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Health Care Transactions, Financing & Group Practice Structuring

Healthcare providers have transaction needs just like any business. These clients may develop relationships with other providers, acquire or sell a practice, or merge with another provider. Unlike many other businesses, however, healthcare providers must complete these transactions within the confines of complex laws and regulations particular to the healthcare industry.

Transactions involving healthcare providers present unique concerns. These transactions must comply with state and federal self-referral and anti-kickback laws, anti-trust laws, laws pertaining to corporate practice of medicine and other state-specific laws. When looking to begin a healthcare business, clients must carefully consider the ownership structure and comply with laws that may dictate who is permitted to own that particular type of practice. If a practice is being sold, it must be carefully structured to comply with Stark Law, which prohibits physician referrals to an entity in which the physician or a family member has a financial interest, and the Anti-Kickback Law, which prohibits providing or soliciting anything of value in exchange for a referral, among other state and federal healthcare laws. Failure to comply with these laws could further result in False Claims Act liability. Unique rules also apply to patient records and notifications regarding the transaction. Even entering into day-to-day agreements with employees, independent contractors, suppliers, or other providers can be complicated by healthcare laws and regulations.  

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Valuation of a healthcare facility or physician practice also presents unique concerns. Healthcare laws impose constraints on the free market in certain transactions with requirements such as prices be fair market value and the transaction be otherwise commercially reasonable, without consideration of any referrals that may be made or business generated between the parties. A failure to properly value a practice or facility could result in a violation with serious financial implications.

Proper structuring of a group practice is required to avoid Stark Law liability for referrals amongst members of a physician's practice. The group practice requirements are complicated, and govern everything from the way the group is legally structured and who owns it, how many members it has, the range of care it provides, the percentage of services furnished by members of the group, how it distributes income and expenses, how it makes decisions and how it bills. There are even special rules for productivity bonuses and profit sharing within group practices. Failure to comply with group practice requirements could result in self-referral violations among group members, which could in turn result in false claims liability.

MacDonald Illig's healthcare group has represented healthcare providers of all sizes and types with healthcare transactions, from day-to-day agreements to acquisitions, to group practice structuring, to sales or mergers of healthcare providers or facilities. Our healthcare attorneys have expertise in negotiating and structuring healthcare transactions and business arrangements to comply with state and federal self-referral and anti-kickback laws, anti-trust laws, laws pertaining to corporate practice of medicine and other state-specific laws. MacDonald Illig is particularly well suited to handle these transactions because it has attorneys with expertise in other applicable areas of law, such as tax, real estate, and employment. That means our team is well equipped to answer any nuances that may arise as part of our client's transactions. Our expertise in public finance, tax and securities laws also allows us to assist healthcare clients with the financing necessary to facilitate these transactions.

In the event our clients experience a claim or lawsuit related to a transaction, or the transaction is investigated by the Office of Inspector General or other applicable oversight agency, our experienced litigators team up with our healthcare attorneys to provide a knowledgeable and zealous defense.