Joseph Rugg's Health Law Blog

Whether as a result of retirement, death, disability, or unresolved professional or personal disputes, the breakup of an established physician practice, or the departure of one or more of the physicians in the practice, is a difficult and trying ordeal for everyone concerned.

It is important for the members of the physician practice to understand the financial, ethical, professional and emotional issues that usually come to play in a practice breakup or physician departure. The physicians and their advisors must be sensitive to the conflicting perspectives of the different parties. The best time for the practice to think about and get guidance for the issues that will arise in a practice breakup or the departure of one or more individual physicians is when the practice is organized. Preparing for the possible breakup of a physician practice or how a physician will depart from that practice should occur when the practice comes together.

If the physicians and their advisors did not take the time when they established their practice to address in their organizational documents and other agreements what happens in a practice breakup, or when a physician leaves the practice, then what was already going to be a difficult and trying ordeal will likely become substantially more difficult, more time consuming, and more expensive.

An additional complicating factor is that physicians in a practice will often have become business partners in other ventures. The practice breakup or physician departure will require the parties to decide whether their interests in these other ventures must be separated also.

Of course, even when a practice has in place the types of documents described in this book, not every issue will be covered and often the agreements reached by the parties may have become stale with time. As issues are addressed and resolved, it is incumbent upon the parties and their advisors to document the practice breakup or physician departure with a definitive separation agreement that sets forth their agreements on how to deal with the various issues.

In a subsequent post, I will include a checklist to assist the parties and their advisors in identifying the critical issues to be considered in a practice breakup or physician departure.

For lawyers and other advisors who represent physicians, you may wish to consider buying Representing Physicians Handbook, Second Edition (2009, published by the American Health Lawyers Association).   http://www.lexisnexis.com/ahla/ProductDetail.aspx?id=78