Professional Corporations: Part 2

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Avoiding Liability Bulletin – August 2011

Can a marriage and family therapist, who is doing business as a professional corporation, hire one or more physicians to provide medical services to clients of the corporation, and can the corporation bill for such services? The answer to this provocative question depends upon state law. In California, the answer appears to be “yes.” California law provides that a marriage and family therapy corporation may have as shareholders, directors, officers or professional employees, persons licensed in other professions, such as physicians, psychologists, clinical social workers and others. These persons are permitted to act within their respective scopes of practice. The corporation is permitted to bill for such services, even though the majority shareholder, or perhaps the sole shareholder, is a licensed marriage and family therapist.

I once testified as an expert witness for a marriage and family therapist who had hired one or two physicians (I forget) to perform workers’ compensation disability evaluations. Such evaluations were not allowed to be performed by licensed marriage and family therapists. The MFT professional corporation grossed hundreds of thousands of dollars as a result of such activity. An attorney for an insurance company publicly stated that the MFT was committing a felony by billing for such services. The therapist sued the lawyer for defamation and won – I forget the amount of the judgment, but it too was six figures! What does the law allow in your state? Can there be multi-disciplinary practices in the corporate form? For those who are entrepreneurs, this might be interesting to explore – with the advice of a knowledgeable attorney.

Click here to read our previous Avoiding Liability Bulletin regarding professional corporations.

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Richard Leslie

"At the Intersection of Law and Psychotherapy" Richard S. Leslie is an attorney who has practiced at the intersection of law and psychotherapy for the past twenty-five years. Most recently, he was a consultant to the American Association for Marriage and Family Therapy (AAMFT), where he worked with their various state divisions to develop and implement their legislative agendas. He also provided telephone consultation services to AAMFT members regarding legal and ethical issues confronting practitioners of diverse licensure nationwide. Additionally, he wrote articles regarding legal and ethical issues for their Family Therapy Magazine and presented at workshops on a variety of legal issues. Prior to his work with AAMFT, Richard was Legal Counsel to the California Association of Marriage and Family Therapists (CAMFT) for approximately twenty-two years. He was director of Government Relations for CAMFT, and as such was the architect of CAMFT’s widely regarded and successful legislative agenda. He represented CAMFT before the regulatory board (the Board of Behavioral Sciences) and was a tireless advocate for due process and fairness for licensees and applicants. He was a regular presenter at workshops and was consistently evaluated as CAMFT’s most highly rated presenter. He also sat with the CAMFT Ethics Committee and acted as their advisor on matters pertaining to the enforcement of ethical standards. Richard is an acknowledged expert on matters pertaining to the interrelationship between law and the practice of marriage and family therapy and psychotherapy. For many years, he taught Law and Ethics courses for a number of colleges and universities in their marriage and family therapy degree programs. While at CAMFT, he provided telephone consultation services with thousands of therapists in California and elsewhere for over twenty years. He is highly regarded for his judgment, his expertise, his direct style, and his clarity. Richard has been the driving force for many of the changes and additions to the laws of the State of California that affect MFTs. In 1980, he was primarily responsible for achieving passage of the "Freedom of Choice Law" that required insurance companies to pay for psychotherapy services performed by MFTs. Passage of that law allowed MFTs to earn a living, allowed them to better compete in the marketplace, and strengthened the profession in California by leading to a great increase in the number of licensees and CAMFT membership. Currently, about half of the licensed marriage and family therapists in the country are licensed in California. While at CAMFT, Richard was primarily responsible for, among other things, the successful effort to criminalize sex between a patient and a therapist. He was successful in extending the laws of psychotherapist-patient privilege to MFTs, thereby giving patients the same level of privacy protection as when seeing a psychiatrist or psychologist. He fought tirelessly and successfully for the right of MFTs to refer to themselves as "psychotherapists," to perform psychological testing services, to be appropriately reimbursed by California’s Victims of Crime Program, and to be employed in county mental health agencies throughout California. Richard was admitted to the Bar in New York (1969) and in California (1973). While practicing in New York, he served as a public defender, and later, as an Assistant District Attorney. Shortly after moving to California, he worked for the San Diego County Human Relations Commission as their Law and Justice Officer. While there, he worked successfully to achieve greater racial diversity in the criminal jury selection system and to expose and stop police abuse. For such work with that agency, he was the recipient of the Civil Libertarian of the Year Award by the San Diego Chapter of the American Civil Liberties Union.

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