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The need for gastroenterology (GI) services is on the rise in the US, with growing rates of colonoscopy, earlier-onset colon cancer, and inflammatory bowel disease. This increase is taking place in the context of a changing regulatory landscape.
, and to that end, a recent educational practice management update was published in Clinical Gastroenterology and Hepatology by Erin Smith Aebel, JD, a health law specialist with Trenam Law in Tampa, Florida. Aebel has been a speaker at several national GI conferences and has addressed GI trainees on these issues in medical schools.
“Healthcare regulation continues to evolve and it’s a complicated area,” Aebel told GI & Hepatology News. “Some physician investors in healthcare ventures see the potential profits but are not fully aware of how a physician’s license and livelihood could be affected by noncompliance.”
Aebel has seen some medical business owners and institutions pushing physicians to their limits in order to maximize profits. “They’re failing to allow them the meaningful things that allow for a long-term productive and successful practice that provides great patient care,” she said. “A current issue I’m dealing with is employers’ taking away physicians’ administrative time and not respecting the work that is necessary for the physician to be efficient and provide great care,” she said. “If too many physicians get squeezed in this manner, they will eventually walk away from big employers to something they can better control.”
Aebel noted that private-equity acquisitions of medical practices — a fast-growing US trend — are often targeted at quick profits and quick exits, which can be inconsistent with quality long-term patient care. “A question to be asked by physicians and patients is who is benefiting from this transaction?” she said. “Sometimes retired physicians can see a great benefit in private equity, but newer physicians can get tied up with a strong noncompete agreement. The best deals are ones that try to find wins for all involved, including patients.”
Many independent gastroenterologists focusing on the demands of daily practice are less aware than they should be of the legal and business administration sides. “I often get clients who come to me complaining about their contracts after they’ve signed them. I don’t have leverage to do as much for them,” she admitted.
From a business standpoint, gastroenterologists need to understand where they can negotiate for financial gain and control. These could relate to compensation and bonuses, as well as opportunities to invest in the practice, the practice management company, and possibly real estate or ambulatory surgery centers (ASCs).
Aebel’s overarching messages to gastroenterologists are as follows: “Be aware. Learn basic health law. Read your contracts before you sign them. And invest in good counsel before you sign agreements,” she said. “In addition, GI practitioners need to have a working knowledge of the federal Anti-Kickback Statute and the federal Stark Law and how they could be commonly applied in their practices.”
These are designed to protect government-funded patient care from monetary influence. The False Claims Act is another federal buttress against fraud and abuse, she said.
Update Details
Though not intended to be legal advice, Aebel’s update touches on several important medicolegal areas.
Stark Law on Self-Referrals
Gastroenterologists should be familiar with this federal law, a self-referral civil penalty statute regulating how physicians can pay themselves in practices that provide designated health services covered by federal healthcare programs such as Medicare or Medicaid.
For a Stark penalty to apply, there must be a physician referral to an entity (eg, lab, hospital, nutrition service, physiotherapy or radiotherapy center) in which the physician or a close family member has a financial interest.
Ambulatory Surgery Centers
Another common area vulnerable to federal fraud and abuse regulation is investment in ASCs. “Generally speaking, it is a felony to pay or be paid anything of value for Medicare or Medicaid business referrals,” Aebel wrote. This provision relates to the general restriction of the federal AKB statute.
A gastroenterologist referring Medicare patients to a center where that physician has an investment could technically violate this law because the physician will receive profit distributions from the referral. In addition to constituting a felony with potential jail time, violation of this statute is grounds for substantial civil monetary penalties and/or exclusion from the government coverage program.
Fortunately, Aebel noted, legal safe harbors cover many financial relationships, including investment in an ASC. The financial arrangement is protected from prosecution if it meets five safe harbor requirements, including nondiscriminatory treatment of government-insured patients and physician investment unrelated to a center’s volume or the value of referrals. If even one aspect is not met, that will automatically constitute a crime.
“However, the government will look at facts and circumstances to determine whether there was an intent to pay for a referral,” Aebel wrote.
The safe harbor designates requirements for four types of ASCs: surgeon-owned, single-specialty, multispecialty, and hospital/physician ASCs.
Private-Equity Investment
With mergers and acquisitions of US medical practices and networks by private-equity firms becoming more common, gastroenterologists need to be aware of the legal issues involved in such investment.
Most states abide by corporate practice of medicine doctrines, which prohibit unlicensed people from direct ownership in a medical practice. These doctrines vary by state, but their primary goal is to ensure that medical decisions are made solely based on patient care and not influenced by corporate interests. The aim is to shield the physician-patient relationship from commercial influence.
“Accordingly, this creates additional complicated structures necessary for private-equity investment in gastroenterology practices,” Aebel wrote. Usually, such investors will invest in a management services organization (MSO), which takes much of the practice’s value via management fees. Gastroenterologists may or may not have an opportunity to invest in the practice and the MSO in this scenario.
Under corporate practice of medicine doctrine, physicians must control the clinical aspects of patient care. Therefore, some states may have restrictions on private-equity companies’ control of the use of medical devices, pricing, medical protocols, or other issues of patient care.
“This needs to be considered when reviewing the investment documents and structural documents proposed by private equity companies,” the advisory stated. From a business standpoint, gastroenterologists need to understand where they can negotiate for financial gain and control over their clinical practice. “This could relate to their compensation, bonuses, and investment opportunities in the practice, the practice management company, and possibly real estate or ASCs.”
Offering a gastroenterologist’s perspective on the paper, Camille Thélin, MD, MSc, an associate professor in the Division of Digestive Diseases and Health at the University of South Florida, Tampa, Florida, who also practices privately, said, that “what Erin Aebel reminds us is that the business side of GI can be just as tricky as the clinical side. Ancillary services like capsule studies or office labs fall under strict Stark rules, ASC ownership has Anti-Kickback Law restrictions, and private-equity deals may affect both your paycheck and your autonomy.”
Thélin’s main takeaway advice is that business opportunities can be valuable but carry real legal risks if not structured correctly. “This isn’t just abstract compliance law — it’s about protecting one’s ability to practice medicine, earn fairly, and avoid devastating penalties,” she told GI & Hepatology News. “This article reinforces the need for proactive legal review and careful structuring of business arrangements so physicians can focus on patient care without stumbling into avoidable legal pitfalls. With the right legal structure, ancillaries, ASCs, and private equity can strengthen your GI practice without risking compliance.”
The bottom line, said Aebel, is that gastroenterologists already in private practice or considering entering one must navigate a complex landscape of compliance and regulatory requirements — particularly when providing ancillary services, investing in ASCs, or engaging with private equity.
Understanding the Stark law, the AKB statute, and the intricacies of private-equity investment is essential to mitigate risks and avoid severe penalties, the advisory stressed. By proactively seeking expert legal and business guidance, gastroenterologists can structure their financial and ownership arrangements in a compliant manner, safeguarding their practices while capitalizing on growth opportunities.
This paper listed no external funding. Neither Aebel nor Thélin had any relevant conflicts of interest.
A version of this article appeared on Medscape.com.
The need for gastroenterology (GI) services is on the rise in the US, with growing rates of colonoscopy, earlier-onset colon cancer, and inflammatory bowel disease. This increase is taking place in the context of a changing regulatory landscape.
, and to that end, a recent educational practice management update was published in Clinical Gastroenterology and Hepatology by Erin Smith Aebel, JD, a health law specialist with Trenam Law in Tampa, Florida. Aebel has been a speaker at several national GI conferences and has addressed GI trainees on these issues in medical schools.
“Healthcare regulation continues to evolve and it’s a complicated area,” Aebel told GI & Hepatology News. “Some physician investors in healthcare ventures see the potential profits but are not fully aware of how a physician’s license and livelihood could be affected by noncompliance.”
Aebel has seen some medical business owners and institutions pushing physicians to their limits in order to maximize profits. “They’re failing to allow them the meaningful things that allow for a long-term productive and successful practice that provides great patient care,” she said. “A current issue I’m dealing with is employers’ taking away physicians’ administrative time and not respecting the work that is necessary for the physician to be efficient and provide great care,” she said. “If too many physicians get squeezed in this manner, they will eventually walk away from big employers to something they can better control.”
Aebel noted that private-equity acquisitions of medical practices — a fast-growing US trend — are often targeted at quick profits and quick exits, which can be inconsistent with quality long-term patient care. “A question to be asked by physicians and patients is who is benefiting from this transaction?” she said. “Sometimes retired physicians can see a great benefit in private equity, but newer physicians can get tied up with a strong noncompete agreement. The best deals are ones that try to find wins for all involved, including patients.”
Many independent gastroenterologists focusing on the demands of daily practice are less aware than they should be of the legal and business administration sides. “I often get clients who come to me complaining about their contracts after they’ve signed them. I don’t have leverage to do as much for them,” she admitted.
From a business standpoint, gastroenterologists need to understand where they can negotiate for financial gain and control. These could relate to compensation and bonuses, as well as opportunities to invest in the practice, the practice management company, and possibly real estate or ambulatory surgery centers (ASCs).
Aebel’s overarching messages to gastroenterologists are as follows: “Be aware. Learn basic health law. Read your contracts before you sign them. And invest in good counsel before you sign agreements,” she said. “In addition, GI practitioners need to have a working knowledge of the federal Anti-Kickback Statute and the federal Stark Law and how they could be commonly applied in their practices.”
These are designed to protect government-funded patient care from monetary influence. The False Claims Act is another federal buttress against fraud and abuse, she said.
Update Details
Though not intended to be legal advice, Aebel’s update touches on several important medicolegal areas.
Stark Law on Self-Referrals
Gastroenterologists should be familiar with this federal law, a self-referral civil penalty statute regulating how physicians can pay themselves in practices that provide designated health services covered by federal healthcare programs such as Medicare or Medicaid.
For a Stark penalty to apply, there must be a physician referral to an entity (eg, lab, hospital, nutrition service, physiotherapy or radiotherapy center) in which the physician or a close family member has a financial interest.
Ambulatory Surgery Centers
Another common area vulnerable to federal fraud and abuse regulation is investment in ASCs. “Generally speaking, it is a felony to pay or be paid anything of value for Medicare or Medicaid business referrals,” Aebel wrote. This provision relates to the general restriction of the federal AKB statute.
A gastroenterologist referring Medicare patients to a center where that physician has an investment could technically violate this law because the physician will receive profit distributions from the referral. In addition to constituting a felony with potential jail time, violation of this statute is grounds for substantial civil monetary penalties and/or exclusion from the government coverage program.
Fortunately, Aebel noted, legal safe harbors cover many financial relationships, including investment in an ASC. The financial arrangement is protected from prosecution if it meets five safe harbor requirements, including nondiscriminatory treatment of government-insured patients and physician investment unrelated to a center’s volume or the value of referrals. If even one aspect is not met, that will automatically constitute a crime.
“However, the government will look at facts and circumstances to determine whether there was an intent to pay for a referral,” Aebel wrote.
The safe harbor designates requirements for four types of ASCs: surgeon-owned, single-specialty, multispecialty, and hospital/physician ASCs.
Private-Equity Investment
With mergers and acquisitions of US medical practices and networks by private-equity firms becoming more common, gastroenterologists need to be aware of the legal issues involved in such investment.
Most states abide by corporate practice of medicine doctrines, which prohibit unlicensed people from direct ownership in a medical practice. These doctrines vary by state, but their primary goal is to ensure that medical decisions are made solely based on patient care and not influenced by corporate interests. The aim is to shield the physician-patient relationship from commercial influence.
“Accordingly, this creates additional complicated structures necessary for private-equity investment in gastroenterology practices,” Aebel wrote. Usually, such investors will invest in a management services organization (MSO), which takes much of the practice’s value via management fees. Gastroenterologists may or may not have an opportunity to invest in the practice and the MSO in this scenario.
Under corporate practice of medicine doctrine, physicians must control the clinical aspects of patient care. Therefore, some states may have restrictions on private-equity companies’ control of the use of medical devices, pricing, medical protocols, or other issues of patient care.
“This needs to be considered when reviewing the investment documents and structural documents proposed by private equity companies,” the advisory stated. From a business standpoint, gastroenterologists need to understand where they can negotiate for financial gain and control over their clinical practice. “This could relate to their compensation, bonuses, and investment opportunities in the practice, the practice management company, and possibly real estate or ASCs.”
Offering a gastroenterologist’s perspective on the paper, Camille Thélin, MD, MSc, an associate professor in the Division of Digestive Diseases and Health at the University of South Florida, Tampa, Florida, who also practices privately, said, that “what Erin Aebel reminds us is that the business side of GI can be just as tricky as the clinical side. Ancillary services like capsule studies or office labs fall under strict Stark rules, ASC ownership has Anti-Kickback Law restrictions, and private-equity deals may affect both your paycheck and your autonomy.”
Thélin’s main takeaway advice is that business opportunities can be valuable but carry real legal risks if not structured correctly. “This isn’t just abstract compliance law — it’s about protecting one’s ability to practice medicine, earn fairly, and avoid devastating penalties,” she told GI & Hepatology News. “This article reinforces the need for proactive legal review and careful structuring of business arrangements so physicians can focus on patient care without stumbling into avoidable legal pitfalls. With the right legal structure, ancillaries, ASCs, and private equity can strengthen your GI practice without risking compliance.”
The bottom line, said Aebel, is that gastroenterologists already in private practice or considering entering one must navigate a complex landscape of compliance and regulatory requirements — particularly when providing ancillary services, investing in ASCs, or engaging with private equity.
Understanding the Stark law, the AKB statute, and the intricacies of private-equity investment is essential to mitigate risks and avoid severe penalties, the advisory stressed. By proactively seeking expert legal and business guidance, gastroenterologists can structure their financial and ownership arrangements in a compliant manner, safeguarding their practices while capitalizing on growth opportunities.
This paper listed no external funding. Neither Aebel nor Thélin had any relevant conflicts of interest.
A version of this article appeared on Medscape.com.
The need for gastroenterology (GI) services is on the rise in the US, with growing rates of colonoscopy, earlier-onset colon cancer, and inflammatory bowel disease. This increase is taking place in the context of a changing regulatory landscape.
, and to that end, a recent educational practice management update was published in Clinical Gastroenterology and Hepatology by Erin Smith Aebel, JD, a health law specialist with Trenam Law in Tampa, Florida. Aebel has been a speaker at several national GI conferences and has addressed GI trainees on these issues in medical schools.
“Healthcare regulation continues to evolve and it’s a complicated area,” Aebel told GI & Hepatology News. “Some physician investors in healthcare ventures see the potential profits but are not fully aware of how a physician’s license and livelihood could be affected by noncompliance.”
Aebel has seen some medical business owners and institutions pushing physicians to their limits in order to maximize profits. “They’re failing to allow them the meaningful things that allow for a long-term productive and successful practice that provides great patient care,” she said. “A current issue I’m dealing with is employers’ taking away physicians’ administrative time and not respecting the work that is necessary for the physician to be efficient and provide great care,” she said. “If too many physicians get squeezed in this manner, they will eventually walk away from big employers to something they can better control.”
Aebel noted that private-equity acquisitions of medical practices — a fast-growing US trend — are often targeted at quick profits and quick exits, which can be inconsistent with quality long-term patient care. “A question to be asked by physicians and patients is who is benefiting from this transaction?” she said. “Sometimes retired physicians can see a great benefit in private equity, but newer physicians can get tied up with a strong noncompete agreement. The best deals are ones that try to find wins for all involved, including patients.”
Many independent gastroenterologists focusing on the demands of daily practice are less aware than they should be of the legal and business administration sides. “I often get clients who come to me complaining about their contracts after they’ve signed them. I don’t have leverage to do as much for them,” she admitted.
From a business standpoint, gastroenterologists need to understand where they can negotiate for financial gain and control. These could relate to compensation and bonuses, as well as opportunities to invest in the practice, the practice management company, and possibly real estate or ambulatory surgery centers (ASCs).
Aebel’s overarching messages to gastroenterologists are as follows: “Be aware. Learn basic health law. Read your contracts before you sign them. And invest in good counsel before you sign agreements,” she said. “In addition, GI practitioners need to have a working knowledge of the federal Anti-Kickback Statute and the federal Stark Law and how they could be commonly applied in their practices.”
These are designed to protect government-funded patient care from monetary influence. The False Claims Act is another federal buttress against fraud and abuse, she said.
Update Details
Though not intended to be legal advice, Aebel’s update touches on several important medicolegal areas.
Stark Law on Self-Referrals
Gastroenterologists should be familiar with this federal law, a self-referral civil penalty statute regulating how physicians can pay themselves in practices that provide designated health services covered by federal healthcare programs such as Medicare or Medicaid.
For a Stark penalty to apply, there must be a physician referral to an entity (eg, lab, hospital, nutrition service, physiotherapy or radiotherapy center) in which the physician or a close family member has a financial interest.
Ambulatory Surgery Centers
Another common area vulnerable to federal fraud and abuse regulation is investment in ASCs. “Generally speaking, it is a felony to pay or be paid anything of value for Medicare or Medicaid business referrals,” Aebel wrote. This provision relates to the general restriction of the federal AKB statute.
A gastroenterologist referring Medicare patients to a center where that physician has an investment could technically violate this law because the physician will receive profit distributions from the referral. In addition to constituting a felony with potential jail time, violation of this statute is grounds for substantial civil monetary penalties and/or exclusion from the government coverage program.
Fortunately, Aebel noted, legal safe harbors cover many financial relationships, including investment in an ASC. The financial arrangement is protected from prosecution if it meets five safe harbor requirements, including nondiscriminatory treatment of government-insured patients and physician investment unrelated to a center’s volume or the value of referrals. If even one aspect is not met, that will automatically constitute a crime.
“However, the government will look at facts and circumstances to determine whether there was an intent to pay for a referral,” Aebel wrote.
The safe harbor designates requirements for four types of ASCs: surgeon-owned, single-specialty, multispecialty, and hospital/physician ASCs.
Private-Equity Investment
With mergers and acquisitions of US medical practices and networks by private-equity firms becoming more common, gastroenterologists need to be aware of the legal issues involved in such investment.
Most states abide by corporate practice of medicine doctrines, which prohibit unlicensed people from direct ownership in a medical practice. These doctrines vary by state, but their primary goal is to ensure that medical decisions are made solely based on patient care and not influenced by corporate interests. The aim is to shield the physician-patient relationship from commercial influence.
“Accordingly, this creates additional complicated structures necessary for private-equity investment in gastroenterology practices,” Aebel wrote. Usually, such investors will invest in a management services organization (MSO), which takes much of the practice’s value via management fees. Gastroenterologists may or may not have an opportunity to invest in the practice and the MSO in this scenario.
Under corporate practice of medicine doctrine, physicians must control the clinical aspects of patient care. Therefore, some states may have restrictions on private-equity companies’ control of the use of medical devices, pricing, medical protocols, or other issues of patient care.
“This needs to be considered when reviewing the investment documents and structural documents proposed by private equity companies,” the advisory stated. From a business standpoint, gastroenterologists need to understand where they can negotiate for financial gain and control over their clinical practice. “This could relate to their compensation, bonuses, and investment opportunities in the practice, the practice management company, and possibly real estate or ASCs.”
Offering a gastroenterologist’s perspective on the paper, Camille Thélin, MD, MSc, an associate professor in the Division of Digestive Diseases and Health at the University of South Florida, Tampa, Florida, who also practices privately, said, that “what Erin Aebel reminds us is that the business side of GI can be just as tricky as the clinical side. Ancillary services like capsule studies or office labs fall under strict Stark rules, ASC ownership has Anti-Kickback Law restrictions, and private-equity deals may affect both your paycheck and your autonomy.”
Thélin’s main takeaway advice is that business opportunities can be valuable but carry real legal risks if not structured correctly. “This isn’t just abstract compliance law — it’s about protecting one’s ability to practice medicine, earn fairly, and avoid devastating penalties,” she told GI & Hepatology News. “This article reinforces the need for proactive legal review and careful structuring of business arrangements so physicians can focus on patient care without stumbling into avoidable legal pitfalls. With the right legal structure, ancillaries, ASCs, and private equity can strengthen your GI practice without risking compliance.”
The bottom line, said Aebel, is that gastroenterologists already in private practice or considering entering one must navigate a complex landscape of compliance and regulatory requirements — particularly when providing ancillary services, investing in ASCs, or engaging with private equity.
Understanding the Stark law, the AKB statute, and the intricacies of private-equity investment is essential to mitigate risks and avoid severe penalties, the advisory stressed. By proactively seeking expert legal and business guidance, gastroenterologists can structure their financial and ownership arrangements in a compliant manner, safeguarding their practices while capitalizing on growth opportunities.
This paper listed no external funding. Neither Aebel nor Thélin had any relevant conflicts of interest.
A version of this article appeared on Medscape.com.
FROM CLINICAL GASTROENTEROLOGY AND HEPATOLOGY