Practice Areas & Industries: Duane Morris LLP


Healthcare: Faculty Practice Plans Return to Practice Areas & Industries

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Practice/Industry Group Overview

As the legal, regulatory and financial environments for healthcare providers continue to evolve, faculty practice plans (FPPs) face increasingly complex legal, strategic and operational challenges. FPPs are multimillion-dollar businesses and integral components of academic medical centers. They often seek separate legal representation from their academic medical center partners for assistance with critical operational issues such as organizational structure and governance, strategic and business planning, financial arrangements with affiliated academic medical centers and compensation plans. FPPs may also find that their interests diverge at times from their academic medical center partners, necessitating separate counsel.

Organizational Structure and Governance Design/Strategic and Business Planning

The structure and governance of each FPP is unique and influenced by a myriad of factors, including the relationship with the associated medical center and school. From comprehensive organizational restructuring to updating existing models, the attorneys of Duane Morris have assisted FPPs at all levels to achieve their goals and objectives. Our deep experience and familiarity with the distinctions between an FPP and a non-academic physician practice enables us to effectively improve both internal governance and the FPP's relationships with the senior leadership of its academic medical center. We also assist FPPs to structure mutually beneficial arrangements with the many non-academic providers such as community hospitals, clinics and pharmaceutical and medical device manufacturers who are eager to capitalize on the cutting-edge clinical services, as well and the teaching and research missions, of the FPP.

Financial Arrangements

The interests of the FFPs and their affiliated academic medical centers often diverge in negotiations of their complex financial arrangements. FFP physicians and staff are tasked with providing clinical services to patients, teaching students and participating in research. Funding arrangements must align with economic incentives and the center's mission while complying with a numerous legal requirements. Traditional or historical arrangements may no longer meet these needs or be compliant with current laws and regulations. Our considerable experience representing both FFPs and academic medical centers enables us to understand the business and legal issues from all perspectives and to design financial arrangements that serve the goals of both the FFP and the academic medical center. We also have extensive experience representing physician groups in managed care contract negotiations and can work with FFPs to ensure the best possible managed care contracts.

Compensation and Benefits Design

Individual physicians and their FPP often have differing compensation and benefits objectives. These are attributable to numerous factors, including a physician's position, age and remuneration level. We know that meeting competing objectives requires incentives to attract and retain the individuals within the FPP and a flexible compensation and benefits package. We counsel FPPs on all aspects of (1) compensation matters, including fixed and variable compensation, (2) retirement plan matters, including design of appropriate retirement benefit levels, and (3) welfare and fringe benefit programs (including group health). We prepare the relevant employment agreements and plans to document these arrangements.

Fraud and Abuse/STARK

FPPs typically involve relationships with hospitals and medical schools that include the transfer of funds to and from the plans. The referral of patients to the hospitals raises issues under the federal Stark and anti-kickback laws and similar state laws. These issues are addressed primarily by reference to the academic medical center exception to the Stark law, as well as more fact-specific analyses under the applicable anti-kickback statutes. Duane Morris attorneys are experienced in setting up and evaluating FPPs against the complex regulatory exceptions and safe harbors necessary for the prevention of violations and whistleblower lawsuits. Our attorneys know the sensitivities involved with these inherently competing interests and if necessary can facilitate a smooth and safe transition to a new or modified structure that properly aligns financial incentives with institutional goals. We also provide knowledgeable and vigorous defense in support of the FPP's relationships in the event of an investigation or lawsuit challenging its arrangement.

Tax Planning

Duane Morris attorneys are highly skilled in the identification, development and usage of tax-efficient structures designed to maximize our clients' after tax compensation, ensure taxes are not over-paid, and create solutions to tax-related issues that result from dealings with tax-exempt organizations. Our attorneys help protect favorable tax treatments, such as the use of the cash basis accounting method. Our attorneys are deeply familiar with the federal, state and local tax needs of FPPs.


FPPs are often confronted with immigration issues relating to the hiring of foreign personnel. For example, it is critical for foreign personnel to have appropriate visas and that the employer files the applications. The lines that define the employee's and employer's respective responsibilities are often blurred. Non-immigrant visas include the J exchange visitor visa, the H-1B specialty occupation visa and the O extraordinary ability visa. A crucial component of the green card process includes labor certifications, employment-based petitions and applications for permanent residence or immigrant visas.

Immigration applications are scrutinized by Citizenship and Immigration Services, Department of Labor and Department of State. Duane Morris attorneys are experienced in all phases of the immigration process, and in particular with representing physician groups, hospitals, doctors, nurses, occupational and physical therapists, biomedical engineers, and all personnel associated with FPPs. Our attorneys are also sensitive to competing employee-employer interests and can facilitate a smooth working relationship. We have extensive experience vigorously defending visa applications, I-9 investigation and public access files in the event of an investigation.

Intellectual Property

We understand the myriad of complex issues that arise from the ownership of a FPP's research and development. We have experience negotiating intellectual property licensing agreements between FPPs and major academic medical centers and other third-party joint venture partners, including provisions related to joint ownership rights, IP enforcement and royalties. Our patent prosecution team's technical capability is among the most diverse within the top tier of large law firms in the United States. Our numerous Ph.D.-patent attorneys and patent agents include several postdoctoral fellows, a medical school graduate, and scientists formerly with leading biotechnology companies and research institutes. Duane Morris is ranked among the top 10 trademark filing firms by Trademark Insider and the top five busiest trademark litigation practices in 2009 by IP Law360. Our firm currently manages worldwide trademark application and registration portfolios for various companies headquartered in the United States, Asia and Europe.

Colleges and Universities

We have had the privilege of performing legal services for dozens of colleges and universities and their research affiliates. We currently have active matters for many university clients, and some of our relationships span more than 20 years. Several of the firm's attorneys have chaired and served on the boards of various academic institutions, and one partner in the firm is a member of the National Association of College and University Attorneys (NACUA).

Articles Authored by Lawyers at this office:

CMS Updates 5 Star Ratings System for Nursing Homes with New Measures
Ari J. Markenson, April 07, 2015
As of February 20, 2015, the Centers for Medicare & Medicaid Services (CMS) has revised its 5 Star Rating System for nursing homes. The changes to the system involve adding two new nursing home quality measures for antipsychotic use into the Quality Measure Rating, Increasing the number of...

Lawyer in Vietnam Oliver Massmann Pharmaceutical Market
Oliver Massmann, March 30, 2015
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OIG - Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities
Ari J. Markenson, March 30, 2015
On January 14, 2015, the U.S. DHHS Inspector General’s Office (the “OIG”) released a report (OEI-02-14-00070) entitled “Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities.”

CMS Advises That Payment Codes on Home Health Claims Will Be Matched Against OASIS
Ari J. Markenson, March 25, 2015
CMS recently issued Transmittal SE1504 entitled “Payment Codes on Home Health Claims Will Be Matched Against Patient Assessments”.

Civil RICO Actions on the Rise to Combat Healthcare Insurance Fraud
James J. J. Ferrelli, March 25, 2015
Over the past several years, insurance carriers have aggressively pursued civil suits against doctors and other medical providers in an effort to fight healthcare insurance fraud. Besides theories of liability based upon common law claims such as fraud and unjust enrichment, insurers have more...

Consultants’ Communications Privileged from Discovery
Philip H. Lebowitz, March 25, 2015
In healthcare, companies often hire consultants to review billing and coding, privacy and security and a host of other technical issues that regular staff does not have the time or expertise to pursue. A recent discovery ruling in federal court in the Eastern District of Pennsylvania holds that...

HHS Moves to Limit In-Office Ancillary Services Exception
Matthew C. Jones, March 19, 2015
The Department of Health and Human Services (“HHS”) is once again targeting the In-Office Ancillary Services Exception (“IOASE”) to the federal Stark Law, in an attempt to produce cost savings in the U.S. healthcare system. The IOASE provides a limited exception to the Stark...

Health System Integration and Antitrust Laws on Collision Course
Philip H. Lebowitz, March 18, 2015
Health systems attempting to fulfill the mandate of integrating hospitals and physicians may find themselves accused of going too far. Although the Affordable Care Act, shared savings, gainsharing and other alternative payment methodologies have made integration of physicians, hospitals and other...

New Jersey State Bar Committee to Review RPC 1.2(d) and Issues Pertaining to Medical Marijuana
James J. J. Ferrelli, March 18, 2015
The New Jersey State Bar Association (“NJSBA”) has established an ad hoc committee to review the ethical issues raised under New Jersey Rule of Professional Conduct 1.2(d) (which prohibits a lawyer from counseling or assisting a client in conduct that the lawyer knows is illegal or...

Virtual Credit Card Payments
Patricia S. Hofstra, March 18, 2015
On January 30, 2015, several healthcare organizations sent a group letter to CMS protesting the use of virtual credit cards by health plans to pay providers. In a virtual credit card payment (a nonstandard type of electronic funds transfer EFT), a health plan or its payment vendor issues single-use...

ACOs are More Important Than Ever for LTC Facilities
Amy E. McCracken, March 13, 2015
On January 26, 2015, the United States Department of Health & Human Services (HHS) announced its timeline for shifting Medicare reimbursements from volume-based criteria to value-based criteria. HHS has adopted a framework that categorizes health care payments according to how providers receive...

Antipsychotic Drug Use Can Lower Nursing Home's Five-Star Rating
Amy E. McCracken, March 13, 2015
The Centers for Medicare & Medicaid Services (CMS) is continuing its efforts to reduce the national prevalence of antipsychotic drug use in long-stay nursing home residents. Its initial goal of a 15.1% reduction in antipsychotic drug use was met, so CMS now seeks to reduce antipsychotic drugs...

Fees and Costs Awarded to False Claims Act Defendant
Seth A. Goldberg, March 13, 2015
A recent decision in the U.S. District Court for the Southern District of New York provides fair warning to qui tam relators who assert erroneous claims under the False Claims Act ("FCA") that they could be hit with legal fees and expenses pursuant to 31 U.S.C. § 3730, which permits...

Health Care Workers May Think Twice Before Becoming a Relator
Amy E. McCracken, March 13, 2015
The Federal False Claims Act (and many similar state false claims acts) allow an individual-called a "relator"-to file a lawsuit on behalf of the United States Government. If successful, the relator stands to collect a portion of the amount collected. Since the False Claims Act provides...

Mayo Lawsuit Against Former Exec Raises Numerous Health Care and Business Litigation Issues
Elinor H. Murarova, March 13, 2015
A recent settlement between Mayo Collaborative Services d/b/a Mayo Medical Laboratories ("MML") and Mayo Clinic (together with MML, "Mayo") and a former Mayo executive, Dr. Franklin Cockerill, reveals the potential legal issues that may arise when health care executives seek new...

New CMS Payment Policy Will Negatively impact Healthcare Investors
C. Mitchell Goldman, March 13, 2015
I have been concerned about the difficulty of projecting revenue and determining valuations for new and existing healthcare companies based on risk based reimbursement models. My fears have not been allayed. Rather, they have been confirmed.

Real Estate Tax Exemption Issue Muddied Again
Philip H. Lebowitz, March 13, 2015
On December 23, 2014, the Commonwealth Court of Pennsylvania logged another frustrating mile down the confused and confusing road of property tax exemption for purely public charities. In Fayette Resources, Inc. v. Fayette County Board of Assessment Appeals, the Court overturned a lower court...

Top Three Problems with Text Messaging in Health Care Settings
Amy E. McCracken, March 13, 2015
1. Since most text messaging is not a secure form of communication, it raises HIPAA concerns if any protected health information is included in the text message. There is the possibility of a data breach in the transmission of the text message, as well as in the event of a lost or stolen phone.

FDA Issues Guidance on Registration, Fees and Reporting Requirements for Drug Compounding Outsourcing Facilities
, February 26, 2015
On November 21, 2014, the U.S. Food and Drug Administration (FDA) announced the release of three new guidance documents related to drug compounding outsourcing facilities. These documents include: