Caution for healthcare MSO / PC structure

The MSO / PC relationship in healthcare private equity is very popular, and there's multiple ways to structure the relationship. The big concern, of course, is complying with rules related to the corporate practice of medicine (CPOM).

I have seen a few threads on Twitter explaining how this structure is supposed to work and the timing of things like establishing group NPI's, credentialing and contracting with payers, revenue sweeping mechanisms. And i'm not sure any of them are objectively CORRECT.

I'm having ongoing conversations with folks in this space and my big takeaway is "just because you've seen someone do it, or seen it work...doesn't mean it's legal." and much of the time, things can happen because enforcement just hasn't tested it yet. So the risk remains. And if you deal with Medicare/Medicaid, there is real risk.

For folks in Healthcare PE or those looking to enter, Oregon has a new CPOM bill (House Bill###-###-#### that may change things dramatically across the country if adopted. It's worth monitoring.

Major implications include CPOM regulation extending to LLC's, and a prohibition of ownership interest between owners of MSO's and PC's (things like JV structures would be dicey)

There's a long period till enforcement for firms to figure out a new way to restructure where they can still exert control...But PE-owned healthcare entities may look a lot different. If passed, this will have major implications.

I'm not an attorney or expert on this stuff, so talk to an expert.

If anyone has intimate knowledge of this Bill or of ways that folks are planning to navigate platform structures, please chime-in!

If anyone needs someone to speak to, shoot me a DM. Happy to pass along contact info of a good attorney who's very familiar with the matter.

Cheers.