The Psychologist’s Legal Obligations in Record Compliance and Understanding Proper Risk Management

Due to the nature of the practice a Psychologist’s obligations relating to the maintenance of proper records is unique. A professional license takes years to acquire and faulty or erroneous record keeping may place one’s career and livelihood in jeopardy.  So too, the mishandling of an investigation or an audit may place may also jeopardize a lifetime of pride and work.  The consequences for failing to maintain proper records and mishandling an investigation or audit can be severe and may implicate administrative, civil, and even criminal consequences.

It is therefore important that Psychologists should be aware, have a basic understanding of, and be educated on the requirements under the law regarding proper record keeping:

  1. The requirements under the law regarding proper record keeping;
  2. Patient privacy issues in the course of investigations and audits;
  3. The scope and authority of the State in conducting investigations of complaints;
  4. The scope and authority and the limitations for an insurance carrier’s audit or investigation of a provider; 
  5. The Administrative process in investigations and the imposition of civil and administrative penalties.

Record keeping compliance is set for the in the New Jersey Administrative Code (“N.J.A.C.”) in N.J.A.C. 13:42-8.1 which specifies how psychologists are to prepare and maintain patient records.

 N.J.A.C. 13:42–8.1 Preparation and maintenance of client records

 (a)   A licensee shall prepare and maintain separately for each client a permanent client record which accurately reflects the client contact with the licensee whether in an office, hospital or other treatment, evaluation or consultation setting.

 (b)   A licensee shall make entries in the client record contemporaneously with the services provided. A licensee may dictate an entry for later transcription, provided the transcription is dated and identified as “preliminary” until the licensee reviews the transcription and finalizes the entry in the client record.

 (c)    The licensee shall include in the client record material pertinent to the nature and extent of the professional interaction, for example: 

  1. The location of treatment, evaluation or consultation
  2. The client name, address and telephone number
  3. The client complaint on intake
  4. Medical history recognized as of potential significance 
  5. Past and current medications
  6. Significant social history
  7. Findings on appropriate examination 
  8. Raw data and interpretation of tests administered
  9. Current functional impairments and rating levels thereof
  10. A diagnostic impression
  11. Contemporaneous and dated progress or session notes including specific components of treatment, evaluation or consultation
  12. Dates of all treatment, evaluation or consultation sessions
  13. An evaluation of progress (if applicable)
  14. A prognosis
  15. The client identity on each page
  16. Fees charged and paid
  17. The identity of each provider of treatment, evaluation or consultation (and supervisor, if any); and
  18. If services are rendered by a permit holder, the written disclosure form signed by the client as required by N.J.A.C 13:42-4.4(f)

(d)   The client record shall contain information regarding referrals to other professionals together with reports and records provided by other professionals and integrated into the client’s treatment, evaluation or consultation report. 

(e)   A licensee may make corrections or additions to an existing record provided that each change is clearly identified as such, dated and initialed by the licensee. Any other alteration of records shall be deemed professional misconduct. 

(f)    When records are to be maintained as confidential, the licensee shall establish and maintain a procedure to protect such records from access by unauthorized persons. 

(g) The licensee shall retain the permanent client record for at least seven years from the date of last entry, unless otherwise provided by law. Records for minors shall be kept for seven years from the date of the last entry or until the client turns 25 years old, whichever is longer, unless otherwise provided by law.  Amended by R. 2021, effective November 1, 2021.

(h)   The licensee shall establish procedures for maintaining the confidentiality of client records in the event of the licensee’s relocation, retirement, death, or separation from a group practice, and shall establish reasonable procedures to assure the preservation of client records which shall include at a minimum: 

  1. Establishment of a procedure by which patients can obtain treatment records or acquiesce in the transfer of those records to another licensee or health care professional who is assuming the responsibilities of that practice
  2. Publication of a notice of the cessation and the established procedure for the retrieval of records in a newspaper of general circulation in the geographic location of the licensee’s practice, at least once each month for the first three months after the cessation; and 
  3. Making reasonable efforts to directly notify any patient treated during the six months preceding the cessation, providing information concerning the established procedure for retrieval of records. 

Amended by R.2000 d.476, effective December 4, 2000; R.2004 d.140, effective April 5, 2004. 

The practical reality is that many professionals do not maintain their records in strict compliance with the law.  A smart professional will periodically review the practices record keeping to insure quality control.  It is better to be proactive and implement proper record keeping procedures before there is an audit by an insurance carrier, an investigation by the Board of Psychological Examiners, an investigation by the Department of Banking and Insurance, or an investigation by a law enforcement agency. 

A wise practice would be to have record keeping procedures periodically reviewed by an attorney to insure current and up to date compliance.  Protecting the viability of one’s professional license is not something that should be an afterthought and should not only addressed when an audit or investigation occurs.  An ounce of prevention is worth a pound of cure.

Eric Marcy, Esq. has represented licensed professionals before a variety of licensing boards. If you have any concerns regarding your professional license, if you believe that a complaint or investigation may commence, or if you are with a notice of formal administrative action, contact Somerville license defense lawyer Eric Marcy, Esq. who is Of Counsel to Lyons & Associates, P.C. You can call 908-581-2388 (cell) or 908-575-9777 (office) or you may email him at [email protected]. Our offices are located in Somerville and Morristown, New Jersey, and we proudly serve clients throughout New Jersey, including but not limited to Somerset County, Morris County, Middlesex County, Union County, Essex County, Bergen County, Hunterdon County, Warren County, Sussex County, Passaic County, and Monmouth County.