Physicians' Legal Update

Physicians have new duties to protect patients’ protected health information (“PHI”) under the Health Information Technology for Economic and Clinical Health Act (the "HITECH ACT"). The HITECH Act requires physicians, as well as hospitals and insurance companies, to notify patients, the Department of Health and Human Services, and in some cases the news media of security breaches involving “unsecured” PHI. “Unsecured” PHI means PHI that is usable, readable or decipherable by unauthorized individuals, for example, unencrypted electronic PHI. A security breach is the unauthorized acquisition, access, use, or disclosure of PHI that compromises its security or privacy and poses a significant risk of financial, reputational, or other harm to the patient. When PHI is accessed, acquired, or disclosed for a purpose authorized by law, e.

Stark & Anti-Kickback. If a doctor treats Medicare or Medicaid patients, that doctor is subject to numerous statutes and regulations governing those programs, including the (in)famous Stark and Anti-Kickback laws. Generally speaking, Stark forbids referrals by physicians to businesses they own, and Anti-Kickback forbids payments in exchange for patient referrals. These broad and confusing laws can trap the unwary physician looking to expand his practice by entering into relationships with potential referral sources or branch out in other medical services. A lawyer can help a doctor avoid these traps.

Doctors abhor lawsuits, and for good reason. Lawsuits consume time, energy, and money better spent on patients, they last forever, and their results seldom satisfy anyone. Which is why doctors, like other businesses and individuals, increasingly turn to arbitration to resolve disputes.

Tennessee offers several options for organizing your medical practice. A physician’s practice can be organized as a sole proprietorship, a partnership, a professional limited liability company or a professional corporation. Some of these business entities will shield the physician/owner from certain types of liability. However, no matter what form of business entity a physician owns, he cannot shield himself from liability for his own professional acts. Because each type of business entity has specific legal and tax consequences to the owners, you should consult with an attorney and carefully consider the structure and governing documents of a medical practice before joining or organizing it. This article discusses some of the non-tax aspects of your choice of entity. You should discuss tax consequences of each form of organization with your financial or tax adviser before deciding which business form works best for your practice.

Physicians sell their practices for a variety of reasons. Until recently the decision to sell a practice usually came at the point at which a physician was ready to retire or to relocate. Most often the purchaser would be a younger physician in the practice. However, recently there has been a change in the character of the parties interested in selling and purchasing a physician practice. Now the seller may be a physician in his middle years of practice and the purchaser may be a local health facility wishing to employ his services directly. Physicians pursue these transactions not because they are ready to leave the practice of medicine but as a way to continue the clinical aspects of medicine and caring for their patients without being burdened with the often frustrating and time consuming aspects of running the business of a physician practice.

What first comes to mind when you think of the assets of a medical practice? Certainly the expertise of the physicians, other care givers, and staff. Practice leaders generally know, too, that this “human capital” can be protected with shareholder agreements and employment agreements. Patient and vendor relationships and the practice’s goodwill in the community readily come to mind as well. In your quick mental balance sheet, you may not immediately think of intellectual property. You should.

A physician driving down the highway comes upon a car wreck with an injured driver in need of immediate medical aid. Should the physician stop and help, or pass by the other side?