Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
Buying a healthcare business is a great idea. The industry is booming and there is a lot of money to be made. However, it’s not like buying another company; there are more rules and regulations that have to be followed, licenses to acquire and more. Rather than worrying about all those matters, you can hire a legal team to assist you with everything and make sure you are compliant with all rules and regulations. A common mistake made in these situations is when you rely on online resources for information. They are good resources to get basic information but are not meant to be relied on when making major business decisions. That’s when you want to have an experienced attorney working with you.
The Florida Health Care Law Firm has assisted hundreds of clients with buying a healthcare business over the years and we are happy to offer our services to you. We understand the laws that are in place for situations like these, what licenses have to be acquired and more. That’s why we are relied on throughout the state to handle these matters and we are here to assist you in any legal situation you may encounter. Contact us today to learn more.
Preparing to buy a dental practice may seem like a daunting task. There are many considerations, many of which usually require an expert opinion and guidance. Buying a dental practice involves legal, financing, real estate, and accounting expertise, at the very least, to ensure a smooth deal with the buyer being protected. Here’s what to consider:
Buying a practice usually means buying the assets of the practice, rather than the corporation itself. In any event, the buyer is taking a significant financial and legal risk and just like any other purchase, you want to make sure that you are getting what you paid for and not any (or at least as little as possible) of the baggage. Every dental transaction should include a well-drafted and thorough purchase agreement which includes substantial representations and warranties by the seller, thorough lists of included and excluded assets, terms addressing restrictive covenants, and disclosures about any potential liabilities affecting the practice. In addition, some transactions might require a portion of the purchase price to be seller financed. In that case, there will be a need for a promissory note and security agreement. As the deal progresses, there might be a need for additional documents to cover an assignment of rights for certain licenses, contracts, and other. Among other things, the final document signed includes a bill a sale, which is like a receipt for the buyer evidencing the sale of the assets. read more
Private money (e.g. private equity) is in full swing purchasing medical practices with large profit margins (e.g. dermatology). This is NOT the same thing as when physician practice management companies (PPMCs) bought practices the 90s. Back then, the stimulus for the seller was (a) uncertainty re practice profits in the future, and (b) the stock price. Selling practices got some or all of the purchase price in stock, with the hopes the purchasing company stock would far exceed the multiplier applied to practice “earnings” (the “multiple”). Buyers promised to stabilize and even enhance revenues with better management and better payer contracting. If the optimism of the acquiring company and selling doctors was on target, everyone won because the large stock price made money for both the buyer and seller. The private equity “play” today is a little different.
Today’s sellers are approaching the private equity opportunity the same way they did with PPMCs, except for the stock focus since most private equity purchases don’t involve selling doctors obtaining stock. Sellers hope their current practice earnings will equate to a large “purchase price.” And they hope the buyer have better front and back office management that will result in more stable and even enhanced earnings. And for this, the private equity buyer takes a “management fee,” which they typically promise (though not in writing) to offset with enhanced practice earnings. read more
The amount of regulation imposed upon those entering into the healthcare business arena can be staggering even for a highly experienced businessman. In the business world, buying and selling businesses is often accompanied by lawyers, documents and consultants. In the healthcare business world, buying into and selling healthcare businesses, or any portion of health care businesses, requires all of that support and much more.
Diving into a healthcare business requires many considerations that are unique to other areas of business. First, appropriate licensing bodies must be notified and/or approve any such purchase or sale. For instance, in the State of Florida:
the Department of Children and Families must be notified every time a new owner becomes a part of a licensed substance abuse treatment center and prior to taking ownership, must either submit to a level 2 background screen or provide proof of compliance with the level 2 background screening requirements.
the Agency for Health Care Administration must be notified sixty days prior to any change in ownership and will run a background check on new owners.
the Agency for Health Care Administration must be notified every time a new owner is added to an entity holding a Health Care Clinic License. Additionally, AHCA must approve any owner of more than 5% of the Health Care Clinic prior to such person becoming an owner.
Healthcare businesses are bought and sold every day! Though sophisticated people are fully aware of the risk difference between an entity sale and an asset sale, some do not understand the lingering nature of Medicare related liability.
When a legal entity (company, limited liability company, whatever) is bought, the liabilities of that entity are often assumed by the buyer. This is because buyers that purchase selling healthcare entities like the idea of keeping both term managed care agreements and the Medicare provider number intact. Keeping them intact can help ensure continual cash flow of the seller, but will also create Medicare liability to the buyer. read more
Vascular access centers are a common ancillary service offered by a variety of physicians, mostly nephrologists. They provide a unique setting for patients requiring interventional vascular services in connection with things like oncology, dialysis, nutritional delivery, wound healing, pain management and more. Unlike many surgical services, however, they are typically not provided via a surgery center, but rather as part of (and inside) the physician’s practices. read more
We shouldn’t be surprised that physicians still talk about banding together into “supergroups.” This has been a hot topic in South Florida for about 20 years. There are notable examples of large single-specialty groups that have succeeded – but unfortunately, there are many more groups that have crashed and burned, with many docs left considering how to get out. It’s an old joke, but getting doctors together really can feel like herding cats. The politics are tiring, expensive and time consuming. And there is no guarantee of success. read more
Healthcare professionals today are constantly faced with views of what’s changing in healthcare, and all of them seem equally convincing. “One day, everyone will be employed by a hospital” is one of the favorites. Not surprisingly, the proponents of that perspective tend to be….hospitals. “Everyone has to merge their practices” is another favorite. The proponents? Large super practices, of course.
How does one sort through this? Who’s right? The truth is that everyone is seeing part of the whole and is “right.” But being “right” doesn’t mean right for you. My opinion? read more
In an effort to stay competitive, hospital physician recruitment deals are on the rise. These arrangements are permitted under applicable federal law (the Stark Law) and are a core tool in hospitals’ tool chest. These arrangements generally involve the hospital “loaning” to the physician or to a practice employing the doctor the costs associated with that doctor joining. Since the ramp up costs associated with hiring or a physician just relocating to a new community can be steep (especially as payer contracts can take many months to set in place), hospital financial assistance can be critical. How do they work? Simple—
1.The hospital guarantees, based in part on MGMA salary surveys and other cost data sources, that the physician will collect at least $X each month for a period of normally up to 12 months;
Though it may sound too good to be true, there are drawbacks, including:
1.There are pretty severe limitations placed on noncompetes for hospital recruited physicians which can be daunting to practices hiring them;
2.Unless carefully worded and negotiated, recruited physicians may find themselves with high expectations and little delivered in terms of the marketing and other support required to create a successful practice. Not being financially successful is no defense to the requirement of staying in the hospital community for several years to write off the loan;
3. Some hospitals offset their business risk by taking any excess earnings (the collections exceeding the guaranteed amount) for months after the 12 month guarantee period, a period when collections should be substantially higher than during the early phases of the recruitment.
Practices entering into a hospital recruitment arrangement need to be careful in their physician contracts to pass as much financial risk as possible to the recruited doctor. A recruited doctor that decides he or she no longer likes the new community can leave the practice holding the bag for a huge amount of money which has not yet been forgiven.
Recruited physicians need to be careful about the risk passed off to them in their employment contracts if they are joining an existing practice, since the practices typically benefit by receiving enough money to cover all of the new physician’s salary, benefits and overhead.
Followers & Friends – BIG Announcement coming out today! If you haven’t seen our new NATIONAL platform, check it out here at www.nationalhealthcarelawfirm.com and stay tuned for our #healthcare #legal news at 2pm EST !!!
(Delray Beach, FL) June 21st, 2012 – The Florida Healthcare Law Firm, one of Florida’s leading healthcare law firms, today announced a major increase in their legal practice capabilities with the official launch of the National Healthcare Law Firm, a d/b/a and new portal of the firm. The expansion to a national platform providing healthcare legal services to physicians and healthcare businesses is one that significantly increases resources for clients who lack qualified local healthcare counsel. While the Florida Healthcare Law Firm has for years assisted clients outside the state of Florida*, this new development further cements the firm’s commitment to providing ethical legal counsel in the healthcare industry.
“We are very excited about it. The fact that we serve clients all over the country has been a small secret for a while but we realized there’s a huge demand and decided to just go for it,” said Jeffrey L. Cohen, Esq. Founder and President of Florida Healthcare Law Firm.
According to Cohen, “It’s just a strange area of the law. Nearly everything in healthcare business is regulated; leases, employment agreements, compensation. Things you wouldn’t think are regulated are strongly regulated. And there are large fines and criminal penalties for getting it wrong! Our clients understand that healthcare business of any kind has serious legal risks and that they need uniquely qualified help.”
Acknowledged throughout the country for its service and excellence, Florida Healthcare Law Firm is one of the nation’s leading providers of healthcare legal services. Founded by Jeffrey L. Cohen, Esq and headquartered in South Florida, FHLF provides legal services to physicians and healthcare businesses with the right pricing responsiveness and ethics. From healthcare clinic regulation, home health agency representation and physician contracting to medical practice formation/representation and federal and state compliance matters, the Florida Healthcare Law Firm is committed to bringing knowledge and experience to a diverse group of clients.