Owning a practice

[medinah]

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Does anybody know if licensure is required to "own" a practice in NY?

 

[mshheaddoc]

Moving to the Gen Res forum where you'll probably get more responses. 🙂

 

[Winged Scapula]

Does anybody know if licensure is required to "own" a practice in NY?

I'm not quite sure what you're asking.

Are you asking if you need a medical license to open up a private practice? If you are planning on practicing medicine, the answer is an obvious yes. If you are planning on hiring employees to do the work for "medinah's medi-spa", but not work yourself...probably not, as long as your employees are independent practitioners (ie, not PAs that need a licensed physician to work under). If it is a true medical practice, then you do need a license.

If you are asking whether you need a license from the state to open a small business unrelated to a medical practice, it depends on what you are planning on doing.

Perhaps if you clarified your plans, we could be of more service.

 

[docB]

I think the OP is talking about the rules governing who can employ doctors and have control/input into their medical decision making. In some states it's illegal for a non-physician to own a medical practice because, as the boss, they have input on medical decision making and are then practicing without a license.

Here's some info from CA which does not allow a non-physician to own a medical practice. The points they bring up illustrate the issue pretty well.

http://www.medbd.ca.gov/Corporate_Practice.htm

As for the law in NY I don't know.

 

[Winged Scapula]

I think the OP is talking about the rules governing who can employ doctors and have control/input into their medical decision making. In some states it's illegal for a non-physician to own a medical practice because, as the boss, they have input on medical decision making and are then practicing without a license.

Here's some info from CA which does not allow a non-physician to own a medical practice. The points they bring up illustrate the issue pretty well.

http://www.medbd.ca.gov/Corporate_Practice.htm

As for the law in NY I don't know.

That's what I figured they were asking...but wasn't sure if it was for a solo practice (in which as you state, *someone* needs to have a medical license) or a group practice, in which I'm not sure that every owner needs a license.

My eyes starting glazing over when reading the AZ requirements; perhaps the OP can find the same at the NY medical board web site.

 

[docB]

That's what I figured they were asking...but wasn't sure if it was for a solo practice (in which as you state, *someone* needs to have a medical license) or a group practice, in which I'm not sure that every owner needs a license.

That's a good point. I have heard of some practices where the physician partners have a partner who is a business type or even a lawyer. I think the way they avoid issues is that there is a clear delineation of who does and does not have input on medical issues.

 

[Winged Scapula]

That's a good point. I have heard of some practices where the physician partners have a partner who is a business type or even a lawyer. I think the way they avoid issues is that there is a clear delineation of who does and does not have input on medical issues.

That's exactly what I was thinking. I interviewed at a practice where one of the partners was an MBA with additional training in IT, non-physician and another where one was an MD/JD and unlicensed as a physician (and hadn't practiced in years as I recall).

 

[DREZ Leptin]

As someone who "owns" a medical practice in New York, I can shed some light on this for you.

When my accountant set up my MD PC, the state of New York required a copy of my medical license registration to approve my medical corporation. It is illegal for a non-physician to employ a physician or run a medical corporation in New York.

As a matter of fact the medical board routinely disciplines physicians in New York who facilitate the practice of medicine by non-physicians.

All shareholders of a medical corporation in New York must be licensed physicians.

 

[DREZ Leptin]

To elaborate on my previous post, these "MBA's" and lawyers other posters have mentioned may not have been partners in the legal sense. There are ways of structuring relationships to circumvent the medical practice laws. They can loan the practice money. They can be paid rent for office facilities. They may hold shares in a surgery center the practice refers to, on and on.

Here is how a typical scam works in New York City run by a non-physician.

Joe Sleazy moves to Brooklyn and obtains control of Sleazy Medical Associates P.C..

Sleazy Medical Associates P.C., being a medical professional corporation can hire Senile Doc without raising any eyebrows (and bill for his services).

Senile Doc is either coerced or bribed to order countless bogus tests.

These countless bogus tests are sent to Sleazy Pathology and Sleazy Radiology. Guess who controls Sleazy Pathology and Sleazy Radiology? That's right! Joe Sleazy. The worst of this corruption happens in the New York State managed Medicaid program.

If a group of physicians introduces a non-physician to you as a "partner", be careful, very careful.

 

[Winged Scapula]

These countless bogus tests are sent to Sleazy Pathology and Sleazy Radiology. Guess who controls Sleazy Pathology and Sleazy Radiology? That's right! Joe Sleazy. The worst of this corruption happens in the New York State managed Medicaid program.

If a group of physicians introduces a non-physician to you as a "partner", be careful, very careful.

Meet our new Board of Directors at Sleazy Medical Group:

 

[bkpa2med]

How did my picture get up there? lol

 

[PeepshowJohnny]

Meet our new Board of Directors at Sleazy Medical Group:

"Hey Paulie, we just got you one of those 3T MRI thingamajibs for you. How'd we get it? Don't you worry about that, it fell of the back of the truck, capiche?"

 

[3dtp]

This has been an interesting discussion. It has raised some interesting points. DrezLeptin talks about medical corporations in NY, which I assume is a special type of corporation. The statement is made, "It is illegal for a non-physician to employ a physician or run a medical corporation in New York."

Likewise, similar comments are made for California.

Where my curiosity is aroused is how do firms like 21st Century Oncology, US Oncology and Cancer Centers of America do business in these states?

These firms are publically traded, for profit corporations run by a shareholder elected board of directors and traded on the NASDAQ (RTSX in the case of 21st Century Oncology). These companies own medical treatment facilities in both NY and CA, hire physicians as employees (properly licensed, of course and boarded, in most cases). There is no guarantee that the board members who are out of state are licensed MDs.
The companies hire, for a salary and bonus, medical directors and the physicians that work for them.

Also, hospitals, which are run by boards which generally include non-physicians at the exec level also hire "hospitalists" as employed physicians. This practice is done in all 50 states.

So, if the above comments are true, then how do these companies operate legally in NY and CA? Inquiring minds want to know!

 

[core0]

This has been an interesting discussion. It has raised some interesting points. DrezLeptin talks about medical corporations in NY, which I assume is a special type of corporation. The statement is made, "It is illegal for a non-physician to employ a physician or run a medical corporation in New York."

Likewise, similar comments are made for California.

Where my curiosity is aroused is how do firms like 21st Century Oncology, US Oncology and Cancer Centers of America do business in these states?

These firms are publically traded, for profit corporations run by a shareholder elected board of directors and traded on the NASDAQ (RTSX in the case of 21st Century Oncology). These companies own medical treatment facilities in both NY and CA, hire physicians as employees (properly licensed, of course and boarded, in most cases). There is no guarantee that the board members who are out of state are licensed MDs.
The companies hire, for a salary and bonus, medical directors and the physicians that work for them.

Also, hospitals, which are run by boards which generally include non-physicians at the exec level also hire "hospitalists" as employed physicians. This practice is done in all 50 states.

So, if the above comments are true, then how do these companies operate legally in NY and CA? Inquiring minds want to know!

Usually when the law states that only a physician can own the company they are referring to a PC (professional corporation). Usually these are known as professional medical corporations. They can be chartered a number of ways. Other types of corporations can own medical practices and medical facilities.

David Carpenter, PA-C

 

[DREZ Leptin]

I'm not a health care attorney but this is what I know.

Remember, there is a distinction between hiring a doctor to sit on a panel to do administrative work and hiring him to do surgery. The later being the practice of medicine.

My experience has been that non-medical corporations(cancer centers,etc) that require medical services set up "arms length" relationships with medical corporations to do the actual hiring,credentialing,etc. A few years ago I saw the organizational chart of the Kaiser health system in California. The Kaiser Foundation set up a contract for services with an independent physician organization that provided services at it's sites. The contracts have to be carefully worded to stay clear of Stark anti-kickback laws in addition to not facilitating the corporate practice of medicine.

Some states have statutory exemptions in the law for hospitals and Universities to hire doctors directly.

I guess with good lawyers you can circumvent any law.

 

[docB]

Also, hospitals, which are run by boards which generally include non-physicians at the exec level also hire "hospitalists" as employed physicians. This practice is done in all 50 states.

So, if the above comments are true, then how do these companies operate legally in NY and CA? Inquiring minds want to know!

Remember that many of these docs are not employed by the hospitals but are independent contractors. When that's the case they don't get paid by the hosptial. They bill the patient.

 

[core0]

Remember that many of these docs are not employed by the hospitals but are independent contractors. When that's the case they don't get paid by the hosptial. They bill the patient.

I'll be the first to admit that I do not understand all the nuances of physician business practice, but not all physicians are independent contractors. There are a variety of exceptions to the prohibition of the corporate practice of medicine. The physicians that work for Kaiser are very much employees not independent contractors. Here is an article that looks at the rise of physician employees.

http://physiciansnews.com/cover/797dv.html

David Carpenter, PA-C

 

[DREZ Leptin]

"The physicians that work for Kaiser are very much employees not independent contractors."

http://en.wikipedia.org/wiki/Kaiser_Permanente

This is a good article that has a section "Permanante Medical Groups". The CEO,board of directors and owners are physicians. Physicians employing physicians.

 

[3dtp]

Remember that many of these docs are not employed by the hospitals but are independent contractors. When that's the case they don't get paid by the hosptial. They bill the patient.

This is not the case with the groups I mentioned above. I have been offered an employment contract with a hospital and with one of these publically traded groups. While the all have a medical director, my line supervision would not necessarily be through the medical director. The professional fees are billed by me, but paid to the corporation which in turn, if I decide to accept this arrangement would give me a paycheck, which is fixed, whether I bill half my salary or double my salary.

There is no independent contractor status, but a regular w-2 employee.

In the case of a publically traded corporation, shareholders can be anybody, they elect the board of directors who hires the CEO who in turn appoints/hires the medical director and hires/fires docs, in the traditional employer-employee relationship.

 

[DREZ Leptin]

I pasted together the following info from a legal website:

The Doctrine is simply a law which prohibits those persons who are not medical physicians from owning a medical practice. Over the years this Doctrine has been eroded in many states and in some states done away with altogether.

The following states currently do not have a corporate practice of medicine Doctrine and would permit you to own shares in a health care company providing medical services.

Alabama Alaska District of Columbia Florida Louisiana Maine Mississippi Missouri
Montana Nebraska New Hampshire New Mexico Rhode Island South Dakota Utah
Vermont Virginia Wyoming

In those states where the Doctrine has been eliminated, anyone may own a corporation which renders medical care however, the corporation must employ a medical physician who is responsible for making all health care related decisions. The owner of the corporation, unless a medical doctor or an osteopathic physician (hereinafter, "MD") him or her self, may have no input with respect to any medical decision concerning any patient.

In all instances there is a medical director who is a licensed medical physician who makes all medical decisions. This medical director is employed by a medical professional corporation in those states where the "corporate practice of medicine" doctrine (the "Doctrine") is in effect, or, in some states where the Doctrine is not in effect, by a general business corporation. Additionally, the Practice may employ chiropractors, physical therapists, acupuncturists, phlebotomists, nurse practitioners, physician assistants, and various other types of health care providers

 

[DREZ Leptin]

"I have been offered an employment contract with a hospital and with one of these publically traded groups."

3dtp;

Which state was this in, if I may ask?

 

[core0]

I pasted together the following info from a legal website:

The Doctrine is simply a law which prohibits those persons who are not medical physicians from owning a medical practice. Over the years this Doctrine has been eroded in many states and in some states done away with altogether.

The following states currently do not have a corporate practice of medicine Doctrine and would permit you to own shares in a health care company providing medical services.

Alabama Alaska District of Columbia Florida Louisiana Maine Mississippi Missouri
Montana Nebraska New Hampshire New Mexico Rhode Island South Dakota Utah
Vermont Virginia Wyoming

In those states where the Doctrine has been eliminated, anyone may own a corporation which renders medical care however, the corporation must employ a medical physician who is responsible for making all health care related decisions. The owner of the corporation, unless a medical doctor or an osteopathic physician (hereinafter, "MD") him or her self, may have no input with respect to any medical decision concerning any patient.

In all instances there is a medical director who is a licensed medical physician who makes all medical decisions. This medical director is employed by a medical professional corporation in those states where the "corporate practice of medicine" doctrine (the "Doctrine") is in effect, or, in some states where the Doctrine is not in effect, by a general business corporation. Additionally, the Practice may employ chiropractors, physical therapists, acupuncturists, phlebotomists, nurse practitioners, physician assistants, and various other types of health care providers

Here is a link to a summary of state law. It seems even in those states if a non physician employs the physician they can't exercise control over independent medical decision making.
http://www.nhpco.org/files/public/palliativecare/corporate-practice-of-medicine-50-state-summary.pdf

David Carpenter, PA-C

 

[DREZ Leptin]

"In the case of a publically traded corporation, shareholders can be anybody, they elect the board of directors who hires the CEO who in turn appoints/hires the medical director and hires/fires docs, in the traditional employer-employee relationship."

You may be making an assumption here that is not true. That assumption is that you would be an employee of the publicly traded company. Remember, the kid who serves hamburgers is not necessarily working for the McDonald's on the stock exchange. He is employed by an LLC incorporated in the state where he lives. This LLC licenses the name "McDonald's" from the corporation that is traded on the NYSE. Almost certainly, there would have to be a legal entity domiciled in your state to employ you.

Businessmen use legal and financial intermediaries all the time. Many employed physicians are unaware of what legal entity pays them.