Medical Practice Partnership Agreement

MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(New Mexico — Court-Ready Template)

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Formation, Name, Purpose & Term
   3.2 Capital Contributions
   3.3 Allocation of Profits & Losses; Distributions
   3.4 Management & Voting
   3.5 Practice Licensing & Regulatory Compliance
   3.6 Compensation Methodology; Fee-Splitting Safeguards
   3.7 Books, Records & Accounting
   3.8 Banking & Spending Authority
   3.9 Partner Duties; Time Commitment; Outside Activities
   3.10 Admission, Withdrawal & Buy-Sell
   3.11 Restrictive Covenants (Non-Solicitation Only — Per NMSA § 24-1I / § 24A-4)
   3.12 Insurance & Risk Allocation
   3.13 Dispute Resolution

4. Representations & Warranties

5. Indemnification
6. Signatures

1. DOCUMENT HEADER

Partners / Members / Shareholders:

2. DEFINITIONS

3. OPERATIVE PROVISIONS

3.1 Formation, Name, Purpose & Term

The Partners form the Practice under the Act to render professional medical services in New Mexico. The Practice shall not engage in any activity prohibited to professional entities under NMSA § 53-6-3 (PC) or § 53-19-9.1 (PLLC). Term: perpetual unless dissolved per Section 3.10.

3.2 Capital Contributions

Additional capital calls require [unanimous / supermajority] approval.

3.3 Allocation of Profits & Losses; Distributions

Profits, losses, and distributions allocated pro rata to ownership unless otherwise agreed in writing. Distributions occur [monthly / quarterly] after reserves for malpractice tail, taxes, and working capital.

3.4 Management & Voting

☐ Managing Partner: [NAME]. ☐ Board of Directors / Managers (see Schedule A).

Major decisions requiring [unanimous / supermajority] approval:

☐ Admission or expulsion of a Partner
☐ Sale or merger of the Practice
☐ Borrowing exceeding $[______]
☐ Acquisition or disposition of material assets
☐ Adoption of compensation methodology
☐ Amendment of this Agreement

3.5 Practice Licensing & Regulatory Compliance

Each Partner shall maintain in good standing: (a) NM Medical Board license under NMSA § 61-6-1 et seq.; (b) DEA registration; (c) any specialty board certification represented to patients; and (d) participation in CME required by NM Medical Board rules. The Practice shall comply with HIPAA, the NM Medical Practice Act, and all applicable federal/state fraud-and-abuse laws (Stark, Anti-Kickback, NM analogs).

3.6 Compensation Methodology; Fee-Splitting Safeguards

Partner compensation may be productivity-based (RVU, collections), salary-plus-bonus, or formula-driven, provided that:

☐ No payment constitutes prohibited fee-splitting under NMSA § 61-6-15 or rules of the NM Medical Board.
☐ No payment is conditioned on referrals in violation of the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) or Stark Law (42 U.S.C. § 1395nn).
☐ All physician compensation is fair market value and commercially reasonable.

3.7 Books, Records & Accounting

Accrual basis; fiscal year ending [__________]. Annual audit/review by [CPA FIRM]. Each Partner has reasonable inspection rights.

3.8 Banking & Spending Authority

Single-signature limit: $[______]. Above that threshold, two Partner signatures required.

3.9 Partner Duties; Time Commitment; Outside Activities

Each Partner devotes [____]% professional effort to the Practice. Outside clinical activities require Board consent. Each Partner owes fiduciary duties of loyalty and care to the Practice.

3.10 Admission, Withdrawal & Buy-Sell

Payment terms: [LUMP SUM / installments over __ years at __% interest], secured by [collateral].

3.11 Restrictive Covenants (Non-Solicitation Only — Per NMSA § 24-1I / § 24A-4)

CRITICAL NEW MEXICO LIMITATION. Under NMSA § 24-1I-2 (recompiled at § 24A-4-2 effective July 1, 2024), a non-compete provision restricting a Healthcare Practitioner's right to provide clinical health-care services is void, unenforceable, and against public policy upon termination of the agreement, any renewal/extension, or the Practitioner's employment. The 2023 amendments expanded coverage to include psychologists, physician assistants, and pharmacists (in addition to physicians, osteopaths, CRNAs, certified nurse-midwives, and nurse practitioners).

Accordingly:

☐ No Partner shall be subject to any post-termination non-compete provision restricting clinical practice in New Mexico.
☐ Choice-of-law and forum-selection clauses applying another state's law to circumvent § 24A-4-2 are likewise void per the statute.
☐ The Practice MAY enforce the following permitted restrictions, subject to reasonableness and current NM law:

• Non-Solicitation of Practice Employees for [12] months post-termination.
• Non-Solicitation of Patients via Active Solicitation (passive treatment of patients who independently follow the departing Partner is not restricted).
• Confidentiality of trade secrets, patient lists, and proprietary protocols (perpetual).
• Return of Practice Property upon termination.

3.12 Insurance & Risk Allocation

☐ Professional liability (malpractice): $[___]M per claim / $[___]M aggregate per Partner.
☐ Tail coverage purchased upon Partner departure; cost allocated [Practice / departing Partner].
☐ General liability, cyber/HIPAA, workers' comp, employment practices liability.

3.13 Dispute Resolution

Disputes shall first proceed to mediation in [COUNTY], New Mexico. Unresolved disputes shall be resolved by binding arbitration before [JAMS / AAA] under its commercial rules, seated in New Mexico. New Mexico law governs (consistent with § 24A-4-2's prohibition on out-of-state choice-of-law for healthcare practitioner agreements).

4. REPRESENTATIONS & WARRANTIES

Each Partner represents: (a) active NM Medical Board license in good standing; (b) no pending disciplinary actions, Medicare/Medicaid exclusions, or felony convictions; (c) authority to enter this Agreement; (d) no conflicting restrictive covenants from prior employers (subject to § 24A-4-2).

5. INDEMNIFICATION

The Practice indemnifies Partners for acts within the scope of practice duties to the extent permitted by NMSA § 53-6-9 (PC) or § 53-19-32 (LLC). No indemnification for gross negligence, willful misconduct, fraud, or acts outside the scope of license.

6. SIGNATURES

Notary acknowledgment for each signature attached.

SOURCES AND REFERENCES

• NMSA 1978, § 53-6-1 et seq. — Professional Corporation Act.
• NMSA 1978, § 53-19-1 et seq. — NM Limited Liability Company Act.
• NMSA 1978, § 61-6-1 et seq. — Medical Practice Act (NM Medical Board).
• NMSA 1978, § 61-6-15 — Unprofessional conduct; verify current fee-splitting subsection.
• NMSA 1978, § 24-1I-1 et seq. / § 24A-4-1 et seq. (recompiled eff. July 1, 2024) — Health Care Practitioner Agreements (non-compete ban; 2023 amendments expanded to psychologists, PAs, pharmacists).
• 42 U.S.C. § 1320a-7b (Anti-Kickback Statute); 42 U.S.C. § 1395nn (Stark Law).