Medical Practice Partnership / Operating Agreement (West Virginia)

MEDICAL PRACTICE PARTNERSHIP / OPERATING AGREEMENT (WEST VIRGINIA)

THIS AGREEMENT ("Agreement") is entered into on [__/__/____] by and among the persons identified as Members or Partners on Schedule A (each a "Member" and collectively, the "Members"), with respect to the formation and operation of [PRACTICE LEGAL NAME], a West Virginia [☐ Professional Limited Liability Company ☐ Professional Corporation ☐ General Partnership] (the "Practice").

1. ENTITY, NAME, AND PURPOSE

Purpose. The Practice is organized solely to engage in the practice of medicine and ancillary services lawful for a physician practice under W. Va. Code § 30-3-1 et seq.

2. ELIGIBILITY OF MEMBERS / SHAREHOLDERS

Each Member (or shareholder, if a professional corporation) must:

Loss of WV licensure automatically terminates the right to hold an equity interest, subject to mandatory redemption under §12.

3. CAPITAL CONTRIBUTIONS AND INTERESTS

Additional Capital Calls. Additional capital may be required by [☐ unanimous ☐ supermajority __%] vote of Members.

4. MANAGEMENT AND GOVERNANCE

Management Structure. ☐ Member-managed ☐ Manager/Board-managed.

Managing Physician / Medical Director: [______________________] — must hold an active WV medical license.

Voting. Except where this Agreement or West Virginia law requires otherwise, decisions are by majority vote (per capita / pro rata as elected): ☐ per capita ☐ pro rata.

Supermajority / Unanimous Actions require [☐ unanimous ☐ __%] consent:

• Admission of a new Member
• Sale or merger of the Practice
• Amendment of this Agreement
• Incurring debt above $[_______]
• Approval of contracts with referral sources
• Change of entity form or tax status
• Dissolution

5. COMPENSATION AND DISTRIBUTIONS

6. FEE-SPLITTING AND REFERRAL COMPLIANCE

Consistent with W. Va. Code § 30-3-14, the Practice and its Members shall not:

• Request, receive, or pay any payment, rebate, refund, commission, credit, or other valuable consideration for the referral of patients;
• Refer a patient to any clinical laboratory, pharmacy, or other entity in which a Member holds a proprietary interest without written disclosure to the patient; or
• Enter any arrangement violating the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) or the Stark Law (42 U.S.C. § 1395nn).

All written disclosures of proprietary interests required by § 30-3-14 shall be maintained in the patient record and Practice compliance file.

7. PROFESSIONAL AUTONOMY AND CLINICAL DECISIONS

Clinical decisions concerning the diagnosis, treatment, and care of patients are reserved exclusively to physician Members and other licensed clinicians acting within their scope. No non-physician person or entity shall direct or interfere with the independent medical judgment of any clinician of the Practice.

8. RECORDS, BILLING, AND COMPLIANCE

9. PROFESSIONAL LIABILITY INSURANCE

Each Member shall maintain professional liability insurance with minimum limits of $[1,000,000] per claim / $[3,000,000] aggregate, written on either an occurrence basis or claims-made basis with tail coverage of at least [____] years upon separation. The Practice shall maintain an entity policy of like coverage. The Medical Professional Liability Act (W. Va. Code § 55-7B-1 et seq.) governs covered claims.

10. NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY

Non-Compete. During each Member's tenure and for a period of [____] months/years thereafter, the Member shall not practice medicine within a radius of [____] miles of any office of the Practice, except as expressly permitted by the Practice in writing.

Non-Solicitation. For [____] months following separation, the Member shall not solicit patients seen at the Practice during the [____] months preceding separation, or solicit employees or contractors of the Practice.

Confidentiality. Members shall protect all confidential business information, trade secrets, and PHI of the Practice consistent with HIPAA and applicable WV law.

Buy-Out of Non-Compete (optional). A departing Member may elect to be released from the geographic restriction upon payment of $[_______] (liquidated, not penalty).

Severability / Blue Pencil. If any restriction is held overbroad, the court is authorized to modify and enforce it to the maximum extent permitted by West Virginia law.

11. TRANSFER, ADMISSION, AND REDEMPTION

Restrictions on Transfer. No Member may transfer an interest except to a physician licensed in WV and admitted by the requisite vote under §4.

Mandatory Redemption Events. Upon any of the following, the Member's interest shall be redeemed:

• Death
• Permanent disability (as defined)
• Loss, suspension, or material restriction of WV medical license
• Federal healthcare program exclusion
• Felony conviction or moral-turpitude misdemeanor relating to practice
• Voluntary withdrawal upon [____] days' notice
• Termination for cause

Valuation Method: ☐ Agreed annual value ☐ Formula (e.g., __ × trailing 12-month earnings + capital account) ☐ Independent appraisal.

Payment Terms: [____]% at closing; balance over [____] years at [____]% interest, evidenced by promissory note.

12. DISPUTE RESOLUTION

Governing law: West Virginia, without regard to conflict-of-laws principles.

13. DISSOLUTION AND WINDING UP

Dissolution upon: (a) unanimous Member consent; (b) sale of substantially all assets; (c) loss of certificate of authorization; or (d) event making continuation unlawful. Upon dissolution, assets are applied first to creditors, then to capital accounts, then to Members pro rata, in accordance with W. Va. Code §§ 31B-8-806 (PLLC) or 31E (corporation), as applicable.

14. MISCELLANEOUS

• Entire Agreement; Amendment. This Agreement is the entire agreement and may be amended only as set forth in §4.
• Notices. In writing to each Member's address on Schedule A.
• Counterparts; Electronic Signatures. Permitted under the WV Uniform Electronic Transactions Act.
• Severability. Per §10 and generally.

SIGNATURES

SCHEDULE A — MEMBERS, ADDRESSES, AND CAPITAL

SOURCES AND REFERENCES

• W. Va. Code § 30-3-1 et seq. — West Virginia Medical Practice Act.
• W. Va. Code § 30-3-14 — Unprofessional conduct; fee-splitting; referral disclosure.
• W. Va. Code § 31E (Business Corporation Act) — professional corporation chartering.
• W. Va. Code § 31B-13-1301 et seq. — Professional limited liability companies.
• W. Va. Code § 55-7B-1 et seq. — Medical Professional Liability Act.
• Reddy v. Community Health Foundation of Man, 171 W. Va. 368, 298 S.E.2d 906 (1982) — physician restrictive covenants.
• WV Board of Medicine — Medical Corporation certificate of authorization rules.
• 42 U.S.C. § 1320a-7b (Anti-Kickback); 42 U.S.C. § 1395nn (Stark Law) — federal compliance.