These types of clauses are difficult to administer from a business prospective. Great care must be taken when creating the contract language and merger plan if such a clause is the preference of the parties.
Other Key Items
Among the other items of importance to address are employee benefit plans (typically, one of the practices’ plans survive), participating or nonparticipating status with Medicare and other payers, malpractice insurance, prospective buy-ins (what a new physician to the group must contribute in order to become an owner), Stark law issues (Medicare and Medicaid patient referrals to a facility in which the physician has a financial interest), and antitrust concerns.
This article is by no means an exhaustive list of the topics of discussion that should take place when planning a merger. Nonetheless, a medical practice merger can be a very rewarding endeavor for physicians and medical practices if crafted carefully and thoughtfully with the right business partners.
Steven M. Harris, Esq., is a nationally recognized healthcare attorney and a member of the law firm McDonald Hopkins, LLC. He may be reached at [email protected].