Training Sites for Trainees: Nonprofits Only?

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1 Training Sites for Trainees: Nonprofits Only? David G. Jensen, J.D., Staff Attorney The Therapist March/April 2011 This may come as a shock, but, trainees can get hours of experience in certain for-profit entities, assuming, of course, that such entities have been approved by the trainee s graduate program. However, trainees still cannot get hours of experience in private practices, although they are forprofit entities. So, a trainee can and cannot get hours of experience at for-profit entities? Yep. Ultimately, it depends on the type of forprofit entity involved. Graduate programs will have to look at entities closely to make such a determination, but more on that aspect of the equation later. Graduate programs, however, are likely free to draw the site line where they deem appropriate. So, if a graduate program wants its trainees to get hours of experience only at 501(c)(3) nonprofit agencies, that seems to be a line it can draw for its trainees. On the other hand, realizing that there are other ships in the sea so to speak may help some graduate programs identify additional training sites for their students, especially if they are having difficulty finding sites. It is always nice to have options! Acceptable Sites for Trainees: The Fundamentals A trainee is someone who is currently enrolled in a master s or doctor s degree program that is designed to qualify him or her for licensure as an MFT and who has completed no less than twelve semester or eighteen quarter units of coursework in the qualifying degree program (California Business & Professions Code (c)). As a trainee, all hours of experience must be coordinated by the trainee s graduate school, and the school must approve the site where the trainee obtains the hours of experience (California Business & Professions Code (b)). It seems that the horse of site approval must go before the cart of acquired hours of experience. Also, notice that the words coordinated and approved are active verbs. Coordinating trainee hours and approving sites are activities that require effort and due diligence by graduate programs. These are not passive activities. They are affirmative obligations. And, the BBS will disallow trainee hours if they are working at unlawful sites. Do Due Diligence! Since graduate programs must coordinate trainee hours and approve training sites, an issue arises about whether trainees could successfully sue graduate programs if hours of experience earned at sites are later disallowed by the BBS because the sites were not appropriate for trainees. That is definitely a possibility! However, graduate programs do not have to cower in fear about this. They just have to do their due diligence in coordinating hours and approving sites. Graduate programs can help protect themselves by being careful, reasonable, and knowledgeable about the sites they approve for

2 their students. It is all about graduate programs being diligent in doing their due diligence in selecting sites for their trainees. Careful consideration of sites should be the standard and the norm. However, we hear about some graduate programs who send trainees out to find their own training sites, and are told to then bring the paperwork back to the graduate program for someone to sign, which does not sound like true due diligence. Moreover, Debbie Flewellyn, a longtime employee of the BBS, who reviews Applications for Intern Registration, has noticed a disturbing trend towards sloppiness in this area, which ultimately results in her having to disallow trainee hours. In terms of true due diligence, potential sites should be visited; the staff of such sites should be interviewed; and, the organizing documents of such sites should be reviewed and copied for the program s file. These actions and documents may help justify placement decisions later, should the need arise. The over-arching question for graduate programs should be: Is this a place at which we want our students getting hours of experience? The due diligence process is also an opportune time for the graduate program and the site to discuss common concerns, such as how feedback regarding particular students will flow from site to program. A worthy goal is the development of a solid working relationship between the graduate program and the training site. But, this seems like a lot of work. Wouldn t creating a list of acceptable sites make this process a lot easier? The Original List Many years ago there was such a list, which I will refer to as the Original List. The existence of it made the analysis easy. If the site was on the Original List, trainees could get hours of experience there; if the site was not on the Original List, they could not. What could be simpler? But, over time, the Original List came to be viewed as being too restrictive in terms of acceptable sites. There were sites that were not on the Original List that should have been. So, the Original List was thrown out, like plaid polyester shirts, and replaced by a three-prong test we now have. The Three-Prong Test The three-prong test regarding where trainees can get hours of experience is set forth in California Business & Professions Code (d)(1). This section requires three criteria to be met for trainees to get hours of experience at that site. Failing to meet all three criteria would result in disallowance of the hours by the BBS. The three criteria are: 1. The site must be one that lawfully and regularly provides mental health counseling or psychotherapy; 2. The site must provide oversight to ensure that the trainee s work at the setting meets the experience and supervision required by law and is within the scope of practice for the profession; and, 3. The site must not be a private practice owned by an LMFT, an LCSW, a licensed psychologist, a licensed physician and surgeon, or a professional corporation of any of these licensed professions.

3 Unfortunately, the three-prong test, although allowing for more flexibility in the selection concerned do not want to wonder about. Graduate programs, supervisors, and trainees want to know, in advance, that the site meets the criteria for getting hours of experience. Ultimately, to bring more certainty to the process, discussions between CAMFT, the BBS, and other interested parties resulted in the generation of a New List. The purpose of the New List is to identify acceptable work settings for trainees. In furtherance of that purpose, trainees may get hours of experience at any of the following: 1. A nonprofit and charitable organization that has received a determination letter from the IRS pursuant to section 501(c)(3) of the Internal Revenue Code, or has an application for such determination on file with the Internal Revenue Service. 2. Hospitals and other licensed health facilities, whether for-profit or non-profit. 3. Governmental entities, whether city, county, state, or federal. 4. Alcohol and drug treatment programs, whether for-profit or non-profit, that are licensed by the State of California s Alcohol and Drug Treatment Division. 5. Schools, colleges, or universities, whether for-profit or non-profit. 6. Pediatric day health and respite care facilities. 7. Churches, either tax-exempt or capable of being tax-exempt. 8. Skilled nursing facilities licensed by the State of California. 9. Intermediate care facilities licensed by the State of California. 10. Residential care facilities licensed by the State of California. 11. State correctional treatment centers. 12. Social rehabilitation facilities licensed by the State of California. 13. Community treatment facilities licensed by the State of California. In reviewing the New List, several themes emerge: The first is that it is lawful for trainees to work at certain for-profit organizations, but not all for-profit organizations. The BBS has sanctioned the placement of trainees at forprofit hospitals and other for-profit licensed health facilities; at for-profit alcohol and drug treatment programs; and, at for-profit schools, colleges, and universities. In reviewing these sites, graduate programs will definitely want to obtain copies of the ownership documents for the business and the applicable state license, if there is one. We cannot stress enough the importance of obtaining copies of any licenses from governmental authorities and copies of any accreditations from credentialing authorities, as applicable. The paperwork will tell the story!

4 In reviewing the ownership documents, graduate programs should pay special attention to a document called Articles of Incorporation ( Articles ). This is typically a one or two-page document that gets filed with the California Secretary of State ( SOS ). Once the Articles have been accepted by the SOS, the corporation exists as a legal entity. How will you know if the SOS has accepted the Articles? If the Articles have been accepted, there will be a Filed and Endorsed stamp from the SOS s office in the upper right corner of the document. If you do not see such a stamp, the Articles have not been accepted and the corporation is not valid. In addition to whether the corporation is valid or not, the Articles will also evidence what kind of corporation the corporation is, which is very important for hours of experience purposes for trainees. Basically, there are three sets of Articles that graduate programs need to be mindful of when reviewing sites. The first are Articles for a NON-PROFIT corporation. These articles will likely contain a reference to being a nonprofit public benefit corporation and will also include some language about being established for public or charitable or public and charitable purposes. This language evidences that the underlying corporation has been organized on a nonprofit basis. When combined with recognition of tax-exempt status by the Internal Revenue Service, nonprofit corporations are acceptable sites for trainees to gain hours of experience. The second type of Articles is for a PROFESSIONAL corporation. This is the type of corporation that LMFTs, LCSWs, licensed psychologists, or licensed physicians certified in psychiatry would create for their practices. These Articles will contain a reference to engaging in the profession of marriage and family therapy; for instance, if that particular PROFESSIONAL corporation was owned by an LMFT. Conversely, if the PROFESSIONAL corporation was owned by a licensed psychologist, the Articles would contain a reference to engaging in the profession of psychology. This language evidences that the underlying corporation is a PROFESSIONAL corporation that has been organized on a for-profit basis. PROFESSIONAL corporations are private practices and trainees are not allowed to obtain hours of experience at them. The third type of Articles is for a REGULAR corporation, such as AT&T, IBM, or Ford Motor Company. These Articles will contain a reference to engaging in any lawful act or activity for which a corporation may be organized under the general corporation law of California other than the banking business, the trust company business, or the practice of a profession permitted to be incorporated by the California Corporations Code. The italicized language above makes clear that a REGULAR corporation cannot ordinarily provide mental health counseling or psychotherapy services because these are services that the professions of marriage and family therapy, social work, psychology, and psychiatry provide to their clients. The word ordinarily is important, however. Although a REGULAR corporation cannot practice these professions, it could own one of the for-profit entities listed on the New List. Here is an important distinction that graduate programs will need to keep in mind: Trainees cannot get hours of experience at REGULAR corporations unless that REGULAR corporation has also received a license from an agency of the State of California to operate one of the health care entities set forth in the New List, or the REGULAR corporation is operating a for-profit school, college, or university. The paperwork will tell the story! And, with REGULAR corporations, graduate programs need copies of the corporation s Articles and copies of the

5 applicable state licenses for health facilities or applicable accreditations for schools, colleges, or universities. The second theme concerns 501(c)(3) nonprofit and charitable organizations. If the non-profit organization has been recognized as an exempt organization by the Internal Revenue Service, graduate programs should obtain a copy of the IRS s determination letter, which is the letter from the IRS that informs the nonprofit organization that it has been recognized by the IRS as a tax-exempt organization. However, if the non-profit has not been recognized as a tax-exempt organization by the IRS, the graduate program should obtain a copy of the organization s Application for Recognition of Exemption, and obtain proof that such Application has actually been filed with the IRS before allowing trainees to acquire hours of experience at that site. The third theme concerns the phrase lawfully and regularly provides mental health counseling or psychotherapy. What does the word lawfully mean? Well, meaning regarding this word is ultimately going to be derived from the type of underlying organization involved. For health facilities such as hospitals, lawfully means state licensure. For 501(c)(3) organizations, lawfully typically means Articles of Incorporation filed with the California Secretary of State and receipt of the determination letter from the IRS. For public schools, lawfully means the imprimatur of applicable governmental authority. Basically, an organization is acting lawfully if it is operating under the color of legal authority for that kind of organization. Paperwork will tell the story! What does the word regularly mean? It seems to mean that mental health or psychotherapy services are provided in the regular course of business for that organization, although such services do not have to be the only services the organization provides. Take for instance, a counseling center at a college or university. Although colleges and universities primarily exist to educate students, they also provide mental health services for their students. Counseling centers are as much a part of a college campus as the gymnasium, the library, and the cafeteria. So, the word regularly does not necessarily mean all we do; it can also mean part of what we do, so long as that part fits with the organization s over-arching mission, whether that be psychological, charitable, educational, or spiritual. The fourth theme concerns supervision of trainees at the site. The law states that the site must provide oversight to ensure that the trainee s work at the setting meets the experience and supervision required by law and is within the scope of practice for the profession. Certainly, adequate supervision is important from a liability perspective, as well as from a trainee getting hours of experience for licensure perspective. Graduate programs need to approve of a site s ability or capacity to supervise to allow trainees to go to that site; the sites then must actually supervise trainees competently. However, because of the breadth of the three-prong test, there is a hidden issue that should be mentioned. Since organizations on the New List are not private practices, as that concept is defined in the law, supervision could be provided by offsite supervisors, although some of these organizations are organized on a for-profit basis (see 16 CCR 1833(b)(4)).

6 The fifth theme concerns the prohibition on trainees from working in private practices owned by an LMFT, an LCSW, a licensed psychologist, a licensed physician and surgeon, or a professional corporation of any of these licensed professions. This is still very much the case. But, what about this one: Assume an LMFT owns an alcohol and drug treatment program that has been licensed by the State of California s Department of Alcohol and Drug Programs. In terms of a setting for hours of experience, is such a setting an alcohol and drug treatment program because of the state licensure component, or is such a setting a private practice because it is owned by an MFT? This distinction is crucial because if the setting is a treatment program, trainees could get hours of experience there; however, if the site is a private practice, they could not. In this situation, treatment program trumps private practice. Consequently, trainees could get hours of experience there even though the business is owned by an MFT. However, and this is critical, note that the alcohol and drug treatment program must be licensed by the State of California for this to be a lawful site for trainees. Without that governmental seal of approval, trainees could not lawfully get hours of experience there. Again, paperwork will tell the story! Another example of unlawful activity is this: Suppose Stan, an MFT with a private practice, contracts with On the Wagon, an alcohol and drug treatment program, to provide psychotherapy to On the Wagon s patients. The work will be done at On the Wagon s place of business. Then suppose Stan, after getting approval from the local MFT graduate program, hires Sue, a trainee, to do therapy with On the Wagon s patients. Everyone believes On the Wagon is an acceptable site because it is licensed as an alcohol and drug treatment program, and such entities are on the New List, which has been published in The Therapist. However, this would not be a lawful site for Sue because she is an employee of Stan s private practice, not an employee of On the Wagon. The deep question is: Who is Sue employed by, not where is Sue working? In this hypothetical situation, Sue is an employee of Stan s private practice, although she is working at an otherwise acceptable site. Hence, this would run afoul of the rules regarding earning hours of experience David Jensen, JD, is a Staff Attorney at CAMFT. He is available to answer members questions regarding business, legal, and ethical issues.

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