Hiring independent contractors for a chiropractic office can offer flexibility and specialized expertise. Still, it comes with a set of legal considerations that must be carefully addressed. From compliance with healthcare regulations to proper classification, chiropractic business owners must be well-versed in the legal requirements of independent contractor relationships. Failing to do so can be costly.
Understanding Classification:
Differentiating between employees and independent contractors is crucial. Misclassification can lead to legal consequences. Independent contractors typically control their work, use their tools/software, are responsible for their billing/collections, and are accountable for their taxes.
Facts that provide evidence of the degree of control and independence fall into three categories:
Behavioral: Does the company control or have the right to control what the worker does and how they do their job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include how workers are paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee-type benefits (i.e., pension plan, insurance, vacation pay, etc.)? Will the relationship continue, and is the work performed a vital aspect of the business? (IRS, 2023)
Two other questions you may want to ask to gain clarity are:
Does the independent contractor do work for any other entity?
If I classify a provider as an independent contractor, do I have them sign a non-compete?
By answering these questions it will help you clarify your employment policies.
Marc Abla, with the Illinois Chiropractic Society, recorded a video to clarify these categories to help you determine if you have an employee or an independent contractor. The cost of non-compliance can be staggering. Fines levied by the US Department of Labor (DOL), IRS, and state agencies for worker misclassification can exceed millions depending on the severity of the infractions. (Abla, 2021)
If you have an independent contractor, as a business owner, you have the responsibility of ensuring the following:
Compliance with Healthcare Regulations:
Chiropractic offices must ensure that independent contractors comply with healthcare regulations such as the Health Insurance Portability and Accountability Act (HIPAA). Contractors should understand the importance of patient privacy and adhere to the highest standards of confidentiality.
Written Agreements:
A well-drafted contract is essential. Clearly outline the scope of work, payment terms, and expectations. Include clauses that address compliance with healthcare laws and regulations.
Professional Licensing:
Please verify that the independent contractor holds the necessary professional licenses and certifications required for their role in the healthcare setting. This is critical to maintain the quality and legality of services provided.
Insurance Coverage:
Independent contractors should have their own liability insurance. However, chiropractic offices must ensure that contractors have adequate coverage to protect against potential liabilities related to their work.
Tax Considerations:
Independent contractors are responsible for their taxes, and chiropractic offices should not withhold income taxes. However, both parties should clearly understand their tax obligations. Ensuring compliance with tax laws is essential to avoid legal issues.
Compliance Training:
Independent contractors should undergo compliance training to understand and adhere to the chiropractic office’s policies and procedures. This is particularly important for maintaining a consistent standard of care.
Termination Clauses:
Include clear termination clauses in the contract. Define the circumstances under which either party can terminate the agreement and the associated procedures.
Ongoing Monitoring and Evaluation:
Regularly monitor the independent contractor’s performance and compliance with legal requirements. Conduct periodic evaluations to ensure continued adherence to healthcare regulations.
In conclusion, hiring independent contractors for a chiropractic office demands a thorough understanding of legal requirements. From proper classification to compliance with healthcare regulations, chiropractors must prioritize legal considerations to foster successful and legally sound relationships with independent contractors. The misclassification of workers significantly impacts the individual worker, the employer, and the economy at large. Seeking legal advice and guidance can be invaluable in navigating the complexities of this hiring process. Because of the high potential cost of misclassification and the additional DOL investigators available to challenge your worker classification, it is more important than ever to ensure you correctly classify your workforce. (Haight, 2023)
Dr. Ray Foxworth, DC, FICC, is founder and CEO of ChiroHealthUSA. For over 35 years, he worked “in the trenches” facing challenges with billing, coding, documentation, and compliance, in his practice. He is a former Medical Compliance Specialist and currently serves as chairman of The Chiropractic Summit, an at-large board member of the Chiropractic Future Strategic Plan Committee, a board member of the Cleveland College Foundation, and an executive board member of the Foundation for Chiropractic Progress. He is a former Staff Chiropractor at the G.V. Sonny Montgomery VA Medical Center and past chairman of the Mississippi Department of Health.
