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Dynamic Chiropractic – May 9, 1990, Vol. 08, Issue 10

CCA Position Statement On Practice Management

By Michael J. Schroeder, Esq.

The CCA hereby condemns the unethical practices taught by many practice management companies. The CCA hereby calls upon all practice management companies to adhere to the following standards:

1. No student should be signed to a practice management agreement until after he graduates from chiropractic college. Many students are naive and enter into practice management contracts without understanding their practical effects.

2. It is recommended that practice management contracts be on a fee-for-service basis, rather than on a percentage basis, and should be terminable by either party on reasonably short notice. Percentage agreements have several pernicious effects and raise substantial ethical issues for both the practice management company and the doctor.

(a) For the doctor, percentage agreements often impede or prevent a doctor from being able to obtain an operating loan if that doctor wants to open an independent practice. Additionally, paying over a percentage of a doctor's professional fee raises serious and substantial concerns as to illegal fee-splitting and unlicensed practice of chiropractic by the practice management firm. Finally, the substantial burden of meeting such practice management fees can easily lead to such doctors becoming so debt-burdened that they will be "debt motivated" to over treat.

(b) For the practice management company, gross percentage agreements create a strong financial incentive to advise every doctor to set up a high volume, high overhead practice, irrespective of whether such practice can ever return a profit to the doctor. Such agreements also raise substantial issues as to fee-splitting, unlicensed practice of chiropractic, violation of California's Franchise Act, and violation of California's Seller-Assisted Marketing Plan Act.

3. No practice management company should ever advise or teach any doctor to say or do anything that is not completely honest, ethical, legal, and truthful. The teaching of deceptive billing practices has resulted in increasing resistance by payors to reimbursement of chiropractic care. The teaching of patient solicitation under the guise of "research," "surveys," or any other false pretense is wrong and is condemned by the CCA. Teaching doctors to pretend to be paged to a patient "emergency" so as to attract attention to such doctor, when no such emergency exists, or any other method of self promotion that is dishonest or deceitful is wrong and is condemned by the CCA. The teaching of such practices can only have the long-term effect of harming both the chiropractic profession and the public.

4. Practice management companies should not engage in self-dealing with their doctor clients by advising these doctors to purchase or lease equipment or other items or services from companies owned by or affiliated with the practice management company and should not accept kickbacks or commissions for sending or referring their doctor clients to nay other company. It is a direct conflict of interest for a practice management company to have a financial interest in the very transactions as to which the practice management company is advising its doctor clients. The CCA condemns such practices.

5. The CCA also urges all practice management companies to open up their seminars and teaching material to review by neutral monitors.

The CCA also declares that each chiropractic college has a duty to its students to protect them from improper activities by practice management companies and finds that the chiropractic colleges have been largely ineffectual in discharging this duty. The CCA calls upon each chiropractic college to exclude practice management personnel from college grounds. The CCA calls upon each chiropractic college to begin recognizing their obligation to protect their students.

Michael Schroeder has formed more than 300 chiropractic-medical practices since 1982. He is the current vice president and general counsel for the American Acupuncture Council, and for the last twelve years has been the vice president of the National Association of Chiropractic Attorneys (NACA). In 1995, NACA honored Mr. Schroeder as their "Attorney of the Year."

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