Can You Franchise Your Health Care Related Business?
.png)
As with any other method of practicing medicine in the United States, a health care franchise is subject to a multitude of complicated federal and state health care fraud and abuse statutes, regulations, case law and administrative opinions. The concept of “franchising” a health care business is a novel approach to the practice of medicine and must undergo a systematic review and evaluation of the proposed (a) franchise system, (b) business and compensation arrangements, (c) franchise disclosure documents and (d) compliance programs.
The most common regulatory and compliance issues affecting health care franchises concern the corporate practice of medicine, prohibited self-referrals and prohibited remunerations. The failure to comply with the foregoing regulations and statutes can result in civil and/or criminal prosecution against both the franchisor and franchisees.
In certain instances the proposed franchise’s business systems and financial arrangements can fall within applicable safe harbors and/or exceptions, or can be narrowly tailored to effectuate compliance with applicable regulations and statutes. In any case, the proposed franchise will require a thorough evaluation and the preparation of strict guidelines and materials for both franchisor and franchisees to follow.
If you are considering franchising a health care business, or would like to conduct a comprehensive review of your existing health care franchise, please contact Ms. Ilana Sable, Esq. to evaluate the options available to you.
For additional health care law articles by Ilana Sable, Esq. visit the Health Care Compliance Watch blog.
