The American Medical Association defines a group practice as three or more physicians who deliver patient care, make joint use of equipment and personnel, and divide income by a prearranged formula.
Under the Physician Self-Referral (Stark) Law regulations, the definition of a “group practice” includes a number of conditions, including that it consist of a “single legal entity,” have at least two physician members (whether employees or direct or indirect owners), and each physician member of the group must “furnish substantially the full range of patient care services that the physician routinely furnishes.” 42 C.F.R. § 411.352
Physician group practices have been in existence for over 100 years. Today, an integrated medical practice usually has the following characteristics:
• Single legal entity
• Single tax and provider number
• All revenue and expenses generated by the physicians flow through the group practice
• All employees, including physicians, allied health professionals and lay administrative staff, are employed by the group
• Group compensation system
• Single or multi-specialty models
• Single site location or multi-site arrangements to provide geographic access for managed care payers.
Excerpt from Hal S. Katz, Characteristics of a Successful Independent Practice Association, Physicians and Physician Organizations Law Institute (American Health Lawyers Association 2000).