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Regulatory Issues that Affect Funding of Physician-Backed Medical Enterprises
By Steve Lawrence, Shareholder, Milligan Lawless, P.C. (2013).
The following is an abstract of Mr. Lawrence’s article, Regulatory Issues that Affect Funding of Physician-Backed Medical Enterprises: A Primer:
This paper provides a summary of key federal regulatory issues that affect funding of physician-based medical enterprises. Margins in medical practices continue to face pressure from all sides. As physician compensation from core medical practices declines, physicians seek new avenues to profit. Many physicians start or sponsor spin-off businesses related to their practice or their medical background. As angel investors, venture capitalists and private equity firms consider investing in such medical businesses, the regulatory constraints on such enterprises becomes an important concern. Beginning with a hypothetical scenario suggested by recent regulatory enforcement cases, this paper examines key federal laws that govern physician-backed medical enterprises that could affect funding of such enterprises – the Stark law, the anti-kickback law and the False Claims Act.