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The Corporate Practice of Medicine

For clinicians practicing chiropractic medicine or acupuncture, the laws regulating ownership of medical professional corporations have become increasingly complex. Many states, Florida among them, now have statutes that restrict how medical professionals may organize ownership of their corporations and who may share professional fees with whom. Only a licensed physician, these states hold, may actually own – or practice medicine through – a medical professional corporation. As such, if part of the ownership or control rests with someone who, despite perhaps being skilled enough to treat patients, is not actually a licensed doctor, the entire enterprise is deemed to be illegal. Because of this, any claims for payment by insurance companies that the medical company has submitted may be subject to claims of insurance fraud – regardless of whether services were or were not properly performed – simply on the grounds that the company wasn’t properly organized initially. There’s no requirement that the insurance company demonstrate that the improper incorporation compromised patient care or otherwise caused actual harm; the problematic incorporation alone is sufficient, legally speaking, to make each and every one of the company’s bills fraudulent.

Serious Criminal Penalties Can Result

Not only can incorrectly incorporating the company – engaging in the so-called illegal “corporate practice of medicine” – lead to civil liability, wherein the insurer attempts to reclaim money paid to the medical provider, it can have serious criminal consequences. The federal Racketeer-Influenced and Corrupt Organizations Act (usually known as “RICO”) provides the government with tools to prosecute illegal incorporation. Under RICO, the government presents the facts as though the organization of the medical professional company represented a conscious scheme to defraud insurance companies by misrepresentation of its legal status. RICO requires the government to prove two or more acts constituting a so-called “predicate felony” within a ten-year period that constituted a pattern of fraudulent activity. A predicate felony includes any act of wire or mail fraud. As such, the theory becomes that each time a bill from the medical provider was transmitted via the mail or electronically, an act of wire or mail fraud was committed, since the bill represented that the company was incorporated in accordance with state law when, in fact, it was not. Thus, a simple failure to comply with the medical corporation licensing statutes becomes converted into charges of a criminal conspiracy.

Defense Counsel Makes the Difference

Fortunately for criminal defendants, not all such prosecutions succeed. The question of who actually owns or controls a corporation is not simply a matter of what is or isn’t written on a particular piece of paper filed with the secretary of state’s office. Rather, the question is who actually managed its day to day operations, made business decisions on its behalf, controlled hiring and firing of employees, and directed its financial decision-making. Proving this is much more complicated than the uncomplicated (though clever) portrait of a criminal conspiracy painted above. It’s essential, though, that the government show that, in practice as well as in theory, the corporation’s profits somehow were controlled by persons who weren’t legally eligible to practice medicine in it.

If you’re facing these sorts of healthcare fraud or insurance fraud charges, you need an attorney who will hold the government to this burden of proof and prevent it from turning a technical molehill into a criminal mountain. Get in touch with Miami based Jeffrey S. Weiner, P.A. today.


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Miami Criminal Attorneys

9130 South Dadeland Blvd
Miami, Florida 33156

Telephone: 305-670-9919
Fax: 305-670-9299

Miami Abogado Criminal Jeffrey S. Weiner website - Delitos de Negocios, Delitos de Drogas y Apelaciones

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