Poor Recordkeeping by Physician Employees: Grounds for Termination?

A common issue faced by medical practices concerns physician employees who chronically fail to complete medical records, convey test results, and otherwise attend to administrative matters which, for better or for worse, are now part of the routine schedule of a physician. Poor or slow record keeping can create issues for a practice when it impacts billing and cash flow, overburdens support personnel, and resources or poses a malpractice risk.

When a problem is determined to exist, I recommend a meeting with the physician to discuss the concerns. Sometimes better planning and support can resolve the situation, especially for young physicians overwhelmed by practice demands. But if the situation becomes intolerable, tough decisions must be made.

Termination Issues: A practice generally can provide notice of termination without cause, which in most contracts requires 90 days to 180 days. If this is too long to allow the situation to continue, perhaps the employment agreement will have other answers. Is timely completion of medical records a requirement of the employment arrangement so that the physician can be given notice of breach? This is a good use of a breach provision, but make sure your contract limits the opportunity to cure a breach to one time only or you may be in the situation of needing to provide multiple opportunities to cure the same breach without a real change in behavior. Failure to complete medical records may also be a ground for immediate termination in the employment agreement.

Penalties: Perhaps the practice is considering charging non-compliant physicians a financial penalty or withholding paychecks until records are complete? While this may seem fair and logical, this can violate state wage claim laws. Talk to counsel before any decision is made.

Paybacks: A concern my clients always have is the possibility that claims will be denied or reimbursement will be sought on claims submitted for a physician who has left the practice. This concern is heightened where a physician exhibited poor recordkeeping, especially when it led to their termination. Although hopefully the practice has a compliance plan and self-audit process in place, it can be helpful to include language in a physician’s employment agreement which allows the practice to seek repayment for claims of the physician which are denied, and which directly relate to the physician’s recordkeeping and coding practices. If the physician is still receiving funds from the practice for any reason following termination, language that allows for offset is also helpful.

In the worst case scenario, you may have a physician leave the practice with incomplete records, undistributed test results, and other issues that you may not even anticipate. We can all agree that a true professional would never leave a practice under such circumstances since it poses a malpractice risk to the physician and the practice, and potentially injures his or her reputation and future in medicine. Additionally, if the practice hopes to bill for the physician’s services after he leaves, it may not be able to if the records are insufficient to meet coding and medical record requirements and cannot be properly corrected or substantiated. Talking with legal counsel as well as a billing specialist before the physician leaves is essential. If the doctor is already gone, you must still try to salvage the situation and find out what legal options may be available.

To minimize the chance of this happening to your practice:

A. Make sure there is ongoing education with each physician on medical record completion and proper billing. The practice’s policies should not let physicians get too far behind in record completion without some disciplinary result;

B. Make sure your employment agreements allow for termination if documentation issues persist after an effort to cure by the physician; and

C. Consider language in the employment agreement that ties compensation to proper medical record completion to make sure each physician shares with the practice in the financial risk related to proper documentation and coding.

As always, state law can dictate what may or may not be appropriate. Consult with counsel to make sure your approach is legal. No matter what option you elect, think ahead to make sure you are prepared for this possible scenario.

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