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Tag: California veterinary practice

Compensation Structures in Veterinary Practices

Know the Legal Structure of Veterinary Practices in California

As with other types of businesses, veterinary practices must have the right legal foundation to thrive. Under the California Veterinary Medicine Practice Act, veterinarians cannot form their business as a partnership or a limited liability company (LLC). Instead, group veterinary practices should be set up as a professional corporation (PC). The PC structure offers some important legal advantages, including liability protection and the ability to be taxed as an S corporation.

The Most Common Ways to Structure Pay for Veterinary Professionals in Group Practices

Within a group practice that is established as a PC in California, there are a few different approaches for structured compensation packages for veterinarians, including: 

  • Veterinary compensation based on individual collections: One common approach for compensation is to base it on individual collections. With this, veterinarians are paid as a percentage of the revenue that they personally generate.
  • Veterinary compensation based on group collections: Another prevalent method is compensation based on group collections. With group collections, revenues are pooled and distributed among veterinarians according to predefined criteria.
  • Hybrid model (compensation based on both): Of course, you do not have to choose between one compensation structure or the other. Many group veterinary practices in California use some form of a hybrid model—with both individual and group collections being used to determine compensation.

What to Know About Veterinarian Compensation and Professional Ethics

The Stark Law and California anti-kickback regulations strictly restrict certain compensation methods for physicians. With limited exceptions, doctors are barred from self-referrals and restricted from receiving “kickbacks” for recommending certain products and services. Veterinarians in California are not subject to the same laws. However, the California Veterinary Medical Board—which regulates professional ethics—could take adverse action against a group veterinary practice that has a compensation structure that violates state law. 

Why Rely on a Bay Area Business Law Attorney?

Determining a compensation structure for your veterinary practice is complicated. Our founder and managing attorney Lynnette Ariathurai caters specifically to business owners. We are proactive. Along with other measures, our California business lawyer for veterinary practices will:

  • Hear what you have to say and answer your questions about compensation structure
  • Gather and prepare all financial documents, records, and supporting information
  • Help you determine the best compensation structure for your veterinary practice

Contact Our California Business Lawyer for Veterinarians Today

Lynnette Ariathurai is a business lawyer for veterinarians. If you have any questions about compensation structures for veterinary practices, our legal team can help. Contact us today to arrange your confidential initial appointment. From our Fremont office, we provide business services to veterinary practices across the Bay Area.

To set up a confidential, no obligation consultation with a top-tier California business attorney, please contact us today.

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