Telemedicine Contracts: Non Compete Agreements

telemedicine lawBy: Karina Gonzalez

Healthcare practitioners are excited about the expansive geographic scope of practice in Telemedicine.  A licensed Florida physician can provide services in other states provided the physician is also licensed in the state where the patient is receiving the services. There are no geographical limitations if the delivery platform of technology provides voice and vision and where necessary videos for the Telemedicine/Telehealth visit.

As more and more physicians practice and contract to provide Telemedicine visits, one of the legal challenges we are facing is how to draft a restrictive covenant. The traditional reasonableness standards used to evaluate non-compete agreements just do not apply. What are you trying to restrict when the physician lives in Florida but has telemedicine practice with patients 500 miles away?Continue reading

What To Consider When Buying A Medical Practice

As physicians retire and the era of healthcare reform rocks physicians, opportunities to purchase practices will likely surge, and not just for entities that employ physicians, like hospitals.  The big issues generally break down like this:

  1. What to pay;
  2. How to structure it; and
  3. How to pay for it.

The Price

It depends on what you’re buying.  If all of the practice income is from personal services performed by the selling physician, the answer is generally “not a lot.”  The price typically consists of (1) the value of the fixed assets (e.g. equipment, furniture), and (2) maybe a little more in order to avoid the cost of starting up a new practice from scratch.  In the event, however, the practice also generates income from services that are not personally provided by the selling doctor, the price is increased to account for this “passive revenue.”  How much?  Maybe the amount of one year’s profit from that ancillary service.

Structure

Practice purchase take one of two forms:  (1) stock purchase, or (2) asset purchase.  Buyers that buy the stock of a medical practice are rare because the buyers get all the liabilities associated with the stock of the selling practice.  Most practice purchases are asset purchases, which makes it easier to say what you’re buying, what you’re not buying, which liabilities you want to assume (e.g. leases) and which ones you don’t want to assume.  Sellers often prefer stock purchases because the seller gets better tax treatment on the purchase price (capital gains instead of ordinary income) than sellers who sell just their assets.

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