Healthcare is part of our firm's DNA. We add real value to our clients' business through our in-depth understanding of the key legal, regulatory and practice-related issues.

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Whether representing large specialty pharmacies or small community stores, we bring our knowledge of the industry and client-centered approach to help our clients succeed in the face of the toughest challenges

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Experienced, dedicated and well-tested litigation attorneys who enjoy the challenges of the courtroom

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When you need attorneys who know and understand your business, not just the letter of the law

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The process of forming a medical practice is different from forming any other type of business.  It must be evaluated from several different perspectives.  Failing to comply with the laws and regulations applicable to medical entities can result in serious consequences, including charges of fraud. In New York, medical practices are typically organized as Professional Corporations (PCs) or Professional Limited Liability Companies (PLLCs), although entities such as general or limited partnerships are also permissible. New Jersey allows organization as a Professional Corporation but does not recognize a special professional LLC form.  With limited exceptions, licensed medical professionals are prohibited from providing professional services through a general business corporation. Forming a professional entity in New York involves many nuances and is best handled by a professional.  The process of forming a professional entity is three-fold.  First, one must obtain a consent or confirmation of licensure from the Department of Education.  Then the organizing documents are filed with the New York State Department of State along with the required consents.  Finally, the filed certificate of incorporation or articles of organization are filed with the Department of Education.  There are also periodic requirements imposed on professional entities by the NY Department of Education.  There are significant issues involving the use of names, the proper form of consents, and the like.  You would be best-advised to use services of a knowledgeable attorney who will ensure that your professional entity is formed quickly and properly. One of the first decisions made in forming a medical practice is determining the type of legal and tax entity to be established. Both tax and non-tax considerations must be studied to make the best decision for your particular practice.  Today, most new medical practices find that the S Professional Corporation and the limited liability company provide better tax and non-tax advantages under which to operate. There are significant advantages to organizing a practice as a subchapter S professional corporation. The shareholders of a corporation generally are not liable for any corporate debt which is not personally guaranteed.  While incorporating will not shield against professional liability claims, the corporate form of business limits the liability of the non-liable shareholders to their share of the corporation’s assets.
A corporation has continuity of life which means it can operate indefinitely — even after a shareholder dies. Corporation shareholders have the opportunity to transfer their ownership interests to others, usually following the terms of a separate agreement between the shareholders called a shareholder or buy-sell agreement. This agreement generally sets the price of the stock and limits those who can hold the stock, making the transfer more controlled for all parties. The limited liability company (PLLC in New York and LLC in New Jersey) can offer significant advantages over the corporate form.  The formation of an LLC occurs with the filing of Articles of Organization. The members (owners) of the PLLC/LLC will adopt an Operating Agreement to define do’s and don’ts of operating the practice. Limited liability companies, by law, can have such legal characteristics as limited liability, centralized management, continuity of life and transferability of interests. Some of the advantages of LLC include:

  • LLCs do not require any special tax election to pass income through to its owners
  • LLCs generally have no restrictions on the type of entities who can own LLC interests (S Corporations limit who can own stock)
  • LLCs have no restrictions on the number of its owners
  • LLCs can have different classes of owners
  • LLCs have much more ability to allocate income, gains and losses
  • LLCs have the opportunity for stepped up basis rules under Section 754
  • LLCs have more liberal contribution and distribution rules
  • LLCs can include debt for which they are liable to their basis for deduction purposes

Some advantages of the S Corporation over the LLC include:

  • S-Corps do not have to allocate pre-contribution gains under IRC Section 704(c)
  • Calculate discharge of business indebtedness income at the corporation level
  • State law is more developed
  • Shareholders are employees for tax purposes, receiving a W-2 form for salary paid, reducing the necessity of quarterly estimated tax payments
  • Retirement plan calculations are more easily calculated than LLC members

Choosing the right entity will depend on your practice’s facts and circumstances. Before making a decision, discuss the implications with your legal and tax counsel. Making the best decision is crucial to your operations. Post-formation process is also extremely important.  It is critical that the shareholders and members of LLCs enter into appropriate agreements to protect their interests and provide for an orderly operation of the practice. Lack of proper documents frequently leads to costly litigation. We have a proven track record in forming professional entities and drafting all types of agreements regulating the affairs of medical practices.  Contact us at 212-668-0200.

Under the Travel Act, Aggressive Federal Enforcement Against

Q.  When does a purely state criminal law-based matter transform into a federal felony prosecution?

A.  When the Federal Travel Act (the "Travel Act") is implicated.Under the Act, a party who travels in interstate . . .

In News and Updates

FEDERAL CRACKDOWN ON PRESCRIBERS OF COMPOUNDED MEDICATIONS

A recent health care fraud guilty plea by a physician has caught the attention of prescribing physicians and the broader industry surrounding compounded medications.Under the plea agreement in New Jersey District Court, the physician . . .

In News and Updates

COMPOUNDING PHARMACIES MAY SOON HAVE NEW MARKET OPPORTUNITIES

Compounding pharmacies, one of the fastest growing sectors in retail pharmacy, may soon be able to expand the market for their products in exchange for agreeing to be placed directly under federal oversight, according to U.S. . . .

In News and Updates

PHARMACY COMPLIANCE UPDATE: GROWING YOUR MEMBERSHIP PROGRAM

Membership programs are a common tool used by retail pharmacies to grow their business. Under this type of program, a pharmacy will give member patients certain benefits, usually taking the form of rebates, discounts, or coupons on in-store . . .

In News and Updates

Medicare Fraud Strike Force Announces $1.3 Billion Healthcare

In what is becoming an annual tradition, the Medicare Fraud Strike Force, comprised of members from the U.S. Department of Justice and the Department of Health and Human Services (more about which can be read here), . . .

In News and Updates

Healthcare Industry Welcomes Changes to Overtime Wage Guidance

In a step viewed optimistically by healthcare businesses, the United States Department of Labor ("DOL") has withdrawn two Obama-era guidance letters used to interpret the overtime wage provisions of the Fair Labor Standards Act.

The . . .

In News and Updates

Final Guidance for Part D DIR Reporting Requirements: Promising

It appears that the Centers for Medicare & Medicaid Services ("CMS"), in its newly-released Final Guidance on Medicare Part D DIR Reporting Requirements for 2016, has begun addressing the lack of transparency surrounding Part D plan . . .

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Senators; New York Times Article Highlights Abuses by Treasury

Contractors Responsible for Collecting Debts Alleged against Medicare Providers 

A recent New York Times article, available here, . . .

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HIPAA UPDATE: OCR RELEASES CYBER-ATTACK RESPONSE CHECKLIST

The Office of Civil Rights of the U.S. Department of Health and Human Services ("OCR") has released a checklist of actions to be taken by covered entities in the event of a ransomware attack or other cyber-related security incident. . . .

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Supreme Court Analysis: Ruling A Victory For Biosimilar Developers

The Supreme Court handed biosimilar drug developers a clear victory this week in its decision on Amgen Inc. v. Sandoz Inc.

In its decision, the high court considered the provisions of the federal Biologics Price Competition and Innovation . . .

In News and Updates

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