Group Practice with Neal Goldstein

Fee Splitting/Corporate Practice of Medicine Laws, and the Business of Healthcare

Most healthcare founders think corporate ownership of medical practices is strictly illegal. The truth is much more complex. Healthcare attorney Neal Goldstein breaks open the state-level laws governing Fee Splitting and the Corporate Practice of Medicine (CPM). In this episode, he strips away the legal fluff to reveal the exact structural workarounds private equity firms use to acquire, manage, and scale medical groups across the United States. If you are trying to understand how modern medical groups are actually financed and structured, this breakdown is for you. What you will learn: ● Why Fee Splitting and CPM are strictly state-level laws with massive enforcement differences across the country ● The critical difference between statutory licensing laws and evolutional common case law in healthcare compliance ● How the historic Berlin v. Sarah Bush Lincoln case accidentally banned hospitals from employing doctors in Illinois ● The exact mechanics of the “Friendly PC / MSO” contract model used to legally bypass corporate ownership bans ● Why structuring a management fee based on a medical practice’s direct profits triggers massive regulatory risks ● The hidden economic reasons why these antiquated 1990s laws remain on the books despite structural changes in GDP ● A collaborative boardroom framework inspired by hospital medical staffs to balance corporate scale with clinical quality Timestamps 00:00 — The Stark Reality of Fee Splitting and Corporate Medicine Statutes 01:22 — Statutory Fee Splitting vs Common Law CPM Compliance 03:06 — Navigating Section 22.2 of the Illinois Medical Practice Act 05:00 — The True Policy and History Behind the Corporate Practice of Medicine 07:26 — The Berlin v. Sarah Bush Lincoln Appellate Decision and Fallout 09:58 — State Enforcement Spectrum: High Risk vs Low Risk Jurisdictions 13:36 — How Private Equity Structures Corporate Healthcare Transactions legally 13:54 — The Friendly PC and MSO Legal Agreement Mechanics 16:36 — Fair Market Value Pitfalls in Management Fee Structuring 18:13 — Why Outdated Healthcare Licensing Laws Still Exist on the Books 22:00 — A Better Boardroom Framework for Medical Group Quality Assurance 25:58 — Wrap Up: Private Equity in Modern Medical Group Ownership Guest Bio: Neal Goldstein is an expert healthcare transaction attorney specializing in regulatory compliance, medical group mergers and acquisitions, and corporate structuring for group practices. Over a multi-decade legal career, he has advised healthcare systems, physicians, and private equity platforms on navigating the complex intersection of corporate scaling and clinical compliance. Website: https://www.pfs-law.com/ Website: https://www.goldsteingrouppractice.com/ Website: https://nealtgoldstein.com/ LinkedIn: https://www.linkedin.com/in/neal-t-goldstein-841aa652/ Show subscribe and platform links New episodes every week — subscribe so you never miss a conversation on the business of medicine. Spotify | Apple Podcasts | YouTube Disclaimer This episode is for informational and educational purposes only and does not constitute legal, financial, or medical advice.

Beyond CPAP: How ENT Dr. Len Covello Is Rethinking Sleep Apnea Care

Most sleep specialists are just CPAP purveyors. If the mask fails you, they often have no next step. Dr. Len Covello is changing that narrative. Neal Goldstein sits down with Dr. Len Covello, an otolaryngologist and sleep surgery innovator who developed the sleep surgical program at Powers Health. This episode cracks open the “system failure” in sleep medicine and provides a holistic roadmap for those failing traditional treatments. What you will learn ● Why the “CPAP or bust” mentality creates a massive blind spot in modern sleep medicine ● The mechanics of Hypoglossal Nerve Stimulation and why it’s a game-changer for moderate to severe apnea ● How common medications like acetazolamide can “trick” the brain into fixing central sleep apnea ● The surprising link between GLP-1 weight loss medications and surgical eligibility for sleep patients ● Why screening in hospitals often leads to “order drift” and how to ensure patients actually get treated ● The “Quarterback” model: why you need a single clinician to own the entire holistic sleep journey ● How to navigate restrictive insurance criteria (BMI and AHI) to get the life-changing surgery you need Timestamps 00:00 — Introduction: Dr. Len Covello’s 30-year journey in ENT 03:31 — The evolution from traditional ENT to sleep surgery specialist 05:40 — Why the UPPP throat surgery was “justifiably discredited” 07:03 — Hypoglossal Nerve Stimulation: How stimulating the tongue nerve works 11:22 — The CPAP blind spot: why 50% of patients are falling through the cracks 15:54 — Creating a high-quality alternative to the CPAP mask 21:50 — Using GLP-1s and weight management as a bridge to sleep surgery 24:32 — Fixing Central Sleep Apnea with acetazolamide 28:45 — The STOP BANG screening method and why it often fails in hospitals 32:20 — The Sleep Counselor: Why patient navigation is the missing link 34:34 — The financial argument for payers: preventing AFib and heart failure Guest bio and links Dr. Len Covello is a board-certified otolaryngologist at Community Hospital in Munster, Indiana (Powers Health). He is a pioneer in sleep surgery and developed a comprehensive program focusing on neurostimulation and holistic airway management. Dr. Covello also consults for financial and medical institutions on the future of sleep technology. Website: https://www.powershealth.org LinkedIn: Show subscribe and platform links New episodes every week — subscribe so you never miss a conversation on the business of medicine. Spotify | Apple Podcasts | YouTube Disclaimer This episode is for informational and educational purposes only and does not constitute legal, financial, or medical advice.

Sale to PE: The Two Hats a Selling Physician Wears

In this episode, Neal Goldstein breaks down the “two hats” physicians wear in private equity transactions: seller and rollover owner/employee. He explains that while most physicians focus heavily on upfront cash, indemnities, and non-competes in the sale, they often don’t pay as much attention to equally critical employment and rollover equity agreements. Neal highlights why it is important to focus on rollover and employment terms.  Rollover equity can represent a substantial portion of total deal value, and its terms—vesting, forfeiture, buyback rights, and valuation—vary widely and directly impact long-term outcomes. He also emphasizes that physicians’ interests diverge based on career stage, productivity, and risk tolerance, making these provisions highly personal. The episode offers a practical roadmap of what to scrutinize in both employment and rollover agreements, urging physicians to give as much attention to their “second hat” as their first—because that’s where significant financial risk and upside often lie.

Being Strategic: Lessons from the PE Firms

In this episode of Group Practice, host Neal Goldstein discusses why private equity (PE) firms are often able to operate more strategically than independent physician groups—and how those groups can adopt similar approaches without selling. Drawing on his experience, Neal explains that PE firms benefit from centralized decision-making, clear performance metrics like EBITDA, and shorter investment horizons that drive disciplined execution. Neal highlights four areas where he sees PE firms create value: physician staffing (particularly succession planning and strategic hiring), expense management (focusing on eliminating inefficiencies such as excess real estate), deployment of capital (retaining earnings to fund growth), and corporate infrastructure (including strong leadership roles like COO, CFO, and CDO). The core takeaway is that while PE has advantages, physician groups can improve performance by adopting even a few of these strategic disciplines—particularly around capital reinvestment, operational efficiency, and leadership structure.

Back to Non-Competes: Addressing Listener Feedback

In this follow-up episode of Group Practice, host Neal Goldstein addresses listener feedback about non-competes in physician practices. He tackles three key questions: Are non-competes ever appropriate? What’s the point of enforcing them if they’re often struck down? And what alternatives exist?   Neal argues non-competes remain appropriate in several contexts: competing against hospital systems, PE-backed practice sales, groups with exclusive hospital contracts, and specialties with high capital costs. He emphasizes that despite headlines suggesting otherwise, non-competes are still being enforced and represent valuable contractual rights worth protecting.   For practices seeking alternatives, Neal offers practical strategies: conditioning tail coverage on non-competition, structuring severance with clawback provisions, strengthening non-solicitation clauses, and negotiating robust no-hire provisions in hospital contracts.