Page 12 - OctSam2019

CORPORATE
MEDICINE

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much control over the doctor. Specifically, the corporation col-
lected two thirds of the revenue, controlled the staff who
worked with the doctors and commercialized the doctors’ li-
cense to obtain various health care contracts. The more strings
and limits to the agreement, the greater the risk it will be illegal.
There are several other notable exceptions which allow an
unlicensed entity to employ a physician. They include certain
non-profit health care corporations, non-profit medical
schools, various State and County institutions/organizations,
including certain hospital districts and certain rural hospitals.
The penalties for violating this legal doctrine in Texas are
pretty hefty. An offending party may get off with an adminis-
trative fine. but a doctor could also lose his license if the cir-
cumstances were sufficiently egregious. Worse yet, criminal
penalties are at least a theoretical possibility even though the
author has been unable to locate any imprisoned doctor for
becoming a party to an unlawful agreement. However, that
doesn’t mean it can’t or won’t happen.

What’s the take home message here?
Any time you’re asked to sign a contract or enter into some
agreement involving lay people and your practice, you need to
be on at least a low level alert. When it involves any form of
compensation to you, or takes some percentage of your fee
ostensibly for some service or product, the alert level goes
from low to high. We’re not just talking about something that
may look a little bit like an employment agreement. You need
to take a hard look at things like practice management agree-
ments, leases of real estate and equipment, franchise agree-
ments or anything by which an unlicensed person may be
entitled to a portion of your fee or may have some way, direct
or indirect, to control your judgment.
Crafty lawyers get big bucks trying to imagine creative agree-
ments to avoid the corporate practice of medicine doctrine.
At day’s end, the courts will always put substance over form.
because your license could be at stake, don’t play lawyer in an
effort to determine the legality of the proposal at hand. Find
somebody who knows these laws and get a professional opin-
ion first. Your job, and the purpose of this article, is simply to
have enough knowledge to be aware of the warning signs and
symptoms that should trigger an alert.

George F. “Rick” Evans Jr. is a founding partner of Evans, Rowe
& Holbrook. A graduate of Marshall College of Law, his practice for
36 years has been exclusively dedicated to representation of physicians
and other healthcare providers. Mr. Evans is the BCMS general counsel.

12 San Antonio Medicine • October 2019