Conflicts of Interest: Do You Have One?

Conflicts of interest. Everyone’s talking about them. Do you have one? They’re apparently bad. Or are they?

But what in the heck does “conflict of interest” even mean?

When you think about it, “conflict of interest” is a term of a type similar to those other PC favorites, “greed” and “fair share” (which, by the way, are two sides of the same coin): terms that are simply lobbed at someone in an attempt to gain the upper hand. Oh, and conflicts of interest prohibitions are the basis for termination, lawsuits, and arbitration without the right to conduct discovery.

Reality check: Life is filled with conflicts of interest. My interests are different than yours, your interests are different than mine, and both of our interests are different from that of a third person’s. So, we all have conflicts of interest and that doesn’t make it bad, it only makes it a fact that they exist.

In my work representing medical groups in their dealings with hospitals and health systems, I’m seeing more and more facilities imposing prohibitions on “conflicts of interest” via contract. And some are even attempting to impose “conflict of interest policies” on all affiliated physicians via the medical staff’s bylaws or rules.

What are those provisions? Are they simply a disguised form of covenant not to compete, which may or may not be legal? Are they restrictions on referrals outside of the hospital’s sphere, in violation of a number of federal laws? Are they, in essence, backhanded ways of requiring physicians to refer to the hospital, creating potentially, both federal anti-kickback statute and state law violations, and, depending on other terms involved, violations of Stark?

I don’t know exactly what a conflict of interest is, but beware if you’ve agreed not to have one. Because even the threat of one can be used as leverage for getting you to stop doing whatever it is that you’re doing or to prevent you from doing whatever it is that you want to do.

I know that hospitals don’t see it this way. All they ask is that you stop being greedy and give up a fair share (i.e., all) of your interests. After all, they deserve it.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com

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