Give health staffing companies a contractual once-over

A column examining the ins and outs of contract issues

By Steven M. Harrisis a partner at McDonald Hopkins in Chicago concentrating on health care law and co-author of Medical Practice Divorce. He writes the "Contract Language" column. Posted Nov. 1, 2004.

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If you have considered hiring additional staff for your practice, one option you might consider is a health care staffing company.

There are several advantages to using a health care staffing company, including: cost-effective provision of services, immediate availability of a licensed professional in a variety of disciplines, and a guarantee of appropriate staff licensure and insurance. Also, insurance coverage, including workers' compensation and liability, is usually paid by the company providing the staff.

Using a health care staffing company might be a way for you to explore whether a certain ancillary service, such as physical therapy, complements your practice and will be used by your patients. Before employing or contracting with a therapist, you might decide to use temporary staff to see if such a service is a good fit.

Of course, if you are considering a health care staffing company, you have to make sure you contract with a reputable one. You should check references and fully understand the company's capabilities before signing a contract.

Specifically look for the following key issues in any health care staffing contracts you are considering: qualifications, billing and collection, patient records, insurance, hiring staff members and proprietary information.

Qualifications. The staffing company should guarantee that the staff it will provide to your practice has all state and federal licenses, registrations and certifications required to provide health care services in your state. Before the temporary staff begins providing services in your office, make sure you have seen a copy of their appropriate licenses, registrations and certifications.

The company also should maintain current files on each staff member that contain the following data: proof of a criminal background check; confirmation of a negative drug screen; completed health screen; educational verification; current license, registration or certification; current CPR and/or advanced cardiac life support card; and initial and annual competency and/or skill verification. You should have access to this information upon request to the company.

Billing and collection. The health care staffing company typically employs the staff that is provided to you, but you still should make sure to retain the right to bill and collect from your patients for all services that are rendered by the temporary workers.

You may consider including the following language in your health care staffing contract:

Physician shall be solely responsible for billing and collection from patients, insurers, Medicare and Medicaid programs, and other third-party payers for all health care services rendered by staff members of the company. The company and its staff shall not submit any claims for payment to physician, physician's patients, insurers or any third-party payers, including but not limited to Medicare and Medicaid.

Patient records. It is imperative that you carefully monitor any documentation that the temporary staff is doing in your patient records to ensure that it is concise, comprehensive and completed on a timely basis. If the temporary staff is coming to your office on a weekly basis, then you should do periodic audits to ensure that the prior documentation meets your requirements and will be appropriate for reimbursement purposes.

Consider including the following provision in your contract:

Each company staff member shall write clinical and progress notes in accordance with physician's policies and procedures. All patient records, including information and notes added by the staff member shall be the property of the physician. Company and its staff agree to maintain the confidentiality of patient information and medical records. Company and its staff agree not to disclose such information or records to any third person without the prior consent of the physician and in compliance with HIPAA regulations.

Insurance. The insurance provision in your health care staffing contract should spell out the policy terms and amounts.

The company providing the staff should pay for the staff's professional liability insurance. You should ask to see such policies before the staff provides services to your patients to make sure that the staff is properly insured. The company also should pay for workers' compensation insurance for its employed staff.

Hiring staff members. If you decide to hire the staff that has been provided to you by the health care staffing company, you most likely will have to pay the company what is known as a finder's fee. Before signing your contract, consider whether you consider this finder's fee a reasonable amount.

The terms of your contract will detail the amount of time you will need to provide the company as notice of your intent to hire the staff member as your employee. It is important that you review these contract provisions, because there also may be a liquidated damages clause triggered if you do not properly notify the company of your intent to hire its staff member. These damages provisions usually include a service charge that accrues on a monthly basis. The liquidated damages and related service charges will far exceed the finder's fee amount.

There is also the possibility that the company will file a lawsuit if the contract is breached and you do not give proper notice of your intent to hire the staff member, and pay the finder's fee or liquidated damages.

Proprietary information. The company and its staff members will have access to your proprietary information, including protected health information under the HIPAA regulations. The health care staffing company should be HIPAA-compliant. Its staff should be well-versed in proper procedures regarding the use and disclosure of protected health information.

Make sure to include a confidentiality provision in your contract requiring the company and its staff to protect your proprietary information during the term of your contract, and upon its expiration or termination.

The company and its staff should immediately return all documents in its possession upon the termination or expiration of the contract.

Steven M. Harris is a partner at McDonald Hopkins in Chicago concentrating on health care law and co-author of Medical Practice Divorce. He writes the "Contract Language" column.

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