Article

Regulation of the Business of Medicine

08/22/2015

Physicians are not often focused on the business of medicine or its regulation. The New York State Department of Health regulates many forms of medical practice through the issuance of a Certificate of Need ("CON"). Hospitals, Nursing Homes, Diagnostic Treatment Centers, Ambulatory Surgery Centers, Home Health Agencies, Home Health Care Programs, Hospices, Adult Care Facilities, and certain programs through the Office of Mental Health, Office of Mental Retardation & Developmental Disabilities, and the Office of Alcoholism and Substance Abuse Services all require various levels of CON review.

 

One aspect of the medical business that occurs frequently and requires a CON submission is a change in ownership of a medical facility. Changes in ownership can occur on a large scale, like a merger and acquisition, or on the local scale, like the addition or subtraction of new physician partners. Both processes require regulatory submissions. When such change in ownership requires a full-review, administrative review, or a notification filing, depends on the facts of each situation. The CON process can be intimidating. Resorting to websites and attempting to submit changes in ownership alone can be an overbearing endeavor that involves risk and intense time commitments.

 

While regulatory reporting is a challenge for the largest of corporations, small and regional medical groups are under the same reporting burdens as their larger counterparts. For example, if a group of physician partners form an Ambulatory Surgery Center, they must form the center through the full-review of the CON process. Ultimately, when physicians change partners or retire, the change in ownership must be reported by filing a specific notification that is reviewed by the New York State Department of Health. Therefore, it is good protection to have competent counsel to assist in the avoidance of common pitfalls that can incur undue regulatory scrutiny.