Long-Term Value: GC Saves Money By Taking on Medicare

, Texas Lawyer

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Richard Cheng, general counsel of Senior Care Centers, says his new colleagues were perplexed when the company hired him last year.

It's rare for long-term health-care companies to have in-house counsel, he explains — an irony since the industry is heavily regulated. Dallas-based Senior Care Centers is one of the few long-term care companies with a general counsel, Cheng says, so when he joined the team, his colleagues had to ask, "Why is he valuable?"

But now Cheng's co-workers recognize the benefits that flow from the company's first and only lawyer. He says they treat him as "a point person and a resource for all departments." They can get answers to their legal questions any time, and they bounce business ideas off Cheng to get feedback from a legal perspective, he says.

"They have as much time as they want with me," says Cheng, noting that he doesn't bill per hour as did the outside counsel who previously helped with such questions.

Aside from being the No. 1 legal resource for the board of directors, company leadership and all departments, Cheng manages a medical appeals department that he created to appeal denied Medicare claims; drafts and reviews contracts; and works with insurance providers to oversee litigation in general liability, professional liability and employment cases.

Cheng earned a bachelor's degree and master's degree in occupational therapy from Texas Tech University in 1999. From 1999 to 2003, he worked as an occupational therapist at various companies in Dallas. He continued doing so part time while attending law school, earning his degree in 2006 from Nova Southeastern University Shepard Broad Law Center in Fort Lauderdale, Fla.

"I really didn't see myself as an occupational therapist forever," says Cheng. "Really, I wanted to go to law school to open up opportunities."

Cheng moved to Minneapolis to become a staff attorney doing corporate due-diligence work at Thomson Reuters, a publication company, from 2006 to 2007. He and another staff attorney left in 2007 to form their own law firm, Hoss & Cheng. There, Cheng did business transactional work and commercial litigation.

After a larger firm bought out Hoss & Cheng, Cheng became an associate with that firm, Pearson, Randall, Schumacher & LaBore, defending businesses such as lumber and construction companies in litigation and representing plaintiffs in tort cases from late 2007 to 2009.

He returned home to Dallas and took a one-year break from the legal profession, serving as director of therapy health services at the Visiting Nurse Association. But an opportunity to merge his therapy and law backgrounds drew him in-house in 2010 to serve as general counsel for Century Rehab, which provides rehabilitation therapy services.

"That's where I kind of made my mark in the health-care industry," Cheng says, explaining he created a medical appeals department to appeal to denied Medicare claims.

But Century Rehab laid Cheng off in late 2010 due to the sluggish economy. The company delivered the news at 9 a.m., and Cheng says, two hours later, Senior Care Centers called because it wanted him to set up a medical appeals department there.

Cheng says it was an amazing opportunity to create a legal department from the ground up at a company with 4,600 employees and about $310 million per year in revenue.

Senior Care Centers' profit margins have benefited from the medical appeals department Cheng launched, he says. When the company provides services to patients, it files claims with Medicare for payment. Medicare audits providers' billings and sometimes denies payment, he says. Companies can appeal, but that first appeal is often "rubber-stamp denied," says Cheng. Most companies just give up, but not Senior Care Centers.

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