Medical Practice Partnership Agreement (Nebraska)

MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Nebraska – Court-Ready Template)

TABLE OF CONTENTS

1. Document Header and Recitals
2. Definitions
3. Operative Provisions
4. Representations and Warranties
5. Covenants and Restrictions
6. Default and Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER AND RECITALS

This MEDICAL PRACTICE PARTNERSHIP AGREEMENT (the "Agreement") is entered into as of [EFFECTIVE DATE] by and among [FULL LEGAL NAME OF PARTNER A], [FULL LEGAL NAME OF PARTNER B], and any other Persons admitted as Partners pursuant hereto (each a "Partner" and collectively, the "Partners").

RECITALS

A. Each Partner is a duly licensed physician authorized to practice medicine in the State of Nebraska under the Nebraska Medical Practice Act, Neb. Rev. Stat. § 38-2001 et seq. (within the Uniform Credentialing Act, § 38-101 et seq.).

B. The Partners desire to associate as a partnership for the practice of medicine and to govern their relationship by this Agreement.

C. The Partners intend that this Agreement comply with all applicable Nebraska and federal laws, including without limitation the Nebraska Uniform Partnership Act of 1998 (Neb. Rev. Stat. § 67-401 et seq.), the Nebraska Professional Corporation Act (§ 21-2201 et seq.) (to the extent the Partners elect to operate through a professional corporation), the Nebraska Uniform Limited Liability Company Act (§ 21-101 et seq.) (to the extent the Partners elect a professional LLC structure), the Uniform Credentialing Act, and the federal Anti-Kickback Statute and Stark Law.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the Partners agree as follows:

2. DEFINITIONS

"Affiliate" means, with respect to a Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.

"Applicable Law" means (a) the Nebraska Medical Practice Act and Uniform Credentialing Act; (b) the Nebraska Uniform Partnership Act of 1998; (c) where applicable, the Nebraska Professional Corporation Act and the Nebraska Uniform LLC Act; (d) the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and Stark Law (42 U.S.C. § 1395nn); and (e) all other federal, state, and local statutes, regulations, rules, and orders applicable to the Practice and the Partners.

"Capital Account" means, with respect to each Partner, such Partner's capital account maintained in accordance with Section 3.2.

"Claim" means any demand, action, suit, proceeding, or investigation, whether civil, criminal, administrative, or otherwise.

"Gross Revenues" means all revenues, receipts, and other monies collected by the Partnership arising out of the Practice, exclusive of returns or refunds.

"Malpractice Claim" means any Claim alleging professional negligence, medical malpractice, or violation of professional standards in the rendering (or alleged failure to render) medical services.

"Person" means any individual, corporation, partnership, limited liability company, trust, or other entity.

"Practice" means the medical practice operated by the Partnership under this Agreement.

"Professional Entity" means a Nebraska professional corporation under § 21-2201 et seq. or a Nebraska professional limited liability company under § 21-101 et seq., if elected.

3. OPERATIVE PROVISIONS

3.1 Formation, Name, Purpose, and Term

3.1.1 Formation. The Partners hereby form a professional partnership (the "Partnership") under the Nebraska Uniform Partnership Act of 1998, Neb. Rev. Stat. § 67-401 et seq., and Applicable Law.
3.1.2 Name. The Partnership shall conduct business as [PRACTICE NAME], or such other name approved by the Partners and registered as required by Nebraska law.
3.1.3 Purpose. The exclusive purpose of the Partnership is the practice of medicine and ancillary activities permissible for licensed physicians under Applicable Law. Only Persons licensed under the Nebraska Medical Practice Act may practice medicine through the Partnership.
3.1.4 Term. The Partnership shall commence on the Effective Date and continue until dissolved pursuant to this Agreement or Applicable Law.

3.2 Capital Contributions

(a) Initial Contributions. Each Partner shall contribute the property or cash specified on Schedule 1.
(b) Additional Contributions. No Partner shall be required to make additional Capital Contributions unless approved by [SUPER-MAJORITY THRESHOLD] of the Partners.

3.3 Allocation of Profits and Losses; Distributions

(a) Allocation. Profits and losses shall be allocated among the Partners pro rata in proportion to their Percentage Interests as set forth on Schedule 1, except as otherwise required by the Internal Revenue Code.
(b) Distributions. Subject to reserve requirements established by the Managing Partner(s), the Partnership shall distribute available cash at least [QUARTERLY/MONTHLY].

3.4 Management and Voting

3.4.1 Managing Partner(s). [NAME OR SELECTION MECHANISM] shall serve as the initial Managing Partner(s).
3.4.2 Authority. The Managing Partner shall oversee day-to-day operations, subject to the Reserved Matters set forth on Schedule 2.
3.4.3 Voting. Except where otherwise specified, actions require approval of Partners holding [SIMPLE MAJORITY/SUPER-MAJORITY] of Percentage Interests. Clinical judgment regarding patient care shall be reserved exclusively to the licensed physician Partner(s) responsible for the patient's care.

3.5 Practice Licensing and Regulatory Compliance

(a) Licensure. Each Partner shall maintain an active, unrestricted Nebraska physician license under § 38-2001 et seq.
(b) Entity Registration. The Partnership (or its Professional Entity, if elected) shall be properly registered with the Nebraska Secretary of State and any required filings made with the Nebraska Department of Health and Human Services.
(c) Practice-of-Medicine Restrictions. Although Nebraska does not formally codify a "corporate practice of medicine" doctrine, only licensed physicians may practice medicine; the Partnership shall ensure that no non-licensee directs or controls clinical decision-making or interferes with the physician-patient relationship.
(d) Continuing Education and Standards. Each Partner shall satisfy continuing education and renewal requirements under the Uniform Credentialing Act.

3.6 Compensation Methodology; Fee-Splitting Safeguards

(a) Compensation Policy. Partner compensation shall be determined under Schedule 3 and shall reflect bona fide services rendered.
(b) Fee-Splitting Prohibition. Compensation arrangements shall comply with Neb. Rev. Stat. § 38-179, which prohibits division of fees with any Person for bringing or referring a consumer, except (i) with a partner or employee of the credential holder, (ii) with a landlord pursuant to a written rental agreement based on gross receipts, or (iii) with a former partner or employee under a bona fide retirement arrangement.
(c) Federal Compliance. Billing and compensation shall comply with the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and Stark Law (42 U.S.C. § 1395nn), including applicable safe harbors.
(d) Billing. The Partnership shall bill in its own name and comply with all federal and state fraud-and-abuse laws.

3.7 Books, Records, and Accounting

(a) Fiscal Year. Ends [DATE].
(b) GAAP. Books and records shall be maintained in accordance with generally accepted accounting principles.
(c) Access Rights. Each Partner may, upon reasonable notice, inspect and copy the Partnership's books and records during normal business hours.

3.8 Banking and Spending Authority

All funds shall be deposited in accounts in the Partnership's name. Two authorized signatories (at least one Managing Partner) shall be required for disbursements above [$ THRESHOLD].

3.9 Partner Duties; Time Commitment; Outside Activities

(a) Fiduciary Duties. Each Partner owes the Partnership and other Partners fiduciary duties of loyalty and care under Neb. Rev. Stat. § 67-409.
(b) Minimum Clinical Hours. Each Partner shall devote not less than [HOURS/WEEK] to the Practice.
(c) Outside Activities. A Partner may engage in outside professional activities only if such activities do not conflict with the Partnership's interests or violate Section 5.3.

3.10 Admission, Withdrawal, and Buy-Sell

Procedures for admission of new Partners, voluntary withdrawal, expulsion, disability, death, and mandatory buy-sell pricing are set forth on Schedule 4.

4. REPRESENTATIONS AND WARRANTIES

4.1 By Each Partner. Each Partner represents and warrants:
(a) Licensure. The Partner holds an active, unrestricted Nebraska physician license.
(b) No Restrictions. The Partner is not subject to any suspension, probation, or limitation by the Nebraska Department of Health and Human Services or any other governmental body.
(c) Authority. The Partner has full power and authority to enter into this Agreement.
(d) No Conflicts. Execution does not violate any other agreement or court order binding on the Partner.

4.2 Survival. Representations and warranties survive until [X] years after a Partner ceases to be a Partner.

5. COVENANTS AND RESTRICTIONS

5.1 Compliance with Laws. Each Partner shall comply with all Applicable Laws, ethical standards, and payer requirements.

5.2 Confidentiality. Partners shall maintain patient confidentiality and protect proprietary information consistent with HIPAA and Nebraska law.

5.3 Non-Competition and Non-Solicitation.
(a) Reasonable Restriction. During the term and for [TWO (2)] years thereafter, no Partner shall establish or join a competing medical practice within a [10-MILE] radius of any office of the Partnership.
(b) Non-Solicitation. During the same period, no Partner shall solicit any patients or employees of the Partnership for competing services.
(c) Nebraska "Rule of Reason." The Parties acknowledge that Nebraska enforces non-compete covenants under a reasonableness standard; restraints must be reasonable in time, geographic scope, and activity restricted, and must protect a legitimate business interest without imposing undue hardship on the restricted Partner or harming the public. See, e.g., Securities Acceptance Corp. v. Brown, 171 Neb. 247 (1960). Nebraska courts generally do not "blue-pencil" overbroad covenants; the restrictions in this Section have been narrowly tailored.

5.4 Notice of Regulatory Issues. A Partner who receives notice of any investigation, claim, or disciplinary action shall notify the Managing Partner within [5] business days.

6. DEFAULT AND REMEDIES

6.1 Events of Default.
(a) Material breach not cured within [30] days after written notice;
(b) Loss, suspension, or restriction of Nebraska medical license;
(c) Conviction of a felony or crime involving moral turpitude;
(d) Gross negligence or willful misconduct resulting in material harm to the Partnership.

6.2 Remedies. Upon an Event of Default, the non-defaulting Partners may:
(a) Suspend the defaulting Partner's voting and distribution rights;
(b) Require the defaulting Partner to sell his or her Partnership Interest under Schedule 4;
(c) Seek injunctive relief or specific performance;
(d) Recover damages, costs, and reasonable attorneys' fees.

7. RISK ALLOCATION

7.1 Malpractice Indemnification

Each Partner (the "Indemnifying Partner") shall indemnify, defend, and hold harmless the Partnership and the other Partners from any Malpractice Claim arising out of the Indemnifying Partner's professional acts or omissions, except to the extent covered by the Partnership's professional liability insurance.

7.2 Limitation of Liability

The aggregate liability of any Partner to the Partnership and the other Partners for Malpractice Claims shall not exceed the lesser of (a) the limits of the professional liability insurance maintained by such Partner under Section 7.3, or (b) [$ AMOUNT].

7.3 Insurance Requirements

(a) Minimum Coverage. The Partnership shall maintain professional liability insurance with limits of not less than [$1,000,000 per claim / $3,000,000 aggregate], or such greater amounts as may be required to qualify under the Nebraska Hospital-Medical Liability Act, Neb. Rev. Stat. § 44-2801 et seq., if elected.
(b) Tail Coverage. Departing Partners shall obtain tail coverage for not less than [X] years post-departure.

7.4 Force Majeure

No Partner shall be liable for failure to perform (other than payment obligations) due to events beyond reasonable control, including acts of God, pandemics, government orders, or labor disputes.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement is governed by the laws of the State of Nebraska, without regard to conflict-of-laws principles.

8.2 Forum Selection. Any court action permitted under this Section shall be brought exclusively in the state district court of [COUNTY], Nebraska.

8.3 Arbitration. Except for (a) actions for injunctive relief under Sections 5 or 6, and (b) collection of undisputed monetary obligations, all disputes shall be resolved by binding arbitration administered by [ARBITRATION PROVIDER] in accordance with its healthcare rules and the Nebraska Uniform Arbitration Act, Neb. Rev. Stat. § 25-2601 et seq. (as applicable).
(a) Location. [CITY], Nebraska.
(b) Arbitrator Qualification. A retired judge or attorney with at least ten (10) years' experience in healthcare law.
(c) Discovery. Limited to that necessary for fair resolution.
(d) Award. Final and judgment may be entered in any court of competent jurisdiction.

8.4 Jury Waiver. To the extent permitted by Applicable Law, each Party irrevocably waives the right to trial by jury in any action relating to this Agreement.

8.5 Injunctive Relief. Each Party acknowledges that breach of Sections 5.2 (Confidentiality) or 5.3 (Non-Competition/Non-Solicitation) would cause irreparable harm and agrees that injunctive relief may be granted without bond, subject to Nebraska law.

9. GENERAL PROVISIONS

9.1 Amendments; Waivers. This Agreement may be amended only by a written instrument signed by Partners holding at least [SUPER-MAJORITY THRESHOLD].

9.2 Assignment. No Partner may assign or encumber its Partnership Interest except as expressly permitted herein. Transfer to non-physicians is prohibited.

9.3 Successors and Assigns. This Agreement binds and benefits the Parties and their permitted successors and assigns.

9.4 Severability. If any provision is held invalid, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary, recognizing that Nebraska courts do not blue-pencil overbroad restrictive covenants.

9.5 Integration. This Agreement, including all Schedules, constitutes the entire understanding of the Parties.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and electronic signatures shall be deemed effective.

9.7 Notices. All notices shall be in writing and delivered to the addresses on Schedule 5.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Partners have executed this Agreement as of the Effective Date.

Pre-Execution Compliance Checklist

☐ Each signing Partner holds an active, unrestricted Nebraska physician license.
☐ Counsel has confirmed entity structure (general partnership / professional partnership / PC under § 21-2201 / PLLC under § 21-101).
☐ Compensation formulas reviewed against § 38-179 fee-splitting prohibition and federal AKS/Stark.
☐ Restrictive covenants narrowly tailored under Nebraska "rule of reason."
☐ Malpractice insurance procured at limits required by hospital privileges and any HMLA election.
☐ Buy-sell valuation methodology and funding mechanism reviewed.
☐ Non-physician ownership and clinical control restrictions confirmed.

SCHEDULE 1 – Capital Contributions, Percentage Interests, and Initial Capital Accounts

SCHEDULE 2 – Reserved Matters Requiring Partner Approval

[Insert list, e.g., sale of substantial assets, incurrence of debt over $X, relocation of main office, amendment of compensation formula.]

SCHEDULE 3 – Compensation Formula

[Insert RVU-based, collections-based, salary plus bonus, or hybrid methodology, ensuring compliance with Neb. Rev. Stat. § 38-179 and federal fraud-and-abuse rules.]

SCHEDULE 4 – Buy-Sell Provisions

[Include valuation method, payment terms, triggering events (death, disability, withdrawal, expulsion, license loss), and required security.]

SCHEDULE 5 – Notice Information

SOURCES AND REFERENCES

• Neb. Rev. Stat. § 21-2201 et seq. (Nebraska Professional Corporation Act)
• Neb. Rev. Stat. § 21-101 et seq. (Nebraska Uniform LLC Act, professional series)
• Neb. Rev. Stat. § 67-401 et seq. (Nebraska Uniform Partnership Act of 1998)
• Neb. Rev. Stat. § 38-101 et seq. (Uniform Credentialing Act)
• Neb. Rev. Stat. § 38-2001 et seq. (Medical Practice Act)
• Neb. Rev. Stat. § 38-178 (disciplinary actions – grounds)
• Neb. Rev. Stat. § 38-179 (unprofessional conduct, fee-splitting prohibition)
• Neb. Rev. Stat. § 44-2801 et seq. (Hospital-Medical Liability Act)
• Neb. Rev. Stat. § 25-2601 et seq. (Nebraska Uniform Arbitration Act)
• Securities Acceptance Corp. v. Brown, 171 Neb. 247 (1960) (non-compete reasonableness)
• 42 U.S.C. § 1320a-7b (Anti-Kickback Statute)
• 42 U.S.C. § 1395nn (Stark Law)