“I didn’t expect her to be sobbing,” explained my client, telling me they had just called off the sale of a practice to a long-time employee. The would-be buyer of the practice was not the only one disappointed.

My client had hoped this sale would create a lasting legacy as the founders retired. Unfortunately, it became obvious that the buyer had not made the necessary arrangements to carry on the practice without interruption, and any closing would be significantly delayed. With other offers in hand, my client made the difficult decision that the employee was not the right buyer after all. All involved will feel the financial and emotional toll of this false start for a while.

Had the buyer better understood the requirements for the practice transition, the story could have had a different ending.

By the time I hung up, another call was coming in. “I know, I have the same concern,” I told the accountant on the other end. We had both been helping a physician with the formation of a new clinic. Now, with a build-out well underway and very expensive equipment already on order, we had just seen a proforma based on inpatient coding and reimbursement for ancillary services that are reimbursed differently in an outpatient clinic that is not hospital based.

At first our client was alarmed, but the concern was already accompanied by gratitude. At least we had discovered the problem before the doors were open and the client tried to submit claims!

'Counselor at Law'

Often, very bright clinicians lack experience with the business and financial intricacies of the health care industry. Independent providers are particularly susceptible to missteps, lacking in-house support. In these circumstances, it’s time to dust off the concept of a “counselor at law.”

The title, however antiquated, is a good summary of the role we can play as health care attorneys to offer broader insight and issue spotting for our clients, early and often. "Counselor" comes from the Latin word “consilium,” meaning “advice” or “plan.” The Cambridge Dictionary defines it as “someone who is trained to listen to people and give them advice about their problems.”

A traditional reactive service in which we prepare requested documents and then leave clients to their own devices is not nearly as valuable as a proactive role in which we listen, offer advice and help a client position themselves for greater success or to avoid common pitfalls.

Happily, this role of “counselor” aligns well with our need to adapt to changes in the legal industry, such as the shift to nonattorney legal service providers and the expansion of artificial intelligence offerings, which are bound to further disrupt historical roles of attorneys in document review, drafting and legal research.

What It Actually Means

What might it look like to play a more intentional counseling role with clients?

Sometimes, the role of counselor involves directing clients to other qualified professionals, such as billing and coding experts, accountants or bankers.

However, attorneys may be uniquely situated to help clients develop a stronger understanding of the industry landscape. Many of the functions we may think of as outside the core legal function, including many aspects of the reimbursement system, have their roots in legal requirements.

Experienced health care attorneys are often familiar with these concepts, but may need to revisit client onboarding workflows to more proactively include these topics in early discussions.

Health care attorneys early in their careers or new to the field of health law should consider developing a baseline understanding of these matters to assist with issue spotting and converse more fluently with clients and their other advisors about the industry requirements that surround and impact core legal work.

Some Examples

Examples of topics that are ripe for such proactive, practical client counseling include:

Learn how a client plans to get paid and help identify related requirements. Clients paid through third-party payer and government payer relationships must obtain certain identifiers used in the claim submission and payment process, such as a Tax Identification Number (TIN) and a National Provider Identifier (NPI) number.^[1]

• Clients are often confused about the ability of individual providers to keep their “Type 1” NPI regardless of where they practice, or whether they should obtain a “Type 2” group-level NPI in connection with certain transactions, such as a new practice formation.
• Help clients understand the significance of any Medicare opt-out and its duration.^[2]
• Clients often underestimate the time required to obtain third-party payer contracts, which can take 12-18 months for a new independent practice. Because most payer contracts are tied to TINs, attorneys can help by filing Articles of Incorporation and the SS4 in advance of other corporate document preparation to secure a TIN as early in the process as possible, while providers work through governance considerations in the Bylaws and other behind-the-scenes matters.

Due to increased emphasis on value-based contracting and alternative delivery and billing models, clients may need help understanding the distinction between bearing business risk and bearing insurance risk, and to appreciate that that not all jurisdictions view this the same way.^[3]

Clients’ success depends on realistic expectations for reimbursement. Make sure clients have appropriate support from a medical coding standpoint if they will be accepting traditional claims-based reimbursement. Attorneys can bring clarity to industry changes they may hear about in the news, such as the renewed proposal to eliminate the inpatient-only list for Medicare reimbursement^[4] and help clients avoid missteps, such as counseling clients about the impact of the Medicare mandatory claims submission rule on cash-pay or hybrid practices.^[5]

Identify requirements that can impact project timelines. Certain types of entities must abide by change of ownership/control requirements in connection with state licensure or certification. For example, notification and application requirements apply for outpatient mental health clinics, community substance use services, and skilled nursing facilities.^[6]

Early in a potential transaction involving assignment or termination of vendor agreements, clients can gather such contracts for review of the timing of notice provisions. The exercise can help with identification of related operational practicalities as well.

Discuss client’s business operations, especially requirements that may not be intuitive. Practitioners may be so accustomed to including certain ancillary service offerings in their facilities as to forget key components of the Stark exception for in-office ancillary services.

For example, a growing client considering how to restructure space or open new locations may require reminders about the need for a certain level of core clinical services at the same postal address as a new location for advanced diagnostics, physical therapy, or other designated health services.^[7]

Asset purchase agreements and other deal structures in which a client may take custody of health care records generated by a different entity warrant guidance about the nature of the custodial role and the proper mechanisms for transfer of records to the record custodian’s primary record set.

Beware the “if you build it, they will come” mentality. Help clients articulate where their patients will come from and pressure test assumptions about referral patterns, total addressable market, etc.

Verify that clients are including required patient notifications into their business forms and workflows, such as patient notifications of alternate suppliers of imaging services^[8] under Stark or informing a patient of a physician’s ownership in an ambulatory surgery center under an anti-kickback safe harbor.^[9]

Conclusion

As counselors at law, our advice and planning can serve as real preventative medicine for independent health care providers and help us establish long-term relationships as trusted advisors that will not be replaced by artificial intelligence or self-service portals. It may be time to reclaim the title, or at least the role.

This article was originally published on the State Bar of Wisconsin’s Health Law Blog. Visit the State Bar sections or the Health Law Section webpages to learn more about the benefits of section membership.

Endnotes

[1] The Administrative Simplification Standards under the Health Insurance Portability and Accountability Act (HIPAA) mandated adoption of NPI numbers in connection with claims submissions. See The National Provider Identifier (NPI) Fact Sheet from CMS. ↩

[2] A good summary in lay terms is available on the data.cms.gov website's Opt Out Affidavits page. Under “Frequently Asked Questions” it references the two-year duration of most opt-out periods. ↩

[3] Past efforts and proposed legislation to clarify the status of direct primary care in Wisconsin, for example, have been unsuccessful, and the Office of the Commissioner of Insurance evaluates such practices on a case-by-case basis. Clients involved in national organizations supportive of this business model may be confused by materials aimed at compliance in other states. The Wisconsin Legislative Reference Bureau in January 2020 prepared a summary of the approach taken in other states. ↩

[4] The CMS Summary is available on the cms.gov website. ↩

[5] The Social Security Act section 1848(g)(4) requires the submission to Medicare of claims for all Medicare patients. ↩

[6] See Wis. Admin. Code chapter 35.14 (outpatient mental health clinic) and 75.07 (community substance use service); and Wis. Stat. sections 50.03(3)(b) and (13)(a) (skilled nursing facilities). ↩

[7] See the performance, location and billing requirements at 42 C.F.R. § 411.355(b). ↩

[8] 42 C.F.R. § 411.355(b)(7)(i). ↩

[9] 42 CFR § 1001.952(r). ↩