Negotiate for Patient Record Access – When Rival Practices Close
by: Roy Edroso
Published Aug 22, 2016 in Part B News
Increase your patient census and practice revenue when a nearby practice closes by striking a deal for limited access to patient records without paying for the privilege. In fact, in some cases, the closing practice may pay you.
One of the valuable tangible assets of a practice sale is the patient records that come with it. While the purchaser can’t under HIPAA treat these records as their own until the patients affirm via signed waivers that they want to adopt the new provider, the fact that the buyer is holding the records provides an enormous incentive for them to do so.
It isn’t necessary for the buyer to purchase the entire assets of the practice either, notes Patrick Stanley, an attorney with Comitz | Beethe in Scottsdale, Ariz. Patient records may be included in a limited asset purchase agreement. As with a complete purchase, the retiring practice would then give patients notice and direct them to the purchaser to retrieve their records or, if they choose, continue their care with the new practice. Remember that the patients would have to sign on and have the final say. Note: Laws on the disposition of medical records may vary by state.
How to take custody of records
Vasilios “Bill” Kalogredis, chairman of the health law department of Lamb McErlane in West Chester, Pa., says he has negotiated several arrangements between practices that were closing down and practices that wanted to pick up their patients.
“I see this a lot,” says Kalogredis. “A solo practitioner is retiring and he can’t sell the practice, or he’s leaving one state for another. Hospitals and other practices may not want to buy, but they’re interested in the patients.”
Propose a “custodial” arrangement if buying the practice or part of it is too rich for your blood. In that case, your practice just takes responsibility for the safekeeping of the other practice’s records. Under such an agreement, when the retiring practice gives notice to its patients, it also would inform them that they can retrieve their records from you and that you also are available to provide continuity of care.
The custodial agreement also should address the length of time that the records will be retained, says D.J. Jeyaram, owner and health care attorney at Jeyaram & Associates in Atlanta.
Consult your legal counsel and malpractice insurance carrier before entering into an agreement to make sure you’re handling things properly from the legal and ethical perspectives, Kalogredis suggests.
Some practices may even receive a fee for accepting this responsibility. But note that while receiving a fee for the storage of medical records would be kosher, an arrangement whereby you pay a fee for the right to store the records “could be seen as remuneration for referrals under the federal anti-kickback statute or its state equivalents,” says Jeyaram.
Mind HIPAA rules
Note that in a custodial arrangement, you would be only holding the patient records — they’re not really your records unless and until the patient releases them to you. “HIPAA only allows for the exchange of protected health information (PHI) without a written release if the transfer is between current or prior health care providers for the purposes of providing treatment,” says Jeyaram.
In this circumstance, under HIPAA, you would be a business associate (BA) of the transferring practice that remains the covered entity, says Jeyaram, and you should execute a business associate agreement (BAA) (PBN 7/11/16).
The BAA, which ensures HIPAA compliance in the transfer and storage of records, should be referenced in the custody agreement, Jeyaram says.
Note that though it varies by state, responsibility for retention of medical records is usually seven years or longer; be prepared to follow through on that if you accept responsibility.
Remember: A custodial arrangement gives you a good shot at inheriting these patients, but it’s not “exclusive” — in some states and under some contracts, other providers from the closed down practice may take their patient lists with them and reach out to these patients too. In the end, it’s always the patient’s choice (PBN 5/2/16). — Roy Edroso http://pbn.decisionhealth.com/
Vasilios (“Bill”) J. Kalogredis is Chairman of Lamb McErlane’s Health Law Department. Bill has been practicing Health Law for over 40 years, exclusively representing physicians, dentists, group practices and other health care professionals and health care-related entities locally and across the nation.