I was recently asked…
Q. Whether a physician-owner of a practice may receive a share of the practice’s profits if that physician no longer provides clinical services.
A. Depends. There is not much literature on this subject and to find the answer one must look to the December 8, 1999 letter from the State Education Department, wherein Assistant Counsel that for a physician owner to retire and retain a percentage of profits, the doctor in question “must be involved in some aspect of patient treatment.” The letter continues that the “physician must be a practicing physician, actually involved in the treatment of patients”. However, treatment of patients would include quality assurance, “done to ensure that patients are receiving proper care and treatment,” and performing such quality assurance would “be considered to be practicing [the] profession.”
We will touch on Illegal Fee Splitting and Corporate Practice of Medicine in future alerts.
