The California Hospital Association defines a group practice as a “medical practice comprised of two or more physicians organized to provide patient care services.” All group medical practices need a strong, well-developed legal structure plan. Understanding the role/responsibilities of the different players in the business is essential. In part one of this series, our Bay Area medical practice law attorney discusses legal controls for group medical practices in terms of shareholders, partners, the board of directors, and managing partners.
In California, a medical practice will generally be formed as a Professional Corporation (PC) under the state’s Moscone-Knox Professional Corporation Act. As a rule, a person must be licensed in the practice of medicine to be eligible to be a shareholder for a group medical practice.
Shareholders in a medical practice are typically the owners of the company. They have invested capital into the practice and, as a result, hold a vested interest in its success. Shareholders often have the power to vote on major decisions affecting the practice.
The rights and responsibilities of a shareholder in a group medical practice will depend, in part, on the structure of the business, including their stake in the company. A majority shareholder will have far more influence than a shareholder who owns a small stake.
The Board of Directors
The Board of Directors is responsible for the strategic direction and oversight of the medical practice. Members are often elected by the shareholders—and, in many cases—are shareholders themselves. Key responsibilities of the Board of Directors typically include establishing governance policies, ensuring the practice adheres to legal standards, financial oversight for the business, and strategy planning.
The managing partner of a group medical practice is a person in a key leadership role. Most often, the managing partner is a senior physician who owns a significant stake in the business. The role of managing partner typically blends clinical medical expertise with strong business skills. Business leadership is important to ensure effective management of the medical practice’s operations.
- The managing partner of a medical practice who is often the individual responsible for overseeing day-to-day operations and ensuring that the practice runs smoothly
Not just anyone can serve as the managing partner for a group medical practice In California. The role is highly regulated due to our state’s strict adherence to the Corporate Practice of Medicine (CPOM) doctrine. A medical practice must be owned and managed by licensed physicians—as such, the managing partner must be a licensed doctor.
Contact Our Bay Area Business Law Attorney for Group Medical Practices Attorney
Lynnette Ariathurai is a top-tier, solutions-driven advocate for clients. With extensive experience representing group medical practices, we have professional knowledge that you can rely on for questions about legal controls. Contact us today to set up your confidential consultation. From our Fremont law office, we work with group medical practices through the Bay Area.