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LEGAL UPDATE
Joshua Kaye, JD
The Legality of Adding a Physician-Owner
With proper documentation, selling equity to new doctors is easy.
O
nce you've attracted physicians to your surgical center and
they've become regular users of your ORs, offering them
ownership solidifies the connection by giving them the oppor-
tunity to participate in the center's decision-making and profit distributions. Selling shares of equity can be a straightforward process if
you take the following simple steps.
Proper documentation
First and foremost, you should require the prospective physicianowner to enter into a confidentiality agreement so the center can
freely share sensitive information with the physician. Consult with
your legal advisors on what such a document should include. After
confidentiality is established, there are 2 primary contracts to enter
into with the physician: a purchase agreement and a governing document.
The purchase agreement facilitates the sale of ownership interest
to the physician. With limited exceptions, a physician's buy-in price
must be consistent with fair market value. In determining the purchase price, your ASC should consider its own debt, if it's carrying
any, and whether the physician will be required to become a personal
guarantor of it. The ownership percentage being purchased should
not compensate the physician for past or expected utilization. And
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O U T PAT I E N T S U R G E R Y M A G A Z I N E O N L I N E | J A N U A R Y 2013
