Physician investment in startup device companies: debunking the myths

Physician entrepreneurship is on the rise; and investment by physicians in startup device companies is one manifestation of it. At the same time, there is increasing concern about potential conflicts of interest in physician business interests, given their fiduciary responsibility to their patients. There are multiple forms such investment can take. The Stark and anti-kickback statutes are relevant to investment in companies that do business with the federal programs. Many physicians are confused about the distinctions between these two statutes and their different requirements. This article elucidates these distinctions, describes a continuum of safety associated with such investment, and offers some practical tips for those considering or involved in such arrangements.