American Academy of Emergency Medicine

The letter printed below represents an action taken by AAEM on behalf of its members in Minnesota. We quickly responded to this call for help knowing that Minnesota has been a very good practice environment with a number of democratic groups. As you will note there is clear existing case and statutory law as well as an Attorney General opinion that supports our contentions in this matter. You should also know that equal or stronger prohibitions on the corporate practice of medicine exist in most states including those where corporate EM groups are dominant. Such prohibitions exist in the home state of some of the contract groups (Texas, Tennessee). This issue has been known about by organized emergency medicine since at least 1978. Karl Mangold, the 1978 President of ACEP wrote this "many state laws support the policy that earnings derived from physician services belong to the physician" (JACEP 1978; 7:245-248).

Unfortunately, this article was addressing the issue of the hospitals taking EM physician fees. Until the formation of AAEM, the leadership of the specialty hid the potential power of the corporate practice of medicine doctrine from the eyes of the working physician. Those in the know will recognize that Dr. Mangold sold his contract group to Team Health enriching himself in a manner that directly contradicts what he wrote in 1978. Fortunately, there exists new leadership in EM that has the working physician's interest at the fore. AAEM stands ready to assist you in issues related to the corporate practice of medicine.

- Robert McNamara, MD, FAAEM-

June 22, 2004

Mike Hatch
Attorney General, the State of Minnesota
Minnesota Attorney General's Office
1400 NCL Tower
445 Minnesota Street
St. Paul, MN 55101

Re: The Corporate Practice of Medicine in Minnesota

Dear Attorney General Hatch:

Pursuant to an issue raised by a number of our members in the state of Minnesota, the purpose of this letter is to convey the concerns of the American Academy of Emergency Medicine (AAEM) regarding corporate ownership of Emergency Department contracts in the state of Minnesota. AAEM is a national professional society representing over 5,000 specialists in Emergency Medicine. It is our understanding that the exclusive contract for emergency services at Methodist Hospital/Park Nicollet Health services in Minneapolis has been awarded to EmCare, Inc., a for-profit corporation. It is our belief that this represents a violation of the public protections afforded by Minnesota 's prohibition of the corporate practice of medicine. Additionally, we are concerned that emergency physicians in the state of Minnesota may unwittingly risk their licensure in this matter by aiding and abetting the prohibited corporate practice of medicine. We are aware of your strong history as an advocate for the citizens of Minnesota in health care matters and request your assistance in this matter of importance to our member physicians and their patients.

We do not dispute the right of Park Nicollet Health Services to award an exclusive contract for emergency services, however, we believe Minnesota statutory and case law as well as prior opinions from the Office of the Attorney General prohibits the awarding of such a contract to a for-profit corporation. To be clear, EmCare, Inc. is a for-profit corporation as it is a major subsidiary of Laidlaw International, Inc., a firm that is traded on the New York Stock Exchange. Confirmation of this can be quickly obtained by accessing www.laidlaw.com . Minnesota statutory law addressing the unlawful practice of medicine (§ 147.081, Subdivision 1) and the formation of professional firms (§ 319B.01, et seq.) supports our concerns about lay involvement in this arrangement. Minnesota case law (Granger v. Adson, 250 N.W. 722; 1933) also confirms our concerns about a corporation practicing medicine in violation of both statute and public policy. Finally, Attorney General Opinion No. 92-B-11 (October 5, 1955) specifically points out the public policy concerns of interference with the physician-patient relationship and the exercise of professional judgment when a for-profit corporation contracts with physicians.

AAEM is also concerned that such corporate employment arrangements may involve prohibited fee-splitting activities under current state and federal statutes. We therefore caution our members about accepting employment with corporate groups and suggest that hospitals examine such an arrangement with due diligence.

AAEM believes that the active enforcement of prohibitions on the corporate practice of medicine is essential. This is particularly so in the specialty of emergency medicine where physicians serve as an important component of the health care safety net of our society. Emergency physicians must remain free of corporate influence because of their difficult role as advocates for the under and uninsured patient. The AAEM firmly believes it is in the best interest of the citizens of Minnesota to have emergency physicians unencumbered by the profit concerns of a corporation.

The AAEM and our member physicians in the state of Minnesota are prepared to provide your office with more information or testimony regarding this matter. Because of the importance of this matter, I have assigned our in-house expert on the corporate practice of medicine, Dr. Robert McNamara, a Past President of our organization, as the primary contact person for this matter. He can be reached through our offices or directly at 215-707-5030.

Thank you for your time and attention to this important matter.

Respectfully yours,

Antoine Kazzi, MD, FAAEM
President, American Academy of Emergency Medicine