Starting a new medical practice in California requires legal business experience & healthcare expertise. The healthcare industry and associated licensure is highly regulated in California. Medicine is a business and the delivery of healthcare has radically changed over the past few years. As the population of the United States continues to age, we’ve been through a pandemic, substantial political headwinds, and budget challenges. The winds of change are still blowing, and your new medical practice will need experienced medical and healthcare business attorneys who can guide you through each step of a medical practice startup. Our healthcare business attorneys and medical practice legal team will assist with multiple aspects of the process, including but not limited to:
- Entity selection – one option is a California Professional Corporation (PC)
- A Management Services Organization or MSO
- Shareholders agreement and corporate documents & bylaws
- Physicians contracts
- Nurse and healthcare professional contracts
- Occupational Safety and Health Administration (OSHA) regulations and compliance
- The Health Insurance Portability and Accountability Act (HIPAA) compliance
Starting a new medical practice in California actually opens the door to a few advantages from the business side of a healthcare entity. California has a unique business entity known as the California Professional Corporation or PC. The California Professional Corporation was specifically developed for advanced degree professionals who are required to obtain specialized licensing. The PC provides personal protections for practicing professionals that a standard LLC, S-Corporation or C-Corporation does not offer. We are able to separate each professional from liability at a corporate or PC level. The PC also provides protections from liabilities arising from actions such as negligence or malpractice by another owner within the PC.
The California Professional Corporation extends advantages associated with taxation and benefits. Your new company will be able to offer and obtain tax deductions for many employment and fringe benefits including health insurance, disability, life insurance and even dependent care. The California Professional Corporation also allows increased retirement or 401(k) contributions that exceed the limitations of other business entities.
The Management Services Organization or MSO has become a go-to tool, blending economies of scale, external investment and business-related expertise and professionals. The services supported by your MSO allow medical professionals to focus on a high quality patient experience rooted in the delivery of exceptional healthcare.
Pro-Tip: “Consider an MSO like your administrator for your business. But if you’re in the healthcare business, your administrator can’t do it all. It’s complicated. And there are actual schools that can take people to learn some of the things that your administrator’s supposed to do, like coding, like billing, like compliance, like HR, like leasing, like software programs. So many things that you have to deal with so many more clients, patients, you have to do so much that MSOs are a good option. Also, you can get non-doctors to partner with you and invest in your company to make you more profitable while you focus on being a doctor.
Pro-Tip: “Consider an MSO like your administrator for your business. But if you’re in the healthcare business, your administrator can’t do it all. It’s complicated. And there are actual schools that can take people to learn some of the things that your administrator’s supposed to do, like coding, like billing, like compliance, like HR, like leasing, like software programs. So many things that you have to deal with so many more clients, patients, you have to do so much that MSOs are a good option. Also, you can get non-doctors to partner with you and invest in your company to make you more profitable while you focus on being a doctor.Business expertise can really benefit a medical practice. All these technologies, all these experts there to help you as a doctor, they can really help. And you can bring in resources, financial resources to make you stronger, more competitive. You can get better contracts, better pay contracts with your payers. I mean, all those things can be accomplished by MSOs with qualified resources and people in them.
Some of your biggest organizations in the United States are run by MSOs or a combination of MSO and other entities. Sometimes you get so big you have to have individual contracting entities that just do that. They go out and find you the best pricing, or they’ll work with a multitude of other healthcare practices and do a group location of better pricing and contracts for the doctors. An MSO should mean more profit, better patient experience, potential for growth of a practice. If you’re not doing it, you know your competitors are!” – Dan Watkins, Founding Partner
Starting a new medical practice in California is an exciting opportunity. It requires unique legal and business experience and expertise to ensure success while providing the protections and advanced benefit options you seek. We invite you to review our podcast Episode 10 – The Importance of a Strong Corporate Attorney as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today. Learn how we have helped many other San Diego and California medical practices and healthcare businesses to grow and thrive, and all we can contribute to get your new medical practice off to a strong start.
