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N O V E M B E R 2 0 1 5 | O U T P AT I E N T S U R G E R Y M A G A Z I N E O N L I N E
Some states prohibit the corporate practice of medicine and the
splitting of professional fees between physicians and non-licensed
individuals or entities. Non-licensed investors in these states typically
must invest in a management company that holds the practice's non-
clinical assets and oversees administrative operations in exchange for
a management fee. All clinical matters are left to the practice, which
continues to be owned by licensed physicians. This complex structure
requires assistance from legal advisors in order to protect the physi-
cians from liability.
• Self-referral. If the practice accepts payments from government
insurance programs, it's important to make sure that the practice is in
compliance with the federal Stark Law and Anti-Kickback Statute.
Most practices provide such ancillary services as lab work, imaging
and infusion, all "designated health services" under the Stark Law.
Since the physicians who'll refer patients for these services will likely
have financial relationships with the practice, verify that the employ-
ment exception or the group practice exception to the Stark Law
applies. Otherwise, these referrals may violate the law and would not
be reimbursable. Since many states have their own versions of the
federal self-referral laws, conducting legal diligence to confirm com-
pliance before a transaction will make the process go much more
smoothly. OSM
Mr. Mitchell (luke@edgemontcapital.com) is a managing director
and partner at Edgemont Capital, a healthcare investment banking firm in New York, N.Y.
Ms. Jester (amanda.jester@wallerlaw.com) is a partner in the
healthcare law department at Waller Lansden Dortch & Davis in Austin, Texas.
