The Federal definition of a medical group practice is found at 42 CFR §411.352, and was amended on December 2, 2020. This definition is used when dealing with Stark and Anti-trust issues, and as such incorporates several “tests:”
A group practice is a physician practice that meets the following conditions:
A. Single Legal Entity. The practice must consist of a single legal entity operating primarily for the purpose of being a physician group practice in any organizational form recognized the State in which the practice achieves its legal status (partnership, PC, LLC, etc…).
A single legal entity does not include informal affiliations of physicians formed substantially to share profits from referrals, or separate group practices under common ownership or control through a practice management company, hospital, etc….
B. Physicians. The practice must have at least two physicians who are members of the group (whether employees or direct or indirect owners).
C. Range of Care. Each physician who is a member of the group must furnish substantially the full range of patient care services that the physician routinely furnishes….through the joint use of shared office space, facilities, equipment and personnel.
D. Services furnished by group practice members. Seventy Five Percent (75%) of the total patient care services of the group practice members must be furnished through the group and billed under a billing number of the group.
E. Distribution of expenses and income. The overhead expenses of, and income from, the practice must be distributed according to methods that are determined before the receipt of payment for the services giving rise to the overhead expenses.
F. Unified business. The practice must be a unified business having (at least) centralized decision-making by a body representative of the group practice and consolidated billing, accounting and financial reporting.
G. Volume or value or referrals. No physician who is a member of the practice may directly or indirectly receive compensation based on the volume or value of his or her referrals.
H. Physician-patient encounters. Members of the group must personally conduct no less than 75% of the physician-patient encounters of the practice.
I. Special rule for productivity bonuses and profit shares. A physician may be paid a share of overall profits of the group or receive a productivity bonus provided these are not directly related to the volume or value of referrals of Designated Health Services by the physician.
For any questions about these regulations or for help with your medical practice, contact HSC Management today!