Houston Medical Practice Set-Up & Merger Attorney
Texas Health and Medical Law Attorneys
Establishing a solid foundation when starting your own health care practice,
merging with another entity, or engaging in a joint venture is critical
to future success. Because the health care industry is governed by a range
of regulations – including those involving fraud and abuse, corporate
practice of medicine, and more – ensuring compliance requires a
comprehensive view of a practice’s structure, business and employment
relationships, liabilities, and proactive measures to reduce risks and
Hendershot, Cannon & Hisey, P.C. is well-versed in the complex laws
surrounding the health care industry, as well as the practical needs health
care providers of all types have when starting or making structural changes
to their businesses. Over 26+ years, we have earned a reputation as one
of Texas' preeminent law firms handling setups, mergers, and acquisitions
of medical practices for
healthcare professionals. Because of our knowledge and experience, other attorneys routinely refer
their most complex health care matters to our firm.
Learn more about our services. Call (713) 909-7323 for an initial consultation.
Managing the liabilities of a health care practice demands a client-specific
focus on all relevant legal issues, including those involving choice of
entity, real estate transactions, employment relationships, and contractual
agreements. Navigating these issues during a set-up or merger also requires
effective risk-management and compliance with regulations tailored to
the unique needs of a practice.
Set-ups – When setting up practices, our services focus on providing step-by-step
assistance to health care providers. This includes helping practitioners
select the most appropriate business structure that provides protection
against liabilities, including
improper medical billing practices and violations of fraud and abuse laws. Our legal team also provides assistance
in reducing exposure to conflict and liabilities that may arise in the
form of disputes between employees and directors by establishing
clear and enforceable agreements at the outset of formation.
Mergers – In addition to managing liabilities inherent to any medical or
health care practice, our team also helps clients navigate liability issues
that may arise from mergers and acquisitions, including billing and recoupment
matters, employment and partnership structure, and determinations for
initiating stock purchases, which transfer liability, or assets purchases,
which often provide more protection but not always the same benefits.
Protecting Your Practice from the Unexpected
From entity selection to contractual agreements, we help create a foundation
and policy-driven structure to facilitate handling of any future issues.
This includes compliance with Texas law against corporate practice of
medicine, establishing rights and duties of stakeholders, control of the
business, employment, and exit strategies.
Corporate Practice of Medicine – Texas law prohibits the corporate practice of medicine, which
means physicians generally may not be employed by individuals without
medical licenses or by business entities governed by laypeople. Although
there are certain exceptions, including nonprofit corporation employment,
this doctrine has far-reaching implications for how medical entities must
be structured and governed. Failure to comply, especially when starting
a business, going through a merger, or establishing a joint venture, can
expose medical providers and entities to significant penalties, including
fines and adverse actions against their medical licenses.
Choice of Entity – In addition to affecting health care compliance with Texas'
prohibition on the corporate practice of medicine, choice of entity sets
the stage for how taxation and liability will be addressed throughout
the life of the business. Each type of business entity comes with its
own advantages and drawbacks that must be carefully assessed based on
the specific circumstances of each business's needs and goals.
We help clients explore the most appropriate entity selection, including:
Professional limited liability companies (PLLCs) – PLLCs provide limited personal liability for members, including
those actively involved in management, and favorable partnership-style
tax treatment. You must have the appropriate license to take advantage
of this entity.
Professional associations (PAs) – These provide favorable tax treatment and easy transfer of ownership
interests. Shareholders are not personally liable for business debts or
for damages claimed in lawsuits against the entity. This entity also requires
shareholders to have appropriate licenses.
Limited liability partnerships (LLPs) – Limited partners (who cannot be actively involved in management)
have limited personal liability for business debts; this entity also enjoys
favorable tax treatment.
Selecting the proper entity is only the first step. Practices will also
need documents to ensure professionals and the business are fully protected.
For example, a PLLC or PA needs agreements detailing how the entity will
deal with transactions, purchase and sales of interest, expelling members,
tagalong and drag-along rights, and buyouts.
Licensing, Contracts & Regulatory Compliance
There are many licensing, contractual, and regulatory issues to address
before a successful practice or medical business can begin to grow and
thrive, and avoid future complications,
business disputes, and even violations of
fraud and abuse laws. We draw from collective experience in health and business law health
to address all pertinent matters, including:
Licensure – Individual compliance with state licensing requirements, as well
as business entity compliance with corporate practice of medicine provisions,
must be carefully examined to proactively avoid liability.
Medical contracts must be negotiated, drafted, and reviewed meticulously. This includes
medical director agreements, management services agreements, physician
employment agreements, space and equipment leases, mobile diagnostic testing
non-compete agreements (including non-competes for executives and professionals), and many other
types of agreements that are clear, executable, and enforceable.
Credentialing – We advise clients on credentialing and peer review proceedings
at hospitals, credentialing for managed care plans, and quality of care
issues for managed care plans.
Compliance – It is imperative to not only comply with
regulatory requirements governing transactions and business dealings, but also to establish compliance
plans and policies to remain in compliance with the Health Insurance Portability
and Accountability Act (HIPAA), the Health Information Technology for
Economic and Clinical Health Act (HITECH), and all other applicable state
and federal regulations.
Joint ventures are subject to extensive state and federal regulations.
Affected by the terms of the business's operating agreement, partnership
agreement, or other applicable contracts, physicians who own clinics,
diagnostic labs, imaging centers, emergency medical centers, and other
types of medical practices can find themselves burdened by a range of
Before you take the first step in forming a joint venture or expanding
your investor base, let us answer your questions regarding:
- The best corporate structure for your partnership or joint venture
- How to ensure good investor and shareholder relations
- Whether state licensure requirements will affect your partnership
- Protecting yourself with employment agreements and non-compete agreements
- The best commercial real estate agreements for your practice
- How Stark laws and/or fraud abuse laws, regulatory compliance and compliance
programs will impact your practice
- How medical contracts may affect partnership agreements
- How third-party billing will affect your practice
Freestanding Emergency Centers (FECs) & Ambulatory Surgical Centers (ASCs)
FECs are becoming increasingly common in Texas. They can be separate and
distinct from hospitals and are generally equipped to diagnose and provide
emergency treatment like hospital emergency departments. We advise and
represent investors in all aspects of establishing FECs, from choice of
entity and joint ventures to fraud and abuse regulations and the
Stark Law. This includes determining whether FECs may benefit from the Series LLC,
a Texas business entity which allows investors to incorporate one entity,
spin off other businesses from it, and retain limited liability in each
of the businesses. We can advise whether a Series LLC or another entity
is the most advantageous for you.
Ambulatory surgical centers (ASCs) focus on providing same-day services
such as diagnostics, preventative care, and surgical procedures. A growing
number of physicians are investing in these centers, and they are being
acquired by or merged with hospitals. We have represented numerous ambulatory
service centers in establishment, mergers, acquisitions and other business
transactions, as well as hospitals in the sale and acquisition of ASCs,
and have advised on regulatory compliance through these matters.
Get the Advice & Advocacy You Need: Schedule a Consultation Today
Hendershot, Cannon & Hisey, P.C. is a recognized Texas leader in health
care and business law. By operating on the belief that an “ounce
of prevention is equal to a pound of cure,” we leverage our insight
and experience to help health care providers across the state navigate
the unique hurdles of their start-ups, mergers, and joint ventures with
an eye on future viability. To learn more about our services,
contact us to request a consultation.