January 27, 2021

Volume XI, Number 27

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Massachusetts Corporate Practice of Medicine Regulations Finalized

The Massachusetts Board of Registration in Medicine recently released final revised physician licensing and discipline regulations, effective February 1, 2012.  The final regulations mark the end of a six-year process to overhaul these regulations.  

Although the disciplinary regulations generated a great deal of controversy within the physician and hospital community, the provision setting out the corporate vehicles through which physicians can practice attracted little attention.   Massachusetts is considered to be one of the states that prohibits the “corporate practice of medicine” – even though the case law upon which the corporate practice prohibition rested is over 50 years old.   Despite the acceptance of the general corporate practice prohibition in Massachusetts, it has been the common practice for nonprofit organizations and licensed entities, such as hospitals, clinics, and skilled nursing facilities, to employ physicians.

Under the Board’s final regulations, physicians may practice medicine through professional corporations, nonprofit organizations (including hospital services corporations and medical services corporation), limited liability companies or partnerships, or any similar organization organized outside of Massachusetts.  The regulations further provide that nothing in the regulations shall prohibit a licensee from practicing medicine as an employee of a licensed health care facility.   But it is notable that general business corporations did not make the list.  

Though these final regulations set forth the corporate practice principles as articulated by the courts in Massachusetts as well as the accepted ways of structuring medical practices, it’s disappointing that general business corporations were not included in the list of permitted corporate vehicles.   For profit health care companies and other providers were hopeful that general business corporations would be included since an early draft of the regulations did, in fact, permit practice through a general business corporation.    

As a practical matter, the Board’s final regulations confirm that the corporate practice of medicine doctrine is alive and well in Massachusetts.

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©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume II, Number 48
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About this Author

Ellen L. Janos, Health care attorney, mintz levin law firm,Digital Health PBMs & Pharmacies Hospitals & Health Systems Post-Acute & Long-Term Care Retail & Urgent Care Physician Organizations
Member

Ellen utilizes her in-depth knowledge of health care regulation to assist clients with government audits and investigations, M&A and financing transactions, and corporate compliance activities. She also provides strategic advice to traditional health care providers, investors, and start-ups on telehealth initiatives as well as the traditional practice of medicine across multiple states. Ellen often comments on developments in telehealth, HIPAA, and the corporate practice of medicine. As an assistant attorney general for the Commonwealth of Massachusetts, Ellen represented state...

617-348-1662
Rachel Irving Pitts, Mergers Attorney, Mintz Levin, Compliance Review Lawyer
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Rachel's practice primarily involves transactional and regulatory matters, including mergers and acquisitions, regulatory compliance review, telemedicine issues, and provider and service contracting matters for various health care providers, administrative organizations, payors, and health systems. Rachel has worked on over 20 transactions valuing more than $200 million since starting at Mintz Levin. She works with hospital systems, dialysis, long-term care, and retail providers, individual providers and practice groups, management companies, independent practice associations, and third-...

617.348.4454
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