With the rise of private equity investments, medical practices should be mindful of their business structure and the role those without a medical license are playing in it. Can a Subscription-Based Healthcare Startup Legally Deploy the RN Profitably? . 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). Decisions regarding coding and billing procedures for patient care services. Page Last Reviewed or Updated: 05-Oct-2022, Request for Taxpayer Identification Number (TIN) and Certification, Employers engaged in a trade or business who pay compensation, Electronic Federal Tax Payment System (EFTPS), Treasury Inspector General for Tax Administration, Entities Engaged in the Corporate Practice of Medicine. Reg. 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. KFF is an endowed nonprofit organization providing information on health issues to the nation. If state law requires the stockholder to have beneficial as well as legal title to the stock, the PSC will probably not qualify for exemption. An official website of the State of Georgia. 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. In other words, medical judgment and practice should not by unduly influenced by the MSOs. Phone: (404) 685-1662 - Medical Practice Formation :: Atlanta Medical Practice Formation Attorney For example, chiropractors and nurses can be up to 49% shareholders in a Professional Medical Corporation. Official Code of Georgia Annotated, Title 43, Chapters 34 and 34A (O.C.G.A. The motion carried unanimously. An official website of the State of Georgia. Gen. Va. 147. has been advising physicians, dentists, and other health care professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. 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. Advantages to Allowing the Corporate Practice of Medicine. The Parents charity care policy is not sufficient. 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. Can there be a parent-subsidiary relationship if the parent does not hold title to the stock of the PSC? 776-77 (Tenn. 2000) (corporate practice of medicine doctrine applies in Tennessee); 94-009 Op. GEORGIA COMPOSITE MEDICAL BOARD MINUTES June 7-8, 2012 Page 4 of 26 Dr. There are also a lot of subtle layers of influence, as California indicates on its Corporate Practice of Medicine web page, including: These are criteria that Californiaa strong corporate practice of medicine stateuses to assess whether there has been a corporate practice of medicine violation. The PSC should maintain its own charity care policy for its activities to further the exempt purpose of the Parent. Cosmetics Companies 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. Responding and managing internal complaints or disputes with regard to asserted noncompliance with state laws, such as a complaint made by a terminated physician or other licensed practitioner. "Georgia has formally prohibited corporations from employing such licensed practitioners as orthodontists under a corporate practice of medicine, or dentistry, . Terms of Use, Disclaimer, and Privacy Policy, Strong form corporate practice of medicine doctrine. Approving of the selection of medical equipment and medical supplies for the medical practice. Because of the CPM doctrine, non-physician in California cannot owna medicalclinic or hire physicians. E.g. Rul. A majority of states restrict the practice of medicine and dentistry by entities that are not owned and controlled by the relevant licensed professionals. Digital & Mobile Health Companies Further to the guiding/non-exhaustive lists provided above, in these cases, there must be a clear distinction between who is providing professional services and who is providing the management services. These may include favorable income tax treatment and immunity from certain types of liability. Are you handling corporate practice of medicine, licensing, fee-splitting . Chad D. Ehrenkranz. 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. Tenn. Code Ann. Similar arrangements are happening in the dental space as well. In OCA, Inc. v. Hodges, 615 F. Supp. 2d 477 (E.D. INSIGHTS. Contact us online or call us today for more information on how the CPOM Doctrine impacts your existing or emerging practice. 63-6-204(b). Are not licensed to engage in the category of professional service for which a professional corporation was formed; and. Each state has its own laws, of course. If your state recognizes the corporate practice of medicine doctrine, you may need to structure your arrangement to fulfill any unique requirements applicable to your . However, court decisions and Attorney General Opinions have Depending on the circumstances, these rulings may come at a state or federal level. Professional service corporations, limited liability companies, and registered limited liability partnerships for the practice of medicine--definitions. 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. Some medical spas are opened by nurses, believing that because you have a medical license you can do whatever you want. Legal Intelligencer article by Lamb McErlane PC Health Law Attorneys Vasilios J. Kalogredis and Rachel E. (Lusk) Klebanoff. Things are state-specific. You may access the full text of the Georgia OCGA at site here. 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. 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. 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. This is not something that should be undertaken casually. 69545. OPEN SESSION Dr. Butler made a motion, seconded by Dr. Weil, to license Dr. Beirne with terms and conditions. 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? Section 43-34-42 provides the penalty for unlicensed practice of medicine or any related violation. 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. The corporate practice of medicine doctrine (CPOM) is a complex ruling that can easily result in legal problems if not followed accordingly. If not done properly, this may not fly. Call 1-800-GEORGIA to verify that a website is an official website of the State of Georgia. 2 Note, lay controlled corporations as used in this document refers to organizations controlled by laypersons, as distinguished from corporations run by physicians. rlusk@lambmcerlane.com. Ensuring compliance with existing state exceptions to corporate practice of medicine or fee-splitting rules, such as those that exist for nonprofit entities or staffing companies. 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. The SCA imposes the provisions of IRC 501(c)(3) on the operation of the PSC. This is why the Medical Board of California advises: This area of law can be complicated, therefore physicians are encouraged to discuss their medical practices and business enterprises with appropriately knowledgeable legal experts. McDermott health lawyers contributed to the second edition of AHLAs Corporate Practice of Medicine: A 50 State Survey. 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. In some states, you have to read the various rules and figure out what the states position is on corporate practice of medicine. 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. The corporate practice of medicine, or CPOM, is a doctrine that's enshrined in many states' laws, either by statute, which is the laws on the books, or by judge-made law case law. 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. MSO has no duty to consult with the Professional Medical Corporation/ Practicing Physician, even on an informal basis. 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. Providing advice to management companies and related platforms regarding state limitations on covenants not to compete and other professional employment considerations. 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. Ultimately, there are a variety of business structures which allow practitioners to provide professional services while being employed, partnering with, and/or engaging the services of other licensed professionals, and even creating business arrangements with non-licensees. 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. 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. Title 20 823 (medical corporation not deemed to be engaged in the corporate practice of medicine) 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. 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)). 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 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? 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. State of Georgia government websites and email systems use georgia.gov or ga.gov at the end of the address. 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. . 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. _______________________________________________. 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 . Seek assurance that there is no such requirement. 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. 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. 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. Attorney advertising. 2. In Californiaas one example, the prohibition against corporate practice of medicine imposes strict rules on contractual arrangements between physicians and non-physicians. 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 Georgia Composite Medical Board. For example, a MSO may, find jobs for licensed professionals; find licensed professionals for potential employers; and manage the services of licensed professionals, including providing services to the professional for a fee, e.g., scheduling or billing. 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)). McDermott health lawyers contributed to the second edition of AHLA's Corporate Practice of Medicine: A 50 State Survey. In the eyes of the law, the services offered by a managed care company can blur the distinction between professional judgment and utilization review. Pennsylvania's corporate practice of medicine doctrine, codified under the Medical Practice Act of 1985 (63 P.S. Telemedicine Ventures. Business and Professions Code section 2400, within the Medical Practice Act, provides in pertinent part: Corporations and other artificial entities shall have no professional rights, privileges, or powers.. Title 12. The first section of this article explains the constraints on ownership of medical businesses imposed by the corporate practice of medicine doctrine.The second section of the article details the role of the professional medical corporation, which is the only business entity permitted to provide medical services or employ physicians in California. These documents should have established adequate control by the exempt parent. The MSO fee should reflect fair market value for the MSOs services. It really isnt something you can figure out from a chart or grid or some poster you can get off the Internet. 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 . The roles played by these agreements may vary from applicant to applicant. And yet this same entrepreneur cant be in controlthats what the corporate practice of medicine says. How Can a Multi-Disciplinary Health & Wellness Platform Handle Legal Risks? 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. May 25 2022. family farm and home chickens. Is Clinical Decision-Making (CDS) Software Expanded or More Legally Ambiguous under the CURES Act? Substance abuse treatment centers must steer carefully when sending patients for labs. Other state regulations also determine the composition of ownership in medical organizations such as medical spas. If the MSO is an employer, then the MSO has the right to control its employeesby definition. Unlike the corporate practice of medicine, Florida expressly prohibits the corporate practice of optometry. 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. Gen. 4 (Jan. 28, 1994) (business corporations may not employ Selection, hiring/firing (as it relates to clinical competency or proficiency) of physicians, allied health staff and medical assistants. Reviewing and evaluating employment, contracting, and other financial relationships with regard to state law compliance. Board Rules. The MSO should take care to leave anything that could be regarded as clinical decision-making or a clinical pathway to the healthcare provider. Additionally, if you are found guilty of commit-ting a crime, by illegally being involved in the corporate As a general breakdown, the following states follow the CPOM: Arizona Arkansas California Colorado Connecticut Georgia Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Montana Nevada New Jersey New York North Carolina North Dakota Ohio Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Washington West Virginia Wisconsin. 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. Like any other applicant, the PSC must meet the organizational and operational tests. What is the Corporate Practice of Medicine Doctrine? This ban on the corporate practice of medicine (CPM) . 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. 2009) and Warren J. Apollon, D.M.D., P.C. You may access the full text of the Georgia OCGA at site here. On the other hand, the practice of medicine prioritizes patient care. 2 These "CPOM" states. 3. Business Law and Corporate Practice of Medicine . The PSCs activities must be exclusively in furtherance of exempt purposes within Section 501(c)(3). Its very much dependent on your exact model. 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. 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