Record-Retention Programs Can Protect Group Practices

Group practices, like other businesses, are required by Federal or state statutes to retain certain records regarding their past activities. For example, many states require incorporated businesses to keep minutes of their board meetings, communications with shareholders, annual reports, and similar

documents for a specified period of time. It is a good business practice, however, to retain other types of records as well, even those not required by law. Group practices should retain not only corporate minutes that document the decisions of the practices, but also banking and other records.(a)

The key reason for retaining all types of records is to protect group practices in the event of litigation. Under the rules of evidence, a practice's business records can be introduced as an exception to the hearsay rule, by which the party who introduces the records receives the benefit of having maintained the business record over the testimony of witnesses. The hearsay rule, which can be found in the Federal Rules of Evidence Rule 801, states that hearsay is an out-of-court statement made by a person who is not testifying at trial that purports to be the truth. Hearsay is generally not admissible as evidence in court, unless one of the exceptions to the hearsay rule applies. Business records, however, are a recognized exception to the hearsay rule. This benefit assumes, of course, that the records are accurate and have not been tampered with.

Which Records to Retain

Group practices should adopt a record-retention policy that specifies which business records to retain and for how long. The policy can be put into practice through the use of a checklist (see Exhibit 1). In general, group practices should retain records that pertain to patient care, taxes, payroll, and contracts.

Patient care. The length of time medical records are kept is sometimes governed by state statute or regulation. In addition, some medical malpractice insurance carriers require their policyholders to maintain medical records for a set period of time as a hedge against a liability claim.

In addition, medical records are required to verify that the care rendered to patients was billed properly to third-party payers. Federal agencies have documentation requirements to support charges billed by physicians and other caregivers in physicians' offices, such as nurse practitioners and physician assistants.