Liability Protection & the Practice of Medicine for Non-Physicians

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What’s the difference between a professional corporation and a general corporation, and why do you need each?

In most states clinical practice can only be provided through the professional corporation or PC. In this case a professional medical corporation. Using a professional corporation has several advantages:

First, the corporation at most – but not all cases, provides protection against personal liability for exposures such as liability for slip and falls, or breach of contract. It’s the corporation that faces liability, not the person. Although corporations can shield you against claims for professional negligence for providing medical services, they can usually protect you from most other kinds of liability.

The second advantage of a professional corporation, is to help buttress the physician against corporate practice of medicine concerns. Non-physician in general corporations cannot practice medicine. There’s a lot of enforcement against entrepreneurs who try to team up with doctors. If the practice of medicine is housed within a professional medical corporation, that helps create a clearer separation between clinical medical care on one hand, and administrative management and marketing functions on the other.

One of the areas in which I provide guidance, is for non-physicians such as entrepreneurs, who want to “partner” with physicians. In most states, they can’t partner, because this would be considered “corporate” practice of medicine.

What most non-physicians can do, is create an MSO, which stands for Medical Services Organization. The MSO can contract with a physician’s professional corporation to provide marketing and management services at fair market value. This helps keep the legal lines nice and clean.

If you’d like more information about the MSO structure, we have a ton of resources on our blog at cohenhealthcarelaw.com and we’d be pleased to speak to you about your MSO arrangement, or professional medical corporation.

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