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Dynamic Chiropractic – February 22, 1999, Vol. 17, Issue 05

Comprehensive Outpatient Rehabilitation Facilities (CORFs)

Is There Reason for Concern?

By Rebecca Berg-Downing
A CORF is a nonresidential rehabilitation facility certified under Medicare Part A. Its purpose is to provide (under the supervision of an MD) diagnostic, therapeutic and restorative services to outpatients for the rehabilitation of the injured, disabled, or sick. Congress authorized CORF certification over 15 years ago to make sure Medicare beneficiaries have access to a variety of rehabilitation services at one location, on an out-patient basis.

The California Chiropractic Association (CCA) has gathered preliminary information to alert doctors of chiropractic to the possible legal issues that CORFs present. Doctors are strongly urged to consult an attorney if they intend to work with a consultant or establish a CORF or rent space to a CORF.

These consultants approach doctors of chiropractic with benefits that seem too good to be true:

  • expanded scope and range of your practice;
  • $21 per square foot paid to you as rental of space in your office;
  • elimination of overhead expenses;
  • ownership of your own million-dollar health care delivery.

The CCA is advising doctors to move cautiously, seeking detailed, comprehensive information from the consultants and legal advice from their own attorney.

How does a CORF work?

A certified CORF is authorized to offer: physician services (not including chiropractic services); physical, occupational and respiratory therapy; speech-language pathology; prosthetic/orthotic device services; social/psychological services; nursing care; drugs/biologicals; supplies, appliances/equipment; and home environment evaluation. Unfortunately, the federal law does not allow for the reimbursement of chiropractic services in a CORF.

A CORF is required to offer at least physician services, physical therapy, and either psychological or social services. Most CORF services must be provided at the CORF facility. Off site services that can be provided are physical therapy, speech pathology, occupational therapy, and home evaluation.

Patients must be referred to the CORF by a medical physician who certifies that the patient requires skilled rehabilitation services. In the CORF, a medical physician must establish and oversee the treatment plan.

How Can Chiropractors Be Involved?

Some chiropractic consultants have implied in their literature that with their assistance you can have your chiropractic office certified as a CORF facility. The CCA does not know first-hand whether it is legal for a chiropractic office to become a CORF. Assuming for discussion's sake that it is legal, most chiropractic offices would require significant re-tooling to make them CORF-eligible.

Some chiropractic attorneys have raised several concerns, including that certain aspects of some consultants' contracts may violate state securities laws. There may also be issues pertaining to illegal self-referral and malpractice liability. The magnitude of the decision to establish a CORF demands that interested individuals seek the advice of counsel familiar with Medicare regulations, unlawful referral, general health care and state securities laws issues.

Establishing a certified CORF, whether starting it from your practice or establishing a brand new facility, is a momentous business decision requiring a significant outlay of capital, not to mention time and effort. At least one consultant charges $60,000 up front to set up the CORF, obtain certification and establish a network of referrals to the CORF; the same consultant then charges 100 percent of the first $240,000 of the gross daily collections of the CORF revenue and 20 percent of the CORF daily collections thereafter. The CCA strongly urges chiropractors not to agree to hefty consultant fees until they have had a competent lawyer look at every aspect of the arrangement.

Operating as an Off-Site Facility

Another aspect of the CORF that may have drawn consultants to your door is the off site concept. A consulting company may solicit you to lease or rent any unused space in your practice to a CORF so that a physical therapist, occupational therapist or speech pathologist may treat CORF patients. This raises legal and administrative issues about billing, collections, shared facilities, self-referral and other details.

The mere leasing or renting of your extra space for a per-square foot per-month price, in writing, for a full year, to a facility that has absolutely no relation to your practice, would theoretically not raise legal problems. However, it is reported that some of the consultants, after getting a chiropractor interested in an off site setup, quickly change the offer from a "per square foot" pricing scheme to pricing structure related to volume, or even the number of patient referrals. This raises criminal aspects of self-referral and the other troubling legal issues mentioned above. Particularly because of the extensive and complex Medicare regulations prohibiting self-referral, chiropractors are strongly cautioned against any pricing or rental scheme based on a per-patient, per-volume, per-referral or percentage pricing structure without independent legal counsel knowledgeable in Medicare laws giving you the OK.

What's the Bottom Line?

Although the CORF concept is clearly authorized in federal law and regulations, the legality of the arrangements proposed by the consultant community is not free from doubt. Doctors are urged to seek legal advice if they are interested. The CCA plans to author an additional article on this topic with additional information as it becomes available.

Editor's note: If your concerned about this issue, contact your state association. Chiropractic state association executive directors are encouraged to contact Rebecca Berg-Downing, CCA executive director for more information.

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