Are you considering healthcare business formation in San Diego or anywhere in California?  The experienced healthcare business and medical practice corporate attorneys at the Watkins Firm have served the California medical and healthcare community for almost 40 years.  We have extensive experience forming physician’s practices, dental groups, ophthalmology practices, nursing or medical technician services, Management Services Organizations (MSOs) and other healthcare entities.

Key Takeaways About Healthcare Business Formation in San Diego and Throughout California:

• The healthcare industry in general consistently faces the highest levels of regulation, professional standards and business challenges in California.  It is essential to work with a legal partner with decades of experience in U.S. and California healthcare law in order to protect your professional license, investments, and business interests.
• California is the most challenging state in the nation in which to be an employer.  The healthcare industry faces substantial challenges in the structure of employment relationships, separation of business operations from the delivery of healthcare, as well as the genuine risks of litigation.
• Medical practices and healthcare businesses need an experienced and proven legal partner who can support every aspect of the legal requirements of a healthcare entity or constellation of entities including Management Services Organizations or MSOs, as well as day-to-day operational challenges, guidance as an employer, and effective dispute resolution.

California is the Most Challenging and Highly Regulated Healthcare Business Environment in the Nation

Nowhere is it harder to start a medical practice or healthcare organization than here in the State of California.  If you are considering healthcare business formation in San Diego or anywhere in the State of California we invite you to consider Watkins Firm.  It may seem that a healthcare entity faces the highest levels of regulation and professional standards all across the country.  However, California has its own laws and regulatory compliance issues, in addition to the federal anti-kick back and healthcare information disclosure (HIPAA) laws regulating the healthcare industry.

Healthcare business formation in San Diego and across California requires meticulous attention to every aspect of the business.  Healthcare businesses require unique employment contracts and customized policies and procedures.  There are a complex web of governmental regulations as well as federal, state and local laws with which your new healthcare entity and its workers must comply.

This includes California’s employment laws, as well as OSHA, Stark Law, HIPAA and all insurance related coding and billing procedures.  We advise our clients on a variety of compliance and healthcare dispute related issues such as physician, nurse and healthcare worker disciplinary hearings, managed care disputes, peer review, credentialing issues, and other standard business related practices and challenges.

The California Professional Corporation is a Unique Option for Your Medical Business Entity

The best business entities to consider when forming a new healthcare business in San Diego or SoCal include the California Professional Corporation or “PC” and the Management Service Organization or “MSO.”  The Professional Corporation provides several significant advantages over a traditional business entity for California licensed professionals and healthcare practitioners.  The actual structure of the Professional Corporation protects individual licensed professionals from each other’s actions, so that no one can be held financially liable for the negligence or malpractice of another member of the medical practice.

When forming a new healthcare business one must consider the additional benefits and deductions provided by the California Corporation.  Contribution thresholds to retirement vehicles such as a 401(k) are much higher than any other corporate entity under California law.  The Professional Corporation also provides significant tax advantage allowing specific deductions for health care, disability, dependent care and life insurance which are unavailable to other entities.

The Management Service Organization

The Management Service Organization or MSO provides an opportunity to streamline expenses such as building(s), HR, billing and tax, technology and even the marketing of any products developed by the underlying PC.  There are obvious restrictions here in California regarding who is able to own voting or management interests in a PC or MSO and the experienced healthcare business attorneys at the Watkins Firm will help you to minimize risks associated with an MSO while increasing profitability as well as patient satisfaction.

Pro-Tip: “Governance and compliance is a challenging concept for any corporate entity, but in the healthcare environment, it’s crucially important.

For example, HIPAA you’re, you’re a doctor. You’ve got to make sure you keep your patients information away from the public, especially from insurance companies who might want to use that to deny people coverage in the future. You have all of these employment laws that are specific to healthcare practices, where your average employer wouldn’t have to comply with them.

You have lawsuits constantly being filed by employees. You have the need for a good employee handbook, ensuring that it’s read and initialed. I can’t tell you how many times we’ve been to trial with a healthcare client, and I pulled out the employee handbook that the employee signed. ‘And it says, right here, you initialed here. Well, you promised to do this if any type of incident happened. And instead you went and found a lawyer and filed a lawsuit’ and we’ve won because of that. So having a good employment handbook is wonderful. Having an HR person that is constantly training your staff is important. If you don’t have HR person, you can use ours, but in continuing education, there’s a requirement as employers in the state of California, we have to continually educate our employees and our managers have to have double the education that the employees have to do every year.

So all of these things combined make it really important to pay attention to governance and do your work ahead of time and avoid a lawsuit.

We’ve been representing surgery centers for over 30 years, and there’s more and more types of surgery centers. There’s centers for LASIK, there’s centers for general orthopedic surgery, for cosmetic surgery, surgery centers. When a group of doctors get together and they buy into their own surgery center that is certified by the state and inspected as being healthy, sanitary and safe, or the types of surgeries as they’re rated to be performed there. So you get your knee scoped or you’ll get your shoulder worked on, or you’ll get eye surgery. You don’t need to spend the night in hospital. You go to a surgery center, it’s more cost effective, and doctors can own them under certain guidelines and they can form their own surgery centers.

They can buy into groups, they can sell their ownerships in those surgery centers. And as long as everyone complies with all the laws, they get a good piece of the profit. If it’s profitable in the long run. And instead of giving it a way to a hospital, which is more expensive than surgery centers, the healthcare business is just fraught with danger for professionals, from a regulatory point of view.

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.

MSOs are different for every kind of practice. And every kind of practice has a classification under the code as to what they can’t do, who they can’t hire, and who they can practice medicine with, or who can supervise who. And we do that with various different types of ancillary service organizations, which means like X-ray companies, MRI, PT, physical therapy, imaging, all those things that you run your business with and the rules on how you can and cannot work with them, those can be covered with your MSO.

Sometimes our healthcare clients will be approached by people who want to set up MSOs. And sometimes the driving factor is the MSO itself who will go out and locate a doctor and say, ‘look, I’ve got this great business model. We collect more. We save your personal time and we make you more profit. Once you come with us.’ Then they’ll come to us and say, ‘write up a custom MSO with this doctor in mind with these parameters, and set it up for us.’ And we do that. We bring two parties together and write it up in such a way that they can start a business or enhance the profitability and success of their existing practice or medical entity.” – Dan Watkins, Founding Partner

Legal Needs to Consider when Forming a New Healthcare Business in San Diego and Southern California

Business formation is just one aspect of forming a new healthcare business in San Diego.  There are other legal needs to consider and it is important to work with healthcare attorneys who will provide sound advice and counsel as well as exceptional legal services.  A new medical practice will require employment contracts for physicians and all healthcare workers as well as office and support staff.  We protect healthcare employers through the development and/or review of your policies and procedures, the employee handbook as well as the consistent management practices and documentation associated with being a San Diego employer.  The Watkins Firm also works with our medical practice and healthcare compliance to ensure governance and compliance with all federal, state and local agencies and laws.

Our healthcare related arbitration and mediation lawyers help to protect your licensed professionals while resolving any dispute or litigation which may arise in a timely and cost-effective manner.

We know that healthcare business formation in San Diego or anywhere in the State of California is an exciting time in your professional career.  Getting your new practice up and running will require a legal partner with deep experience and legal skill in the healthcare industry as well as a common sense approach to business.

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.

Meet Daniel Watkins:

Daniel W. Watkins is a true people person who sincerely listens. He cares deeply about what others are going through.  Dan enjoys digging into the facts and finding creative solutions to problems.  He contributes his insights candidly and constructively.

Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.

Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a trusted litigation strategist and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.

He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.

THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR

Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.

In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.