Non-Physicians in Healthcare Acquisitions
Compliance Challenges for Non-Physicians in Healthcare Acquisitions
Buying a healthcare business is a big opportunity. But, it has unique challenges—especially for Non-Physicians in Healthcare Acquisitions. The healthcare industry has strict rules designed to protect patients and prevent fraud. For non-physician buyers, it’s vital to know and follow these rules. They will help avoid costly mistakes.
Non-physicians face these main compliance challenges when entering healthcare:
Stark Law and Anti-Kickback Statute (AKS)
These laws stop unfair healthcare practices, like self-referrals and paying for patient referrals. Non-physicians must ensure all financial relationships are above board. For example, any agreement with doctors needs to follow strict guidelines. A deal that looks like a kickback or unfair advantage could lead to legal trouble.
Work with healthcare compliance experts. They can ensure all contracts meet federal and state requirements.
Corporate Practice of Medicine (CPOM)
In many states, only licensed physicians can own or control medical practices. Non-physicians can’t make decisions about patient care. So how can non-physicians get involved?
A common solution is using a Management Services Organization (MSO). An MSO handles the business side, like billing and operations. Doctors oversee clinical care. Check your state’s specific CPOM rules to avoid missteps.
Licensing and Credentialing
Healthcare businesses often require specific licenses to operate. These licenses may not transfer automatically when you buy the business. Missing or outdated licenses can cause delays or even shut the business down.
Before acquiring a business, confirm all licenses are valid and transferable. Include these details in your due diligence process.
Learn more about Licensing and Credentialing
HIPAA and Patient Privacy
Patient privacy is a top priority in healthcare. Laws like HIPAA require businesses to protect patient data. For non-physician owners, understanding these rules is very important.
You’ll need secure systems for managing patient records. Employees also need training to avoid mistakes, like accidentally sharing private information. Investing in compliance tools and audits can protect patients and your business.
Fair Market Value (FMV)
It’s vital to pay doctors and staff fairly. But, payments must meet “fair market value” standards. If compensation looks excessive, it could raise red flags. Regulators may see it as an attempt to buy referrals.
To stay safe, always document the reasoning behind financial agreements. An independent FMV analysis can also ensure payments are reasonable.
Medicare and Medicaid Compliance
Many healthcare businesses rely on Medicare or Medicaid for revenue. These programs come with strict rules about billing and reimbursement. If the previous owner made errors, you could inherit those liabilities.
Before closing the deal, review the business’s billing practices. A thorough audit can uncover any issues and help you avoid penalties later.
State-Specific Regulations
Healthcare laws vary by state, which can complicate multi-state acquisitions. For example, some states may have stricter rules on facility ownership.
The best approach is to research each state’s laws in detail. A legal expert familiar with healthcare regulations can guide you through the process.
Why Legal Help Is Essential
Healthcare regulations are complex. A small mistake can have big consequences. Legal experts can spot compliance risks early, saving you time and money in the long run. They’ll ensure contracts, licenses, and business structures meet state and federal laws.
Legal guidance also protects you. It prevents you from inheriting debts, like past billing errors or regulatory issues. Talk to an experienced attorney who will help you with the fine print. Schedule a FREE Intake Discussion with Dike Law Group today.
The Bottom Line
For non-physicians, buying a healthcare business means more than just closing the deal. You must navigate a web of rules while keeping the business running. From patient privacy to ownership laws, the challenges can be overwhelming.
The key is preparation. Surround yourself with knowledgeable advisors. Do thorough due diligence. Invest in compliance from day one. With the right approach, you can beat these challenges. You can then build a successful, compliant business.
