Managing Risk When Expanding a Medical Practice to Multiple Locations in California
Are you preparing to expand your medical practice to a different location in California? If so, there are several different risks that you need to consider. Multi-location expansion changes how a California medical practice operates from day to day. Staffing models, reimbursement flow, and physician oversight become more difficult to monitor across sites. Seemingly small breakdowns have the potential to cause very big problems. Within this article, our California attorney for buying a medical practice highlights the key things to know about managing risk.
Key Risk: Corporate Practice of Medicine and Ownership Structure (California Law)
There are strict rules and regulations in our state regarding the business operations of medical practices. Specifically, California’s corporate practice of medicine doctrine restricts who may own and control a medical practice. That is a big risk to consider for medical practices that are preparing to expand to new locations. Expansion often involves new entities, real estate arrangements, or management agreements. If ownership and control blur between clinical and non-clinical parties, the regulatory risk rises. To remain in full compliance with California law, each location must preserve physician control over clinical decision-making and medical revenue.
Additional Risk: Licensing, Supervision, and Scope of Practice
There are many other risks to consider as well beyond California’s corporate practice of medicine doctrine. Each additional location increases licensing and supervision obligations. Physicians must maintain proper licensures for all locations of the medical practice. Beyond that, medical practices in California must ensure compliant supervision of physician assistants, nurse practitioners, and other clinical staff. Scope-of-practice violations can arise when oversight becomes decentralized. It is a major risk that requires attention before additional medical practices are opened.
Another Additional Risk: Billing, Reimbursement, and Payor Compliance
Expansion complicates billing and reimbursement controls. Practices must confirm that payor contracts permit services at each location. Credentialing delays or location mismatches can result in recouped payments or even denied claims, resulting in significant revenue losses. It is crucial that billing practices get careful attention.
Proactive Planning Helps to Reduce Risk When Opening New Medical Practice Locations
For medical practices that are planning to expand to a new location(s) in California, a proactive approach is the best approach. Advanced planning can go a long way towards reducing the risk of problems. Medical practices that grow without tightening their structure often discover problems through enforcement rather than planning. You do not want that to happen to your business. A risk-managed expansion aligns ownership, clinical authority, and operational controls before opening new doors. An experienced business attorney for medical practices in California can help.
Speak to Our California Business Lawyer for Medical Practices Today
Lynnette Ariathurai is a California business attorney with extensive experience working with medical practices. If you have any questions about managing risks when expanding to a multi-location medical practice, please contact us today for a completely confidential, no obligation case review. With offices in Fremont, we handle business law matters for medical practices across the Bay Area.
medical practice expansion, medical practice risk management, Multi-location medical practice California