Biotechnology & Life Sciences Nurse) you cannot open a medical spa on your own, you must have a doctor associated with the medical spa. 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. 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). Pennsylvania also permits health maintenance organizations (HMOs) and licensed hospitals and health care facilities to employ physicians and provide health care services. 2010 Georgia Code TITLE 43 - PROFESSIONS AND BUSINESSES CHAPTER 11 - DENTISTS, DENTAL HYGIENISTS, AND DENTAL ASSISTANTS . georgia corporate practice of medicine. Gross made a motion, seconded by Dr. Retterbush, to go into closed session. Another risk is fee-splitting, which many states prohibit to reduce the likelihood that unnecessary medical services will be provided to maximize income. 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 . Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture. The MSO may provide services used by professionals. 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. Advantages to Allowing the Corporate Practice of Medicine. Washington, DC, Partner | Suite #5901 Wilbanks Drive, Norcross, Georgia, 30092 USA [1.770.448.0769]. GEORGIA COMPOSITE MEDICAL BOARD MINUTES June 7-8, 2012 Page 4 of 26 Dr. Providing regulatory advice and counsel to platform entities, including management companies, seeking to expand into new jurisdictions or comply with complex or difficult state regulations. 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 challenge is that the healthcare venture managed by able healthcare entrepreneurs wants to call the shots. 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. , 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- (Business & Professions Code 2052 and 2400.). However, given the structural complexity of many such medical entities, including MSOs, it is vital to ensure that any corporate/business arrangements comply with the requirements of the CPOM doctrine. 3 State law may provide for specific exceptions; for hospitals, for example. On the other hand, the practice of medicine prioritizes patient care. Guidelines for analyzing professional service corporation cases involving the Corporate Practice of Medicine (CPOM). 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 should take care to leave anything that could be regarded as clinical decision-making or a clinical pathway to the healthcare provider. 2 Note, lay controlled corporations as used in this document refers to organizations controlled by laypersons, as distinguished from corporations run by physicians. 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. Compensation to the physician employees must be reasonable. 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. Healthcare Facilities Medicare/Medi-Cal Audits, Appeals and Overpayment Disputes, Moscone-Knox Professional Corporation Act, majority of the shareholders must be licensed. v. OCA, Inc., 592 F.Supp.2d 906 (E.D. Again, these situations are very fact-specific. Section 43-34-42 provides the penalty for unlicensed practice of medicine or any related violation. 63-6-204(b). Medical practices of all types are subjected to various regulations from business formation to HIPAA compliance, and everything in between. Even in a weak Corporate Practice of Medicine state, there is some ambiguity in the legal rules. The Parent (not the shareholder) initiates all actions regarding the election and removal of the corporations board of directors. Well, we appreciate the medical board promoting legal services. In Californiaas one example, the prohibition against corporate practice of medicine imposes strict rules on contractual arrangements between physicians and non-physicians. ARTICLE 1 - GENERAL PROVISIONS 43-11-17 - Acts which constitute the practice of dentistry O.C.G.A. The PSC and the Parent should have safeguards in place to ensure that compensation of physician employees is reasonable. 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. 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. 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. Searchable directory of Georgia Board of Dentistry Rules and Regulations. Will Corporate Practice of Medicine Kill Your Healthcare Venture? To get to the prohibition against the corporate practice of medicine (or Corporate Practice of Medicine), you have to put these three sources together. Failing to do so may result in professional misconduct and/or unlicensed practice of the profession. 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. 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. 2d 477 (E.D. Austin. Dietary Supplement Companies Is the MSO going too far into medical practice, in the eyes of the regulators who enforce the corporate practice of medicine prohibition? PSC and Shareholder abide by terms and conditions of an SCA acceptable to Manager. Rachel E. (Lusk) Klebanoff, Esq. Other state regulations also determine the composition of ownership in medical organizations such as medical spas. public policy considerations underlying the cpom include concerns that the corporate employment or control of a licensed professional: (1) commercializes and debases licensed professions; (2) undermines the physician-patient relationship and the physician's exercise of independent medical judgment; and (3) allows unlicensed corporate entities to OPEN SESSION Dr. Butler made a motion, seconded by Dr. Weil, to license Dr. Beirne with terms and conditions. Telemedicine Ventures. Often, this language appears inconsistent when read in conjunction with the laws created to govern a Professional Corporation formed under a state's business corporation laws. But what does this mean and how far does the practice of medicine doctrine go? In order to avoid regulatory pitfalls, however, contractual MSO arrangements need to be structured carefully to ensure that . A good healthcare lawyer will work with your healthcare venture to help structure the business model so as to help mitigate regulatory risk. But it is not the law, simply a restatement of what the medical board interprets the law. 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. 1992 Op. A version of this article was published in The Daily Record on September 8, 2015.. Subsequent case law is sparse and other authorities provide limited guidance on the applicability of the CPOM doctrine. For example, some applicants use employment and management agreements instead of shareholder control agreements to bind the physician shareholder to the Parent. Our location is real and we are now virtually enabled to assist new long distance clients and out-of-town colleagues. 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. Although most prohibit it, some have no regulatory statute at all. While medical practice allows nurses to perform certain procedures, that doesn't mean a doctor can be relieved of their responsibilities. The above are in the domain of the medical doctor and cannot be intruded upon by the MSO. 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. 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. 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. Legal Intelligencer article by Lamb McErlane PC Health Law Attorneys Vasilios J. Kalogredis and Rachel E. (Lusk) Klebanoff. Atty. 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. Georgia Government Contracts Health . In OCA, Inc. v. Hodges, 615 F. Supp. State licensure laws, including fee-splitting and the Corporate Practice doctrine, can complicate that collaboration. 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? 178 (1938), which has not been overruled or modified in the 82 years since the original holding. Corporate Practice of Medicine (CPOM) application is far from simple, and adoption and enforcement vary by state. Medical Management (MSOs) The issue of noncompliant ownership structure is state driven. For example, in Virginia there is at least one Attorney General opinion that is permissive with respect to Corporate Practice of Medicine: The Virginia Attorney General concluded that Virginia statutes and court decisions allow a hospital to employ a physician as long as the employment agreement authorizes the physician to exercise control over the diagnosis and treatment of the patient, the physicians professional judgment is not improperly influenced by commercial or lay concerns, and the physician-patient relationship is not altered. So, what it means is that only doctors can practice medicine. The Medical Board of California continues to receive complaints and inquiries about the law, and some repeating issues are presented here. PSC obtains managers approval of its compensation agreements with physicians. 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 . The Parent approves in advance and in writing the voting of every share of the corporations stock. In this way, the Medical Board of California pulls together the various pieces of legislation. 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. 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. Tenn. Code Ann. The answer is invariably nuanced. 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: If not done properly, this may not fly. 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. Local, state, and federal government websites often end in .gov. University of Maryland Physicians v. Commissioner, T.C. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). Do not hold themselves out to the public generally as being authorized to engage in the practice of the profession for which the . In some states, you have to read the various rules and figure out what the states position is on corporate practice of medicine. . Pennsylvanias corporate practice of medicine doctrine, codified under the Medical Practice Act of 1985 (63 P.S. WE PROVIDE LEGAL STRATEGY & REGULATORY ADVICE TO BUSINESSES THAT ACCELERATE HEALTH AND WELLNESS, Addiction Treatment Centers Work at the direction or under the supervision of those who are so licensed; and. 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. 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. 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. Medical Spas The Corporate Practice of Medicine: Is It Applicable for Your Client? 69545. Seeking the advice of knowledgeable and experienced professionals is imperative before taking any such steps. In practice, states with CPOM laws permit professional service entities to practice medicine, but only if owned by physicians licensed in that state. 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. 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 . 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