HEALTH LAW SUPPLEMENT Summer 2006

Are they really independent contractors? Healthcare professionals often work part-time as independent contractors for facilities, agencies and group or large practices. Contractors get no benefits, pay their own taxes and receive 1099’s at years-end (instead of the W-2’s employees receive.) For hiring facilities, contractors can be cheaper, and less of a burden administratively, than employees. Because professional contractors have considerable freedom in the performance of their duties, a sine qua non of contractors as opposed to employees, their designated status as contractors had usually been accepted when they were retained on a part-time basis.
Recent audits of clients by New York State Unemployment Insurance and New York State Workers Compensation agencies have revealed that these taxing bureaus are examining more closely the relationship between agency and contractor for indicia of employment. A finding that a “contractor” is really a mislabeled employee may result in significant back-taxes and penalties for the facility. (There’s no penalty for the contractor/employee.)
For instance, the setting of the compensation of the contractor by the facility, rather than the facility acting as agent for collection of the contractor’s fees from patients (and the agency retaining a certain amount), is taken as evidence of employment. Restrictive covenants have also been cited as evidence of an employment relationship and at odds with an independent contracting arrangement. Other evidence of employment might be requiring training or supervision, or identifying the contractor as a representative of the facility.
Those who retain professional contractors are advised to review the terms and written contracts under which their contractors are retained to ascertain whether taxing bodies might take a different view of the relationship.

Will there be a single federal patient privacy standard? Maybe, maybe not. HIPAA privacy standards that went into effect in 2003 are federal, but they are pre-empted if state laws provide more protection for patients. The United States Department of Health and Human Services would prefer and has proposed a single standard not subject to preemption by states. The Senate passed a “one-standard” bill in November 2005 (S 1418), but the House bill (HR 4157) is stalled. The two APA’s, NASW and AMHCA all expressed reservations about the legislation because it might dilute privacy rights in some states and place too much authority in the hands of one agency that is overly subject to political vagaries (and they believe, is currently hostile to privacy rights). One State where patient rights would be lessened would be New York, where our laws often provide more protection than HIPAA and so supersede HIPAA.

It’s all in the name. “I want to incorporate and call my practice ‘The Briefest Possible Therapy Center, PC’; that’ll get me on managed care panels.” “I want patients to think the practice consists of more than just me, so I’d like the name ‘Neurology Associates of Eastern Long Island PLLC’.” “I want to give the impression of a nonprofit academic institution so how about the name “The Institute for Holistic Mental Health?” Whatever business sense these ideas make (and many marketing mavens say they do make sense), there are potential legal problems with all of these notions.
The State imposes restrictions on names of corporate entities generally and professional entities especially. One guiding principle is that a name may not be misleading. At least as far as State regulators are concerned, “Center” connotes a State licensed entity, “Associates” more than just one principal, and “Institute” a chartered educational institution. There may be dispensations, but legitimate reasons for an exception must be present, and it can take considerable time and additional expense to get them.
Customary and easiest to obtain for professionals is a name that contains their proper name, e.g., “Jane Doe, Licensed Clinical Social Worker, PC,” or alternatively a business name that contains the title of the profession to be practiced, e.g., “Westside Clinical Social Work Services, PLLC” and no questionable terms (geographic terms are usually OK). The name must denote the type of legal entity, PC, PLLC, etc.
An assumed name or “doing business as” name (DBA) also can be obtained for the corporate entity. Some of the limitations placed on legal formal names may be relaxed in obtaining a DBA.

Giving the kids to auntie. Sometimes a client consults about healthcare treatment for a minor where informed consent to the treatment is offered by someone who is not the natural parent or guardian of the child, but instead a person in whose care the minor has been left by the parents. Is this permissible for non-emergency care?
Yes, in fact, New York State has specific procedures for parents and guardians to designate another person to act “in parental relation” to their child, General Obligations Law Title 15-A. (This might seem an incongruous place for such a law, with laws regarding contractual relations, but the designation is a type of power of attorney.)
There are two types of such designations, one lasting for less than 30 days, the other for more than 30 days but less than 6 months. Six months is the longest the designation can last, although they are renewable. The one of longer duration requires greater formality, e.g., it must be notarized. The designations can apply to healthcare and educational decisions, although they are not supposed to be used to change residence for educational districting; the child’s legal residence remains the address at which the child last lived with his or her natural parents or guardians.
A designation does not relieve the parents or guardian of their support obligation. The designation may be relied upon by healthcare practitioners and educational institutions, as long as that reliance is in good faith, i.e., there is not credible evidence present that contradicts the existence of the designation.

Bruce wrote something, an article entitled, “Beyond My Ken; Scope of Practice Issues for Early Intervention Professionals,” in Mental Health in Early Intervention: Achieving Unity in Principles and Practice, a book edited by Drs. Gil Foley and Jane Hochman, published by Brookes Publishing Co., 2006.

INFORMATION IN THIS NEWSLETTER IS NOT LEGAL ADVICE FOR ANY PARTICULAR CLIENT OR SITUATION. CONSULT WITH AN ATTORNEY INDIVIDUALLY FOR LEGAL ADVICE REGARDING THE SPECIFICS OF YOUR SITUATION.

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