Healthcare Entrepreneurs know that medicine is a business of heart. Patients want to feel genuine care, while insurance companies want to appear as though they care. More importantly, running a successful healthcare business requires operating from the heart.
But keeping your practice efficient, profitable, and sustainable also requires a brain.
Entrepreneurs who understand the healthcare business make smart legal decisions. Not enough practice owners do this.
Ready to learn how to take your practice to the next level?
Let’s dive in.
Why Legal Considerations Matter When Scaling Your Practice
Let’s start with something that doesn’t get enough attention…
Unless you’ve been blissfully ignorant of regulatory requirements or worked in healthcare law firm services, you should know that compliance with federal and state regulations isn’t optional. Working with trusted Healthcare Attorneys ensures your practice stays protected as you grow.
Once you begin scaling your practice, legal considerations matter more than ever.
Adding new locations? Treating new patients? Hiring new staff?
Every one of these things magnifies your legal and regulatory exposure.
Do you know what’s worse than one doctor’s office getting in trouble with regulators?
Ten doctor’s offices getting in trouble with regulators.
Operating your medical practice without competent legal guidance is asking for disaster.
Take action steps to make sure your business is prepared to scale as soon as possible.
The Biggest Regulatory Challenges When Scaling Your Practice
Now it’s time to dive into the specifics.
The major regulatory challenges healthcare businesses face when scaling include:
HIPAA Compliance
HIPAA stands for Health Insurance Portability and Accountability Act.
Any new practice locations you open will require new:
- IT systems
- Staff members
- Physical security measures
These elements introduce risk of HIPAA violations every time you scale.
HIPAA enforcement penalties consistently rise each year. The Office for Civil Rights collected over $9.9 million in penalties in 2024.
The Stark Law & Anti-Kickback Statute
This regulatory framework relates to physician referrals and financial relationships.
Penalties can include exclusion from Medicare, financial penalties, and even jail time.
In an aggressive regulatory environment, many practices unknowingly trigger Stark Law and anti-kickback scrutiny by:
- Adding new service lines
- Accepting help from outside partners
Some well-intentioned agreements between Healthcare Entrepreneurs and other businesses can run afoul of these regulations.
State Licensing Requirements
Each state has its own laws relating to:
- Licensing of physicians and other practitioners
- Healthcare facilities and equipment
- Telehealth
- Practice of medicine by corporations
You need to research licensing requirements prior to expansion. Some states have prohibitions on the corporate practice of medicine.
Employees often overlook these regulations when scaling their healthcare business.
Employment & Labor Laws
Once you hire more employees, you open your practice up to litigation under state and federal employment laws.
Some examples of legal pitfalls include:
- Employment contracts
- Non-compete agreements
- Worker classification issues
Save yourself from a world of headache and hire a lawyer to ensure your contracts are ironclad.
Protecting Your Practice When Scaling
So how do you keep your business compliant when taking on Bigger & Better Things™?
Here’s what healthcare entrepreneurs should know:
Conduct a Legal Audit Before Scaling
If you’re considering opening new practice locations or expanding your service line, hire a lawyer to review everything.
Contracts, compliance programs, corporate structure.
Find out where your practice stands now. Before you grow.
Build Compliance Into Your Business Model
Too many healthcare businesses view compliance as a headache.
But it doesn’t have to be that way.
Embed compliance practices into your everyday business activities. That way it feels natural.
Here are a couple examples:
Before you open that new location:
- Have IT setup and test your EHR’s security systems
- Hire and train staff on HIPAA before they see patients
- Use those new patient check in kiosks? Update your notice of privacy practices so patients can actually read it
The projected shortage of up to 86,000 physicians by 2036 means competition for qualified staff is fierce. Balance aggressive hiring with proper credentialing and background checks.
Document Everything
This advice cannot be stressed enough!
Documentation is your best friend when you’re faced with a regulatory audit.
If you can’t prove you did something…regulators assume it didn’t happen.
Examples of things you should be documenting include:
- Compliance staff training sessions
- Notices of privacy practice acknowledgment
- Incident reports and follow up actions
- Business associate agreements
Get Insurance Limits Increased
Running one practice location is different from running three, five, or ten.
Your malpractice insurance should reflect the scale of your operations.
The same goes for cyber liability insurance.
Healthcare data breaches are a major risk these days. Having the proper coverage can mitigate that risk.
Build the Right Team for Scale
You don’t have to go it alone…
Here are a few members of your dream team:
Legal Counsel
This cannot be stressed enough: only retain attorneys that specialize in healthcare.
The licensed healthcare business.
Sure, your accountant probably knows a thing or two about small business law. But odds are they don’t know healthcare law.
Working with lawyers that focus on healthcare businesses will save you time, money, and stress.
Healthcare Compliance Officers
Every successful healthcare organization has Healthcare Entrepreneurs or dedicated professionals whose job is to keep them compliant.
At a minimum, you need a documented compliance plan that’s:
- Implemented throughout your organization
- Regularly updated to reflect current laws
- Enforced by appropriate disciplinary action
If your practice grows beyond a certain number of locations, you should strongly consider hiring a dedicated compliance professional.
Financial Advisors
Accounting rules for doctors aren’t the same as accounting rules for other small businesses.
Medicare reimbursement rules change constantly too.
This makes it difficult for healthcare providers to keep up.
That’s why it pays to work with financial advisors that specialize in healthcare practices.
HR Know-It-Alls
Just like accounting, there are a lot of employment law rules that apply specifically to the healthcare field.
From credentialing to background checks of certain employees, your HR team should know this stuff.
One bad employment decision can come back to haunt you later.
Scale With Confidence
Healthcare entrepreneurs who scale successfully treat legal compliance as seriously as clinical care.
The regulations exist for good reasons. They protect patients. And they protect practices that follow them.
Healthcare entrepreneurs who invest in proper legal guidance from the start avoid the costly mistakes that sink their competitors.
Get the foundation right. Then build something amazing.
