Health care investors and health care business companies often look to partner with physicians, dentists, optometrists, therapists, and other licensed professionals. State licensure laws, including fee-splitting and the "corporate practice of medicine" (CPOM) doctrine, can complicate that collaboration.
Broadly speaking, the CPOM doctrine provides that a non-licensed person (or company) should not own or control a professional practice (such as a physician or dental practice), whereas fee-splitting laws prohibit professionals from sharing or dividing their fees with a non-professional in return for a referral of patients or customers.
Applicable laws implementing the CPOM and fee-splitting prohibitions vary from state to state as well as from professional licensure category to professional licensure category. For instance, not only is the regulation of physicians different from state to state, but the regulation of physicians and dentists can be quite different within the same state. The state-level laws governing the conduct of licensed professionals and their investors or partners may appear in general laws, criminal laws, common or judge-made laws, corporate formation requirements, Attorney General opinions, professional licensing laws or rules, or even in informal announcements or contested case determinations of applicable licensing boards. 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.
Epstein Becker Green’s 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. We understand the state-by-state nuances of the state laws governing licensed professional services, and we work closely with our clients through each step of their venture to ensure state licensure compliance.
Who We Are
Our state licensure and corporate practice attorneys have decades of combined experience in this unique area of the law, working with hundreds of clients to design, establish, counsel, and repair the legal structures necessary to permit non-licensed investors to establish and develop partnerships with licensed health care providers. Our attorneys understand the high-stakes nature of these prospective ventures and the complex interplay of legal and practical considerations, and they 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.
How We Help
Our state licensure and corporate practice attorneys counsel clients on a number of aspects of state law, including matters related to:
- Forming and structuring practice management entities, including physician practice management companies, as well as optometrist management, dental management, therapist management, and veterinarian management companies.
- 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.
- Negotiating, or assisting other counsel in negotiating, with lenders and insurance providers concerned about state law and/or CPOM compliance.
- Reviewing and evaluating employment, contracting, and other financial relationships with regard to state law compliance.
- Developing internal policies and procedures, communication materials, job descriptions, and related internal compliance materials regarding compliance with state laws, including the CPOM doctrine and the proper role of a management organization.
- 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.
- Providing advice to management companies and related platforms regarding state limitations on covenants not to compete and other professional employment considerations.
- Ensuring compliance with existing state exceptions to CPOM or fee-splitting rules, such as those that exist for nonprofit entities or staffing companies.
- Responding to state professional board inquiries, information requests, complaints, investigations, and other related matters.
- 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.