Before buying a home, buyers usually hire an engineer to check the structural integrity of the home and a termite inspector to make sure the home is not infested. In addition, they perform a title search (to make sure the correct title) and a property survey. However, when doctors buy a stake in a doctor`s office, they often don`t do their due diligence to make sure they get what they were negotiated for. For a partnership to be successful, partners must be compatible and have common goals. As existing partners have extensive experience and are approaching retirement age, the potential new partner must determine how these factors affect their future and practice. In addition, the potential new partner must be familiar with the approaches of existing partners in medicine and business. Neglecting differences can lead to chaotic “separations” or eventual financial failure of the practice. At some point, one or more of these problems will arise and not being aware of the legal consequences of partnerships or mergers can lead to unnecessary expenses and disrupt or even destroy a practice. Involving a qualified lawyer at the beginning of a practice group merger or partnership with a physician has the added benefit of allowing physicians to devote their time and energy to growing the practice rather than settling the day-to-day details of the agreement.
Entering into a partnership without a legally binding contract can clearly lead to devastating situations. But making ill-conceived deals could be just as ineffective and risky. This leaves you wide open to a dog fight over everything from compensation to debt to patients` medical records. Before you embark on the partnership path – and long before a break is imposed on you – here are a few things to keep in mind about partnership agreements: Think about what partnership means to you and your practice. The landscape of medical practice has changed in recent years, notes Brian McCartie, vice president of business development at Cejka Search, a health care recruitment firm based in St. Louis, Missouri. Young doctors tend to demand more flexible working conditions. “Partnership can mean a variety of different things,” McCartie says. Partners can only share overhead, a receptionist and billing. Or they can choose to group and divide the profits or simply divide the profits of the ancillary services. Whatever form the partnership takes, write it down. Notification to patients.
Think about how patients will be notified of changes to the partnership. Who writes the letter to patients and what will she say? Some partnership agreements even define who bears the time and financial burden of patient notification, Johnson says. For example, a retiring physician may have to pay for copies of leaked medical records. What are the copy fees? At 35 cents per page, that can really add up, Johnson notes. Value. A partnership membership agreement looks at the value of the practice`s assets, such as furniture and furniture that can be written off based on a schedule over time, and the value of debts that can be deducted from your salary over a period of time, Johnson says. The buyout agreement will, of course, reflect that, he says. By examining the value of your practice, you can be protected in the event of a catastrophic event, such as the sudden death of a partner. Do you know what`s in your partnership agreement? Poorly designed or non-existent contracts can be catastrophic for you and your practice. Learn how to make sure you`re protected. Partnership/shareholder/corporate agreements generally contain mandatory buy-back provisions. Often, new physician partners focus on their membership commitments rather than their obligations (or those of the company) to purchase existing partners in certain circumstances.
How is the buyout financed? Are there cross-purchase life insurance policies for the life of partners to finance redemptions? How is the purchase price determined and how does it compare to the purchase price? Don`t wait. As with any other difficult decision, Bernick says, it doesn`t get any easier as you get closer to the moment of truth. Set the details at the beginning of the relationship – not when a partner gets sick or stops suddenly. Keep in mind that the priorities of a new partner can be very different from those of a partner who is one year away from retirement. New employees also need to know what to expect from the partnership journey. “Make sure that before you join a practice, everything is settled for you,” says Kenneth Hertz, director of MGMA Health Care Consulting Group. And the agreement should be reviewed frequently to ensure it is up-to-date and relevant. Before completing the acquisition, the potential new partner must review the agreements that apply to the physician`s owners (p.B the partnership agreement, shareholders` agreement or operating agreement).
Often, potential new partners are so enthusiastic about becoming partners that they focus only on financial matters and fail to examine and understand the other rights, obligations and obligations for which they enter into contracts. B such as buy-back provisions, voting rights and restrictive agreements. Physicians should consider the impact that the terms of their employment contract will have on their partnership membership negotiations. As far as possible, the employment contract must contain general buy-ins of the company. B for example the method used to calculate the purchase price, the method of payment and the percentage of ownership shares to be granted to you. In any case, your partnership agreement should be reviewed regularly to ensure that its provisions effectively reflect the current working arrangements between the partners. .