Monthly Archives: July 2012
One of the fastest areas of liability exposure for the dental profession is the negligent hiring and retention of employees.
If an owner of a dental practice fails to conduct a due diligence investigation of a potential employee prior to hiring that particular employee, then the owner of the practice may be held liable for the negligent or intentional acts of that particular employee.
Prior to hiring an employee, the owner of a dental practice should conduct a due diligence investigation, which should include the following:
1. Performing a criminal background check;
2. Reviewing the driving history of a potential employee;
In general, negligent hiring is based upon the principle that an owner of a dental practice has an obligation to protect not only the employees, but also the patients.
If the owner of a dental practice fails to conduct a criminal background check on a new or existing employee, and that particular employee commits some type of criminal act against a patient [i.e., improper touching, credit card fraud, etc.], then the owner of the practice may be held liable.
A growing area of potential liability for the owner of a dental practice is the negligent retention of an employee.
If the owner of the practice discovers that an employee has committed a negligent or criminal act while employed at the practice, and the owner of the practice fails to take appropriate disciplinary action against that particular employee, the owner of the practice may be liable if the employee commits a subsequent act.
[Example: The retention of an employee after it is discovered that the employee improperly charged a patients credit card for personal use, or an employee had prior misconduct with a patient].
In today’s society, security is a big concern, especially in the area of domestic violence. The owner of a dental practice may have a certain legal obligation to protect his/her office staff and patients from potential danger.
If an employee is being harassed at work, either by a spouse, significant other, friend, etc., then the owner of the practice should make sure the harassment does not interfere with office operations, or place employees or patients at risk. For example, if a very heated verbal altercation occurs during office hours between an office employee and his or her spouse as a result of a pending divorce, the owner of the practice should immediately address any potential security concerns.
With a little due diligence and the implementation of proper office procedures, the owner of a dental practice should be able to avoid a great deal of liability exposure.
All dentists should be aware that as a general rule, an unemancipated minor’s consent to treatment is not valid. The consent of a parent or legal guardian must be obtained before treatment is rendered. Unfortunately, many dentists still provide “routine” dental treatment to their minor patients without obtaining informed consent from the parent or legal guardian of a minor child.
The informed consent process should be a complete and thorough discussion between the dentist and the patient – and the parent of a minor child – as to what procedures will be taking place, including, but not limited to, extractions, root canals, crown and bridge, implants, and incision and drainage. A written informed consent form should be obtained before treatment starts, including any procedure involving flap reflection, cosmetic dentistry, TMD treatment, orthodontics and IV sedation or general anesthesia.
The informed consent process should include a discussion between the dentist (not just a staff member) and the patient about the nature of the treatment, potential risks and complications, likely benefits, prognosis, alternatives (including referral to a specialist when appropriate), timing and estimated fees.
The informed consent process does not necessarily have to be as detailed for routine diagnostic and treatment measures. However, the patient must be advised about all of the treatment and diagnostic procedures with respect to the proposed dental care, including what is to be done and why. The patient does have a right to refuse even the most routine treatment.
In the case of an unemancipated minor child who is unaccompanied by a parent or legal guardian to your office, you should take a few steps to minimize a potential conflict and reduce your liability exposure.
First, make a professional judgment as to whether any delay in treatment will likely be detrimental to the minor patient’s dental or systemic health. Ask yourself whether it is in the patient’s best interest to proceed with the treatment immediately, or whether treatment can wait until a parent or legal guardian can be contacted.
Next, make a reasonable effort to contact the parent or legal guardian. The patients chart should be updated with cell phone numbers.
A patient’s dental record should contain detailed documentation regarding all of the times you attempted to contact the patient’s parent or legal guardian.
However, if you cannot reach a parent or guardian, it may be prudent to defer routine treatment unless an emergency exists, until you can obtain a parent or guardian’s informed consent.
The verbal consent or signature on a consent form from the parents of a minor child should be sufficient. However, it is essential that the parent granting consent is legally authorized to do so. Divorces can often be highly contentious, to the point where some divorce decrees have stipulated that a non-custodial parent cannot make medical decisions. If a parent has no parental rights, then that parent is precluded from granting consent on behalf of his or her minor child.
If an unaccompanied minor child comes for an appointment for simple or routine treatment that has already been discussed and consented to by the parent or guardian, it should be permissible to proceed with treatment. However, be very careful that you do not perform any treatment whatsoever outside of the prior consent.
Finally, I would suggest that all adult patients and parents or guardians of all minor children be required to sign an “Admission to the Practice Agreement.” This document provides for, among other things, the consent of the patient (or the patient’s parent or legal guardian) to routine dental procedures, as well as treatment and diagnostic tests, including x-rays, that are deemed necessary in the dentist’s professional judgment. If a conflict arises later, the signature of the parent or legal guardian on such a document will, at a minimum, demonstrate that implied consent was granted by the parent or legal guardian for routine dental procedures for the minor patient.
Every veterinary practice is vulnerable to natural disasters such as fires, floods, and tornadoes. However, advance preparation can minimize your exposure in several ways. For example:
Buildings, equipment, furniture, inventories, and supplies should all be protected by adequate property and casualty insurance. Be sure to review each policy for “named perils,” which are the disasters covered (such as floods or earthquakes). If your location is prone to one of the “perils” not listed, consider expanding your coverage or buying an additional policy to include it.
Business interruption insurance will reimburse you for lost profits, which will be computed from your financial records. Your policy should allow a realistic time period for recovery, even if it costs a little more.
Missing records can cause a host of problems, including making it hard to quantify your disaster losses. Duplicates of financial statements, patient lists, asset inventories, and other important data should be maintained in a secure off-site location and updated regularly. Important on-site documents should be stored in a fire-proof safe or vault.
Critical computer data should be duplicated regularly on portable hard drives or other storage media. Updated copies should be stored off-site.
Consider buying “extra expense” insurance to cover relocation costs for a quick post-disaster recovery. Also, you should identify alternative sources of operating assets (such as furniture and equipment lessors), and investigate other possible practice locations. Look into government disaster relief programs available to businesses in general and veterinarians in particular.
If a security breach occurs in a dental practice, the practice owner must take the necessary steps in order to comply with federal law, in order to avoid a potential increase in liability exposure.
Rules Requiring Patient Notification of a Security Breach
The U.S. Department of Health and Human Services (HHS) has issued strict regulatory guidelines that dental practice owners must follow in the event of a security breach. The Federal Trade Commission (FTC) has also issued breach notification regulatory requirements that dental practice owners must comply with, in the event of a security breach.
Breach Notification Requirements
Depending on the type of security breach and the extent of the breach, a dental practice owner must notify affected patients, the Secretary of HHS and the FTC [if applicable], and, in certain circumstances, the media.
If you are not familiar with the 2009 American Recovery and Reinvestment Act and the 2009 HITECH Act, your dental practice is probably not in HIPAA compliance. In fact, statistically, 85% of all dental practices are not in HIPAA Compliance.
Dental practices that have experienced a breach of patient protected health care information can significantly limit their legal exposure by complying with simple regulatory guidelines.
According to a recent survey, many parents with special needs children have not secured their child’s financial future. Statistically, 66% of parents do not expect their child with special needs to be financially independent, and 68% of parents with special needs children do not have a will. Estate planning is essential for parents with special needs children. Outlined below are five simple steps that will help you plan for your child’s future:
- Children with special needs should not be a “direct beneficiary” of a will or trust [they may be disqualified from receiving federal and state aid].
- A special needs trust should be established in order to make sure that certain designated money or property will be used for your child’s best interest.
- In many cases, a legal guardian should be appointed for any special needs child that turns 18 years old. Once a child turns 18 years old, they are considered an adult.
- A special needs trust should be established in order to protect your child’s eligibility for state and federal aid.
- With proper planning, a life insurance policy can ensure your child will be financially secure. A gift of money or property to a child with special needs should go directly to that child’s special needs trust. If a child with special needs is the direct beneficiary of any type of money or property, they may become ineligible for state or federal benefits.
With proper estate planning, you can secure your child’s future. For more information on special needs trusts, please contact us.
The purchase and sale of a veterinary practice are two extremely significant events in a veterinarian’s career. Finding the perfect practice to purchase or the perfect buyer is very important. However, the failure to properly draft a purchase and sale agreement has detrimental consequences.
Letter of intent
In general, just about every practice transaction [with or without a broker] should start with a signed letter of intent. The letter of intent memorializes the agreement between the parties regarding the purchase price, date of the proposed sale of the practice, accounts receivables, as well as lease issues. The letter of intent should also be non-binding.
The seller and buyer of a veterinary practice should keep the letter of intent confidential, regardless of the outcome whether or not the sale of the practice takes place. The seller of a practice should also have a potential buyer sign a non-disclosure agreement, which will keep the seller’s financial and practice information confidential.
Allocation of purchase price
As a general rule, most practice transactions involve the sale of practice assets (equipment, supplies, etc.) It is extremely important that the seller and buyer establish a purchase price allocation for: (1) equipment that is being sold; (2) account receivables that are being purchased; (3) goodwill of the practice; and (4) non-compete stipulations. From a tax standpoint, expensing, depreciating, or amortizing the assets are important to the seller and buyer. Certain tax rules apply regarding what can and can not be depreciated over time.
For the protection of the seller and buyer, a contract for the purchase of a practice should have an outline of events that must occur before the sale takes place. For example, the buyer must agree to the terms of the seller’s lease agreement [which the buyer will probably be assuming], or the buyer’s accountant should approve the seller’s financial records, and the sale should be contingent of the buyer’s approval of the loan amount. The buyer should also make sure that any liens [i.e. UCC-1] that are attached to the seller’s assets will be paid at closing.
Just about every practice sale agreement should have a non-compete clause that applies to the seller. The non-compete clause restricts the seller from practicing for a reasonable period of time and within a reasonable geographic radius of the practice.
Careful consideration should be taken when including a non-compete clause. The non-compete clause should take in to account that the seller may become a part-time associate, partner, shareholder, director, officer, consultant, employee or independent contractor of another practice.
If the practice sale contemplates that the seller will work part time for the buyer, the buyer should require that the seller enter in to some type of Host-Provider Agreement [i.e. independent contractor agreement], which should become effective from the date the practice is sold.
The sale of a veterinary practice can be extremely rewarding for the seller and buyer. However, if the terms and conditions of the practice sale are not clearly outlined, then it can be a very frustrating transaction for all parties involved. Before entering in to a contract for the sale of a practice, the seller and buyer should seek the assistance of professionals who are experienced in the area of veterinary transactions.
In the last few weeks, we have received more and more questions as to what additional provisions should be included in an Employee Manual, over and above the “standard” provisions. As a result, outlined below are certain provisions which should be included in every Employee Manual.
Employee Recruitment: This provision should include where to advertise for employees, how to write job advertisements, how to prepare effective job descriptions, proper interview techniques, as well as sample interview questions.
Office Policies: This provision should focus on establishing office policies and procedures in order to introduce new staff to your practice, as well as provide ground-rules and practice philosophy.
Employment Policies: With this provision, you should establish guidelines for personal appearance, sexual harassment, and substance abuse. In addition, an employee manual should also outline the use of cell phones and social media within the practice and outside of the practice.
Employee Training: Your office manual should establish employee training techniques from OSHA and HIPAA, where mandatory.
Employee Benefits: Every employee manual should address vacation, sick time, other leave policies, health insurance coverage, and retirement plans.
Employee Management: This provision should set forth employee management guidelines in order to promote positive office morale, employee appreciation and incentive programs, bonuses, performance-based raises, and performance evaluations.
Employee Termination: This provision should focus on the delicate but important issue of employee termination procedures. Failure to address employee termination in the proper manner could open a practice owner up to certain violations of state and federal law.
Patient Management: This provision should set forth guidelines for employees to promote positive relations with special needs, pediatric, geriatric, and difficult patients through confident communication skills.
Workplace Safety and Security: Your office manual should examine safety and security in the workplace, including complying with OSHA standards, as well as handling emergencies and natural disasters.
By evaluating your Employee Manual and implementing a few additional provisions, a practice owner may avoid a wide range of employment law problems.
Responding to OSHA Requests
Initial informal phone calls are becoming more and more frequent from OSHA. First and foremost, you must have a plan in place, if you ever receive such a call from OSHA.
Letters from OSHA
Typically, when OSHA receives a non-formal complaint, its first investigative step is usually to send a letter to the owner of a practice.
Telephone Calls From OSHA
When investigating a non-formal complaint, OSHA may also call a practice owner, in addition to sending an investigatory letter. Responding to a OSHA telephone inquiry poses several unique risks for practice owners.
Developing an Office Protocol
To avoid potential and unintended problems, practice owners should create a risk management plan for responding to telephone calls from OSHA inspectors. Once formulated, the office protocol should be clearly explained to and followed by all office staff.
By formulating an office protocol in order to handle OSHA investigations, practice owners can take steps to adequately protect themselves during the investigation process. It is crucial that practice owners plan for OSHA investigation inquiries. In addition, it is also critical that all employees are aware of office protocol regarding OSHA inquiries, in order to avoid unintended consequences.
The day to day pressure in running a veterinary practice is enormous, especially in today’s economy when every dollar counts. Unfortunately, veterinarians spend most of their day practicing medicine, instead of supervising their staff members who manage their veterinary practice. In this type of atmosphere, embezzlement can thrive.
According to statistics, approximately thirty-three percent (33%) of veterinary offices have been or will become the victim of employee embezzlement. Recent studies indicate that employee embezzlement in a veterinary office has become rampant. Every year, veterinarians suffer losses to their practices which total hundreds of thousands of dollars.
Listed below are signs employee embezzlement may be taking place:
-You fail to receive financial information in a timely manner
-Employees are resistant to any type of change in the present accounting system
-You have large numbers of unexplained accounting adjustments
-Your collections have slowed
-Your cash deposits have declined
-An employee refuses to take a vacation
-A staff member resents your income or lifestyle
-An employee always works late and/or takes work home .
-You have employees who always seem to have cash on hand, and/or appear to live above their means
-An employee treats office procedures as an annoyance .
Perform an Embezzlement Audit of your Practice
If you suspect that an employee is embezzling funds, there are three ways to initiate a practice audit, and they are: (1) request that your accountant perform a practice audit, or hire a forensic accountant that specializes in employee embezzlement; (2) ask your accountant to design a brief self-audit process for you to follow; or (3) perform an immediate, cursory, on-the-spot random audit by pulling approximately 15 to 20 charts.
If you Suspect Embezzlement in your Practice
Anytime you suspect that you are the victim of embezzlement, you should seek legal advice immediately. Your attorney should prepare an investigation strategy, which should include working closely with your practice CPA, or an outside forensic accountant.
When the owner of a veterinary practice is first confronted with the prospect of employee embezzlement, there are four primary objectives, which are: (1) to determine whether employee embezzlement has actually taken place; (2) to determine the total amount and method(s) of the theft; (3) to remove the dishonest employee from the workplace [and take remedial actions to prevent employee embezzlement in the future]; and (4) to recover the money or property lost.
Conducting the Investigation
It is extremely rare that an employee is actually caught embezzling funds by direct observation. Most embezzlement cases are detected based upon initial circumstantial evidence, such as an inconsistent practice financial report or through a random audit.
If you suspect that the loss is potentially large, or the theft appears to be complex, you should always seek the advice of legal counsel, a CPA, a computer data retrieval specialist, and other required experts to assist in the investigation.
At the early stages of an employee embezzlement claim, and depending on the extent of the theft, you may wish to contact their insurance agent in order to determine whether you have employee dishonesty coverage. Most insurance policies have strict time requirements for reporting an employee dishonesty claim.
Appropriate Disciplinary Action
Once the investigation has been thoroughly completed, and if you have determined that employee embezzlement has actually occurred, you must decide what action you should take, including termination of the suspected employee.
In certain ways, investigating suspected embezzlement is similar to investigating other employee misconduct. The scope and manner of the investigation will depend in part on the size and complexity of the theft. Of course, as with any investigation, the employer’s rights and abilities to investigate the facts and circumstances surrounding the incident are intertwined with the myriad of rights and protections conferred upon employees by federal and state law.
Recovering the Losses
Depending on whether the loss is covered by your insurance policy, and if so, the amount of the deductible, the owner of a veterinary practice may wish to file a civil action against the dishonest employee in order to recover any type of loss. It is important to note that civil lawsuits and criminal prosecution are matters of public record, and as a result, you must weigh the consequences of any adverse publicity
In today’s market place, employee embezzlement is rampant. However, with a little precaution, the financial hardship of employee embezzlement can be avoided. Also, with proper employee screening, proper control and oversight, as well as prudent financial control, a devastating financial loss can be avoided.