Physicians and other licensed clinicians are frequently approached with business opportunities like partnerships or ownership interests in ambulatory surgery centers or diagnostic labs. Some are perfectly lawful and can not only lead to financial benefits but also benefit your patients. Others can jeopardize your license, trigger audits or create civil and even criminal exposure. The key question is often not whether the idea sounds innovative, but whether the arrangement respects professional licensing rules, billing requirements and fraud and abuse restrictions.
When an opportunity is usually compliant
A business opportunity is more likely to be compliant when it preserves independent clinical judgment, aligns with your scope of practice and uses truthful documentation and billing. Rules that guide these relationships often focus on the physician’s duty to practice medicine with appropriate standards, proper delegation and adequate supervision. Federal rules layer in requirements affecting referrals, prescribing and billing for federal healthcare program beneficiaries.
Even when these elements are present, the opportunity may still require careful guardrails, but the risk profile is typically manageable.
When an opportunity is not compliant or high risk
Red flags that should grab your attention include any interference with medical judgment or an arrangement that resembles payment for referrals. Federally, the Anti Kickback Statute can apply when remuneration is tied to referrals or federally reimbursable business. The Stark Law can restrict physician referrals for certain designated health services where there is a financial relationship, unless an exception applies. The False Claims Act can create major exposure if claims are not supported by medical necessity or accurate documentation.
In Texas, additional risk often arises from the corporate practice of medicine doctrine, fee splitting restrictions and improper delegation to nonphysicians.
If one or more of these factors are present, the opportunity may be unlawful as structured even if the underlying service is legitimate.
Practical next steps
Those who are considering a proposal are wise to ask for the full proposed deal terms in writing, including who owns what, who bills, patient referrals and clinician payment. Then have counsel review federal fraud and abuse implications and Texas specific licensing, delegation and corporate practice constraints for compliance concerns.
Attorney John Rivas is responsible for this communication.