Epstein Becker Green Webinar with Attorney Kevin J. Ryan - March 15, 2016 This webinar series should be of interest to providers, payors, private equity investors, and other health care and mental health stakeholders. This webinar will provide: * A discussion of the concept of the "corporate practice of medicine" and other professional services: * Who is allowed to employ licensed professionals may vary by state * Professional corporations * The management of professional corporations * National expansion * The scope of practice issues Learn more: http://www.ebglaw.com/events/corporate-behavioral-health-care-not-so-fast-behavioral-health-crash-course-webinar-series/ These materials have been provided for informational purposes only and are not intended and should not be construed to constitute legal advice. The content of these materials is copyrighted to Epstein Becker & Green, P.C. ATTORNEY ADVERTISING.

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Corporate Behavioral Healthcare:
“Not So Fast”
March 15, 2016

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This presentation has been provided for informational
purposes only and is not intended and should not be
construed to constitute legal advice. Please consult your
attorneys in connection with any fact-specific situation under
federal, state, and/or local laws that may impose additional
obligations on you and your company.
Cisco WebEx can be used to record webinars/briefings. By
participating in this webinar/briefing, you agree that your
communications may be monitored or recorded at any time
during the webinar/briefing.
Attorney Advertising

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Presented by
Kevin J. Ryan
Member of the Firm
kryan@ebglaw.com
312-499-1421
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4. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
This Webinar will provide:
 A discussion of the concept of the “corporate practice of medicine” and
other professional services:
• Who is allowed to employ licensed professionals
• Professional corporations
• The management of professional corporations
• National expansion
 Scope of practice issues
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5. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Corporate Practice of Medicine
 General Business Entities May Not Practice Medicine Defined As:
• “Any person who practices or attempts to practice, or who advertises or holds
himself or herself out as practicing, any system or mode of treating the sick or
afflicted in this state or who diagnoses, treats, operates for, or prescribes for any
ailment, blemish, deformity, disease, disfigurement, disorder, injury, or other
physical or mental condition of any person.” California Business and Professions
Code §2502.
• Similar Provisions in Other States
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6. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Corporate Practice of Medicine
 Practical Aspects on the Prohibition on the Corporate Practice of Medicine
• Ownership of a Profession Practice is limited to Professional
• Ownership of a Professional’s practice by lay persons is prohibited
• Ownership of a Professional’s practice by a general business corporation is
prohibited
• Certain exceptions apply for ownership by hospitals and HMOs
 Management Agreements
• Professional decision making must be left to professionals
• Advertising of professional services can only be done by professional
• Determination of how many patients to see in a given period of time cannot be
decided by an unlicensed person
• Determination of what tests are appropriate for a particular condition can only be
done by professional
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Corporate Practice of Medicine
 Violation of the Prohibition on Corporate Practice of Medicine
• Can be a Felony
• Fines
• Prison
• Licensure Action taken against professional
• Can also pursue anyone who aids and abets the violation
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Professional Corporations
 The “Friendly PC” Model
• A professional corporation is formed by a professional associated with the
management company
• A Stock Transfer Agreement is entered into between the management company
and the professional
• The Stock Transfer Agreement allows the management company to designate the
owner of the stock of the professional corporation
• Certain states may restrict use of Stock Transfer Agreement
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National Expansion
 Can set up a PC in each state in which management company will operate
 Can set up one PC and qualify it as a foreign corporation in other states
 Not all states allow foreign PCs
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Scope of Practice
 State licensure laws govern scope of practice of professionals
 Scope of practice may vary by state
 Licensure in state of patient
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Questions?
Kevin J. Ryan
Member of the Firm
kryan@ebglaw.com
312-499-1421
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12. © 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
 Mental Health Parity Implementation: Are We There Yet?
March 22 at 2:00 - 2:15 p.m. ET
Lesley R. Yeung
 Managed Care and Behavioral Health
March 29 at 2:00 - 2:15 p.m. ET
Jackie Selby
To register, please visit: http://www.ebglaw.com/events/
Upcoming Webinars
Behavioral Health Crash Course Series
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Thank you.
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