Private equity funds have become major players in the professional health care delivery sector in recent years due to acquisitions of professional practices, including physician practices, senior living facilities and the like, notes the Robinson Bradshaw law firm.
Such activity has attracted attention from regulators, policymakers and the public, with a particular focus on impacts on quality of care and potential conflicts of interest for providers. Acquisitions of professional practices by private equity funds involve myriad regulatory and compliance obligations at both the federal and state level, and private equity sponsors should be aware of such obligations in connection with their acquisitions and ongoing involvement with such entities.
Corporate practice of medicine prohibitions are an important consideration for private equity funds engaged in professional practice acquisitions. Although CPOM prohibitions vary among states (with some states having abandoned the doctrine all together), they generally prohibit non-licensed persons, including individuals and business entities, from practicing medicine or employing physicians to provide medical services. Read more.
