In Rush v. City of St. Petersburg, 205 So.2d 11 (Fla. 2d DCA 1967),9 the Florida Court of Appeal held that the City of St. Petersburg had not practiced medicine because it had not interfered with the physician-patient relationship, thus acknowledging that a physician could be legally employed by a nonphysician business.
The decision of a Florida federal bankruptcy court in the case of In re Urban2 also indicates that a corporation may lawfully employ a physician to engage in a medical practice. In the Urban case, creditors attempted to void a physician's transfer of shares in two corporations arguing that the purpose of the corporations was to conduct medical practices in violation of state law prohibitions. The corporations argued that they were not conducting a medical practice, but were employing physicians to engage in the practice of medicine. The bankruptcy court agreed that there was no legal basis to void the transfer of shares. The court seemed to accept the difference between a corporation's practicing medicine and the employment of a physician to practice medicine. This distinction appears to allow the utilization of the corporate form to employ the physician as long as the physician makes all significant medical decisions involving patient care.
The Florida Board of Medicine has published several declaratory statements also indicating that there is no prohibition in Florida on the practice of medicine by physicians as corporate employees.3
Florida laws do allow for licensed health care professionals to operate as professional service corporations (designated by the initials "P.A." in Florida) and as professional limited liability companies ("PLC").4
If the physician (or any other professional, for that matter) chooses to operate as a professional service corporation or professional limited liability company, he must remember that only persons in that same profession may serve as shareholders (or "members" in the case of a limited liability corporation), officers or directors of the corporation.5 However, there is no prohibition on a health care provider's forming and operating his or her medical practice as a regular business corporation (usually designated by the abbreviation "Inc.") or as a regular limited liability company ("LLC").
SUMMARY OF FLORIDA LAW REGARDING CORPORATE PRACTICE OF MEDICINE:
- Florida law does not prohibit the corporate practice of medicine, but does prohibit "fee-splitting" by health care professional.
- Florida does prohibit the corporate practice of dentistry and optometry.
For more information about corporate medicine in Florida, please visit our webiste at http://www.thehealthlawfirm.com/.
Sources:
1. Rush v. City of St. Petersburg, 205 So.2d 11 (Fla. 2d DCA 1967).
2. In re Urban, 138 B.R. 632 (Fla. M.D. 1992).
3. See In re John W Lister, M.D., 9 EA.L.R. 6299(1987) and In re Conrad Goulet, M.D., Florida Board of Medicine Case No. 89-BOM-01 (1989).
4. See Chapter 621, Fla. Stat. (2002).
5. Florida law defines "members of the same profession" very narrowly in this regard. Thus, a professional service corporation composed of doctors of medicine (M.D.'s) cannot legally allow any other profession, including doctors of osteopathic medicine (D.O.'s) or doctors of chiropractic medicine (D.C.'s) to be owners, officers or directors of the same P.A. Likewise, a professional service corporation composed of doctors of chiropractic medicine (D.C.'s) cannot legally allow any other profession, including doctors of osteopathic medicine (D.O.'s) or doctors of medicine (M.D.'s) to be owners, officers or directors of the same P.A. It goes without saying that layperson, including family members can never legally be owners, officers or directors in the same P.A.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. http://www.thehealthlawfirm.com/ The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
