The Corporate Practice of Medicine (CPM) doctrine continues to befuddle, beleaguer, and bewilder healthcare companies seeking to venture with physicians and non-physician entrepreneurs. Such assurance could come, for example, in the form of an opinion from the state attorney general. (a) Health care corporations shall have the right to sell contracts providing for the payment of specified charges made by participating physicians furnishing medical or surgical care, or both, to the holders of such contracts, their beneficiaries, and covered dependents as provided for in this Code section. . 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 . GEORGIA COMPOSITE MEDICAL BOARD MINUTES June 7-8, 2012 Page 4 of 26 Dr. Republish It is not legal in this state for a non-licensee to own any portion, no matter how small, of a physician practice. If state licensing laws do not permit the Parent to appoint the PSCs board, the PSC may nevertheless qualify for exemption if, by some combination of mechanisms, the Parent indirectly controls the PSCs board. By Steve Polyakov June 28, 2021, 5:57 PM EDT. billing and collecting on behalf of the Professional Medical Corporation. 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 . 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. Sometimes the medical board website spells it out and pulls it all together. Biotechnology & Life Sciences 2016 BOM Decision. Healthcare Facilities As we said, the prohibition is not necessarily embodied in a statute, but rather, may be expressed in cases, or, perhaps a policy statement by the state medical board. 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. [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.]. How you know. 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. 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. ), is rooted in the Pennsylvania Supreme Courts decision in Neill v. Gimbel Brothers, Inc., 199 A. According to the MBC, certain things require complete Professional Medical Corporations control and decision, while others require that Professional Medical Corporations have at least shared control with the MSO and other aspects do not necessarily require the Professional Medical Corporations involvement at all. Please see Title 43, Chapters 1 and 11, for general provisions and dental law, respectively. And our healthcare lawyers have seen a thousand variations. Setting the parameters under which the physician will enter into contractual relationships with third-party payers. The Parents charity care policy is not sufficient. The PSC and the Parent should have safeguards in place to ensure that compensation of physician employees is reasonable. Can a Subscription-Based Healthcare Startup Legally Deploy the RN Profitably? Again, these situations are very fact-specific. But what does this mean and how far does the practice of medicine doctrine go? Ask the Parent of the applicant to provide the following written representations: The Parent's SCA with the physician shareholder is enforceable at law and in equity., The Parent will not suffer or permit the physician shareholder (together with all successors, heirs and assigns of the physician shareholder and all subsequent designees holding the corporation's stock) to financially benefit in any manner, directly or indirectly, from the physician shareholder's legal ownership of the stock of the corporation as the designee and fiduciary of the Parent., The Parent will expeditiously and vigorously enforce all its rights in the shareholder control agreement and will pursue all legal and equitable remedies to protect its interest in the assets and stock of the corporation., Carefully review all organizational documents. In other words, medical judgment and practice should not by unduly influenced by the MSOs. v. OCA, Inc., 592 F.Supp.2d 906 (E.D. 422.1 et seq. Cannabis Ventures Because providers are often paid separately for their services in the current fee-for-service environment, there is little need for the exceptions related to management, organization, or fee-splitting. 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.. Some legal authorities . 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. These may include favorable income tax treatment and immunity from certain types of liability. McDermott health lawyers contributed to the second edition of AHLA's Corporate Practice of Medicine: A 50 State Survey. Are you handling corporate practice of medicine, licensing, fee-splitting . The good news is that many states (e.g., Connecticut, Georgia, and Massachusetts) have no such prohibition, while other states (e.g., Florida, Oregon, and California) take a middle-ground approach and do not prohibit the corporate practice of veterinary medicine, but require only that the veterinary clinic designate a licensed veterinarian . Digital & Mobile Health Companies . Search Georgia Code. State licensure laws, including fee-splitting and the Corporate Practice doctrine, can complicate that collaboration. 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. Part Two. 610-701-4416. May 25 2022. family farm and home chickens. In 2016, the Idaho Board of Medicine abandoned its position that Idaho law prohibits physicians from being employed by non-physicians. The statutes require that all of the ultimate beneficial owners of these entities be licensed persons. Joshua Kaye. The corporate practice of medicine doctrine has been shaped over the years by state statutes, regulations, court decisions, attorney general opinions and actions by state medical licensing boards. is a senior associate at Lamb McErlane PC who focuses on health law and health care litigation. The SCA prohibits the shareholder from disposing of the stock without the parents permission. Then usually a third set of statutes that deal with who can organize and own a professional corporation. objects in mirror may be closer mandela effect . _______________________________________________. Additionally, MSOs are used to navigate state "corporate practice of medicine" (CPOM) laws prohibiting non-physician-owned business entities from practicing medicine or employing licensed health care providers. 422.1 et seq. Click here to view the December 1, 2020 Legal Intelligencer article. These are mixed questionsin other words, they touch on the medical practice but also require business judgment. Medicare/Medi-Cal Audits, Appeals and Overpayment Disputes, Moscone-Knox Professional Corporation Act, majority of the shareholders must be licensed. So if you ask, if enforcement possible, the answer is, YES. Its very much dependent on your exact model. has been advising physicians, dentists, and other health care professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. 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. 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). Fenton Law Group has a practice focused on the transactional legal issues that arise in the medical industry including, the CPOM doctrine. 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. La. So, what it means is that only doctors can practice medicine. 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. Manager approves the expenditures of the PSC. Title 20 823 (medical corporation not deemed to be engaged in the corporate practice of medicine) 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. 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. There are many benefits to operating a business in a corporate form. Forming and structuring Practice Management entities, including Physician Practice Management companies, as well as Optometrist Management, Dental Management, Therapist Management, and Veterinarian Management. Failing to do so may result in professional misconduct and/or unlicensed practice of the profession. Each state has its own laws, of course. In all states where the IRS has issued determinations, the IRS has received this information. He is Chairman of Lamb McErlane PCs Health Law Department. 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. The non-physician entrepreneur dreams up the healthcare venture, gets it funded, even staffs it with the right medical doctor. For example, chiropractors and nurses can be up to 49% shareholders in a Professional Medical Corporation. 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. 1992 Op. 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. 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. Neither Party May Solely Make Ultimate Decision Both the Professional Medical Corporation/ Practicing Physician and the MSO must agree when making a decision. Under the auspices of protecting the public, the American Medical Association (AMA) promulgated the initial version of the CPOM doctrine. Rachel E. (Lusk) Klebanoff, Esq. one or more persons licensed pursuant to the medical practice act of 1987, as heretofore or hereafter amended, may form a corporation pursuant to the "business corporation act of 1983", as amended, to own, operate and maintain an establishment for the study, diagnosis and treatment of human ailments and injuries, whether physical or mental, and While there often is a Corporate Practice of Medicine exception for hospitals that hire physicians, the AGs rationale in the 1995 opinion, cited above, provides a good statement of the logic behind the weak version of the prohibition against Corporate Practice of Medicine. Approving of the selection of medical equipment and medical supplies for the medical practice. More below. You may access the Board Rules by clicking here. 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. Lets say, for example, compounded skin care creams to treat acne? 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. Professions and Occupations. 2 These "CPOM" states. 2. 178 (1938), which has not been overruled or modified in the 82 years since the original holding. As we noted, whenever you find Corporate Practice of Medicine concerns, youre likely to also find state law prohibitions against fee-splitting, kickbacks, conflict of interest, patient exploitation, and so on. 1. 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). The team of experienced and proactive healthcare attorneys will work with your practice to make sure it can receive the funding needed without jeopardizing the organization. La. In practice, states with CPOM laws permit professional service entities to practice medicine, but only if owned by physicians licensed in that state. What conditions can be referred to another physician specialist, What diagnostic tests are appropriate for a particular condition, What gets included in a particular patients medical records, Whether a particular patient visit requires a particular billing code, Communications of a purely clinical nature with patients, Determination as to whether an emergency medical condition exists, Compensation for allied health and lay staff, Selecting purely administrative staff that do not hold key positions, Non-clinical decisions concerning medical records, Contractual relationships with third-party payors, How much the physician group (including cost of all benefits) should be compensated, Setting the global budget for limited license practitioner compensation, Mergers, acquisitions, conversions and affiliations, Ownership and scope of ancillary ventures, Making a decision to transfer a stable patient, How much the lay entity, including the entitys executive management should be compensated. Typically, a corporation or business main goal is to make a profit. Health care investors and health care business companies often look to partner with physicians, dentists, optometrists, therapists, and other licensed 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 PSC should maintain its own charity care policy for its activities to further the exempt purpose of the Parent. Title 12. 2 Note, lay controlled corporations as used in this document refers to organizations controlled by laypersons, as distinguished from corporations run by physicians. Compliance Issues for Consulting Fees, Honoraria, Medical Directorships, and Other Types of Remuneration. Rev. Is Clinical Decision-Making (CDS) Software Expanded or More Legally Ambiguous under the CURES Act? Local, state, and federal government websites often end in .gov. 3. This means that only 49% of those who own a practice can be non-licensed individuals. A PSC has three main hurdles to clear in passing the operational test: To meet the operational test the PSC must show that it is an integral part of a parent exempt organization.4 An organization is an integral part if it provides services for, or carries on a function for the benefit and convenience of, the parent. The MSO should take care to leave anything that could be regarded as clinical decision-making or a clinical pathway to the healthcare provider. Telemedicine Ventures. The rule stated recognizes the necessity of immediate and unbroken relationship between a professional man and those who engage his services.. 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. rlusk@lambmcerlane.com. 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