physicians be held liable for helping strangers in emergency situations?

According to California Business and Professions Codes 2395 and 2396, physicians responding to emergencies on a volunteer basis to care for people who are not their patients are generally protected from liability. The same holds true for physicians volunteering at school athletic events. This isn’t a substitute for malpractice insurance, however. You could be sued and need to defend yourself, though the law is likely to be on your side. For more information on this issue you should contact your malpractice carrier or go to www.cmanet.org and download CMA On-Call document number 0820, Good Samaritan and Other Immunities.

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Are physicians obligated to alert the DMV when they are concerned about their patients’ driving abilities?

According to California law, physicians need to report patients with conditions associated with "lapses of consciousness" to the DMV. The DMV is then left to investigate the patient's capabilities and make a determination about the patient's license status.

California's Code of Regulations (Chapter 17, Section 2806) provides the following definition:

Note that all three (#1 - 3) must be present to force a report. "Sensory motor functions" refers to a patient's ability to physically respond to external sensations (sight, sound, etc.), like seeing a yellow light and hitting the brake pedal.

For a more detailed discussion about the DMV reporting requirement, including issues of re-reporting, etc., refer to CMA On-Call document #1525, available (free if you're a CMA member) at www.cmanet.org. Links to the DMV forms to report a lapse of consciousness can be found in the Forms Center.

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I need to buy malpractice insurance. What should I look for in a company and coverage?

Malpractice insurance is supposed to protect you from the legal and financial risks inherent in the practice of medicine. The two most important qualities in an insurance company are that it be financially sound and that the company be responsive to the needs and concerns of insureds. A.M. Best or Weiss Ratings can provide you with information about malpractice company ratings. You want to work with a company rated “A” or better.

Here are some of the questions to ask when evaluating malpractice carriers and their policies:

• What are the available policy limits, and how much does coverage for someone in my specialty cost?
• Are there premium discounts for good claims experience and/or attendance at risk management seminars?
• What types of coverage are available, such as peer review or Medical Board defense?
• How is defense counsel assigned to a malpractice case. Do I have any say in the process?
• What role would I play in determining whether to accept any settlement offer made in my case?
• What are the company’s routine policy exclusions?
• How many insureds does the company have in California and nationwide, and what is the breakdown by specialty? How long has the company been in existence?

For an exhaustive list of questions to evaluate malpractice policies, click here. You may also wish to consult the AMA’s Medical Professional Liability Insurance guide, a thorough rundown of the malpractice issues. Call the AMA at 800-621-8335 and request item number OP631297.

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Where should I go to buy malpractice insurance?

The California Academy of Family Physicians Recommends California-based, physician-owned malpractice companies to its members. These include:

Doctor’s Insurance Company, 800-421-2368, www.thedoctors.com
Medical Insurance Exchange of California (MIEC), 800-227-4527, www.miec.com
Norcal Mutual Insurance Company, 800-652-1051, www.norcalmutual.com
Southern California Physicians Insurance Exchange (SCPIE), 310-551-5910, www.scpie.com

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How important is tail coverage? What should I know about it?

It is very important that you maintain continuous malpractice coverage throughout your career in family medicine. California has a claims-made insurance market. You can be sued but not be covered for your defense if you receive notice of a lawsuit for something that happened while you were insured, but have already terminated your policy with that insurance company. Tail insurance is supplemental coverage to a claims-made policy for incidents that happened under an old malpractice policy.

When switching insurance companies, be sure to obtain tail coverage from your old company or nose coverage (for prior acts) from the new company. Tail coverage can either last for a certain amount of time or be unlimited. You may need to have been with the insurance company for a certain amount of time before you can purchase it. Tail insurance usually costs between 175 and 200 percent of your last annual premium, and is typically only available for a short period of time after a policy expires, generally 60 to 90 days.

Many companies have provisions for “forgiving the tail” in situations of death, permanent disability, or retirement. Be sure to investigate these provisions carefully for vesting requirements, age limits, etc.

Think that the company that carries your malpractice insurance and tail coverage isn’t important? Think again. CAFP recently fielded a call from a retired physician whose malpractice tail carrier had gone out of business some 10 years before. Because he was not actively practicing, he couldn’t find another source of insurance. Lo and behold, he received notice of intent to sue some 20 years after the act had been committed, potentially compromising the security of his retirement. Don’t let this happen to you. Chose wisely and make sure that the malpractice company is well-respected and fiscally sound.

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My malpractice rates suddenly went up. What should I do?

Since price shouldn’t be your top consideration in choosing a malpractice insurer, you should carefully weigh the benefits and drawbacks of switching malpractice carriers. Malpractice rates are determined based on an insurer’s claims and loss experience according to specialty. Thus the simplest explanation for a rate increase is that the company realized larger than expected losses in the previous year, and needs to rebuild its reserves. Having adequate financial reserves is a critical component of the insurance business. Over the long term, you want to make sure that your malpractice insurer is in sound financial health. A.M. Best or Weiss Ratings can provide you with information about malpractice company ratings.

Another reason for an increase may be due to the length of time the policy has been in force. New physicians only have one or two years worth of patient care for which they need malpractice insurance. This is reflected by pricing--claims made policies are priced low the first year and increase in a series of ‘steps’ over the first four to six years. After this point, annual premiums should be relatively stable, as the physician is considered to be at a mature level of exposure.

The vast majority of policies written in California are written on a “claims-made” basis. This means that you are only covered for malpractice incidents that take place during the period that your policy is in force. When you terminate a claims-made policy, the coverage for all care given during the time of that policy ends, thus you will need to purchase “prior acts” coverage either from the former insurer (tail coverage) or your new insurer (nose coverage). This is an often overlooked cost of switching malpractice carriers. Tail coverage rates are a factor of the last year’s annual premium, generally around 175 to 200%.

Two other arguments against switching companies (often, policies allow for free or low-cost tail coverage upon retirement, but this requires a certain number of years vesting). And, your loss ratio (the number of years in practice divided by the number of claims against you) will be smaller the longer you are insured with a company.

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PRACTICE MANAGEMENT/CARE

Where can I obtain a copy of Cal-OSHA regulations to figure out if my practice is in compliance?

There are any number of workplace safety regulations that apply to medical practices in California that are administered by the California Division of Occupational Safety and Health (Cal-OSHA). These include regulations pertaining to bloodborne pathogens, hazardous materials, medical waste, and worker injury and illness prevention. Every practice must have established policies and procedures that address these regulations. The regulations themselves are likely written in legalese, and not a practical, “can do” source of information. The best resource on this subject is the California Medical Association’s “CMA On-Call” document series, which are available free of charge to CMA members and for sale to non-members. To view a list of available articles, go the CMA’s web site, proceed to “CMA On Call,” and click on the “office safety” subject heading.

Another useful resource is the Cal-OSHA consultation service, which provides education and information about how to comply with workplace laws. This service is not in any way connected to the inspection unit, and it is a highly recommended source of one-on-one assistance. Contact the Cal-OSHA consultation service at 800-963-9424 for more information.

A health plan recently sent a contract to most of the PCPs in the area to contract with them directly on a fee-for-service basis. The contract also covers the IPA model, but comes into force when the plan deems that there is a problem with their IPA contract. Should the PCPs sign it?

This kind of action is becoming more commonplace. Theoretically, IPAs are the closest thing to collective bargaining that is available to independent physicians. However, this strategy may not work for several possible reasons:

1. The IPA bargains effective rates, but does not share the surplus with the physicians. In the scenario, the plan offers a favorable rate to the IPA; however the intended amount for the individual physicians never reaches their hands.

2. The IPA negotiates a favorable rate, but mismanages, or mis-allocates the dollars in the split between primary and specialty budgets. The net effect is the same: not enough of the money gets into the intended hands.

3. The health plan acts in bad faith, and purposely puts a "divide and conquer" plan in motion with the intention of contracting directly with the physicians. In this scenario, the health plan purposely disadvantages the IPA in the negotiations/ rate proposals, in order to "bust" the union. When the IPAs refuse to deal with such health plans, the plan's recourse is to go directly to individual physicians to try and cut individual deals. The initial contracts are often "teasers" with premium short-term rates. Later, when the physicians have lost all collective bargaining power, the plans convert to the rates they intended to pay in the first place.

When considering whether to sign an individual contract, you need to evaluate it based on the potential of the contract to contribute to the short- and long-term profitability for your practice, including potential volume offered in the contract, the current number of your patients that are serviced under the plan in question, and, if favorable, the potential for the proposed rates to be sustained. At the same time you need to take into account the overall picture of your practice’s finances and your strength in future negotiations, as an individual, with a large, powerful health plan. You need to weigh this against the integrity, strength and skill of your local IPA to do the right thing for its members.

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My medical group’s negotiations with a large health plan have broken down and I don’t have a current contract with them. Can I keep seeing my patients?

New provisions recently went into effect strengthening continuity of care for patients. A health plan, at the patient’s request, must provide continued coverage with the terminated provider beyond the termination date for certain acute and chronic conditions (up to 12 months), for the duration of a pregnancy, for the duration of a terminal illness, for the care of children ages 0 to 3 years (up to 12 months), and for surgeries previously authorized and scheduled to take place within 180 days of contract termination. Plans may require the physician to agree to the same terms and conditions as a contracted provider, and patients must pay the same deductibles and co-pays. Health plans were expected to file newly updated continuity of care policies, including a template of the notice they are using to inform patients of their right to completion of covered services, with the Department of Managed Health Care by March 31, 2004. For more information, go to www.cmanet.org and check out CMA On-Call document number 1055.

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I am thinking about hiring a midlevel provider for my practice. Should I choose a physician assistant (PA) or a nurse practitioner (NP)?

Hiring a midlevel provider can be an important way of expanding the care you are able to provide in your practice. Nurse practitioners are trained in nursing schools, while physician assistant training programs are commonly aligned with medical schools and may be more interdisciplinary in nature. PAs are dependent practitioners working in close collaboration with MDs under delegatory services agreements. NPs practice more independently, but must follow standardized procedures that are developed in collaboration with physicians. PAs tend to have more varied health care backgrounds and, as a group, are more bilingual/bicultural. Both groups have their own professional organizations.

These differences aside, studies that have compared NPs and PAs working in the same settings have not shown significant differences between the two. Therefore, your best course of action might be to advertise for either an NP or a PA, and hire the candidate best suited to fit in with the practice and meet your patients’ needs. For more information about NP scope of practice laws, visit www.rn.ca.gov; for PAs, visit www.physicianassistant.ca.gov. You should also contact your malpractice carrier before adding a midlevel to your practice.

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I am thinking about hiring a midlevel provider (either a NP or a PA) for my practice. How much supervision will be required?

Since NPs and PAs are licensed differently, there are different supervision requirements for both. NPs practice under standardized procedures with protocols; PAs can practice with one of two mechanisms for supervision: the MD countersigns the chart notes (or some percentage thereof) or the standardized procedures/protocols required of NPs. Both professionals can practice with remote supervision by telephone, but of course, that will depend on the experience of the PA or NP. Many sites use the same method of supervision for both NPs and PAs who practice there. You may wish to reference certain texts as the basis for your clinical protocols. Two examples include:

1. Nurse Practitioner/Physician Collaborative Practice: Clinical Guidelines for Ambulatory Care, UCSF Nursing Press, GM Collins-McBride and JM Saxe, Editors, ISBN 0943671161.
2. The Roles of Physician Assistants and Nurse Practitioners in Primary Care by Kay Clawson, ISBN 1-879694-07-7.
Your malpractice carrier might also be able to suggest sources of sample protocols.

It is essential that the supervising physician be comfortable with the amount of oversight he or she has with midlevel providers, as the physician employee typically covers the midlevel under his or her malpractice policy. (Occasionally, midlevel providers have their own malpractice insurance.) For more information about NP scope of practice laws, visit www.rn.ca.gov; for PAs, visit www.physicianassistant.ca.gov. Be sure to contact your malpractice carrier before adding a midlevel to your practice.

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PRACTICE FINANCES/REIMBURSEMENT

I am setting up a new practice and need to establish a fee schedule. Where can I turn for help?

There are numerous ways to determine your fee schedule, such as percentage of Medicare and/or using the resource-based relative value scale (RBRVS). CAFP is prevented from gathering or disseminating specific fee schedules used by family physicians in California due to federal antitrust laws. Fee schedule information is available from a number of businesses, including:

Medical Fee Survey, 800-451-8107
Medicode, 800-999-4600 or www.medicode.com
Practice Management Information Corp., 800-633-7467 or pmicbooks.com

PhysiciansPractice, www.physicianspractice.com, has a fee schedule worksheet. Look in the “tools” section. Some information may also be available in Facts About Family Practice, Section VI, Economic Status of Family Physicians, available at www.aafp.org/facts.

An experienced practice management consultant can also guide you in the development of your fee schedule. Contact shogeland@familydocs.org for a referral.

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What are the laws pertaining to prompt payment, and what recourse do I have if plans fail to comply with these laws?

Non-HMO health plans such as PPOs are required to pay non-contested insurance claims within 30 working days of receiving claims. Knox Keene health plans including HMOs and IPAs are required to pay claims within 45 working days. (This assumes, however, that you have not agreed to a payment time frame greater than these limits in any contracts you may have signed with HMOs and other insurers.) Knox Keene health plans and IPAs that pay claims late are required by law to pay 15% interest per year on all late payments beginning on the first day after the 30-day (or 45-day) window. In addition, Knox-Keene plans that fail to pay interest automatically are subject to a $10 per claim surcharge (Health and Safety Code section 1371). Health insurers are required to pay interest at 10% annually (Insurance Code section 10123.13.)

Non-HMO health plans must notify providers within thirty working days if a claim is to be contested or denied. HMOs must do the same within 45 days. If you receive neither notice of a claim being contested/denied nor payment, you will need to write a demand letter requesting payment with interest, as per California law. To request a sample demand letter, send your fax number to shogeland@familydocs.org.

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How should my practice bill Medicare for services provided by our midlevel providers?

Rules pertaining to direct billing and “incident-to” services by nurse practitioners and physician assistants were updated in the Balanced Budget Act of 1997. AAFP’s Coding & Reimbursement Manager, Kent Moore, wrote helpful summaries about getting reimbursed for NP services and PA services

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Can discounts to patients cause problems?

Generally, you can offer self-pay patients a discount but there are some guidelines you should follow. First, and most importantly, you should only have one fee schedule for all patients. The use of multiple fee schedules is strongly discouraged. You should not discount lower than the Medicare allowable for any service. Discounts given for self-paying patients paying at time of service are generally safe, since the discount is usually equivalent to related collection costs. Across-the-board discount policies of any type should be discouraged, but physicians do have the right to waive payment for cash-paying patients due to financial hardship.

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I recently set up a new practice on a cash-only basis. I’ve been providing my patients with ICD-9 and CPT codes so that they can be reimbursed by their insurance company. I’ve been asked to provide my tax i.d. (TID) number to process these claims, but don’t want to. What should I do?

Your options are to 1) refuse to provide the insurance company with your TID# or 2) provide it and hope/assume that the insurance company will keep track of the fact that it reimbursed the patient and thus not issue a 1099 for you.

If you choose option 1, insurance companies may refuse to pay the claim, leaving your patients out the money they paid for services for which they thought they were covered. Insurance companies may reserve the right to reimburse only providers--have your patients check their policies and see if this is a possibility. The upside of not providing your TID number to the insurance companies is that this is the *purest* form of a cash-only practice, and makes the accounting relatively simple. You should still be able to grow a cash-only practice successfully despite the possibility of denied claims.

If you choose option 2 (to give your TID# to insurance companies), you will have to keep close accounting of the money you receive from patients for care, in the event that for some reason the insurance company reports their reimbursement to patients as income to you. If the insurance company issues the check to you instead of the patient (accidentally), you will also have to deal with that. (Have the check reissued, credit the patient, etc.) I'm guessing that this is what you wanted to avoid when you set up your new practice.

You may want to consider sticking by your guns and issuing a superbill with ICD-9 and CPT codes, leave it at that, and hope for your patients' understanding if the insurance company refuses to pay the claim without your tax i.d. number.

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FAMILY MEDICINE PRIVILEGES

I am evaluating a practice opportunity in a community I don’t know very well. How do I make sure that I will be able to have a full-scope family medicine in this location?

Having a realistic sense of the typical scope of family medicine is an essential part of choosing the right community for your practice. Family physicians who want to maintain a full-scope family practice should conduct a careful evaluation of scope of practice issues in any community they’re considering. The ability to deliver babies, admit patients to the hospital, and perform GI procedures like colonoscopy are just a few of the “hot button” issues in family physician privileging across California.

I would like to apply for obstetrics privileges at one of the hospitals close to my practice, but the privileging requirements are onerous and I don’t think I’ll be approved. What should I do?

CAFP’s policy states that hospital privileges should be determined based on your training, experience, and demonstrated competence. In theory, your residency training and your track record of procedures and patient care should earn you the right to be proctored, to determine your current competence. In practice, however, it can be quite difficult to get the privileges to which you are entitled. Take a two-pronged approach, education and politics, if you are anticipating a struggle for privileges.

The California and American Academies of Family Physicians have a number of resources to assist you with privileges. These include:
• AAFP Protocol for Handling Privileging Problems, a step by step guide to the process.
• Family Practice in Health Care Organizations, a thorough examination of privileging.
• Family Physicians: The Logical Resource for Our Changing Health Care Environment, a meta-analysis of literature examining family physicians’ quality of care.
• An AAFP-commissioned legal opinion about specialty-related privileging disputes.

CAFP will also write a letter of support outlining our policy. It can be addressed either to you or to the medical staff leadership, as you choose. To request a letter, contact shogeland@familydocs.org.

It’s been said that all politics are local, and this holds especially true for privileging disputes. Hospital medical staffs are democratic, independent decision making groups and, the movement towards evidence-based guidelines notwithstanding, defining quality of care still happens one hospital community at a time.

An often overlooked component of privileging is the need for political engagement. Making sure that others are on your side is essential to your success. The first step is getting to know other physicians, both family physicians and specialists, on the medical staff. Building a solid relationship and understanding other peoples’ issues and concerns is the key to being an effective politician. Your communications should be clear, respectful, and use a blend of inquiry and advocacy at all times. Use the information that you’ve gathered and stay calm and upbeat when pressing your case.

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Does CAFP have numerical criteria for privileges or sample guidelines?

No. The CAFP policy is that privileges should be determined based on training, experience, and demonstrated competence. Numbers of procedures are neither grounded in science nor adequate proxies for quality of care. If a hospital is putting forth numbers-based privileging guidelines, ask to see the literature that supports those numbers as evidence of quality of care. The Illinois Academy of Family Physicians has made available a sample privileging list. To request a copy, send your mailing address to shogeland@familydocs.org.

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