Medical Practice Partnership Agreement (District of Columbia)

DISCLAIMER (MANDATORY – DO NOT DELETE)
The District of Columbia does not formally adopt the corporate-practice-of-medicine doctrine in the strict form applied in some other states; nevertheless, fee-splitting, kickbacks, and certain ownership arrangements are constrained by the Health Occupations Revision Act (D.C. Code § 3-1201 et seq.), 17 DCMR § 4614, the federal Anti-Kickback Statute, and Stark. This template is a model only; obtain D.C. licensed legal review before use.

MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(District of Columbia)

ARTICLE I. FORMATION AND PURPOSE

1.1 Formation. The Partners form the Practice under the Uniform Partnership Act of 2010, D.C. Code § 29-301.01 et seq. (or, if applicable, organize the Practice as a professional entity under § 29-501 et seq.).

1.2 Lawful Medical Purpose. The sole purpose of the Practice is the lawful provision of medical services through duly licensed physicians and other licensed health professionals, in compliance with the Health Occupations Revision Act, D.C. Code § 3-1201 et seq.

1.3 Licensure Requirement. Each Partner shall at all times hold and maintain in good standing a license issued by the District of Columbia Board of Medicine (or the appropriate professional board for the Partner's discipline).

1.4 Term. The Practice commences on the Effective Date and continues until dissolved under Article XI.

ARTICLE II. DEFINITIONS

"Capital Account" – Each Partner's record of contributions, distributions, allocations of profits and losses.

"Highly Compensated Employee" – As defined in D.C. Code § 32-581.01(5A), an employee reasonably expected to earn annual compensation at or above the statutory minimum (the "HCE Threshold"). The 2022 floor was $150,000 ($250,000 for "medical specialists") and is adjusted annually for the Washington-MSA CPI; the Parties shall reference the threshold in effect on the date a covenant is signed.

"Medical Specialist" – As defined in D.C. Code § 32-581.01, a licensed physician engaged primarily in providing medical services in a recognized specialty after completion of accredited residency training.

"Practice Assets" – All tangible and intangible property of the Practice, including patient lists, goodwill, EHR data, and contractual rights, but excluding individual professional reputation, independent licenses, and individual medical records as protected by law.

"Protected Health Information / PHI" – As defined in 45 C.F.R. § 160.103.

ARTICLE III. CAPITAL CONTRIBUTIONS

3.1 Initial Contributions.

3.2 Additional Contributions. Required only on unanimous written consent of the Partners.

3.3 No Interest on Capital. No Partner is entitled to interest on Capital Account balances except as expressly provided.

ARTICLE IV. ALLOCATIONS, DRAWS, AND DISTRIBUTIONS

4.1 Profits and Losses. Net profits and losses are allocated in proportion to Percentage Interests, except as adjusted by Section 4.2.

4.2 Productivity-Based Compensation. A portion of net professional revenue may be allocated based on collected professional fees attributable to each Partner's personally performed services, provided the formula is structured to comply with the Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), Stark (42 U.S.C. § 1395nn), and 17 DCMR § 4614 (no compensation for referrals; no improper fee-splitting with non-licensees).

4.3 Periodic Draws. Monthly draws as set by the Managing Partner / Executive Committee, subject to working-capital reserve.

4.4 Tax Distributions. Annual distributions sufficient to cover each Partner's reasonably estimated federal, D.C., and other tax liability on allocated income.

ARTICLE V. GOVERNANCE

5.1 Management. ☐ Managing Partner [NAME] ☐ Executive Committee of [N] Partners. Day-to-day operations are delegated to the Managing Partner / Practice Administrator subject to the Partners' reserved powers in § 5.3.

5.2 Meetings. Regular partnership meetings held at least quarterly; written notice not less than seven (7) days; quorum = majority by Percentage Interest.

5.3 Reserved Matters (Unanimous Consent Required).

• ☐ Admission of a new Partner;
• ☐ Sale, merger, dissolution, or sale of substantially all Practice Assets;
• ☐ Borrowing in excess of [$____];
• ☐ Amendment of this Agreement;
• ☐ Acquisition or disposition of real property;
• ☐ Capital call;
• ☐ Initiation of bankruptcy.

5.4 Clinical Autonomy. Notwithstanding any administrative governance provision, no business decision shall override the independent clinical judgment of any licensed Partner with respect to patient care, consistent with D.C. Code § 3-1201 et seq.

ARTICLE VI. PARTNER OBLIGATIONS AND CONDUCT

6.1 Devotion of Time. Each full-time Partner shall devote substantially all professional time to the Practice; outside professional services require written consent of the Partners.

6.2 Standard of Care. Each Partner shall practice consistent with the prevailing professional standard of care and applicable D.C. Board of Medicine rules.

6.3 Compliance Program. The Practice maintains written compliance policies addressing HIPAA, Anti-Kickback, Stark, fee-splitting (17 DCMR § 4614), billing integrity, and OSHA. Each Partner annually attests to receipt and review.

6.4 Insurance. The Practice maintains professional liability insurance for each Partner with limits not less than [$____] per claim / [$____] aggregate, plus tail coverage as required.

6.5 No Improper Fee-Splitting or Kickbacks. No Partner shall offer or accept anything of value in exchange for the referral of patients or the recommendation of items or services for which payment may be made by a federal health-care program, in violation of 42 U.S.C. § 1320a-7b or 17 DCMR § 4614.

ARTICLE VII. ADMISSION, WITHDRAWAL, AND TRANSFER

7.1 Admission. New Partners admitted only on unanimous consent and execution of a joinder.

7.2 Voluntary Withdrawal. A Partner may withdraw on not less than ninety (90) days' written notice; withdrawal does not dissolve the Practice unless otherwise provided by law.

7.3 Death, Disability, Loss of License, or Cause. A Partner is automatically deemed withdrawn upon (a) death; (b) Permanent Disability (as defined); (c) revocation, suspension, or surrender of license under the Health Occupations Revision Act; (d) exclusion from a federal health-care program; or (e) "Cause" (felony, fraud, gross misconduct).

7.4 Buy-Out. The Practice (or remaining Partners pro rata) shall purchase the withdrawing Partner's interest at the price determined under Schedule A (Valuation Methodology), payable over [__] months.

7.5 Transfer Restrictions. No Partner may transfer or pledge any interest without unanimous consent; any non-licensee transferee shall hold only an economic interest to the maximum extent permitted by D.C. Code § 29-505 et seq. and the Health Occupations Revision Act.

ARTICLE VIII. RESTRICTIVE COVENANTS

8.1 Non-Solicitation of Patients. For [TWELVE (12) / TWENTY-FOUR (24)] months after withdrawal, the former Partner shall not knowingly and directly solicit patients of the Practice last seen by the Practice within the twelve (12) months preceding withdrawal, except for patients with whom the former Partner had a personal physician-patient relationship before joining the Practice.

8.2 Non-Solicitation of Employees. For [TWELVE (12)] months after withdrawal, the former Partner shall not solicit any employee or contractor of the Practice for employment elsewhere.

8.3 Confidentiality. Each Partner shall hold all non-public Practice information (including business plans, payor contracts, and trade secrets) in strict confidence indefinitely. Patient PHI is governed independently by HIPAA and District law and may not be used or disclosed except as permitted by law.

8.4 Non-Compete (Conditional – HCE / Medical Specialist Only).
☐ Applicable. Where a covered Partner is, on the date of execution, a "Highly Compensated Employee" or "Medical Specialist" at or above the then-current CPI-adjusted threshold under D.C. Code § 32-581.01, and where the formalities of § 32-581.01b have been satisfied (written notice not less than fourteen (14) days before execution and again fourteen (14) days before commencement of work, plus inclusion of the statutorily required disclosure language), the Partner agrees that for [TWELVE (12)] months after withdrawal the Partner shall not establish or join a competing medical practice within a [____]-mile radius of any Practice office in the District of Columbia.
☐ Not applicable. No post-employment non-compete is imposed; the Practice relies solely on §§ 8.1–8.3.

8.5 Reasonableness; Reformation. If any restriction is held overbroad, the court is requested to reform it to the broadest restriction permitted by D.C. law.

ARTICLE IX. RECORDS, PHI, AND PATIENT NOTIFICATION

9.1 Medical Records Custodian. The Practice is the custodian of patient medical records and shall maintain them as required by D.C. Code § 3-1210.11 and HIPAA.

9.2 Patient Notification on Withdrawal. Where a Partner withdraws and continues to practice, the Practice and the withdrawing Partner shall coordinate written notification to active patients consistent with D.C. Board of Medicine guidance on continuity of care, and shall honor patient choice of provider. No covenant in this Agreement shall be construed to interfere with a patient's right to seek care from the practitioner of the patient's choice.

9.3 HIPAA. The Practice shall enter into Business Associate Agreements where required and shall maintain administrative, physical, and technical safeguards under 45 C.F.R. Part 164.

ARTICLE X. INDEMNIFICATION AND LIABILITY

10.1 Indemnification. The Practice shall indemnify each Partner to the fullest extent permitted by D.C. Code § 29-301.01 et seq. for liabilities incurred in good faith on Practice business, except for personal professional negligence, willful misconduct, or knowing violation of law.

10.2 No Indemnity for Personal Malpractice. Indemnification does not extend to a Partner's individual professional negligence; each Partner remains personally responsible and shall maintain professional liability insurance under § 6.4.

ARTICLE XI. DISSOLUTION AND WINDING UP

11.1 Events of Dissolution. (a) Unanimous written consent; (b) sale of substantially all Practice Assets; (c) judicial decree; (d) reduction to a single Partner for more than ninety (90) days.

11.2 Winding Up. Practice Assets shall be liquidated and applied: (i) to creditors; (ii) to tax reserves; (iii) to return Capital Accounts; (iv) to Partners pro rata.

11.3 Patient Records on Dissolution. Patient records shall be retained, transferred, or transmitted to a licensed custodian consistent with D.C. record-retention requirements; abandonment is prohibited.

ARTICLE XII. DISPUTE RESOLUTION

12.1 Governing Law. District of Columbia.

12.2 Mediation. Any dispute shall first be submitted to mediation in the District of Columbia.

12.3 Arbitration. Unresolved disputes (other than equitable claims to enforce §§ 8.1–8.4 or HIPAA) shall be finally resolved by binding arbitration in the District of Columbia under the AAA Commercial Rules.

12.4 Equitable Relief. Either Party may seek injunctive relief in the Superior Court of the District of Columbia to enforce confidentiality, non-solicitation, and non-compete obligations.

ARTICLE XIII. GENERAL PROVISIONS

13.1 Notices. In writing, sent to the addresses on the signature page.

13.2 Amendments. Only by writing signed by all Partners.

13.3 Severability. Invalid provisions are severable; remainder remains effective.

13.4 Integration. This Agreement plus Schedules is the entire agreement.

13.5 Counterparts; Electronic Signatures. Permitted.

EXECUTION

SCHEDULE A – VALUATION METHODOLOGY (BUY-OUT)

SCHEDULE B – PARTNER COMPENSATION FORMULA

SCHEDULE C – COMPLIANCE POLICIES

SOURCES AND REFERENCES

• D.C. Code § 29-301.01 et seq. (Uniform Partnership Act of 2010).
• D.C. Code § 29-501 et seq. (Professional Corporations / Professional Entities).
• D.C. Code § 3-1201 et seq. (Health Occupations Revision Act).
• 17 DCMR § 4614 (Medical practice rules – fee-splitting).
• D.C. Code § 32-581.01 et seq. (Ban on Non-Compete Agreements; D.C. Law 24-175, eff. October 1, 2022; CPI-adjusted thresholds since 2024).
• 42 U.S.C. § 1320a-7b (Federal Anti-Kickback Statute); 42 U.S.C. § 1395nn (Stark).
• 45 C.F.R. Parts 160, 164 (HIPAA).