Legal considerations for practice mergers and sales

While there are many benefits to aligning with other healthcare organizations, practices must also consider the legal ramifications of their decision to merge or sell. Practices must assess the following three areas of risk before they commit, according to an article from Family Practice News:

Records transfer. To meet privacy requirements, advise all current patients that the practice is being transferred and give them the opportunity to obtain their original records if they desire a new physician, David N. Vozza, a health law attorney for Kern Augustine Conroy & Schoppmann, told FPN. Further, physicians may not release records to a new practice or other third party without the patient's authorization. The physician-seller's attorney should prepare the proper documents to ensure patient privacy is maintained throughout a smooth record transfer, according to a separate article co-authored by Vozza.

Pending malpractice cases or audits. "When merging with a larger group, you should be concerned with how they are doing internally," David Levy, also of Kern Augustine Conroy & Schoppmann, told FPN. "Are they under any audits or investigations? Have they been disciplined by the state licensure board?" Practices looking to buy or join a group should make sure they're not held accountable for the other group's existing debts or liabilities, he added. As part of this discussion, determine which party will pay for a physician's "tail coverage" for past actions should it be required.

Antitrust. Companies must notify government agencies if the value of the transaction exceeds $75.9 million, according to FPN. Failure to file the required notification is a violation of antitrust law, Christine White, chair of the American Health Lawyers Association's Antitrust Practice Group and a staff attorney in the FTC's Northeast Regional Office, told FPN. However, most physician practice sales do not raise serious antitrust concerns.

To learn more:
- read the article from Family Practice News
- see the article from Kern Augustine Conroy & Schoppmann

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