You may access the full text of the Georgia OCGA at site here. But even states that abide by the Corporate Practice of Medicine doctrine might have allowable exceptions. . McDermott health lawyers contributed to the second edition of AHLAs Corporate Practice of Medicine: A 50 State Survey. 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. If you keep reading, California takes the corporate practice of medicine very seriously. 3. 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. 2010 Georgia Code TITLE 43 - PROFESSIONS AND BUSINESSES CHAPTER 11 - DENTISTS, DENTAL HYGIENISTS, AND DENTAL ASSISTANTS . Is your therapy an FDA-regulated medical device? The policy expressed in Business and Professions Code section 2400 against the corporate practice of medicine is intended to prevent unlicensed persons from interfering with or influencing the physicians professional judgment. 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. (42 USC 1320a-7a(b)(1); 42 CFR 1003.102). 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. MSA renews automatically unless terminated. Because of the CPM doctrine, generally non-physicians in California cannot owna medicalclinic or hire physicians. The PSC should maintain its own charity care policy for its activities to further the exempt purpose of the Parent. Healthcare ventures are not necessarily looking for a healthcare lawyer who will green-light decisions willy-nilly, nor on the other hand, for the most conservative healthcare legal advice. 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. ARTICLE 1 - GENERAL PROVISIONS 43-11-17 - Acts which constitute the practice of dentistry O.C.G.A. 1 Several states restrict the practice of medicine by lay controlled corporations. In terms of risk mitigation, here some key legal strategies the healthcare venture can bake into its operational plan: Your healthcare lawyer can provide nuanced advice as what is good for business, often is fodder for enforcement; and conversely, what is most compliant, is often neither efficient nor profitable. Things are state-specific. Local, state, and federal government websites often end in .gov. The Parent limits its stock value to a nominal amount. Colorado Revised Statutes Title 12. And in California, there is a relatively new exception for incidental medical services provided by substance abuse treatment centers. Title 12. 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. Healthcare Facilities The rule stated recognizes the necessity of immediate and unbroken relationship between a professional man and those who engage his services.. The roles played by these agreements may vary from applicant to applicant. Can a Subscription-Based Healthcare Startup Legally Deploy the RN Profitably? The corporate practice of medicine doctrine is a medical practice act aimed at protecting patients from deceptive behavior that might come with the private ownership of medical corporations by non-licensed individuals including: The commercialization of the practice of medicine The imbalance between patient obligations and stakeholder obligations Interference of a physicians medical judgment due to outside influences. Rev. 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. Reg. 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. Lets just say that these are appropriate arenas for MSO involved. do permit Professional Service Corporations -- a special type of corporation which must be owned by physicians -- to do so. In the strong form of Corporate Practice of Medicine, there is a typically a violation, whether the physicians are hired as employees or independent contractors, to provide medical services. Section 43-34-42 provides the penalty for unlicensed practice of medicine or any related violation. But it is not the law, simply a restatement of what the medical board interprets the law. Medical practices of all types are subjected to various regulations from business formation to HIPAA compliance, and everything in between. OIG Advisory Opinion Regarding Possible AKS Violations. Thus, a medical practice is not supposed to be a business that employs medical professionals but rather owned by mostly practitioners themselves. 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. An official website of the United States Government. Can there be a parent-subsidiary relationship if the parent does not hold title to the stock of the PSC? legally may provide medical services except under the supervision, control and responsibility of a licensed physician. 610-701-4416. Concierge Medical Practices 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.. 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. How Can a Multi-Disciplinary Health & Wellness Platform Handle Legal Risks? The Parent selects any transferee of the stock. For example, a hypothetical Professional Medical Corporation named Occupational Therapists For Everyone a Professional Medical Corporation may only provide occupational therapy services. 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 . Section 43-34-39 provides that the state medical board, in addition to any other remedy or criminal prosecution (emphasis added), may file a complaint to the superior court and seeking a restraining order and an injunction against any person, firm, company, partnership, association, or corporation or the agent, officer, or director of such firm, company, partnership, association, or corporation who is or has been violating any state law relating to the practice of medicine. 2016 BOM Decision. Welcome to FindLaw's Cases & Codes, a free source of state and federal court . A version of this article was published in The Daily Record on September 8, 2015.. 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. 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 is a senior associate at Lamb McErlane PC who focuses on health law and health care litigation. 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. 422.1 et seq. This means that only 49% of those who own a practice can be non-licensed individuals. 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). Following a model known as Practice Perfect, a New Jersey chiropractor incorporated a management company and a medical practice. 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. The answer is invariably nuanced. The SCA imposes the provisions of IRC 501(c)(3) on the operation of the PSC. Typically, a corporation or business main goal is to make a profit. Joshua Kaye. Nor may they contract with a physician to have the physician provide medical services, either as an employee or an independent contractor. The SCA prohibits the shareholder from disposing of the stock without the parents permission. Because of the limitations of the weak Corporate Practice of Medicine model, for some healthcare ventures, it makes sense to use one modelbased on the strong version of Corporate Practice of Medicineacross states. 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 problem with the case is that they are typically very old. Republish 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). Sometimes the medical board website spells it out and pulls it all together. 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. La. Guidelines for analyzing professional service corporation cases involving the Corporate Practice of Medicine (CPOM). What is 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. Searchable directory of Georgia Board of Dentistry Rules and Regulations. The MSO fee should reflect fair market value for the MSOs services. Laws, Policies, & Rules. 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 premise underlying the doctrine was that it would protect patients from potential abuses because commercialized medicine would ultimately divide a physicians loyalty between profits and the delivery of quality patient care. In Maryland, the corporate practice of medicine doctrine prohibits a corporation from operating a physician practice, unless the corporation is owned exclusively by physicians or related licensed professionals, or the corporation is itself licensed or statutorily permitted to practice medicine, as is the case . Professions and Occupations 12-36-134. 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. The Corporate Practice of Medicine: Is It Applicable for Your Client? The Medical Board of California continues to receive complaints and inquiries about the law, and some repeating issues are presented here. In Californiaas one example, the prohibition against corporate practice of medicine imposes strict rules on contractual arrangements between physicians and non-physicians. The Parent can control the shareholder through an. 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. What is the Corporate Practice of Medicine Doctrine? 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. 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). California corporate practice of medicine strict prohibition. There are exceptions to the one field rule, notably in the Moscone Knox Professional Corporations Act, which allows some licensed healthcare professionals to be directors, employees, or shareholders in another professional corporation. Wednesday, June 6, 2012. Decisions regarding coding and billing procedures for patient care services. 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. AB 1000 significantly changed the Moscone-Knox Professional Corporations Act regarding: The types of professional corporations that may employ a physical therapist, including medical corporations; The types of professional corporations that may allow a physical therapist to have an ownership interest or serve as an officer or director; and