Considerations for Doctors Renting Office Space

A number of small medical practices facing increased financial pressure and competition from urgent care clinics and other large providers have taken unconventional steps to increase revenues and get the most out of expenses. Many have opted for office pooling or renting office space to other medical providers, including contemporaneously sharing office space or letting out offices on days they are not otherwise in use. While such sharing can effectively offset some overhead expenses, some accompanying complexities need to be addressed.

In addition to the practical considerations inherent in space sharing there are also legal and ethical considerations. Doctors should consider a number of issues before agreeing to sublet office space:

  • HIPAA considerations — Federal law imposes a number of requirements concerning the security of patient files. Doctors considering subletting their work areas must take steps to ensure patient health information remains secure.
  • Liability considerations — Members of the public can easily infer an association between two medical professionals who practice in the same space, potentially creating some liability issues for both parties.
  • Referral issues — While it seems reasonable that one would make appropriate referrals to another medical professional practicing in the same office, referrals can raise some ethical issues if made part of the contractual arrangement. In addition, for Medicaid and Medicare patients the Stark Law may come into play unless the lease meets certain requirements.

Despite these concerns, subletting office space can offer many benefits for some practices. Consulting with a respected New Jersey health care law attorney beforehand can help medical professionals identify and address all the potential issues.

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Posted in: Compliance, Regulation