The two healthcare providers worked for months on their plan to open a Botox clinic, a medical practice according to the laws of their state. The only problem was that neither the chiropractor nor the physical therapist was a medical doctor.
And then it occurred to them. Why not, even in their state with a strong prohibition on the corporate practice of medicine, just bring one on for a stipend of $3,000 a month in exchange for owning the practice and serving as its “medical director”. “Just tell us what to do,” they told the physician, “and you don’t have anything to worry about. We’ll hold you harmless.” Sure.
As physicians get squeezed by insurers and other payers, including Medicare, and as the costs of operating a medical practice increase, more are looking for ways to supplement their income. But the sort of deal being proposed by the chiropractor and the PT, essentially a “lease” of the physician’s license, could and likely would land the physician in medical board disciplinary hell or even in jail. After all, as usually proposed, the physician has little to no personal involvement in practice operations, and, certainly, far less than what is legally required involvement in patient care, something that somehow doesn’t keep him or her from signing charts.
I’m seeing more of these shady deals than I have in several decades.
And it’s not just me. In a recent conversation with the highly regarded Los Angeles-based physician practice accountant and consultant, Bill Davidson, CPA, Bill expressed that the largest issue he’s seeing is physicians being asked to “lend” their medical licenses to Botox and med spa clinics.
Can many of these ventures be legally structured? From the perspective of my physician clients, yes. However, that assumes that the others involved in pitching the plan have an interest in a legal operation. Often times, their intent goes well beyond running a clinic to running gobs of fraudulent claims through a clinic.
In regard to those who just went ahead and signed on the crooked dotted line, I’ve seen physicians disciplined by medical boards, physicians pulled into investigations into billing fraud, and physicians prosecuted for felonies committed by their career criminal “fellow investors”. In fact, the actual criminals often quickly flip on the physician in return for non-prosecution agreements or for comically light plea-bargained punishment.
You must carefully vet, with the assistance of qualified healthcare legal counsel, any medical practice deal in which you’re planning to participate. It goes without saying that any deal pitched to you in which it’s proposed that you’ll become the physician co-owner of a medical practice together with non-physicians, a practice in which you’ll have very little to no actual involvement, falls completely within the highly suspect category.
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