In the state of California the Moscone-Knox Professional Corporation Act states that the majority of the shareholders must be licensed. 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. 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. Such assurance could come, for example, in the form of an opinion from the state attorney general. An official website of the State of Georgia. State law prohibitions against corporate practice of medicine come in to flavors: The distinction between the strong and weak versions can be particularly important when designing an MSO (management services organization) structure. It is important that practices are informed of these regulations from the start of their business operations to ensure they are not engaging in fraud or other illegal activities. is a senior associate at Lamb McErlane PC who focuses on health law and health care litigation. More below. Florida Statute 463.014 states that no corporation, lay person, organization or individual other than a licensed practitioner can engage in the practice of optometry by engaging the services, through paying a salary, commission, or . Does Healthcare Law Favor or Smash Integrated Healthcare Practices Between Medical Doctors and Chiro Smart Healthcare Venture, Smart Legal Choices. The motion carried unanimously. Title 20 823 (medical corporation not deemed to be engaged in the corporate practice of medicine) 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. 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). 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 Corporate Practice of Medicine ICS Staff The general rule in Illinois, as well as in many states, is that physician services may only be provided by physicians, and not by business entities. The PSC and the Parent should have safeguards in place to ensure that compensation of physician employees is reasonable. 2016 BOM Decision. #healthcarelaw#healthlaw #healthlawattorney, The Newest Trend in Online Medicine: Telehealth, Cover your Assets. 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.. So if you ask, if enforcement possible, the answer is, YES. 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. Healthcare Facilities Welcome to FindLaw's Cases & Codes, a free source of state and federal court . 2023 Fenton Law Group, LLP.All rights reserved. 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. For example, chiropractors and nurses can be up to 49% shareholders in a Professional Medical Corporation. Practitioners and other medical personnel should always consult a healthcare attorney when a legal question or concern arises for advice on how to proceed. For example, a hypothetical Professional Medical Corporation named Occupational Therapists For Everyone a Professional Medical Corporation may only provide occupational therapy services. 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). Rul. If its not Corporate Practice of Medicine, Watch Out for Anti-Kickback Enforcement. Most states do not allow you, a licensed professional, to facilitate what is, in effect, the unlicensed practice of medicine/ podiatry. 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. What is the Corporate Practice of Medicine Doctrine? 3. 2 Note, lay controlled corporations as used in this document refers to organizations controlled by laypersons, as distinguished from corporations run by physicians. 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)). 2010 Georgia Code TITLE 43 - PROFESSIONS AND BUSINESSES CHAPTER 11 - DENTISTS, DENTAL HYGIENISTS, AND DENTAL ASSISTANTS . A majority of states restrict the practice of medicine and dentistry by entities that are not owned and controlled by the relevant licensed professionals. PSC irrevocably appoints Manager as its agent and attorney in fact with full power to enforce the terms of the SCA. Law360 (June 28, 2021, 5:57 PM EDT) -- . Are not licensed to engage in the category of professional service for which a professional corporation was formed; and. 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. When contemplating a health care transaction between licensed health care professionals and nonprofessionals . In OCA, Inc. v. Hodges, 615 F. Supp. While there can be an overlap in goals, the CPOM doctrine seeks to protect patients from a practices ulterior motives by preventing non-medical practitioners from owning a medical practice. MSA renews automatically unless terminated. The statutes require that all of the ultimate beneficial owners of these entities be licensed persons. 78-41. 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. Under the auspices of protecting the public, the American Medical Association (AMA) promulgated the initial version of the CPOM doctrine. Tenn. Atty. How Can a Multi-Disciplinary Health & Wellness Platform Handle Legal Risks? Because of the separation between clinical and non-clinical activities, a Professional Medical Corporation may not serve as a management services corporation. the corporate practice of medicine doctrine. McDermott health lawyers contributed to the second edition of AHLAs Corporate Practice of Medicine: A 50 State Survey. There are a few exceptions to the CPOM doctrine in Pennsylvania, including practicing medicine through a professional corporation, limited liability partnership, or restricted professional company. The MSO should take care to leave anything that could be regarded as clinical decision-making or a clinical pathway to the healthcare provider. Unlike the corporate practice of medicine, Florida expressly prohibits the corporate practice of optometry. Strong v. Weak Corporate Practice of Medicine States. Our state licensure and corporate practice attorneys have decades of combined experience in this unique area of the law, working with hundreds of clients to design, establish, counsel, and repair the legal structures necessary to permit non-licensed investors to establish and develop partnerships with licensed health care providers. legally may provide medical services except under the supervision, control and responsibility of a licensed physician. 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 . If you ask, if enforcement likely, thats another story. The crime is designated a felony, punished by a fine of $1,000 per violation or by imprisonment for two to five years, or both. 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 MSO structure can work very well in navigating the twin of corporate practice of medicine enforcement: the prohibition against kickbacks and fee-splitting. Pennsylvanias corporate practice of medicine doctrine, codified under the Medical Practice Act of 1985 (63 P.S. The applicant must describe in detail the methods and procedures through which the exempt parent controls the shareholder. 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. For health care investors considering a venture in a health care service that requires professional licensure, consulting with an attorney broadly experienced in the web of state-specific laws and regulations can help ensure efficient platform structuring and enterprise compliance and avoid criminal liability. Official Code of Georgia Annotated, Title 43, Chapters 34 and 34A (O.C.G.A. Many states have enacted laws which directly or indirectly are viewed as prohibiting the "corporate practice" of medicine. ), is rooted in the Pennsylvania Supreme Courts decision in Neill v. Gimbel Brothers, Inc., 199 A. And dentistry by entities that are not licensed to engage in the Pennsylvania Supreme decision! A management services Corporation be up to 49 % georgia corporate practice of medicine in a Medical. Auspices of protecting the public, the American Medical Association ( AMA ) promulgated the initial version of the beneficial! Engage in the Pennsylvania Supreme Courts decision in Neill v. 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