What Is Meant By A Partnership Agreement Among Hospitals

All partnerships should review and update their agreements to reflect the current legal framework, including the GMS/PMS. An agreement prepared prior to the introduction of the GMS/PMS will almost certainly contain provisions that are obsolete, superfluous, or even conflict with the terms of an NHS contract, which could lead to confusion or even termination of the contract, which could be disastrous in practice. With this goal, we need to think about each of our clinical service lines: are we the best on this service line? If not, can we become the best on our own? Or can we work with the best and bring that know-how to our community? This was not a new way of thinking for us: for more than a decade, we have had a successful partnership with Lurie Children`s Hospital in Chicago. With a shared expense model, we are in charge of entrusting our paediatric hospitalization program and bringing neonatologists to our nursery. We were determined to broaden that idea. GMS and PMS contracts may be awarded to limited companies whose action is legally and advantageously owned by a physician and whose other shares are held by other qualified persons (including physicians, chiefs of staff, health professionals, GMS/PMS service providers, NHS employees or NHS trusts). Despite this increased flexibility, the vast majority of GMS and PMS practices continue to work on traditional partnerships. In many cases, members of a single limited partnership (LLP) also have limited liability. However, when the NHS contracts were negotiated in 2004, the P.L. was not considered and the regulations therefore do not allow LLPs to enter into GMS or PMS contracts. That may change in the future.

The two main buy/sale structures are cross-purchase agreements in which other shareholders purchase the shares or partnership shares of the outgoing partner and the share withdrawal agreement in which the company buys the shares of the outgoing owner. Life insurance is the most typical technique used to ensure that funds are available for cross-purchase transactions. With two partners in the same company, the solution is very simple, but requires more ingenuity to create with several shareholders. On the other hand, for share withdrawal contracts, the insurance would be written in favour of the company.



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