Centuries ago, a doctor or dentist would graduate from medical school and start a practice. In small towns and large cities, medical professionals would “hang out a shingle” and display their credentials inside the office. Folks would often travel from nearby towns to receive medical care, especially in newly developed parts of the country.
Doctors and dentists were part of the town community, well respected, and often made house calls. Over the years, massive cities grew and the medical profession experienced dramatic changes. As a result, government regulations increased and setting up a medical practice today requires legal assistance. So, “putting up a shingle” no longer exists in our modern world.
This article discusses legal aspects involved with healthcare practices. This includes starting a medical practice and why it’s essential to have a healthcare law attorney assist with any business operating in the healthcare sector.
How to Start a Medical Practice in Florida
Starting any business requires legal advice; however, starting or purchasing a private medical practice involves all the legalities any business owner must consider AND all the laws and regulations facing the healthcare industry. Basically, nothing is more complex than establishing a medical practice and maintaining it while following ALL federal and state laws.
Business Structure – Every business must decide which classification and legal structure the business will be identified as for tax purposes. For example, will your practice be considered a professional limited liability company (PLLC), sole proprietorship, corporation, or a general partnership? These classifications determine your liability regarding taxes and potential lawsuits.
An experienced business law attorney can assist you with this decision. Of course, the numbers of partners in your practice may determine this classification, too. Future buy in/buy out arrangements may be established as well as ownership percentages. Other important documents to establish with your attorney are your business contracts. These apply to employees, vendors and any other entities involved in your business.
Initial fees – Starting a business involves numerous fees. Your attorney can assist you with filing Florida’s numerous forms. Of course, if you plan to purchase an office building that’s an obvious large expense. On the other hand, if you plan to lease space in an existing building, there are still fees and monthly expenses. It’s important to choose a building close to a hospital for certain medical professionals. For example, an OB/GYN practice needs to be located near the hospital where the doctor has admitting privileges. On the other hand, a dental practice may be more flexible in choosing a prime location.
Medical Licensing – The healthcare industry has very strict licensing requirements for obvious reasons. People expect their doctors, surgeons, dentists, nurses, anesthesiologists and every medical professional to be fully accredited. In Florida, The Florida Board of Medicine provides a national provider identifier number. All medical practices must have this number. Additionally, any doctor that prescribes narcotics must have a DEA number from the federal government.
Operating a Medical Practice
Once a medical practice opens, the necessity for following state and federal regulations continues. In Florida, The Agency for Healthcare Administration (ACHA) has extensive, complex laws that control and regulate the industry. Additionally, these laws change and are updated constantly. So, it’s important to have an experienced healthcare attorney assist your practice with these ever changing regulations.
One example of a recent change involves medical malpractice lawsuits. Certainly, no medical professional wants to face this type of case; but, it’s important to understand the latest Florida Supreme Court Ruling regarding damages. In North Broward Hospital Dist. v. Kalitan, the previous caps on damages were overturned. In other words, Florida no longer has caps on non-economic damages in medical malpractice lawsuits.
This Supreme Court decision may affect how much medical malpractice insurance a physician or surgeon will need when operating a private practice.
Healthcare Law Compliance
There are many other laws and regulations that a physician or healthcare professional will have to comply with in order to legally operate their practice. This includes both federal and state regulations.
On a federal level, Stark Law is an important set of laws that all medical professionals must understand. Violating these laws may affect your ability to collect any future payments from Medicare or Medicaid patients. Penalties may include a $100,000 fine for each violation and reimbursement of fees collected from the federal government.
Basically, Stark Law prohibits doctors from referring patients to other clinics that the physician (or a family member) owns. So, if a doctor owns a nursing home; he may not send his patients to that particular home. In other words, a physician may not use patients to “pad their own pockets.” Although this may be a rare occurrence, each person working in a medical practice must be aware of this law so no mistakes are made by an employee.
At the state level, Florida has anti-kickback laws. Numerous statutes exist in Florida regarding kickbacks. Basically, no physician, dentist, pharmacy, nursing home, or any other organization involved in healthcare may receive a monetary reward for referring a patient. Non-compliance in Florida is a felony. Anti-kickback laws also exist at the federal level. The consequences of breaking these laws remain severe and may include civil and criminal penalties. No medical professional wants to end up in prison or lose their license. So, it is extremely important that all employees understand these laws.
Finally, keeping great records remains important for any business. In healthcare, any record involving private healthcare information must remain confidential. The Health Insurance Portability and Accountability Act (HIPPA) protects patients’ health information.
The only time confidentiality may be broken is in cases of child abuse or communicable diseases that threaten entire populations. So, it’s important to train staff and document HIPPA training. That way, your practice is protected if a rogue employee inadvertently shares confidential information on social media or is overheard talking about a patient. In closing, document all staff meetings and training sessions. Since a well informed staff protects your organization, keep all employees updated.