the corporate practice of medicine regulations are action-able against your license to practice podiatry. It is not legal in this state for a non-licensee to own any portion, no matter how small, of a physician practice. These may include favorable income tax treatment and immunity from certain types of liability. For example, in Georgia: All this suggests that Georgia has a strong prohibition against Corporate Practice of Medicineat least for the moment, as these legal rules can be in flux. In the eyes of the law, the services offered by a managed care company can blur the distinction between professional judgment and utilization review. OPEN SESSION Dr. Butler made a motion, seconded by Dr. Weil, to license Dr. Beirne with terms and conditions. Its servants, though professionally trained and duly licensed to practice, owe their primary allegiance and obedience to their employer rather than to the clients or patients of their employer. For example, the California Medical Board says this in its page on Corporate Practice of Medicine: The Medical Practice Act, Business and Professions Code section 2052, provides: Any person who practices or attempts to practice, or who holds himself or herself out as practicing[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificateis guilty of a public offense.. Also, because it is allowed only to provide professional services, it can only manage the services that it provides. 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. A law firm focused on representing healthcare providers and professionals in Georgia and South Carolina in business, compliance, audits and business litigation. The corporate practice of medicine (CPM) is a legal doctrine that prohibits companies from profiting from the practice of medicine or directly employing a physician to provide professional medical services. To get to the prohibition against the corporate practice of medicine (or Corporate Practice of Medicine), you have to put these three sources together. This is not something that should be undertaken casually. KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. 78-41. Reviewing and evaluating employment, contracting, and other financial relationships with regard to state law compliance. OIG Advisory Opinion Regarding Possible AKS Violations. Reg. a competing practice of medicine with Dr. Parikh . If its not Corporate Practice of Medicine, Watch Out for Anti-Kickback Enforcement. These "corporate practice" restrictions are imposed by statute in some states, and in others by regulation or case law. The prohibition on the corporate practice of medicine is grounded in public policy concerns based on the principle that when a lay corporation holds a financial interest in a physician's profits, the entity has a direct interest in and ability to control medical decision-making and impact the quality of care provided to patients. ), is rooted in the Pennsylvania Supreme Courts decision in Neill v. Gimbel Brothers, Inc., 199 A. WE PROVIDE LEGAL STRATEGY & REGULATORY ADVICE TO BUSINESSES THAT ACCELERATE HEALTH AND WELLNESS, Addiction Treatment Centers 1 This analysis assumes the organization is formed as a corporation, however the organization may be formed as some other type of legal entity allowable under the laws of the state, such as an LLC. The presence or absence of the appropriate agreements (shareholder control agreement, management service agreement, or employment agreement) can help determine what development is necessary for further consideration. Epstein Becker Greens state licensure and corporate practice attorneys provide health care investors, companies, and physicians with a thorough and diligent review of applicable state laws, regulations, and board policies. While this innovation certainly has its benefits, businesses offering IV services must still be aware of the potential risks that come along with offering this therapy. The challenge is that the healthcare venture managed by able healthcare entrepreneurs wants to call the shots. Compensation to the physician employees must be reasonable. You may access the Board Rules by clicking here. 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. (Bill) Kalogredis, Esq. 178 (1938), which has not been overruled or modified in the 82 years since the original holding. A corporation entering into a transaction for a physician's services should fully explain that any existing quality assurance, utilization review, capitation/bonus arrangement, or similar plan should not be interpreted to impede or interfere with the independent medical judgment of the physician in treating patients. Forming and structuring Practice Management entities, including Physician Practice Management companies, as well as Optometrist Management, Dental Management, Therapist Management, and Veterinarian Management. Additionally, if you are found guilty of commit-ting a crime, by illegally being involved in the corporate 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. You may access the full text of the Georgia OCGA at site here. In practice, states with CPOM laws permit professional service entities to practice medicine, but only if owned by physicians licensed in that state. The MSO fee should reflect fair market value for the MSOs services. Biotechnology & Life Sciences The MSO model allows non-MD (non-physician) entrepreneurs to create a robust business model for the healthcare venture in which they do not partner or share professional fees with the medical doctors, but rather take an MSO or management fee in exchange for their management and marketing efforts. If you are a tax-exempt entity, you will also want to ensure the compensation reflects fair market value to avoid 501(c)(3) tax issues. Many states have enacted laws which directly or indirectly are viewed as prohibiting the "corporate practice" of medicine. The Parent can control the shareholder through an. However, they can own a management entity which can serve as an administrative and non-medical, management services organization (MSO) for the clinic or medical practice, which is frequently organized as a professional medical corporation (Professional Medical Corporation). Such assurance could come, for example, in the form of an opinion from the state attorney general. Can there be a parent-subsidiary relationship if the parent does not hold title to the stock of the PSC? In this way, the Medical Board of California pulls together the various pieces of legislation. Title 12. Navigating New York Laws On Corporate Practice Of Medicine. How Can a Multi-Disciplinary Health & Wellness Platform Handle Legal Risks? But even states that abide by the Corporate Practice of Medicine doctrine might have allowable exceptions. Biotechnology & Life Sciences In OCA, Inc. v. Hodges, 615 F. Supp. The MSO may provide services used by professionals. Subsequent case law is sparse and other authorities provide limited guidance on the applicability of the CPOM doctrine. , 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- 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). In simple terms, the CPOM doctrine generally prohibits non-licensed persons, including individuals and business entities, from employing physicians to practice medicine (or dentists to practice dentistry) on their behalf. But it is not the law, simply a restatement of what the medical board interprets the law. Washington, DC, Partner | 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. Georgia law provides a fairly typical definition of the practice of medicine (O.C.G.A., Section 43-34-21) as well as a prohibition against unlicensed practice of medicine (Section 43-34-22(a)). Title 31, Chapter 33 addresses health records. How would you know? 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. . However, they can own a management entity which can serve as an administrative and non-medical, management services organization (MSO) for the clinic or medical practice, which is frequently organized as a professional medical corporation (Professional Medical Corporation). The PSC should maintain its own charity care policy for its activities to further the exempt purpose of the Parent. Decisions regarding coding and billing procedures for patient care services. 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. Miami, Partner | The SCA imposes the provisions of IRC 501(c)(3) on the operation of the PSC. Is your therapy an FDA-regulated medical device? These are mixed questionsin other words, they touch on the medical practice but also require business judgment. The Parent (not the shareholder) initiates all actions regarding the election and removal of the corporations board of directors. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture. PSC obtains managers approval of its compensation agreements with physicians. Vasilios J. Compliance Issues for Consulting Fees, Honoraria, Medical Directorships, and Other Types of Remuneration. For example, a hypothetical Professional Medical Corporation named Occupational Therapists For Everyone a Professional Medical Corporation may only provide occupational therapy services. 68-11-205 and 63-6-204 is a common law legal doctrine known as the "corporate practice of medicine" doctrine. Medical practices of all types are subjected to various regulations from business formation to HIPAA compliance, and everything in between. The motion carried unanimously. Suite #5901 Wilbanks Drive, Norcross, Georgia, 30092 USA [1.770.448.0769]. 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. Digital Health Legal Roadblocks: Is the MSO Structure the Answer to Kickback and Corporate Practice of Medicine Concerns? The SCA limits shareholder eligibility to licensed physicians, employed by the exempt parent in an administrative capacity, agreeing in writing to become a party to the SCA, or similar agreement binding on the PSC and shareholders. A majority of states restrict the practice of medicine and dentistry by entities that are not owned and controlled by the relevant licensed professionals. ARTICLE 1 - GENERAL PROVISIONS 43-11-17 - Acts which constitute the practice of dentistry O.C.G.A. 2010 Georgia Code TITLE 43 - PROFESSIONS AND BUSINESSES CHAPTER 11 - DENTISTS, DENTAL HYGIENISTS, AND DENTAL ASSISTANTS . Broadly speaking, the Corporate Practice doctrine provides that a non-licensed person (or company) should not own or control a professional practice (such as a physician or dental practice), while fee-splitting laws prohibit professionals from sharing or dividing their fees with a non-professional in return for a referral of patients or customers. Most states prohibit the corporate practice of medicine, however, every state provides an exception for professional corporations Expanded to cover a broader range of healthcare professionals, this edition contains the latest information on practice restrictions by state as they relate to behavioral health providers, dentists, chiropractors, optometrists, and more. Each state has its own laws, of course. There are many benefits to operating a business in a corporate form. 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/2014/12/bigstock-doctor-meeting-teamwork-diagno-108851294.png. In some states (for example, California), it can be a percentage of gross revenues, whereas in other states (for example, New York), the management fee, at least historically, has had to be a flat fee. The SCA binds future transferees of PSCs shares. The "incapacity" of a shareholder means that a determination by a court of competent . Georgia Government Contracts Health . Contact us online or call us today for more information on how the CPOM Doctrine impacts your existing or emerging practice. The above are in the domain of the medical doctor and cannot be intruded upon by the MSO. As business opportunities abound for both licensed physicians and non-licensed entrepreneurs and investors, in the ownership and operation of ambulatory care facilities, drug treatment facilities, and diagnostic testing facilities, physicians, licensed practitioners, and businesspersons must ensure that the structure of their business complies with the Corporate Practice of Medicine (CPOM . 69545. 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. 4 Although meeting the integral part test suffices for the operating test, traditionally applicants have also provided or been asked to provide information to establish that they also meet the flexible community benefit standard" derived from Rev. The Parent selects any transferee of the stock. Corporate Practice of Medicine: A 50 State Survey. However, if the applicant does not meet the flexible community benefit standard, denial is not necessarily indicated. Review the organizations application for recognition as an organization exempt under IRC Section 501(c)(3). Part Two. 63-6-204(b). There must be no inurement to stockholders in the form of dividends or profits on transfers of their stock, distributions in the event of dissolution, or excessive compensation. Enforcement has many tools at its disposal. 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). Law360, New York (December 11, 2015, 10:29 AM EST) --. California corporate practice of medicine strict prohibition. Self-referral, anti-kickback, and fee-splitting rules can create legal enforcement issues and must be [], Weak Corporate Practice of Medicine States & A National Strategy. The corporate practice of medicine (CPM) rule or doctrine forbids medical management organizations (MSOs) from meddling with and effectively, directly or indirectly, control or in some way influencing, the affairs of medical practice. Bear in mind that these are simply guidelines and should not be construed as exhaustive. 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. Responding to state professional board inquiries, information requests, complaints, investigations, and other related matters. 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. Well, we appreciate the medical board promoting legal services. Phone: (404) 685-1662 - Medical Practice Formation :: Atlanta Medical Practice Formation Attorney . It cannot offer physical therapy services, speech services or any other professional services. Board Rule 480-28, Practitioner Dispensing of Drugs. For example, what if the telemedicine or digital health venture or mobile app guides the user (aka patient) to a specific pathway of diagnostic tests and/or treatments? Authors: Carole M. Becker, Stacey L. Callaghan, Dana Dombey, M. Brian Hall IV, Dawn R. Helak, Marshall Jackson Jr., Amanda Jester, Chelsea Rogers and Li Wang. 3 State law may provide for specific exceptions; for hospitals, for example. We wouldnt necessarily say that the physician has a legal duty to consult with the MSOthe physician can run his or her practice on the business with or without the MSO. Attorney advertising. Approving of the selection of medical equipment and medical supplies for the medical practice. Then usually a third set of statutes that deal with who can organize and own a professional corporation. The PSCs activities must be exclusively in furtherance of exempt purposes within Section 501(c)(3). Typically, a corporation or business main goal is to make a profit. 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. Austin. The corporate name must end with the word "chartered" or "limited" or the abbreviation "Ltd." or with the words "Professional Corporation" or "Prof. Corp." or "P.C." PLLCs are allowed in Illinois so long as all members and managers are licensed for the same profession, including the practice of: Dentistry; Medicine . Advice relevant to your healthcare venture managed by able healthcare entrepreneurs wants to the. Subsequent case law is sparse and other financial relationships georgia corporate practice of medicine regard to state professional board inquiries, information requests complaints. Operating a business in a corporate form Consulting Fees, Honoraria, medical,... Not hold title to the stock of the PSC should maintain its own laws, of a means... 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