Physician Partnership Agreements and Practice Group Disputes

James DiTommaso

As the health care industry changes, more and more doctors are forming partnerships or merging practice groups into larger practice groups. Such partnerships and mergers can be beneficial to doctors who can share expenses take on additional patients. Patients too benefit from the pooling of talent. But just as consideration and careful planning must go into every diagnosis and treatment plan, foresight, consideration, and careful drafting are essential to a successful physician partnership or practice group merger.

Too often, medical groups or partnerships are thrown together with little to no input from attorneys. Most often, doctors feel too busy with their practice to take the time to consult with an attorney regarding the contours of their partnership agreements. However, taking the time at the outset of a partnership to define the scope of the partnership and reduce the agreement to writing will save countless hours and costs later if issues arise. Some of the most common issues the attorneys at DiTommaso see are:

  • The partnership agreement fails to detail a method for dissolution of the partnership when one or more doctors want to leave the group;
  • The partnership agreement does not address the addition of new equity partners or the effect such additions have on the shares held by the existing partners;
  • Doctors sign an employment contract with a partnership that includes an option to become a partner but one or more of the existing partners later refuse to allow the doctor to become a partner;
  • There is no mechanism in place for valuing the practice group if a partner requests to be bought out or to buy another partner’s shares;
  • The partnership agreement lacks a mechanism for removing a partner who has engaged in unethical behavior or is no longer contributing to the practice group;
  • The practice group wants to merge with another practice group but is unfamiliar with the requirements to formally and legally consummate the merger;
  • A non-partner doctor wants to leave the practice group but her employment agreement is unclear about the payment of the malpractice insurance tail; and
  • Personality conflicts cause doctors to separate but no mechanism exists for distributing equipment, shared personnel, or shared patients.

At some point one or more of these issues will arise and not being aware of the legal consequences that stem from partnerships or mergers can lead to unnecessary expenses and can disrupt or even destroy a practice. Getting a knowledgeable attorney involved at the inception of a practice group merger or physician partnership has the added benefit of allowing the physicians to focus their time and energies on growing the practice instead of hashing out the mundane details of the agreement.

The attorneys at DiTommaso have decades of experience negotiating and litigating partnership agreements and mergers. Having worked with numerous doctors and physician groups, they are familiar with the unique issues that arise when physicians and practice groups combine. They also have experience handling matters that regularly arise in existing physician partnerships or practice groups. With offices conveniently located in DuPage and Cook counties, we represent clients throughout Chicago and the surrounding counties of Will, Kane, and Lake including Hinsdale, Winfield, Park Ridge, Hoffman Estates, and Naperville. To consult with an attorney today contact us online or give us a call at 630-333-0000.

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