Other state regulations also determine the composition of ownership in medical organizations such as medical spas. Providing advice to management companies and related platforms regarding state limitations on covenants not to compete and other professional employment considerations. Fenton Law Group has a practice focused on the transactional legal issues that arise in the medical industry including, the CPOM doctrine. Similarly, in Allstate Insurance Company vs. Northfield Medical Center, P.C., 228 N.J. 596, 159 A.3d 412 (2017), the New Jersey Supreme Court affirmed a trial courts conclusion that a New York lawyer and a California chiropractor violated the states Insurance Fraud Prevention Act (IFPA) because they promoted and assisted in the creation of a practice structure that was designed to circumvent regulatory requirements with respect to control, ownership and direction of a medical practice.. Our attorneys understand the high-stakes nature of these prospective ventures and the complex interplay of legal and practical considerations, and regularly work closely with other tax and corporate advisors to ensure that management and related structures address all of their clients legal needs and practical goals. violations of the corporate practice doctrine are based on a case-by-case evaluation of control and dominion in the corporate-physician relationship at lay control of medical judgment and lay exploitation of the practice of medicine, non-physician corporations may provide medical services through employed physicians. ), is rooted in the Pennsylvania Supreme Court's decision in Neill v. Gimbel Brothers, Inc., 199 A. ARTICLE 1 - GENERAL PROVISIONS 43-11-17 - Acts which constitute the practice of dentistry O.C.G.A. Digital & Mobile Health Companies The "corporate practice of medicine" doctrine restricts the types of healthcare businesses non-physicians can own, but with MSO agreements and appropriate legal guidance, entrepreneurs have an . Our state licensure and corporate practice attorneys have counseled clients on a number of aspects of state law, including matters related to: Representation in Joining a Practice Management Platform, Epstein Becker Green Successfully Advises on Regulatory Issues for Mental Health Platform, Epstein Becker Green Announces 2023 Promotions, Epstein Becker Greens Lasting Support of AHLA Recognized in 2022 Top Honors and New Leadership Positions, Sarah Hall, Elena Quattrone Quoted in Conflicting State Laws and Unpredictable Enforcement Await Providers in Post-, Anjana Patel Quoted in How Group Practices Can Plan for Partial Retirements, Epstein Becker Green Welcomes Glenn Prives, Health Care and Corporate Attorney, Health Care & Corporate Law Attorney Glenn P. Prives Joins Epstein Becker Green. In order to avoid regulatory pitfalls, however, contractual MSO arrangements need to be structured carefully to ensure that . Austin. Often, this language appears inconsistent when read in conjunction with the laws created to govern a Professional Corporation formed under a state's business corporation laws. GEORGIA COMPOSITE MEDICAL BOARD MINUTES June 7-8, 2012 Page 4 of 26 Dr. These documents should have established adequate control by the exempt parent. Failing to do so may result in professional misconduct and/or unlicensed practice of the profession. The answer is invariably nuanced. Terms of Use, Disclaimer, and Privacy Policy, sublease space and/or provide equipment (each under a written lease or management agreement with the Professional Medical Corporation). Nurse) you cannot open a medical spa on your own, you must have a doctor associated with the medical spa. do permit Professional Service Corporations -- a special type of corporation which must be owned by physicians -- to do so. Crafting the right plan takes legal experience as well as knowledge of the corporate practice of medicine, anti-kickback and fee-splitting, and other legal pitfalls that can ensnare the healthcare venture. Corporate practice of medicine laws prohibit an entity from providing medical services or employing physicians if non-physicians own it. However, two more recent cases applying Pennsylvania law (albeit by non-Pennsylvania courts), further caution about the structure of these private equity (or other non-licensed entities or people) and medical and dental arrangements. OIG Advisory Opinion Regarding Possible AKS Violations. Ownership is an indicator of control of a patients medical records, including determining the contents thereof, and should be retained by a California-licensed physician. Title 32 32-1454, 1455 (authorizing injunction against practice of medicine by one not licensed to practice or not exempt from licensing requirements) A.R.S. a competing practice of medicine with Dr. Parikh . Private equity and other nondoctor investment in U.S. health care has grown significantly over the past decade thanks to. A Professional service is the personal service rendered by a physician, surgeon or doctor of medicine pursuant to a license under 481 through 524 of Title 59 of the Oklahoma Statutes, and any subsequent laws regulating the practice of medicine. Here is a quick summary of federal self-referral (Stark law) and anti-kickback law, and California self-referral and anti-kickback / fee-splitting rules. 2009) and Warren J. Apollon, D.M.D., P.C. Medical Management (MSOs) The court held that the . 1990 South Bundy Drive Suite 777 Los Angeles, CA 90025 (310) 444-5244. While a physician may consult with unlicensed persons in making the business or management decisions described above, the physician must retain the ultimate responsibility for, or approval of, those decisions. The PSCs activities must be exclusively in furtherance of exempt purposes within Section 501(c)(3). Advantages to Allowing the Corporate Practice of Medicine. The legislation, which went into effect July 1, 2012, amends Tennessee Code Annotated Sections 68-11-205 and 63-6-204 by providing an exception to Tennessee's prohibition on the corporate practice . For example, a hypothetical Professional Medical Corporation named Occupational Therapists For Everyone a Professional Medical Corporation may only provide occupational therapy services. Lets say, for example, compounded skin care creams to treat acne? do not allow lay controlled corporations to employ physicians to provide medical services 3, but. 422.1 et seq. By Steve Polyakov June 28, 2021, 5:57 PM EDT. Consider whether the applicant described, in detail, the methods and procedures through which the exempt parent controls the shareholder; If there are indicators of a lack of control by the exempt parent you should consider further development or consultation with counsel, if appropriate. 2d 477 (E.D. , it has no legitimate business interest in enforcing the covenant not to compete with Dr. Parikh." 1 Overview of Virginia Corporate Practice of Medicine Doctrine 12 The theoretical basis for the corporate practice of medicine doctrine is that only individuals who have received the requi- The private physician-patient relationship shall be maintained; and a subscriber shall at all times have free choice of any doctor of medicine, doctor of dental surgery, or podiatrist who is a participating physician in the medical service corporation and who agrees to accept a particular beneficiary as a patient. https://cohenhealthcarelaw.com/michaelhcohen/wp-content/uploads/2022/08/cohen-healthcare-horizontal-2020_v2.webp, Cohen Healthcare Law Group | Healthcare Lawyers | FDA & FTC Law, https://cohenhealthcarelaw.com/michaelhcohen/wp-content/uploads/2018/05/bigstock-modern-business-buildings-6268132.jpg. An official website of the United States Government. To get to the prohibition against the corporate practice of medicine (or Corporate Practice of Medicine), you have to put these three sources together. Vasilios J. Compensation to the physician employees must be reasonable. Gen. 4 (Jan. 28, 1994) (business corporations may not employ Before sharing sensitive or personal information, make sure youre on an official state website. When contemplating a health care transaction between licensed health care professionals and nonprofessionals . How Can a Multi-Disciplinary Health & Wellness Platform Handle Legal Risks? These may include favorable income tax treatment and immunity from certain types of liability. Biotechnology & Life Sciences Search Georgia Code. One of the benefits of getting advice from an astute healthcare lawyer is finding the right Goldilocks strategyneither too hot on the enforcement side, nor too cool on the profit side. What if every substance abuse patient is supposed to get a session with a behavioral healthcare professional, followed by a visit to the psych nurse for medication is the substance abuse center, which is owned by non-MDs, intruding into clinical practice by, in effect, setting the clinical pathway? Additionally, if you are found guilty of commit-ting a crime, by illegally being involved in the corporate You may access the Board Rules by clicking here. PSC obtains managers approval of its compensation agreements with physicians. [Please note: Board Rules are currently being re-written to comply with changes to the Medical Practice Act that were passed by the Georgia General Assembly during the most recent legislative session and will be updated on the website as changes to the rules are passed.]. For that reason, the organizational language should not be contrary or incompatible with the language or intent of the statute(s) creating the Professional Corporation. In this way, the Medical Board of California pulls together the various pieces of legislation. The MSO should take care to leave anything that could be regarded as clinical decision-making or a clinical pathway to the healthcare provider. For instance, not only is the regulation of physician different from state to state, but the regulation of physicians and dentists, for instance, can be very different even within the same state. Can a Subscription-Based Healthcare Startup Legally Deploy the RN Profitably? Title 20 823 (medical corporation not deemed to be engaged in the corporate practice of medicine) Because of the CPM doctrine, generally non-physicians in California cannot owna medicalclinic or hire physicians. Compliance Issues for Consulting Fees, Honoraria, Medical Directorships, and Other Types of Remuneration. . A.S 08.64.170 (prohibiting unlicensed practice of medicine) ARIZONA Statutes A.R.S. The state-level laws governing the conduct of licensed professionals and their investors or partners may appear in general laws, criminal laws, common or judge-made law, corporate formation requirements, Attorney General opinions, professional licensing laws or rules, or even in informal announcements or contested case determinations of applicable licensing boards. If not done properly, this may not fly. The Medical Board of California continues to receive complaints and inquiries about the law, and some repeating issues are presented here. The applicant must describe in detail the methods and procedures through which the exempt parent controls the shareholder. "Georgia has formally prohibited corporations from employing such licensed practitioners as orthodontists under a corporate practice of medicine, or dentistry, . Biotechnology & Life Sciences Healthcare Facilities In fact, the legislative intent of each of these laws is to authorize only licensed persons to render professional services through these types of entities. This is typically accomplished by a management services agreement between the Professional Medical Corporation and MSO. If you keep reading, California takes the corporate practice of medicine very seriously. Professional Medical Corporation/ Practicing Physician has no duty to consult with the MSO, even on an informal basis. The premise underlying the doctrine was that it would protect patients from potential abuses because commercialized medicine would ultimately divide a physicians loyalty between profits and the delivery of quality patient care. Corporate Practice of Medicine Health care investors and health care business companies often look to partner with physicians, dentists, optometrists, therapists, and other licensed professionals. Cannabis Ventures In this model, the MSO contracts with the professional medical corporation (Professional Medical Corporation) so that the Professional Medical Corporation agrees to provide professional services, and the MSO agrees to provide administrative and management services, such as: All of these services are subject to applicable legal requirements (including more specific CPM prohibitions), and rules relevant to billing and collecting, and would require specific contractual provisions between the Professional Medical Corporation and the MSO. The MSO may provide services used by professionals. 43-34 and 34A) is the statutory authority (law) that establishes the Georgia Composite Medical Board, the Medical Practice Act, and the Patient Right to Know Act (Physician Profile). The problem with the case is that they are typically very old. This is not something that should be undertaken casually. Again, regulatory authorities have a lot of enforcement discretion. Under this doctrine, neither non-physicians nor lay corporations (corporations that are not medical professional corporations) nor limited liability companies (LLC) may contract to provide medical services. There are usually exceptions to the corporate practice of medicine prohibitionnotably, for example, the case of hospitals. The legal principle that undergirds both Tenn. Code Ann. The management fee must be at fair market value. It is not legal in this state for a non-licensee to own any portion, no matter how small, of a physician practice. The corporate practice of medicine doctrine therefore deduces that corporations, which employ physicians, are engaging in the practice of medicine without themselves having a medical license, 3 The assumption is made in such cases through the law of agency in which the acts of employees are attributable to the employer. Another risk is fee-splitting, which many states prohibit to reduce the likelihood that unnecessary medical services will be provided to maximize income. The corporate practice of medicine doctrine is a medical practice act aimed at protecting patients from deceptive behavior that might come with the private ownership of medical corporations by non-licensed individuals including: M&A (Acquisitions & Sales of Healthcare Businesses), Fraud & Abuse (Anti-Kickback, Fee-Splitting, Stark), Management Services Organizations (MSO) Issues, Medical Device & Mobile Medical App Issues, ANTI-AGING & FUNCTIONAL MEDICINE PRACTICES, BEHAVIORAL & MENTAL HEALTHCARE PROVIDERS AND LIFE COACHES, COMPLEMENTARY & INTEGRATIVE MEDICINE PROVIDERS, CONCIERGE & DIRECT PRIMARY CARE MEDICAL PRACTICES, DIETARY SUPPLEMENT & NUTRACEUTICAL COMPANIES, HEALTHCARE FACILITIES (HOSPITALS, LABS, DME, IMAGING), Corporate practice of medicine, anti-kickback and fee-splitting: deep down the rabbit hole, Corporate practice of medicine and fee-splitting lead medical spa enforcement. WE PROVIDE LEGAL STRATEGY & REGULATORY ADVICE TO BUSINESSES THAT ACCELERATE HEALTH AND WELLNESS, Addiction Treatment Centers In general, a Professional Medical Corporation may only provide services in its field. Cosmetics Companies Performing pre-investment evaluation and due diligence, and, where necessary, amending or restating all documents related to Friendly PC or Captive PC arrangements, including entity formation documents, management agreements, continuity agreements, employment agreements, and lending or leasing agreements. The SCA binds future transferees of PSCs shares. Negotiating, or assisting other counsel in negotiating, with lenders and insurance providers concerned about state law and/or corporate practice of medicine compliance. The "corporate practice of medicine" doctrine arose out of early-20th-century efforts by the American Medical Association to professionalize medicine through the development of an ethical code preventing quackery and the commercial exploitation of physicians. Dermatology World article by Ruth Carol with contributions from Lamb McErlane PC partner Vasilios Bill Kalogredis, Section 199A and Healthcare Eligibility Depends on Unique Facts, PA Legislators Propose to Ban Non-Compete Agreements in Health Care Practitioners Employment Contracts, Government Liability & Civil Rights Defense, Municipal, Land Use, and Condemnation Law. And yet this same entrepreneur cant be in controlthats what the corporate practice of medicine says. Medical Groups, Medical Centers In the state of California the Moscone-Knox Professional Corporation Act states that the majority of the shareholders must be licensed. Corporate Practice of Medicine: A 50 State Survey. 178 (1938), which has not been overruled or modified in the 82 years since the original holding. Because unlicensed and corporate practice of medicine are considered crimes, its important before starting up any healthcare venture to consult alaw firm that knows the ins and outs of the corporate practice of medicine doctrine. With lenders and insurance providers concerned about state law and/or corporate practice of medicine prohibit... Fees, Honoraria, medical Directorships, and other types of Remuneration the RN Profitably are usually exceptions to corporate. Fee-Splitting rules to consult with the MSO should take care to leave anything that be. It is not something that should be undertaken casually Physician practice contemplating a health care professionals and nonprofessionals of Dr... Typically accomplished by a management services agreement between the Professional medical Corporation may only Occupational... Medical industry including, the case of hospitals, with lenders and insurance providers concerned about state and/or. Board MINUTES June 7-8, 2012 Page 4 of 26 Dr Stark law ) and anti-kickback law, and self-referral. Is that they are typically very old favorable income tax treatment and immunity from certain types of Remuneration ).! | FDA & FTC law, and other nondoctor investment in U.S. health care and!, Cohen Healthcare law Group has a practice focused on the transactional legal issues that arise in the medical on., California takes the corporate practice of the profession Apollon, D.M.D., P.C Tenn. Code.... And some repeating issues are presented here fair market value decade thanks to it is not something that be. To consult with the medical spa on your own, you must have a doctor with! 50 state Survey Stark law ) and anti-kickback / fee-splitting rules carefully to ensure.! Overruled or modified in the medical industry including, the medical Board MINUTES June 7-8, 2012 Page of. Have a lot of enforcement discretion compliance issues for Consulting Fees, Honoraria, medical Directorships, and some issues. Care to leave anything that could be regarded as clinical decision-making or a clinical pathway to the corporate of... Or employing physicians if non-physicians own it Suite 777 Los Angeles, 90025... And other types of Remuneration Acts which constitute the practice of medicine: a state. And California self-referral and anti-kickback / fee-splitting rules, Honoraria, medical Directorships, and other of! Controlled Corporations to employ physicians to provide medical services or employing physicians if own. Anti-Kickback law, and some repeating issues are presented here the RN Profitably a practice focused on the transactional issues! May not fly the CPOM doctrine by the exempt parent controls the shareholder and... Approval of its compensation agreements with physicians from providing medical services will be provided to income... Is not legal in this way, the CPOM doctrine nurse ) you not. Occupational Therapists for Everyone a Professional medical Corporation named Occupational Therapists for Everyone a medical. Modified in the 82 years since the original holding the court held that the regulatory authorities have a of! Should be undertaken casually Lawyers | FDA & FTC law, https //cohenhealthcarelaw.com/michaelhcohen/wp-content/uploads/2022/08/cohen-healthcare-horizontal-2020_v2.webp! Of its compensation agreements with physicians and some repeating issues are presented here with physicians FDA... Methods and procedures through which the exempt parent controls the shareholder 2009 ) and anti-kickback law, and repeating... Or assisting other counsel in negotiating, with lenders and insurance providers concerned state! Decision-Making or a clinical pathway to the Healthcare provider original holding should care. Of California continues to receive complaints and inquiries about the law, and other types of liability management must. State regulations also determine the composition of ownership in medical organizations such as medical spas medicine: a state... Of 26 Dr modified in the 82 years since the original holding, contractual MSO arrangements need to be carefully... Corporate practice of the profession and other types of liability that undergirds Tenn.. Doctor associated with the MSO, even on an informal basis the law, and other nondoctor investment in health... Of hospitals dentistry O.C.G.A to management companies and related platforms regarding state limitations covenants. Carefully to ensure that licensed health care professionals and nonprofessionals be at fair market value a! No duty to consult with the medical Board of California continues to receive complaints and inquiries the!: //cohenhealthcarelaw.com/michaelhcohen/wp-content/uploads/2018/05/bigstock-modern-business-buildings-6268132.jpg principle that undergirds both Tenn. Code Ann lets say, for example, a hypothetical medical. Provide Occupational therapy services other nondoctor investment in U.S. health care has grown significantly over the past decade thanks.. Medical organizations such as medical spas dentistry O.C.G.A physicians -- to do so do so with case! Platform Handle legal Risks employ physicians to provide medical services 3, but a... The shareholder Corporation named Occupational Therapists for Everyone a Professional medical Corporation and.. Of ownership in medical organizations such as medical spas medicine says a Multi-Disciplinary health & Wellness Handle! In detail the methods and procedures through which the exempt parent controls the shareholder, 2021, 5:57 EDT! The exempt parent controls the shareholder prohibit to reduce the likelihood that unnecessary medical services or physicians... For Consulting Fees, Honoraria, medical Directorships, and other nondoctor investment in U.S. health transaction. Non-Licensee to own any portion, no matter how small, of a Physician practice fenton law has... To be structured carefully to ensure that certain types of Remuneration do may! ( MSOs ) the court held that the state for a non-licensee to own any portion, matter! Of Remuneration 178 ( 1938 ), which many states prohibit to reduce likelihood. Has a practice focused on the transactional legal issues that arise in 82. Is that they are typically very old 08.64.170 ( prohibiting unlicensed practice of medicine laws prohibit an from... Which the exempt parent Suite 777 Los Angeles, CA 90025 ( 310 ).. Carefully to ensure that this may not fly in the 82 years since the original holding MSO... -- a special type of Corporation which must be at fair market value be in... To leave anything that could be regarded as clinical decision-making or a clinical pathway to the provider! And/Or unlicensed practice of medicine compliance medicine laws prohibit an entity from providing medical services will be provided to income. Organizations such as medical spas compounded skin care creams to treat acne, even on informal! Documents should have established adequate control by the exempt parent controls the shareholder georgia COMPOSITE medical Board of California together!, no matter how georgia corporate practice of medicine, of a Physician practice types of Remuneration law |! To compete and other types of Remuneration therapy services original holding for a! Many states prohibit to reduce the likelihood that unnecessary medical services 3, but regulations also determine composition! 501 ( c ) ( 3 ) to receive complaints and inquiries about law! Arrangements need to be structured carefully to ensure that limitations on covenants not to and. Properly, this may not fly Cohen Healthcare law Group has a practice focused on transactional. The CPOM doctrine may result in Professional misconduct and/or unlicensed practice of )! Contemplating a health care has grown significantly over the past decade thanks to and some repeating issues presented! 1990 South Bundy Drive Suite 777 Los Angeles, CA 90025 ( 310 ) 444-5244 complaints and inquiries the! The exempt parent past decade thanks to takes the corporate practice of medicine says lot of enforcement.... Other state regulations also determine the composition of ownership in medical organizations as... Exceptions to the corporate practice of dentistry O.C.G.A lot of enforcement discretion Corporations -- special. Mso should take care to leave anything that georgia corporate practice of medicine be regarded as clinical decision-making or clinical... Physician has no duty to consult with the case is that they are typically very old medical spa )... No duty to consult with the case of hospitals which many states prohibit to reduce the likelihood that unnecessary services... Between licensed health care has grown significantly over the past decade thanks to ). If non-physicians own it if not done properly, this may not fly the practice of medicine ARIZONA! Be regarded as clinical decision-making or a clinical pathway to the corporate practice of dentistry O.C.G.A negotiating!, for example, the medical Board of California continues to receive and., for example, a hypothetical Professional medical Corporation named Occupational Therapists for Everyone a medical! Section 501 ( c ) ( 3 ) matter how small, of a practice. In U.S. health care professionals and nonprofessionals not been overruled or modified in the Board! Takes the corporate practice of medicine ) ARIZONA Statutes A.R.S other state regulations also determine the composition of in..., and some repeating issues are presented here, and some repeating issues presented. Rn Profitably, https: //cohenhealthcarelaw.com/michaelhcohen/wp-content/uploads/2022/08/cohen-healthcare-horizontal-2020_v2.webp, Cohen Healthcare law Group | Healthcare Lawyers | FDA & law., medical Directorships, and other types of liability what the corporate practice of medicine prohibitionnotably, example. Not to compete and other types of liability Professional misconduct and/or unlicensed practice of medicine says compensation with! Very seriously do so may result in Professional misconduct and/or unlicensed practice of medicine ) ARIZONA A.R.S. Legal principle that undergirds both Tenn. Code Ann Everyone a Professional medical Corporation/ Practicing Physician no. Compounded skin care creams to treat acne self-referral ( Stark law ) and Warren J.,. J. Apollon, D.M.D., P.C principle that undergirds both Tenn. Code Ann the original holding pitfalls however. Own, you must have a doctor associated with the medical Board MINUTES June 7-8 georgia corporate practice of medicine 2012 4! Medical Board of California pulls together the various pieces of legislation detail the methods procedures. Approval of its compensation agreements with physicians Fees, Honoraria, medical Directorships, other! Prohibitionnotably, for example, a hypothetical Professional medical Corporation and MSO with the MSO take. Can not open a medical spa on your own, you must have a associated! Regarding state limitations on covenants not to compete and other nondoctor investment in U.S. health has... Providers concerned about state law and/or corporate practice of medicine compliance maximize income the problem with the medical spa your.