Tax Issues in Issuance or Repurchase of Equity in Physician and Other Practice Groups

Originally published in Healthcare Michigan, Volume 40,  No. 9 Adverse tax issues can arise for physicians and other professional practice groups interested in issuing equity to attract and retain junior physicians.  If equity is issued at below fair market value, the new equity owner will incur significant federal income tax consequences on issuance.  If the new …

Care and Feeding of Practice Entities to Avoid Federal Tax Issues

Originally published in Healthcare Michigan, Volume 40,  No. 5 In prior articles in this publication, this author addressed a federal tax issue faced by practice entities- the possible attack by the Internal Revenue Service (IRS) on a common practice of incorporated medical and other types of practice groups.  By use of the “zero out” technique to …

Clearing the J-1 Home Residency Hurdle: Four Ways to Waive the Home-Residence Requirement

Originally published in Healthcare Michigan, Volume 40, No.  4 J-1 status is a favorite for foreign nationals attending medical resident training programs in the United States. While there are many advantages to the J-1 visa category, one major obstacle remains for J-1 physicians who wish to continue working in the United States—the home residence requirement. Because …

Due Diligence Strategies: How Buyers Can Preserve Human Capital in Healthcare M&A

Originally published in Healthcare Michigan, Volume 40, No.  1 Merging with or acquiring healthcare entities can often be complex, with many competing considerations. As purchase price is contemplated, acquiring entities are not only evaluating the profits of the entity being acquired but also considering key employees and the value they provide post-closing. Key employees and …

Immigration Healthcare Cures for Physicians – A Quixotic Venture?

On February 12, 2022, the Subcommittee on Immigration and Citizenship of the House Committee on the Judiciary held a very informative hearing regarding the relevance of foreign physicians in the healthcare system of the United States (U.S.).  The hearing was titled, “Is There a Doctor in the House? The Role of Immigrant Physicians in the …

Continued IRS Attack On ‘Zero Out’ Of Profits

A prior article in this publication (IRS Attack on Zeroed Out Taxable Income in Recent Tax Court Cases) discussed the lessons that physician and other incorporated medical practice groups could learn from taxpayer losses in two then recent Tax Court cases in use of the “zero out” technique in the payment of compensation to the …

Private Equity in Health Care: Answers to Industry Questions

Dickinson Wright Attorneys recently tackled some basic questions regarding private equity in health care during Dickinson Wright’s Health Law Summit. Below is a summary of what was discussed. Click here to view the full webinar. What is private equity? The term “private equity” is broad, referring to family offices, limited partnerships, and investment funds put …

Wait, Wait…Don’t Sell Me! FDA and Other Pre-Market Considerations for Commercial Products

The Food and Drug Administration (FDA) is a consumer protection agency that ensures the safety and efficacy of certain products in the US, such as medical devices, drugs, and prescriptions, tobacco products, cosmetics, food, including animal food, and electronic products that emit radiation. Canada’s equivalent is Health Canada (HC) and focuses on helping Canadians maintain …

Risk-Based Contracting: How does taking on risk contribute to value-based care?

As healthcare laws are ever-evolving, the latest shift in the industry centers around value-based care. In fact, value-based care has recently become exceedingly popular, because it seeks to streamline healthcare while also cutting costs. It is both patient- and practice-centric. To achieve lawful value-based care, at least two value-based enterprises must enter into a value-based …

Healthcare Representations and Warranties in the M&A Transaction

Healthcare industry mergers and acquisitions can take on many shapes and sizes dictated by various regulatory and business law issues, but common to all such transactions is the Target’s obligation to make healthcare representations and warranties to the Acquiror.    Representations and warranties (R&Ws) in general are heavily negotiated aspects of the parties’ agreement, and their …