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.. Thus, a medical practice is not supposed to be a business that employs medical professionals but rather owned by mostly practitioners themselves. Failing to do so may result in professional misconduct and/or unlicensed practice of the profession. There can, and the heart of a CPOM case is a demonstration that the PSCs physician shareholder or shareholders are subject to stringent restrictions on their activity to the point where a separate 501(c)(3) exempt organization exercises effective control in all respects over the PSC. Biotechnology & Life Sciences Responding to state professional board inquiries, information requests, complaints, investigations, and other related matters. Because of the separation between clinical and non-clinical activities, a Professional Medical Corporation may not serve as a management services corporation. 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. Understanding these questions is essential to structuring medical business and management service entities in accordance with the law. She represents physicians, dentists, medical group practices, and other health-related entities in transactional, regulatory, and compliance matters. 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). However, court decisions and Attorney General Opinions have And yet this same entrepreneur cant be in controlthats what the corporate practice of medicine says. 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 rule stated recognizes the necessity of immediate and unbroken relationship between a professional man and those who engage his services.. Javascript is required to view this site. 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. 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 2008), the District Court for the Eastern District of Louisiana, interpreting Pennsylvania law, found that the ability of a management company to participate in the profits of a dental practice pursuant to the parties business service agreement (which created the illegal partnership but were not severable) was akin to a partnership interest and would be precluded by the Pennsylvania CPOM doctrine. The Parent can control the shareholder through an. georgia corporate practice of medicine. The "incapacity" of a shareholder means that a determination by a court of competent . Dietary Supplement Companies The applicant must ensure that the PSC operates in a charitable manner and remains an integral part of the exempt parent holding beneficial title. The intent of the doctrine was to ensure that only licensed medical professionals delivered medical care and that lay persons and entities not influence treatment decisions. COPM is an antiquated doctrine that has no sound basis in public policy, no firm basis in Idaho law, and has been widely . And so long as the MSO does not overly interfere with the clinical duties of the medical doctors leaves a lot of room for interpretation. 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. 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. 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. Whatever the medical board says on its website is a good indication of the medical boards enforcement position. What Is the Corporate Practice of Medicine? Sometimes the medical board website spells it out and pulls it all together. Georgia and grant the right to temporary independent medical practice to them. Additionally, if you are found guilty of commit-ting a crime, by illegally being involved in the corporate In 2016, the Idaho Board of Medicine abandoned its position that Idaho law prohibits physicians from being employed by non-physicians. The corporate practice of medicine (CPM) rule or doctrine forbids medical management organizations (MSOs) from meddling with and effectively, directly or indirectly, control or in some way influencing, the affairs of medical 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. 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. By Steve Polyakov June 28, 2021, 5:57 PM EDT. Because the Professional Service Corporation (or PSC) is owned by natural persons (shareholders), it is normally a taxable corporation, however, the IRS will recognize a PSC as exempt if it meets certain stringent requirements. 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. This ban on the corporate practice of medicine (CPM) . Its very much dependent on your exact model. Medical Management (MSOs) Reviewing and evaluating employment, contracting, and other financial relationships with regard to state law compliance. The above are in the domain of the medical doctor and cannot be intruded upon by the MSO. GEORGIA 1 Chart of Sources 2 Summary 3 Key Professions 4 Entities . Nor may they contract with a physician to have the physician provide medical services, either as an employee or an independent contractor. 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. 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. For example, a hypothetical Professional Medical Corporation named Occupational Therapists For Everyone a Professional Medical Corporation may only provide occupational therapy services. 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. 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. Official Code of Georgia Annotated, Title 43, Chapters 34 and 34A (O.C.G.A. Is Clinical Decision-Making (CDS) Software Expanded or More Legally Ambiguous under the CURES Act? Privacy, Cybersecurity & Data Asset Management, Physician-Owned Management Services Organizations: Regulatory Compliance, Contract Considerations, Enforcement, Clifford Barnes Featured in Follow the Brand Podcast: Wise Counsel, Sarah Hall, Elena Quattrone Quoted in Conflicting State Laws and Unpredictable Enforcement Await Providers in Post-Roe America, Glenn Prives Featured in Bloomberg Law Wake Up Call: Laterals, Moves, In-House, NJBiz Features Glenn Prives in Health Care Attorney Joins Epstein Becker Green. Board Rules. 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. 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.. 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 . The medical practice was owned by a physician, and the management company was owned by the chiropractor. La. Cosmetics Companies 2 Note, lay controlled corporations as used in this document refers to organizations controlled by laypersons, as distinguished from corporations run by physicians. Again, these situations are very fact-specific. Work at the direction or under the supervision of those who are so licensed; and. [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.]. California corporate practice of medicine strict prohibition. Corporate Practice of Medicine: A 50 State Survey. 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. That is, it cannot provide management services to other occupational therapists. Telemedicine Ventures, Healthcare M&A: Dos and Donts of Buying or Selling a Medical Practice, Californias New Scope of Practice Law for Nurse Practitioners - Part Two, FDA Issues Warning Letter to Company that Sells CBD Products Online and Through Social Media, 5 Key Stark and Anti-Kickback Legal Rules Youll Want to Know. (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. First and foremost, one must understand that, in most states, the piercing of the outermost layer of the skin or the epidermis and the rendering . The SCA binds future transferees of PSCs shares. Professional Medical Corporation/ Practicing Physician has no duty to consult with the MSO, even on an informal basis. 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). In the eyes of the law, the services offered by a managed care company can blur the distinction between professional judgment and utilization review. 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. 78-41. 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. . GEORGIA COMPOSITE MEDICAL BOARD MINUTES June 7-8, 2012 Page 4 of 26 Dr. 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). Seek assurance that there is no such requirement. 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.. In other words, medical judgment and practice should not by unduly influenced by the MSOs. Telemedicine Ventures. ), is rooted in the Pennsylvania Supreme Court's decision in Neill v. Gimbel Brothers, Inc., 199 A. Gen. 4 (Jan. 28, 1994) (business corporations may not employ is a senior associate at Lamb McErlane PC who focuses on health law and health care litigation. Attorney advertising. The presence or absence of the appropriate agreements (shareholder control agreement, management service agreement, or employment agreement) can help determine what development is necessary for further consideration. WE PROVIDE LEGAL STRATEGY & REGULATORY ADVICE TO BUSINESSES THAT ACCELERATE HEALTH AND WELLNESS, Addiction Treatment Centers Reg. Dermatology World article by Ruth Carol with contributions from Lamb McErlane PC partner Vasilios Bill Kalogredis, Section 199A and Healthcare Eligibility Depends on Unique Facts, PA Legislators Propose to Ban Non-Compete Agreements in Health Care Practitioners Employment Contracts, Government Liability & Civil Rights Defense, Municipal, Land Use, and Condemnation Law. Georgia Dental Law. Health care investors and health care business companies often look to partner with physicians, dentists, optometrists, therapists, and other licensed professionals. While some nurses may perform certain acts, as a rule, no medical spa should be opened without a doctor associated with it. 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: Is It Applicable for Your Client? Because of the CPM doctrine, non-physician in California cannot owna medicalclinic or hire physicians. WE PROVIDE LEGAL STRATEGY & REGULATORY ADVICE TO BUSINESSES THAT ACCELERATE HEALTH AND WELLNESS, Addiction Treatment Centers Subsequent case law is sparse and other authorities provide limited guidance on the applicability of the CPOM doctrine. A majority of states restrict the practice of medicine and dentistry by entities that are not owned and controlled by the relevant licensed professionals. KFF is an endowed nonprofit organization providing information on health issues to the nation. Medical Groups, Medical Centers And the prohibition against corporate practice often isnt written into statutes; the statutes prohibit unlicensed practice of medicinereferencing to individuals. In all states where the IRS has issued determinations, the IRS has received this information. Are you handling corporate practice of medicine, licensing, fee-splitting . Limitations to the Weak Corporate of Medicine Allowance. 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. What is the Corporate Practice of Medicine Doctrine? Although most prohibit it, some have no regulatory statute at all. However, if the applicant does not meet the flexible community benefit standard, denial is not necessarily indicated. To get this down on paper, the California Medical Associations Board of Trustees authorized the formation of a Technical Advisory Committee (TAC) to examine the issues surrounding the corporate practice of medicine bar and the various financial and contractual arrangements currently in place between hospitals, physicians, and other interests and to develop a response to those arrangements. 2d 477 (E.D. 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 . 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). (Business & Professions Code 2052 and 2400.). Each state has its own laws, of course. 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 . 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. 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. Applicable laws implementing the Corporate Practice and fee-splitting prohibitions vary not only state to state, but professional licensure category to professional licensure category. Decisions regarding coding and billing procedures for patient care services. ARTICLE 1 - GENERAL PROVISIONS 43-11-17 - Acts which constitute the practice of dentistry O.C.G.A. 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. 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. Healthcare Facilities 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? PSC obtains managers approval of its compensation agreements with physicians. McDermott health lawyers contributed to the second edition of AHLAs Corporate Practice of Medicine: A 50 State Survey. Corporate Practice of Medicine. Can a Subscription-Based Healthcare Startup Legally Deploy the RN Profitably? #healthcarelaw#healthlaw #healthlawattorney, The Newest Trend in Online Medicine: Telehealth, Cover your Assets. 1. The corporate name must end with the word "chartered" or "limited" or the abbreviation "Ltd." or with the words "Professional Corporation" or "Prof. Corp." or "P.C." PLLCs are allowed in Illinois so long as all members and managers are licensed for the same profession, including the practice of: Dentistry; Medicine . Vasilios J. Such assurance could come, for example, in the form of an opinion from the state attorney general. 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.. The PSC and the Parent should have safeguards in place to ensure that compensation of physician employees is reasonable. 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. 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. Rul. Miami, Partner | Official Code of Georgia Annotated, Title 43, Chapters 34 and 34A (O.C.G.A. 2. Can there be a parent-subsidiary relationship if the parent does not hold title to the stock of the PSC? Then there is often a second set of statutes that talk about the fact that corporations cannot engage in professional practices. bkalogredis@lambmcerlane.com. 422.1 et seq. 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. But it is not the law, simply a restatement of what the medical board interprets the law. While medical practice allows nurses to perform certain procedures, that doesn't mean a doctor can be relieved of their responsibilities. Gross made a motion, seconded by Dr. Retterbush, to go into closed session. 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 . These documents should have established adequate control by the exempt parent. Seeking the advice of knowledgeable and experienced professionals is imperative before taking any such steps. Contact us online or call us today for more information on how the CPOM Doctrine impacts your existing or emerging practice. The CPOM doctrine varies by each state. Digital & Mobile Health Companies As business opportunities abound for both licensed physicians, dentists and other licensed and non-licensed entrepreneurs and investors in the ownership and operation of medical and dental practices, ambulatory care facilities, drug treatment facilities, diagnostic testing facilities and other types of healthcare facilities, doctors and business individuals and entities must ensure that the structure of their businesses comply with their states Corporate Practice of Medicine (CPOM) doctrine. It cannot offer physical therapy services, speech services or any other professional services. 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. The legal principle that undergirds both Tenn. Code Ann. Consistent with the premise underlying the CPOM doctrine, the Court reasoned: A corporation as such cannot possess the personal qualities required of a practitioner of a profession. 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. Advantages to Allowing the Corporate Practice of Medicine. Our location is real and we are now virtually enabled to assist new long distance clients and out-of-town colleagues. Many states have enacted laws which directly or indirectly are viewed as prohibiting the "corporate practice" of medicine. 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. The SCA limits shareholder eligibility to licensed physicians, employed by the exempt parent in an administrative capacity, agreeing in writing to become a party to the SCA, or similar agreement binding on the PSC and shareholders. Lets just say that these are appropriate arenas for MSO involved. Healthcare Facilities Suite #5901 Wilbanks Drive, Norcross, Georgia, 30092 USA [1.770.448.0769]. Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture. Because unlicensed and corporate practice of medicine are considered crimes, its important before starting up any healthcare venture to consult alaw firm that knows the ins and outs of the corporate practice of medicine doctrine. 3. Title 31, Chapter 33 addresses health records. McDermott health lawyers contributed to the second edition of AHLA's Corporate Practice of Medicine: A 50 State Survey. 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).