Tag Archives: Physician Office Laboratory Evaluation Program

Physician Owned Labs Affiliating with Hospitals

Hospital-physician practice acquisitions represent a large segment of the very active healthcare mergers and acquisitions market, which will likely continue in 2016.[1]  In New York, an acquiring hospital often forms a new professional corporation owned by one or more hospital-based physicians to acquire the business and operations of a group physician practice in an asset purchase. The acquiring hospital will be able to exercise a level of management and control over the new professional corporation, often referred to as a “captive PC”, through a contractual arrangement with the captive PC.  This captive PC structure is used to comply with New York’s corporate practice laws as well as to allow the group practice to continue operations as a separate entity but with close business ties to the hospital, e.g. with respect to participation in the hospital’s managed care contractual arrangements and access to other resources of the hospital system. 

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