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You’ve reached the point where you’re ready to sell your practice and move into a different role in your professional career. But how do you evaluate offers from various buyers, including a DSO?

Here are a few key questions to ask before you sign a letter of intent to sell your practice:

• Is there a financial holdback? If so, what are the terms?
  • Many buyers will expect to hold back a percentage of the purchase price for various reasons. Most commonly, its to ensure that the seller performs the conditions of the transition or that the seller has been accurate and truth in regards to the representations and warranties made regarding the practice. its important to understand how you fulfill the terms to receive the full purchase price.
• Will another doctor be brought in to support the transition?
  • If you’re ready to retire, you are going to want to know the plan to get you there. As a seller, you’ll be the key person to bridge the gap from your ownership to a new owner and ultimately, you’re the key and sole provider too. Its key to know the plan for bringing in (and choosing) a new dentist to take over the patient care as you transition out.
• Can you speak with other dentists that have previously sold to this buyer?
  • If a buyer has made multiple acquisitions wherein the seller has remained on board for some time, they should provide some contact information for other sellers that you can speak to and ask questions. There is no better way to gauge if this is the right opportunity for you than to speak with others that previously sold.

Planning and asking the right questions is key to ensuring you find the right partner in your transition.

As an associate dentist, its easy to get lulled into the continuous cycle of contract auto-renewals. You sign a contract, put your head down and start working hard to build a schedule, continue to educate yourself, and produce in order to justify your position. Before you know it, you’re 2 or 3 years in and still getting compensated under the same terms you signed while in school or residency. So when is the right time to renegotiate?

The answer is, it depends. It depends on your goals with the renegotiation. It depends on how well your first few years have gone in terms of production and development. It depends on the employer. More important than timing is preparation. Are you prepared to support your proposals with information that demonstrates good reason for those changes?

While timing is not the key factor, when it comes to the terms in your agreement, timing is key. For example, if the contract specifically requires you to renegotiate during specific time frames, you must abide by those time frames. This means preparation in advance and ensuring you’ve had access to production reports and additional documentation that demonstrates your success thus far. In any case, don’t be afraid to broach the subject. If you don’t ask for it, you won’t get it.

The weight loss industry has been around for years prior to the surge of recent interest due to the #semaglutide and #tirzepatide phenomenon. Dietitians and nutritionists were the leaders in the state of Florida creating weight-loss plans, which resulted in the state legislature getting involved. House Bill 1375, was passed October 1, 1993, the purpose of which included mandating persons who assist others in losing weight to disclose the cost of the weight-loss program, the approximate duration of the program, the qualifications of the staff involved in the program and a copy of the Consumer Weight-Loss Bill of Rights.

The law went on to exempt persons licensed as MD’s, DO’s, #Chiropractors, Podiatrists, Naturopathy, Optometry, Pharmacist, and Physical therapists from complying with the above if they give weight-loss advice or provide weight-loss services which are incidental to the performance of their profession and not a primary activity. Weight-loss program means any plan or procedure offered to encourage weight loss. Therefore, creating a treatment plan that could include the above, triggers the requirement for #compliance.

As noted above, #Nurses and #NursePractitioners are not listed as exempt. The unknown issue is, is a clinic or practice owned by a non-physician also subject to these requirements? We don’t know at the time, but we do know that enforcement and regulations are in the sights of the legislature.

The civil penalties for violation of the Commercial Weight Loss Bill are as follows:

1. The Department of Agriculture and Consumer Services may bring a civil action in circuit court for temporary or permanent injunctive relief to enforce the provisions of this act and may seek other appropriate civil relief, including a civil penalty not to exceed $5,000 for each violation, for restitution and damages for injured customers, court costs, and reasonable attorney’s fees.
2. The Department of Agriculture and Consumer Services may terminate any investigation or action upon agreement by the offender to pay a stipulated civil penalty, make restitution or pay damages to customers, or satisfy any other relief authorized herein and requested by the department.
3. Remedies provided in this section shall be in addition to any other remedies provided by law.

In summary, providers and practices involved in the weight-loss space should be cautious and should stay up to date with developing regulations and previous passed regulations. The federal government and certain states have shown great interest in this space as of late.

The U.S. Department of Health and Human Services Office of Inspector General (OIG), has produced literature regarding their intention to prosecute private equity firms who do not conduct proper due diligence in healthcare deals. At this time, a few private equity firms have been charged in civil litigation cases for healthcare fraud related civil allegations. However, the OIG has stated that healthcare laws with criminal penalties are not off the table. How does this impact deal flow? Knowing who now stands over the shoulder of private equity, venture capital, family offices (“PE Groups”) is essential, because it dictates what they will have to look for in acquisitions to come.

Compliance with billing and coding practices should be at the top of the list for PE Groups conducting a sort of regulatory due diligence. Medicare Advantage has become an area of concern as well, as the government is aware and realizes that there is opportunity for improper billing under Medicare Advantage coding and billing procedures, also known as MRA gaming. PE Group dollars will be more than ever looking for medical group sellers who are compliant. In the past these hurdles and issues were simply used as deficiencies that effectively reduced the purchase price. A medical group seller must ensure that their structure, contractual arrangements, tax filings, compliance with COVID-19 aid, billing and coding, and internal policies and procedures are in tip top shape. The foundation to continuing revenue in healthcare is compliance, and PE Groups have learned that if a Medical Group is non-compliant, the money faucet is turned off.

Medical Groups of all sizes, from solo practitioners to thousands of providers, shall require compliance plans that are both properly followed and enforced. The need for a compliance officer within a medical practice (not the owner), is a requirement when seeking reimbursement from a governmental payor. Commercial carriers will surely follow any requirements set out by the OIG as it relates to government payor enforcement.

The DOJ has also released guidance that deal documents shall be subject to scrutiny where due diligence and representation and warranties shall be parts of the deals which are reviewed. These are the areas where a buyer and a seller can prove that proper due diligence was conducted, and if any bad acts (healthcare fraud) were discovered, it was self-reported.

The Biden-Harris Administration has released guidance over healthcare spending in the United States and has directly blamed the involvement of private equity in the healthcare space as the main driver for increased spending on healthcare. Healthcare was 17.3% of the national GDP in spending in 2022. That was a 4.1% increase from the previous year. The Executive branch is committed to curtailing the involvement of PE Groups in the healthcare sector and will continue to do so via OIG and DOJ enforcement, and Anti-Trust legislation. Before going to market, medical groups need to be aware of and prepare for the level of scrutiny that the current regulatory landscape is dictating.

A lawyer’s primary role in a dental practice transition is to protect their client’s interest, whether as the buyer or seller. Most importantly, its important for a lawyer to ensure that the language in purchase documents actually match the spirit and intention of the deal. No one ever expects that a transition will lead to litigation, but if one party misrepresents key facts, or fails to fulfill a responsibility, it can create problems post-closing.

A lawyer should also be the leader of the transaction to ensure that it moves efficiently and without interruption. A typical transaction involves at least 5 parties – the buyer, the seller, a practice broker, a lender, a practice consultant. Sometimes, it involves more than that. Each of these parties have multiple things occurring at once and while deadlines are flexible in general, lending puts the most pressure on a deal closing due to interest rate locks.

A lawyer should also be a mediator. At times, hard conversations have to occur. Whether it be about the structure of the deal, the transition period, post-closing obligations, or otherwise. A lawyer can step in to help find middle ground or the lawyer can be the “bad guy” that the client needs to use to explain a position or proposal to the other party.

The outbreak of the COVID-19 pandemic prompted a reevaluation of healthcare regulations, particularly with regard to telemedicine and the prescription of controlled medications. One significant development in this area is the temporary exceptions granted by the Drug Enforcement Administration (DEA) to the Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which governs the prescription of controlled substances.

The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, commonly known as the Ryan Haight Act, set stringent guidelines for prescribing controlled medications. Under this act, prescribing practitioners were required to conduct in-person evaluations of patients before prescribing these medications, with some limited exceptions. This law was enacted to combat the proliferation of online pharmacies that were distributing controlled substances without proper medical oversight.

In January 2020, the Secretary of the Department of Health and Human Services (HHS) declared the COVID-19 Public Health Emergency (COVID-19 PHE). In response to this unprecedented global crisis, the DEA recognized the need for flexibility in healthcare practices. Under the authority of the Public Health Service Act, the DEA granted temporary exceptions to the Ryan Haight Act and its implementing regulations to accommodate the surge in telemedicine during the COVID-19 PHE by suspending the requirement for in-person evaluations of patients before prescribing controlled medications.

On March 1, 2023, the DEA and HHS introduced two Notices of Proposed Rulemakings (NPRMs) to solicit public input on allowing the prescription of controlled medications via telemedicine, even when an in-person evaluation hadn’t taken place. Following public feedback, the DEA and HHS issued the First Temporary Rule on May 10, 2023, extending the exceptions to existing DEA regulations, preventing lapses in care for patients, and applying particularly to practitioner-patient relationships formed after the expiration of the COVID-19 Public Health Emergency on May 11, 2023. These extensions lasted until November 11, 2023.

As the healthcare landscape continues to evolve and with a strong emphasis on the role of telemedicine, the DEA and HHS are taking measured steps to address these changes. Building on the feedback and insights gathered through Telemedicine Listening Sessions, these regulatory bodies have introduced a second temporary rule. In this latest development, the DEA and HHS are further extending exceptions to existing DEA regulations for new practitioner-patient relationships through December 31, 2024.

As we move forward, it’s essential for healthcare practitioners, policymakers and the public to stay informed about these developments and actively participate in discussions surrounding the future of telemedicine and the prescription of controlled medications.

Get Help

As a boutique law firm dedicated to supporting the healthcare community, our goal is to ensure our clients are protected. Please contact us at Florida Healthcare Law Firm to set up a consultation today.

We’ve all seen the boom in medical practices offering aesthetic and/or IV therapy treatments in recent years. And yes, providing aesthetic treatments or IV therapy treatments is generally considered the practice of medicine. The legal landscape governing these practices can vary significantly from state to state. Let’s take a look at the differences between California and Florida. The first thing to understand is the corporate practice of medicine (“CPOM”).

The CPOM doctrine is a legal principle that prohibits corporations and non-physician entities from practicing medicine or employing healthcare professionals to provide medical services. This doctrine aims to safeguard the integrity of the doctor-patient relationship and ensure that medical decisions are made by licensed and qualified healthcare professionals. Each state has their own take on the CPOM doctrine.

California has historically upheld a strict interpretation of the CPOM doctrine. Having a “medical director” of a medical practice isn’t enough in California. A physician has to own at least 51% of the medical practice. Other licensed healthcare professionals, like a nurse, can own up to 49% of the medical practice. Non-healthcare professionals are prohibited from owning or controlling medical practices.
Florida, on the other hand, takes a more flexible approach to the CPOM doctrine. While the state recognizes the importance of physician oversight, it allows for greater latitude in the ownership and management of medical practices by non-healthcare professionals. Here, medical practices are permitted to be owned by non-healthcare professionals, although a medical director or supervising physician is required to supervise midlevels, like nurses and physician assistants. Florida’s approach allows for a more diverse range of ownership structures in the rapidly expanding fields of aesthetics and IV therapy.

Understanding each state’s take on the CPOM doctrine is key for anyone in the game – physicians, nurses, non-healthcare, so that owners and operators can properly structure their businesses.

Get Help

As a boutique law firm dedicated to supporting the healthcare community, our goal is to ensure our clients are protected. Please contact us at Florida Healthcare Law Firm to set up a consultation today.