February 20, 2020

QUESTION:        We’re thinking of a joint venture with a company who we don’t know that well.  What should we watch out for?

ANSWER:           Any time you are thinking of a joint venture with anyone who you have not dealt with before, you should do your homework and conduct due diligence in much the same way you would in a merger, although not quite as intense.  Among other things, make sure you know who all the owners of your potential joint venture partner are.  Run a background check on them and also check the OIG exclusion list to see if they are on it.  Check with others who have done business with them before.  And make sure they have the financial wherewithal to bear their share of start-up costs.

These are only a few questions.  There are a lot of other things you should look into from a tax, antitrust and fraud and abuse perspective.

For more on what you should look for when considering a joint venture, check out Horty Springer’s recent podcast “Thinking of a Joint Venture?  Look Before You Leap!” by  Dan Mulholland  and  Henry Casale at our Health Law Expressions page; or even better, join Henry and Dan in Chicago on April 23 – 25 for the Physician-Hospital Contracts Clinic where they will discuss this and other hot compliance topics in detail.