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NEW JERSEY REGISTER
VOLUME 38, ISSUE 24
ISSUE DATE: DECEMBER 18, 2006
PUBLIC NOTICES
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
BOARD OF MEDICAL EXAMINERS

N.J.A.C. 13:35-6.16
Notice of Final Action on Petition for Rulemaking

Professional Practice Structure
Petitioner: Kern Augustine Conroy & Schoppman, P.C.

Authority: N.J.S.A. 52:14B-4.

Take notice that, on September 22, 2006, the Board of Medical Examiners (Board) received a petition for rulemaking from Kern Augustine Conroy & Schoppmann, P.C., without identification of the client, requesting that N.J.A.C. 13:35-6.16(f) be amended to allow physicians who are not licensed in New Jersey to become members of a New Jersey medical practice LLC, as long as the foreign practitioners own less than a majority of the membership interest in the LLC and do not engage in the professional practice of medicine in New Jersey. See 38 N.J.R. 4762(a).

On November 28, 2005, the Board previously received a petition for rulemaking from petitioner, requesting on behalf of its client, Children's Health Associates, LLC , that the Board amend its regulation governing acceptable professional practice forms, N.J.A.C. 13:35-6.16(f), to permit physicians who are not licensed in New Jersey to become members of a New Jersey medical practice limited liability company (LLC), as long as the foreign practitioners own less than a majority of the membership interest in the LLC and do not engage in the professional practice of medicine in New Jersey. The Board denied that petition on the grounds that N.J.A.C. 13:35-6.16(f) was intended to extend to the LLC practice form the Professional Service Corporations Act's requirement in N.J.S.A. 14A:17-5(a) that all members of a professional medical corporation be licensed in New Jersey and be accountable to the Board. The Board further based its decision on the fact that this requirement is necessary to ensure its unencumbered oversight and disciplinary control over the conduct of medical practices in this State. See 36 N.J.R. 1608(b).

The petitioner now makes the argument that the Board erred in its reliance upon N.J.S.A. 14A:17-5 to deny its previous petition. The petitioner argues that, although N.J.S.A. 14A:17-5(a), which is applicable to Board licensees, explicitly states that "one or more persons, each of whom is duly licensed or otherwise legally authorized to render the same or closely allied professional service within this State, may organize and become a shareholder or shareholders of a professional corporation. . ." (emphasis added), the quoted statute does not prohibit shareholders from organizing and becoming shareholders of a professional corporation with others who are not licensed in New Jersey. It further argues that, since N.J.S.A. 14A:17-5(b), which addresses only professional legal corporations, allows for a foreign professional legal corporation as long as every shareholder or employee of the foreign professional legal corporation providing legal services in this State is an attorney-at-law licensed and eligible to practice in this State, physicians not licensed in New Jersey should be permitted to become part of a New Jersey medical practice, too. The petitioner contends that there are existing New Jersey medical practices which "will be forced to restructure" if the Board does not permit physicians who are not licensed in New Jersey to become members of a New Jersey medical practice LLC.

The Board finds that the bases for its original decision above remain intact. It further notes that the business and clinical operations in medical practices are too intimately connected to countenance the scenario petitioner promotes. Finally, the Board is disturbed by petitioner's argument that currently existing New Jersey medical practices "will be forced to restructure," given that its regulations at no time have authorized physicians who are not licensed in New Jersey to become members of a New Jersey medical practice corporation or LLC.

A copy of this notice has been mailed to the petitioner pursuant to N.J.A.C. 1:30-4.2.



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