20B — March 15 - 28, 2019 — New Jersey — M id A tlantic
Real Estate Journal
www.marejournal.com
N ew J ersey
By Jeremy S. Piccini, Esq., Richard G. Lyons, Esq. Healthcare use & effect on retail & office markets
H
ave you not i ced more urgent-care and other medical
our opinion, may be expand- ing the business opportuni- ties for such practices due to
care services as an employee of a corporation or other en- tity in which the sharehold- ers or members are not all licensed practitioners (with certain exceptions). The ba- sis for the CPOM doctrine is to create a line between the healthcare practitioner, who must act in a patient’s best interests, and corporate shareholders, who seek to maximize profits, thereby removing any influence in the provision of medical care from a corporate share- holder. The intent behind this policy is that doctors,
life-threating treatments. For example, in private ar- rangements, or in private equity and hospital affiliate acquisition scenarios, the non-clinical assets of the practices are typically sold to (or if done at the outset, purchased by) the non-li- censed private group, hos- pital or related entities not owned by non-physicians, with real estate assigned, leased, or licensed by these private groups. The assets are then leased back to the medical practice through a series of agreements, pri- marily a management ser- vices agreement. The basis of the management service agreement is to detail the services provided by the private group, primarily to manage the “business” end, with the healthcare profes- sional group (or PC) man- aging the clinical/patient end. Fair market value, knowledge, experience, and actual control are some of the factors used to deter- mine whether these end-run arrangements are legally permissible. Because of the expanded legal guidance on these structures, the New Jer- sey retail and office and stand-alone markets may see an uptick in tenancies as these business opportuni- ties abound for both licensed physicians and non-licensed entrepreneurs and investors (assuming the structure of their business complies with the Corporate Practice of Medicine (CPOM) doctrine). It is very important to seek professional guidance when setting up manage- ment service agreements, as the CPOM is a literal mine- field of pitfalls, that carry stiff civil and criminal fines for any violations. Jeremy S. Piccini is a partner at Bertone Pic- cini LLP and provides strategic counselling to clients in the areas of commercial transac- tions, health care law, and commercial real es- tate law. Richard G. Ly- ons is a senior associate at Bertone Piccini LLP and focuses his practice in the area of commercial transactions, corporate dealings, and commer- cial real estate.
not corporate employers, should responsible for the practice of medicine in New Jersey and New York and medical judgment and pa- tient interactions. With creative legal struc- tures guided by the inter- pretation of recent court cases, legal practitioners have found ways to imple- ment “franchise” models of practicing medicine, such as “Doctor’s Express” and other walk-in medical, elective, en- hancement, cosmetic, or other non-invasive or non-
retail, office and stand- alone loca- t i ons over the last two years? Some major New Y o r k a n d New Jersey court cases
the expand- ed range of investment and bus i - ness struc- ture options now avail- able. By way of background,
Jeremy S. Piccini Richard G. Lyons
in 2017 have paved the way towards better guidance on health care practices being owned by non-licensed med- ical practitioners. This, in
the New Jersey Corpo- rate Practice of Medicine (CPOM) doctrine prohibits a licensed healthcare practi- tioner from providing health
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