New Guide Untangles Regulatory Web in Leasing MOBs, Healthcare Facilities

The staggering number of regulatory and patient safety issues that come into play when leasing healthcare facilities has led to the release of a timely guide entitled Understanding the Regulatory Issues in Leasing Medical Office Buildings and Healthcare Facilities.

Researched and authored by B. Alan Whitson, RPA – president of Corporate Realty, Design, and Management Institute, this guide details the labyrinth of legal issues that healthcare providers, property owners, investors, lenders, attorneys, architects, engineers, commercial real estate brokers and property managers must navigate.

Understanding the Regulatory Issues in Leasing Medical Office Buildings and Healthcare Facilities is available online at

Fueling the shift to leased rather than owned facilities is the explosive growth of urgent care centers and the popularity of placing outpatient clinics in traditional retail and office spaces. The number of retail clinics is projected to double by 2015, rising from 1,400 in 2012 to almost 2,900. The number of leased healthcare facilities will increase similarly.

“Real estate leases and the process of negotiating them is unfamiliar territory for many in healthcare,” says Whitson. “Equally, many on the other side of the negotiating table are dealing with healthcare tenants for the first time too. The regulatory environment for healthcare facilities is a tangled web of rules, regulations and guidelines from multiple federal, state and local agencies. It’s a place where – what you don’t know can hurt you financially – pain points include fines and losing the right to receive payments from Medicare and Medicaid programs.”

Because Medicare and Medicaid payments can account for 60 percent or more of a healthcare provider’s revenue, regulatory compliance by tenants is crucial for property owners and lenders. Yet, the need to comply with regulations is not exclusive to tenants. A failure by a landlord, including its employees and contractors, to follow any number of rules can lead to severe consequences for a healthcare tenant including civil and criminal penalties. To further complicate matters, common commercial lease provisions and practices can expose a landlord to fines and possible criminal prosecution.

“Remember ignorance of the law is not a defense, and sometimes no intent is needed to be in violation,” adds Whitson. “It’s easy for the actions of a property owner, tenant or other tenants in medical facility to have a negative impact on the other parties. Leasing healthcare facilities in today’s regulatory setting is similar to walking through a minefield. One misstep and you can be facing serious financial and legal problems.”

Understanding the Regulatory Issues in Leasing Medical Office Buildings and Healthcare Facilities offers a road map to key federal statutes from the DOJ, DOT, EPA, FDA, OSHA, Center for Medicare and Medicaid and Social Security Administration that apply to leasing and running medical facilities. Covered are:

  • Anti-Kickback and Stark Law
  • The False Claims Act
  • Fraud Enforcement and Recovery Act
  • Occupational Safety and Health Act
  • Controlled Substances Act
  • Clean Air Act
  • Clean Water Act
  • Toxic Substances Control Act
  • Comprehensive Environmental Response Compensation and Liability Act
  • Resource Conservation and Recovery Act
  • Federal Insecticide, Fungicide, Rodenticide Act
  • Americans with Disabilities Act, Rehabilitation Act and Fair Housing Act
  • Health Insurance Portability and Accountability Act
  • American Recovery and Reinvestment Act
  • Facility Guidelines Institute and The Joint Commission
  • Sample Lease Clauses
  • Section on Using the Electronic Code of Federal Regulations

Whitson speaks on healthcare, facility management, leasing and regulatory issues. His experience spans four decades and 40 million square feet of facilities worldwide. He is the author of multiple publications including 327 Questions to Ask Before You Sign a Lease.

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Posted December 10, 2014

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