When considering optimization of healthcare business operations it is important to remember Limited Liability Companies are fundamentally just partnerships with added liability protection. The LLC structure offers liability protection called charging order protection, which prevents your (or your partners’) personal creditors from seizing your business or its assets to settle personal debts. Since LLCs were designed to be partnerships, you are expected to adhere to some basic partnership rules – most importantly, you should have partners. Running an LLC with no partners opens you up to liability.
The beginning of a new year is a great time to evaluate your medical practice and determine ways to protect its healthy growth for the future. The time, effort and dedication that it may take to build a successful practice may be quickly undermined without certain contractual protections in place. As you seek to establish or expand your practice, it is essential to protect your hard earned efforts from employees and consultants taking a portion of your patient base, employees and valuable proprietary business processes to compete against you.
One of the ways physicians seek to protect the investment that they have made in their practice is through the use of restrictive covenants. Restrictive covenant is an all-inclusive term used to refer to all contractual restrictions upon competitive practices; nonsolicitation; confidential information and use of trade practices. Restrictive covenants may be found in a number of documents related to your practice. A restrictive covenant may be found in your practice governing documents, such as the shareholder agreement, the partnership agreement of a partnership or the operating agreement of a limited liability company. A restrictive covenant is often included in an employment contract where it prevents an employee from engaging in certain competitive practices while they are an employee and for a period of time after their employment ends. There may be a restrictive covenant provision in a contract for the sale of a party’s interest in the practice.
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.