Medical Practice Partnership Agreement (Idaho)

DISCLAIMER (MANDATORY — DO NOT DELETE)
This template is intended as a starting point for forming or governing an Idaho medical group practice. Idaho permits physicians to practice through professional service corporations (I.C. § 30-1301 et seq.) or professional limited liability companies (I.C. § 30-25-101 et seq., read with I.C. § 30-21-901). True general partnerships are uncommon for medical practice today and offer no liability shield; this agreement is drafted as a hybrid that can be adapted to a PSC, PLLC, or general partnership form. Engage qualified Idaho counsel before use.

MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Idaho — Professional Group Practice Governance Agreement)

This Medical Practice Partnership Agreement (this "Agreement") is made and entered into as of [__/__/____] (the "Effective Date") by and among the persons identified on Schedule A as the founding owners (each a "Partner" or "Member" and collectively the "Partners"), each of whom is a physician duly licensed to practice medicine in the State of Idaho under the Idaho Medical Practice Act, I.C. § 54-1801 et seq.

I. RECITALS

A. The Partners desire to associate for the purpose of practicing medicine in the State of Idaho through [PROFESSIONAL SERVICE CORPORATION / PROFESSIONAL LIMITED LIABILITY COMPANY / GENERAL PARTNERSHIP] (the "Practice").

B. Each Partner is duly licensed by the Idaho Board of Medicine to render the professional services contemplated under this Agreement.

C. The Partners intend that the Practice shall comply with the Idaho Medical Practice Act, the Idaho Professional Service Corporations Act (I.C. § 30-1301 et seq.) and/or the Idaho Uniform Limited Liability Company Act (I.C. § 30-25-101 et seq.), and applicable federal healthcare laws, including the federal Anti-Kickback Statute and the Stark Law.

II. ENTITY STRUCTURE

The Partners acknowledge that under I.C. § 30-21-901 and I.C. § 30-1304, only persons duly licensed to render the professional services for which the Practice is organized may hold equity in or be employed to render those services through the Practice.

III. CORPORATE PRACTICE OF MEDICINE (CPOM) ACKNOWLEDGMENT

The Partners acknowledge that:

1. Idaho does not have a codified, strictly enforced corporate practice of medicine doctrine; the Idaho Board of Medicine in 2016 disavowed the position that physicians may not be employed by non-physician entities, subject to compliance with the Idaho Medical Practice Act.
2. Notwithstanding the foregoing, only individuals licensed under I.C. § 54-1801 et seq. may engage in the practice of medicine. All medical decisions shall be made by, or under the appropriate supervision of, licensed physicians, physician assistants, or other appropriately licensed clinicians.
3. The Practice shall maintain clinical decision-making authority within the licensed clinicians of the Practice and shall not delegate such authority to any unlicensed owner, manager, investor, or management services organization.

IV. CAPITAL CONTRIBUTIONS

Additional capital calls require approval by [SUPERMAJORITY %] of the Partners. No Partner shall be required to make additional contributions except as approved in writing.

V. ALLOCATIONS, DISTRIBUTIONS, AND COMPENSATION

A. Compensation Formula. Partner compensation shall be determined under the formula set forth in Schedule B, which shall be reviewed annually. The formula may include base salary, productivity-based components, and quality/value metrics, provided that all variable compensation components comply with the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), the Stark Law (42 U.S.C. § 1395nn), and Idaho law prohibiting fee-splitting under I.C. § 54-1814(8).

B. No Prohibited Fee-Splitting. No Partner shall divide, share, split, or rebate any fee with any person, institution, or corporation in exchange for the referral of a patient or for any reason proscribed by I.C. § 54-1814(8) or applicable federal law.

C. Distributions. Distributions of available cash shall be made [QUARTERLY / ANNUALLY] in proportion to ownership percentages, after reserve set-asides approved by the Managing Partner.

VI. GOVERNANCE

A. Managing Partner / Board. The Practice shall be governed by [a Managing Partner / a Board of Directors / a Manager] appointed by majority vote of the Partners.

B. Reserved Matters. The following actions require approval of [SUPERMAJORITY %] of the Partners:

☐ Admission or expulsion of a Partner.
☐ Sale or merger of substantially all Practice assets.
☐ Incurrence of indebtedness exceeding $[________].
☐ Adoption or material amendment of the compensation formula.
☐ Entry into any management services agreement with a non-physician entity.
☐ Filing for bankruptcy or dissolution.

C. Day-to-Day Operations. The Managing Partner shall manage day-to-day operations consistent with Practice policies and this Agreement.

VII. ADMISSION OF NEW PARTNERS

New physician owners may be admitted upon:

1. Idaho medical licensure in good standing under I.C. § 54-1801 et seq.
2. Satisfactory credentialing and malpractice history review.
3. Approval by [SUPERMAJORITY %] of existing Partners.
4. Execution of a counterpart of this Agreement and any buy-in note.
5. Verification of eligibility to hold equity in a professional entity under I.C. § 30-1304 (PSC) or I.C. § 30-21-901 (PLLC).

VIII. WITHDRAWAL, RETIREMENT, DEATH, OR DISABILITY

A. A Partner may voluntarily withdraw upon [____] days' prior written notice.

B. Upon a Partner's death, disqualification (loss of Idaho medical license), or permanent disability, the Practice shall purchase the affected Partner's interest at the price determined under Schedule C.

C. Disqualified-equity rule: Under I.C. § 30-1304 and I.C. § 30-21-901, only duly licensed individuals may hold equity. A Partner who loses Idaho licensure must promptly transfer his or her interest to the Practice or to a qualified physician.

IX. RESTRICTIVE COVENANTS (I.C. § 44-2701 et seq.)

A. Statutory Framework. The Partners acknowledge that under I.C. § 44-2701 et seq., a written covenant restricting a "key employee" or "key independent contractor" from engaging in directly competitive employment after termination is enforceable if reasonable in duration, geographic scope, and type of employment, and not greater than necessary to protect legitimate business interests. Each Partner is a "key employee" within the meaning of the Act.

B. Non-Competition. For [____] months (not to exceed eighteen (18) months, the duration presumed reasonable under Idaho law) following the date a Partner ceases to be a Partner, such former Partner shall not provide medical services in direct competition with the Practice within a [____]-mile radius of any office of the Practice where such Partner provided substantial services during the twelve (12) months preceding departure.

C. Patient-Access Considerations. The Partners acknowledge that an Idaho court evaluating enforceability against a physician will consider the impact on patient access to care. Nothing in this Section shall be construed to prevent a former Partner from providing emergency care or from continuing to treat patients where reasonable access to alternative providers is unavailable.

D. Non-Solicitation. For [____] months following departure, the former Partner shall not solicit (i) patients with whom the Partner had a treating relationship at the Practice or (ii) employees of the Practice for employment elsewhere.

E. Confidentiality. Each Partner shall maintain in confidence all proprietary information of the Practice and shall comply with HIPAA and Idaho privacy laws regarding protected health information.

F. Reformation / Blue-Pencil. If any restrictive covenant is held overbroad, the parties consent to its judicial modification to the maximum scope enforceable under Idaho law.

X. INSURANCE AND INDEMNIFICATION

A. Professional Liability Insurance. Each Partner shall maintain professional liability (medical malpractice) insurance with limits not less than $[____] per claim / $[____] aggregate, with tail coverage upon departure paid by [__________].

B. Entity Coverage. The Practice shall maintain general liability, cyber/HIPAA, employment practices, and directors-and-officers coverage as appropriate.

C. Indemnification. The Practice shall indemnify each Partner to the fullest extent permitted by I.C. § 30-1305 (PSC) or I.C. § 30-25-408 (PLLC), as applicable, except for acts constituting gross negligence, intentional misconduct, or violation of law.

XI. COMPLIANCE PROGRAM

The Practice shall maintain a written compliance program addressing:

☐ HIPAA Privacy and Security Rules.
☐ Federal Anti-Kickback Statute and Stark Law.
☐ Idaho Medical Practice Act and Board of Medicine rules (IDAPA 22).
☐ Idaho controlled substances and prescription monitoring program rules.
☐ Mandatory reporting under I.C. § 54-1818.
☐ Fee-splitting prohibitions under I.C. § 54-1814(8).

XII. DISPUTE RESOLUTION

Any dispute arising under this Agreement shall first be submitted to good-faith negotiation, then to mediation in [COUNTY], Idaho. If unresolved, the dispute shall be submitted to binding arbitration under the rules of [AAA / JAMS] seated in [COUNTY], Idaho, applying Idaho substantive law. Notwithstanding the foregoing, any party may seek injunctive relief in a court of competent jurisdiction in Idaho to enforce restrictive covenants or to protect confidential information.

XIII. DISSOLUTION

The Practice may be dissolved upon (i) the affirmative vote of [SUPERMAJORITY %] of the Partners, (ii) the sale of substantially all assets, or (iii) any event causing dissolution under the Idaho Uniform Limited Liability Company Act or the Idaho Professional Service Corporations Act, as applicable. Upon dissolution, assets shall be applied first to creditors, then to return of capital, then to Partners in proportion to ownership percentages.

XIV. GENERAL PROVISIONS

A. Governing Law. This Agreement is governed by Idaho law, without regard to conflict-of-laws principles.

B. Venue. Venue for any non-arbitrable action lies in the District Court of [____] Judicial District, [COUNTY] County, Idaho.

C. Entire Agreement; Amendment. This Agreement, together with its Schedules, constitutes the entire agreement among the Partners and supersedes all prior agreements. It may be amended only by a writing signed by [SUPERMAJORITY %] of the Partners.

D. Severability. If any provision is held unenforceable, the remainder shall remain in effect.

E. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, including by electronic signature.

XV. EXECUTION

SCHEDULES

• Schedule A — Roster of Founding Partners and Capital Contributions
• Schedule B — Compensation Formula and Productivity Metrics
• Schedule C — Buy-Out Valuation Methodology (death, disability, withdrawal)
• Schedule D — Form of Joinder Agreement for New Partners
• Schedule E — Compliance Program Manual Reference

SOURCES AND REFERENCES

• Idaho Code Title 30, Chapter 13 (Professional Service Corporations Act)
• Idaho Code Title 30, Chapter 25 (Idaho Uniform LLC Act)
• Idaho Code § 30-21-901 (general professional entity provisions)
• Idaho Code Title 54, Chapter 18 (Idaho Medical Practice Act)
• Idaho Code § 54-1814 (grounds for medical discipline; fee-splitting)
• Idaho Code § 44-2701 et seq. (covenants protecting legitimate business interests)
• Idaho Board of Medicine guidance, IDAPA 22 (Bureau of Occupational Licenses — Medicine)
• 42 U.S.C. § 1320a-7b (Anti-Kickback Statute); 42 U.S.C. § 1395nn (Stark Law); HIPAA, 45 C.F.R. Parts 160 and 164