Get It in Writing

Contract considerations for consulting/onsite services.

By Gwen Simons, PT, OCS, FAAOMPT, Esq

November 2014

Physical therapists have historically provided a wide array of services to employers, including post-offer screenings, onsite physical therapy for work-related injuries, injury prevention programs, and ergonomic analyses. When pitching proposals and arranging such services, therapists frequently fail to obtain a written agreement that reflects the terms of service to which both parties have agreed, sometimes resulting in nonpayment, intellectual property infringement, and liability/legal compliance risks. Under the new rules for incentivizing non-discriminatory wellness programs in employer-sponsored health plans, physical therapists will have even greater consulting opportunities, thus increasing the need to get service agreements in writing. Whether a simple letter agreement or a detailed contract is in order, the following items should be included or considered:

• Acceptance of Proposal/Service Offer. A service proposal may be considered an “offer” and therefore could be legally binding if accepted. Include a time limit for how long the offer stands to avoid having your proposal accepted long after your cost to provide the service has increased or other circumstances have changed that will interfere with your ability to provide the services.
• Space, Equipment, Supplies. Identify which party will provide the space, the equipment, the computer and documentation programs, the supplies, and anything else needed and whether associated costs will be involved.
• Pricing Your Services. Be sure to describe what is included in the price of each service completely. For instance, if proposing injury prevention programs for a “daily” rate, define what you mean by “daily” and how many employees will be allowed in each educational session. If you do not, you may find out the company has scheduled you to work a 24-hour day! (This actually happened to a physical therapist I know.) If you are going to offer a health/wellness screening at the same time as a post-offer employment screening for new applicants, think about pricing these two services separately. Applicants can be required to participate in a post-offer screening but participation in a company wellness program has to be voluntary. Therefore, job applicants have to be allowed to opt out of answering health and wellness questions or submitting to wellness/fitness tests and measures that are not job related and consistent with business necessity even if it is part of the post-offer employment screen.
• Intellectual Property. If you develop intellectual property that you want to use in the future with other client companies or you are going to be using yours or someone else’s copyrighted materials to provide the proposed services, make sure you have a clause in your agreement that protects the ownership of the intellectual property being used. In some situations, a licensing agreement may be required.

• Legal Compliance. Identify any legal compliance issues that each party is responsible for, such as:

  • maintaining employee post-offer screening records pursuant to record-keeping requirements under the Americans with Disabilities Act and other applicable state and federal laws
  • maintaining medical records of onsite physical therapy in accordance with HIPAA and/or workers compensation laws
• Liability. Limit your liability exposure as much as possible, especially things for which you should not be responsible, by including indemnification and liability waiver clauses.
• Payment Terms. Identify when and how payment will be made. If possible, collect some money up front. It is not unusual for large companies to change their minds about what they want you to do—especially if a change in company management has occurred after you have invested time and effort into developing a company program.
• Legally Binding Agreement. Make sure that your letter agreement or contract is signed by a person who has legal authority to bind the company.
• Determine Whether or How HIPAA Applies. If the therapist is providing employment screens, wellness services, and/or health care services, the physical therapist must take extra care to determine whether and how HIPAA applies. The self-insured employer may be “hybrid entities” under HIPAA because the employer is a single legal entity whose business activities include covered and noncovered functions under HIPAA. Hybrid entities are required to identify and document what business activities are covered functions under HIPAA and ensure they do not disclose protected health information to individuals or managers within the company who are not entitled to receive protected health information without a signed authorization. The employer may want the contract service agreement with the physical therapist to include a clause that designates specifically which individuals the physical therapist is permitted to disclose protected health information to so the employer can maintain separation of the employer’s designated health plan components.
• Using Subcontractors. If the contract physical therapist uses subcontractors to provide HIPAA covered services, the physical therapist will have to have a business associate agreement with their subcontractors, which mirrors the terms in the physical therapist’s agreement with the employer. Specifically, the therapist should pay particular attention to the timeframe in which the physical therapist must report security and privacy breaches to the employer under the Business Associate Agreement (BAA) and make sure its subcontractors are required to report security and privacy breaches in the same or less time so the contract physical therapist can meet his or her obligations under contract with the employer.

These are just a few of the contractual issues to be aware of when providing services to employers. As always, it is highly recommended to consult an attorney before proposing services to industry to ensure your services are designed to comply with applicable laws and regulations.

For more in-depth information on these issues, see Work Injury Prevention & Management: Legal and Regulatory Considerations, The Injured Worker Independent Study Course 24.1, published by the Orthopaedic Section, APTA (available at www.orthopt.org/content/c/24_1_the_injured_worker).

Gwen Simons, PT, OCS, FAAOMPT, Esq is an attorney at Simons & Associates Law, P.A., in Scarborough, Maine. She can be reached at gwen@simonsassociateslaw.com.