2d 477 (E.D. 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 answer is invariably nuanced. 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. 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. Business Law and Corporate Practice of Medicine . the corporate practice of medicine regulations are action-able against your license to practice podiatry. The official Administrative Rules are published separately from the law and further clarify the regulations form the OCGA and are specific to the professions licensed by . The issue of noncompliant ownership structure is state driven. Privacy, Cybersecurity & Data Asset Management, Physician-Owned Management Services Organizations: Regulatory Compliance, Contract Considerations, Enforcement, Clifford Barnes Featured in Follow the Brand Podcast: Wise Counsel, Sarah Hall, Elena Quattrone Quoted in Conflicting State Laws and Unpredictable Enforcement Await Providers in Post-Roe America, Glenn Prives Featured in Bloomberg Law Wake Up Call: Laterals, Moves, In-House, NJBiz Features Glenn Prives in Health Care Attorney Joins Epstein Becker Green. One of the purposes of the CPM doctrine is to separate medical from business decision-making. We have seen many try to navigate the CPOM doctrine waters and not survive the rocky seas. So, what it means is that only doctors can practice medicine. 2 These "CPOM" states. Following a model known as Practice Perfect, a New Jersey chiropractor incorporated a management company and a medical practice. However, the MSOs services must not interfere with the professionals medical (clinical) judgment or otherwise result in MSO control over the medical aspects of the medical practice. While some nurses may perform certain acts, as a rule, no medical spa should be opened without a doctor associated with it. Foreign specialists may be invited to Georgia for temporary independent medical practice: a) from the countries enlisted in Article 9(3)(a) of this Law; b) in the medical specialties determined by paragraph 2 of this article. Board Rule 480-28, Practitioner Dispensing of Drugs. 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.. A majority of states restrict the practice of medicine and dentistry by entities that are not owned and controlled by the relevant licensed professionals. La. (Bill) Kalogredis, Esq. If not done properly, this may not fly. 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. Because of the CPOM doctrine, non-physician investors desiring to offer physician services (alone or with other services) often set up two entitiesa professional corporation that employs physicians through which physician services are furnished (often referred to as a captive PC or friendly PC), and a management services organization (MSO) that, under contract with the professional corporation, furnishes all non-physician services to the business (e.g., space, equipment, non-physician staffing, billing and collection, and other functions). Georgia Dental Law. Miami, Partner | May 25 2022. family farm and home chickens. Rachel E. (Lusk) Klebanoff, Esq. A good healthcare lawyer will work with your healthcare venture to help structure the business model so as to help mitigate regulatory risk. State licensure laws, including fee-splitting and the Corporate Practice doctrine, can complicate that collaboration. 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. By Steve Polyakov June 28, 2021, 5:57 PM EDT. And sometimes, the medical board may be more aggressive in its interpretation, signaling a strong enforcement posture to the Attorney General or District Attorney who will actually be the one prosecuting the case. Responding to state professional board inquiries, information requests, complaints, investigations, and other related matters. Digital & Mobile Health Companies , 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- If the MSO is an employer, then the MSO has the right to control its employeesby definition. The MSO is paid a fee for providing these services to the medical practice, which should be fair market value and commercially reasonable for the services provided. Section 33-18-17, a statute that deals with nonprofit medical service corporations, states that this statute shall not be construed as authorizing the corporate practice of medicine.. COPM is an antiquated doctrine that has no sound basis in public policy, no firm basis in Idaho law, and has been widely . In other words, medical judgment and practice should not by unduly influenced by the MSOs. Decisions regarding coding and billing procedures for patient care services. 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. Compensation to the physician employees must be reasonable. INSIGHTS. Professional Medical Corporation or MSO and the level of decision making Authority the Professional Medical Corporation or MSO should exercise: exclusive, consultative, shared or joint. Similar arrangements are happening in the dental space as well. Our location is real and we are now virtually enabled to assist new long distance clients and out-of-town colleagues. Failing to do so may result in professional misconduct and/or unlicensed practice of the profession. There are usually exceptions to the corporate practice of medicine prohibitionnotably, for example, the case of hospitals. GEORGIA 1 Chart of Sources 2 Summary 3 Key Professions 4 Entities . Nurse) you cannot open a medical spa on your own, you must have a doctor associated with the medical spa. So if you ask, if enforcement possible, the answer is, YES. The decisions described below are examples of some of the types of behaviors and subtle controls that the corporate practice doctrine is intended to prevent. The court concluded that the medical practice was essentially under the control of the management company and the physician was a nominal owner; thus, because the medical practice was not legitimately structured, it was not allowed to submit medical insurance claims. For example, the SCA or employment agreement can be used to control the shareholders choice of board members, by providing that the shareholder can vote only as approved in advance by the Parent. While California law does allow a percentage of gross revenues under certain conditions, generally, percentages raise enforcement issues. Do not hold themselves out to the public generally as being authorized to engage in the practice of the profession for which the . States with a weak Corporate Practice of Medicine prohibition potentially might allow such companies to hire physicians to provide medical services, so long as the contract clarifies that the company cannot interfere with clinical decision-making. 3. KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. . Attorney advertising. Rul. We will be focusing on the exclusive decisions of the Professional Medical Corporation/Practicing Physician and the MSO respectively and decisions where neither party may solely make ultimate decision. 178 (1938), which has not been overruled or modified in the 82 years since the original holding. Providing advice to management companies and related platforms regarding state limitations on covenants not to compete and other professional employment considerations. More below. Developing internal policies and procedures, communication materials, job descriptions, and related internal compliance materials regarding compliance with state laws, including corporate practice and the proper role of a management organization. Medical Practice Act: Business and Professions Code Section 2052, requiring a medical license to practice medicine, and Section 2400, declaring that corporations have no professional rights, privileges, or powers. Georgia Government Contracts Health . The statutes require that all of the ultimate beneficial owners of these entities be licensed persons. do permit Professional Service Corporations -- a special type of corporation which must be owned by physicians -- to do so. 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), QUICK SUMMARY OF FEDERAL STARK SELF-REFERRAL & ANTI-KICKBACK LAW AND CALIFORNIA SELF-REFERRAL AND FEE-SPLITTING PROHIBITIONS, HOW SUBSTANCE ABUSE TREATMENT CENTERS NAVIGATE ANTI-KICKBACK RULES. Also, because it is allowed only to provide professional services, it can only manage the services that it provides. 3. That is, it cannot provide management services to other occupational therapists. Memo 1981-23 (1981), Corporations that employ physicians to provide medical services are engaged in the corporate practice of medicine.1 Several states restrict the practice of medicine by lay controlled corporations.2 These CPOM states. The motion carried unanimously. The MSO fee should reflect fair market value for the MSOs services. 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. 2016 BOM Decision. Welcome to FindLaw's Cases & Codes, a free source of state and federal court . We understand the state-by-state nuances of the state laws governing licensed professional services, and we work closely with our clients through each step of their venture to ensure state licensure compliance. The Board's new position removes obstacles to non-physician investments in medical practices and other transactions that previously were prohibited by the Board's enforcement of an antiquated rule known as the corporate practice of medicine doctrine . 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. 43-11-17 (2010) . KFF is an endowed nonprofit organization providing information on health issues to the nation. 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 TAC developed a list of those decisions which would affect, directly or indirectly, the practice of medicine and assigned the decision making authority of those decisions to the appropriate party, i.e. Specifically, under Pennsylvania law, only licensed physicians may be shareholders of or partners or members in, as the case may be, professional corporations, limited liability partnerships or restricted professional companies which have been formed to provide 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. 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. 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? The SCA imposes the provisions of IRC 501(c)(3) on the operation of the PSC. When evaluating the various legal and regulatory hurdles associated with telehealthsuch as licensure, reimbursement, and privacy one hurdle that often goes overlooked is the corporate practice of medicine. 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