Employer-Sponsored, On-Site Health Care
Thursday, February 26, 2015

It’s Monday at 8 a.m. A frantic mom wakes up to discover that her young daughter, Emily, is running a fever with a sore throat. Dad already left for work, and mom needs to be at the office by 9 a.m.

Scenario #1: Mom scrambles, first calling the office of Emily’s pediatric physician, but it hasn’t opened yet. Next, mom and child drive to an urgent care clinic, where they face at least a two-hour wait. The child is miserable. Mom loses a busy Monday morning at work.

Scenario #2: After realizing that Emily has a fever, mom buckles Emily into the car and drives straight to her employer’s office a few minutes away. There, in the on-site clinic at the employer’s office, a nurse practitioner is ready and waiting to treat the health care needs of any employee or his/her dependent during business hours. The health care is subsidized by the mother’s employer. The nurse immediately examines and treats Emily. Mom drives her daughter home and then returns to her office, just in time for her 9 a.m. meeting.

The first scenario represents the traditional model of health care delivery. Emily’s mother has insurance provided by her employer. That insurance reimburses health care providers at the point of care. The employer has no control over the timing or quality of care. The second scenario represents a shift in health care, where employers become more than insurance funders, they organize the delivery of health care services. What’s in it for the employer? Proponents argue that employer-sponsored care improves health and wellness for employees, results in reduced absenteeism, and subsequently fosters more consistent day-to-day operations with lower overall health insurance costs. A growing number of companies are pursuing this more holistic approach to employee health and wellness.

Employer-Sponsored Offerings at the Workplace

On-site, employer-sponsored treatment can come in many shapes and sizes with various levels of employer involvement. Employer-sponsored offerings can run a wide range of service levels. The following three tiers of service provide examples of employer-sponsored health care:

  1. periodic “health fair” events for flu shots, vaccinations, and as needed primary care treatment;

  2. a “health suite,” where an employer provides an on-site practitioner, generally a nurse practitioner, who offers primary care in the office at regularly scheduled days and times available for any employee; and

  3. at the full-service end of the spectrum, “on-site medical clinics” established by an employer at its office locations offering primary care, flu shots, lab work, prescription dispensing, or any other needs available to all employees and, sometimes, even their dependents.

Health Fairs

The most basic offering is some form of a “health fair,” which can be as simple as semi-annual or quarterly one-day events for primary care and health risk screenings. Services provided often include flu shots, vaccines, venipuncture (“fingerstick”) blood draws to test for risk factors like cholesterol, and primary care, as needed.

This approach raises several legal risk factors and questions for an employer: Does an employer contract directly with health care providers for their services? If so, what level of care can a health care practitioner provide within his/her scope of practice outside a dedicated clinic? Are there any issues with drawing blood for lab work without proper permits from a state department of health? [1] The employer may consider outsourcing the entire operation to an entity that provides this type of service regularly. This shifts the risk of the process to the third-party entity while still providing the periodic care benefits to patients.

Health Suites

An employer may want to offer something more consistent but without a full physical on-site clinic. This intermediate “health suite” offering provides in-office care for an employer at regular intervals, perhaps once a week or twice a month, without the overhead of an entire medical clinic. Health suite providers may even offer telemedicine services for care on days when the practitioner is not physically present. The health care provided may come from a variety of health care practitioners, such as nurse practitioners, wellness counselors, and nutritionists. On-site care raises many issues for both the employer and the entity that the employer contracts with to provide the services.

The risk factors to consider in regard to this approach include:

  • the privacy and security of patient health information, or PHI, accumulated in the office visits (this raises issues under HIPAA and state health information privacy laws);[2]

  • access to, and ownership of, medical records during treatment, as in determining whether the employer or individual health care providers are responsible for maintaining patient medical records[3] with a data security system to keep the employee personnel files separate from the employee medical records;

  • the scope of services that may be provided by practitioners; potential issues raised by blood samples, lab work,[4] and medical waste; and state regulation of telemedicine services; and

  • whether the practitioners can prescribe or even dispense on site.

On-Site Medical Clinics

The most dedicated employer-sponsored offering is a physical on-site medical clinic staffed with nurse practitioners, physician assistants, and medical assistants and, as needed, supervised and/or owned by a licensed physician. An employer-sponsored, on-site clinic may serve one company or a group of companies in close proximity that pools resources to provide services for all employees. Some states regulate this type of full clinic by requiring physician ownership under the “corporate practice of medicine” doctrine, which is enforced to keep corporate interests outside the independent judgment of medical professionals. [5] Or, a state may require the on-site clinic to be licensed by a state department as an outpatient clinic or ambulatory facility.[6]In these instances, the employer may elect to contract with another entity that is familiar with these issues and can manage the day-to-day operations of the practice and develop the proper contractual safeguards to reduce liability.

In addition to the ownership and licensure factors, an on-site clinic must deal with all the overlapping issues discussed in the “health suite” model: practitioner scope, laboratory regulations, HIPAA privacy and medical records controls, and telemedicine regulation, as applicable. An on-site clinic may also want to offer enhanced prescriptive services, including dispensing beyond samples, which raises issues of drug storage and safety, labeling, and potentially federal Drug Enforcement Administration (“DEA”) and state-level reporting requirements. [7]

Employer-Sponsored Treatment in the Future

Given the legal obstacles, some employers may question whether becoming a proactive provider of care is worth the effort as compared to the traditional insurer reimbursement role. Proponents argue that successful employer-sponsored care not only helps reduce the burden of health needs for working families, but also can provide significant financial gains by helping monitor the more chronic conditions that lead to high absenteeism.

An employee with diabetes or high cholesterol may, at times, either forget to take medication or skip a follow-up appointment that requires leaving work. By offering on-site care, the employee will receive immediate access to follow-up care, and the on-site practitioners can monitor prescription refills and other gains in health and wellness to create long-term improved outcomes and reduce long-term spending on insurance costs.

The next time someone in your household wakes up with a fever and nasty sore throat, will you drive straight to work?


[1] Oregon, as an example, requires a Health Screen Testing Permit from the Department of Health Services.

[2] HIPAA is the federal Health Insurance Portability Accountability Act, which dictates standards for securing the privacy of patient health information. Some states add additional obligations to the HIPAA standards.

[3] Medical record ownership laws vary by state. In California or Pennsylvania, the facility/employer clinic would own the records. Whereas in Texas or Virginia, the individual health care practitioner owns the records.

[4] The federal Clinical Laboratory Improvements Amendment (“CLIA”) regulates laboratory testing nationally, with many state agencies mandating additional oversight and licensure obligations.

[5] Illinois and California are examples of states that require physician ownership of medical practices, with physician oversight of nurse practitioners and other medical professionals. The employer or a management company can contract with the physician practice to provide services.

[6] Florida and Massachusetts are examples of states where clinic licensure may be required.

[7] Federal DEA regulations dictate storage, security, and recordkeeping requirements for any clinic practice that dispenses controlled substances. All states regulate quantities and schedules of drugs that may be dispensed from a non-pharmacy clinic and obligate dispensing practitioners to report controlled substances in electronic prescription drug monitoring programs. 

 

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