Blog Feed
Healthcare
California’s New Electronic Prescription Law – AB 852
More and more states like California are requiring that doctors and any other health providers who have the authority to prescribe medications should prescribe medications electronically. California recently passed a law, Assembly Bill (AB) 2789, that requires that all prescriptions, effective January 1, 2022, issued by a licensed healthcare provider be submitted electronically. Healthcare providers who fail to comply with the new law may be subject to disciplinary action. According to the California Hospital Association, there are some exceptions. A few exceptions include: The technology or electrical failures prevent the prescription order from being sent. The prescription is dispensed from a non-California pharmacy. The prescription is “issued to a patient who has a terminal illness “pursuant to Section 11159.2 of the Health and Safety Code. Other exceptions to the electronic transmission requirement listed in the AB 852 statute include: Prescriptions issued pursuant to Section 11159.2 of the Health and Safety Code. A hospital emergency department or urgent care center issues the prescription and at least one of the following conditions apply:The patient resides outside of California or outside the hospital’s geographic area. The patient is homeless, indigent, and doesn’t have a preferred pharmacy. The prescription is issued “at a time when a patient’s regular or preferred pharmacy is likely to be closed.” A veterinarian is the prescriber. The prescription is for eyeglasses or contact lenses. “The prescribing health care practitioner and the dispenser are the same entity.” Other statutory conditions AB 852 provides that additional exceptions to the electronic data transmission prescription requirement may apply for prescribers who are registered with the California State Board of Pharmacy and who state that the prescriber meets the exception criteria – for example, that the prescriber issues 100 or fewer prescriptions each calendar year. AB 852 also provides “specified exceptions to the requirement for a pharmacy to immediately transfer an electronic prescription to an alternative pharmacy upon request of the patient, including if the action would result in a violation of any state or federal law.” The full list of exemptions is located at Section 688 of the California Business and Professions Code. The Board of Registered Nursing, according to the California Hospital Association, is recommending that licensed prescribers also have paper prescription forms “that meet the requirements of AB 149 should a technological or electrical failure prevent a prescription from being issued electronically.” The California state attorney general’s website has a list of approved security prescription printers. AB 852 – California Assembly (2021-2022) AB 852 states that prior to the January 1, 2022 effective date of the law, existing law: “Provides for the regulation of health care practitioners and requires prescription drugs to be ordered and dispensed in accordance with the Pharmacy Law. The Pharmacy Law provides that a prescription is an oral, written, or electronic data transmission order and requires electronic data transmission prescriptions to be transmitted and processed in accordance with specified requirements.” AB 852 requirements: AB 852 now: Requires that healthcare practitioners who are authorized to issues prescriptions – should have the capability to issue electronic data transmission prescriptions. Pharmacies, pharmacists, or other practitioners authorized to dispense medications should have the capability to receive electronic data transmission prescriptions. AB 852 also requires that: The pharmacy promptly notify the prescriber if the prescription order failed or there was a problem with the prescription order. Healthcare providers who issue “a prescription for a controlled substance” but don’t “transmit the prescription as an electronic data transmission prescription shall document the reason in the patient’s medical record as soon as practicable and within 72 hours of the end of the technological or electrical failure that prevented the electronic data transmission of the prescription.” Patients or people authorized on behalf of the patient may request that a pharmacy that has received an electronic data transmission prescription (from a healthcare provider who has not yet dispensed the medication to the patient) immediately send that electronic prescription to a different pharmacy requested by the patient or an authorized person on the patient’s behalf. As discussed, if the pharmacy (or staff) is aware that the electronic prescription transmission failed or is incomplete the pharmacy must promptly notify the prescriber of the failure/incomplete transmission. AB 852 does not “require the pharmacy verify that a written, oral, or faxed prescription satisfies the specified exemptions.” The law exempts healthcare providers, pharmacists, and pharmacies who provide healthcare to specified individuals – who are under the Department of Corrections and Rehabilitation’s jurisdiction. Other exceptions and conditions may apply that skilled California healthcare lawyers can explain. Additional B 852 regulations AB 852, according to OpenStates, would: “prohibit a pharmacy, pharmacist, or other practitioner authorized to dispense or furnish a prescription from refusing to dispense or furnish an electronic prescription solely because the prescription was not submitted via, or is not compatible with, their proprietary software.” AB 852 would: “Authorize a pharmacy, pharmacist, or other authorized practitioner to decline to dispense or furnish an electronic prescription submitted via software that fails to meet any one of specified criteria, including compliance with the federal Health Insurance Portability and Accountability Act of 1996.” Failure to comply with AB 852 Healthcare providers, pharmacists, and pharmacies that fail to comply with AB 852 will be “referred to the appropriate state professional licensing board solely for administrative sanctions, as provided.” E-prescribing and CMS The Centers for Medicare and Medicaid Services defines E-prescribing as electronic prescriptions that are “accurate, error-free, and understandable” to a pharmacy. CMS supports electronic prescriptions because they help reduce medication errors. CMS requires Part D sponsors, prescribers, and dispensers to support electronic prescribing consistent with regulations at 42 CFR § 423.160. E-prescribing outside of California States outside of California have their own e-prescription laws. For example: “Nevada Assembly Bill 310 mandates that all controlled-substance prescriptions be electronically prescribed. The bill outlines additional regulations for controlled substance prescriptions including penalties for prescribers. See Nevada E-Prescribing for further details.” New York “was the first state to mandate e-Prescribing and put penalties in place for non-compliance. The Internet System for Tracking Over-Prescribing, or I-STOP, mandate was passed in 2012 and requires prescribers to electronically prescribe both non-controlled and controlled.” E-prescribing and HIPAA The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law. HIPAA creates standards for protecting sensitive health information from disclosure without the consent or knowledge of the patient. According to the US Centers for Disease Control and Prevention (CDC), HIPAA applies to “every healthcare provider, regardless of size of practice, who electronically transmits health information in connection with certain transactions.” HIPAA also applies to healthcare plans and other healthcare entities. Generally, the transmission of electronic prescriptions is required by HIPAA – which means that the patient needs to consent to the electronic transmission and the sender and receiver need to comply with HIPAA security rules to protect the patient’s health information. The transmission of electronic prescriptions may involve other federal and state privacy and protection laws that our skilled healthcare lawyers can explain. According to HIPAA Journal, healthcare providers and pharmacies need to review HIPAA’s administrative rules, privacy rule, security rule, and breach notification rule. There are also “best practices” for pharmacies. There are penalties for pharmacies that fail to comply with HIPAA. In addition to compliance with AB 852, CMS rules, and HIPAA, healthcare providers and pharmacies that send and receive electronic prescriptions need to understand the US Department of Justice rules for the electronic prescription of controlled substances. Prescriptions based on telemedicine may raise other legal issues including telemedicine issues and FDA compliance issues. Healthcare providers and pharmacies in California need to understand the new compliance requirements for sending and receiving electronic prescriptions. Failure to comply with the new California Law, AB 852, and other electronic prescription laws such as HIPAA can result in severe disciplinary actions. FAQs About HIPAA and the Right of Access, Part one The US Department of Health and Human Services provides questions and answers to the HIPAA Privacy Rule’s Right of Access. These FAQs directly affect healthcare practices. FAQs About HIPAA and the Right of Access Part two The US Department of Health and Human Services provides questions and answers to the HIPAA Privacy Rule’s Right of Access. These FAQs directly affect healthcare practices
March 15, 2023
Healthcare
California Assembly Bill (AB)-890 and Two New Nurse Practitioner Categories
Assembly Bill 890 was signed by California Governor Newsom. The law which went into effect on January 1, 2023, creates two new Nurse Practitioner (NP) categories. The California Association for Nurse Practitioners (CANP) states that the law enables NPs in certain practice settings to start practicing without physician supervision and expand much-needed care. The law, according to the California Board of Registered Nursing (BRN), also provides education, regulatory, training, certification, and medical staff governance requirements for those two categories. The BRN provides the following list of Frequently Asked Questions and Answers. Our seasoned healthcare compliance lawyers are ready to discuss all your AB 890 questions and review all your federal, California, and local healthcare compliance requirements. What are the New NP Categories? AB 890 establishes two new categories called 103 NP and 104 NP. The two new categories don’t “significantly extend or alter the current NP’s scope of practice.” The new NP categories provide additional authority to work without standardized procedures. Please see our prior discussion of nursing and scope of practice requirements for more information. Please see our prior discussion of standard procedures for additional information. California’s New Scope of Practice Law for Nurse Practitioners – Part One California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.” California’s New Scope of Practice Law for Nurse Practitioners – Part Two California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.” How Doctors & Nurses Use Standardized Procedures for Medical Spa Compliance Doctors and nurses and standardized procedures, oh my! Well it doesn’t quite have the same resonance as Dorothy’s chant in Wizard of Oz, but doctors and nurses and standardized procedures really […] 103 NP This category of nurse practitioner works under the provisions of the Business and Profession Code Section 2837.103. A 103 NP “can work without standardized procedures, in a group setting with at least one physician and surgeon, within the population focus of their National Certification.” BPC Section 2837.103 provides that in addition to any other authorized practices, an NP who meets the requirements of the statute “may perform the following functions without standardized procedures in accordance with their education and training:” Conduct advanced assessments. Order, perform, and interpret diagnostic procedures.“For radiologic procedures, a nurse practitioner can order diagnostic procedures and utilize the findings or results in treating the patient. A nurse practitioner may perform or interpret clinical laboratory procedures that they are permitted to perform under Section 1206 and under the federal Clinical Laboratory Improvement Act (CLIA).” Establish primary and differential diagnoses Prescribe, order, administer, dispense, procure, and furnish certain therapeutic measures, including, but not limited to those set forth in the BPC. “After performing a physical examination, certify disability pursuant to Section 2708 of the Unemployment Insurance Code.” Delegate some tasks to a medical assistant based on other regulations A 104 NP A 104 NP works pursuant to Business and Professions Code Section 2837.104. A 104 NP “may work without standardized procedures, outside of a group setting, within the population focus of their National Certification.” Among other provisions that experienced healthcare lawyers can explain, BCP 2837.104 provides that: (c) A nurse practitioner authorized to practice pursuant to this section shall comply with all of the following: “(1) The nurse practitioner, consistent with applicable standards of care, shall not practice beyond the scope of their clinical and professional education and training, including specific areas of concentration and shall only practice within the limits of their knowledge and experience and national certification.” “(2) The nurse practitioner shall consult and collaborate with other healing arts providers based on the clinical condition of the patient to whom health care is provided. Physician consultation shall be obtained as specified in the individual protocols” and under the circumstances set forth in the statute such as when a patient requests a physician consultation, emergency conditions that require “prompt medical intervention after initial stabilizing care has been started,” and other circumstances. (3) “Nurse practitioner consultation with a physician and surgeon alone shall not create a physician-patient relationship. The nurse practitioner shall be solely responsible for the services they provide.” [Emphasis added]. (4) “The nurse practitioner shall establish a plan for referral of complex medical cases and emergencies to a physician and surgeon or other appropriate healing arts providers.” The plan should meet additional criteria set forth in the BCP law. (d) “A nurse practitioner shall verbally inform all new patients in a language understandable to the patient that a nurse practitioner is not a physician and surgeon. For purposes of Spanish language speakers, the nurse practitioner shall use the standardized phrase “’enfermera especializada.’” Can an NP start practicing independently as an NP immediately in January 2023? No. An NP who wants to practice “without standardized procedures, must apply to the BRN for a special certification before they can do so.” There is no automatic grant of this authority. To apply for 104 NP status, a 103 NP must work as “a 103 NP in good standing for at least 3 years prior to becoming a 104 NP.” This means that the earliest the California Board of Registered Nursing can certify 104 NP is 2026. How do I apply to become a 103 NP? The BRN has released the new 103 NP application via BreEZe. Eligible NPs can start applying now. The BRN is encouraging all licensees to routinely check their emails to confirm that their application is live. What are the eligibility requirements to become a 103 NP? Business and Profession Code Section 2837.103, requires that the NP meet the following requirements to obtain 103 NP status: Certification as an NP by the California Board of Registered Nursing. Hold[ing] a National Certification in a recognized population focus consistent with 16 CCR 1481 by a national certifying body accredited by the National Commission for Certifying Agencies or the American Board of Nursing Specialties and recognized by the Board. Completion of a “transition to practice within the category of your National Certification in California of a minimum of three full-time equivalent years of practice or 4600 hours within 5 years of the date of your application.” What is a transition to practice? Business and Professions Code 2837.101 states that “transition to practice refers to additional clinical experience and mentorship provided to prepare a nurse practitioner to practice independently.” Examples of this additional clinical experience and mentoring include “managing a panel of patients, working in a complex health care setting, interpersonal communication, interpersonal collaboration and team-based care, professionalism, and business management of a practice.” The clinical and mentorship experience must include either three-full time equivalent years or 4600 hours completed – in California, within five years prior to the date the applicant applies for certification as a 103 NP, after BRN certification as an NP, or if direct patient care meets additional criteria. How does the Board verify an applicant has completed their transition to practice? The 103 NP needs to provide proof the NP completed the “transition to practice.” The NP will submit to the BRN information about the provider(s) “who oversaw and provided the mentorship during the transition to practice period.” The BRN will then request that the provider(s) attest to the applicant’s training. The providers must be competent in the same specialty area or category listed in 16 CCR Section 1481(a) in which the applicant seeks as a 103 NP. The person or entity that attests to the NP’s transition to practice “cannot have a familiar or financial relationship with the applicant and will be attesting to the applicant’s completion of the transition to practice requirement under penalty of perjury.” Can a 103 NP or 104 NP work in any content area without standardized procedures? No. An NP applicant can only obtain certification as a “103 NP or 104 NP and practice without standardized procedures in whichever of the six NP categories outlined in 16 CCR 1481(a) that the [NP] received their education and training in, hold a national certification in and completed their transition to practice clinical experience in.” These six categories are: Family/individual across the lifespan Adult-gerontology, primary care, or acute care Neonatal Pediatrics, primary care, or acute care Women’s health/gender-related Psychiatric-Mental Health across the lifespan Will the Board certify 103 NPs and 104 NPs in categories other than those outlined in 16 CCR 1481(a)? “According to Business and Professions Code Section 2837.103(a)(1)(B) and Section 2837.104(b), a 103 or 104 NP must hold a certification from a national certifying body accredited by the National Commission for Certifying Agencies or the American Board of Nursing Specialties and recognized by the Board.” “NPs who wish to progress to a 103 or 104 can only do so in whichever of the six NP categories outlined in 16 CCR 1481(a) in which they received their national certification in.” The Board cannot currently grant a 103 or 104 NP status in additional specialty areas such as an Emergency NP or a Dermatology NP. Can I open an independent practice as a 104 NP? “Yes. After 2026, when approved by the Board to become a 104NP, a 104 NP can practice without standardized procedures outside of a group setting. However, they cannot practice beyond the scope of their clinical and professional education and training, including specific areas of concentration. A 104 NP can only practice within the limits of their knowledge and experience and national certification.” BPC 2837.104(c) requires that “a 104 NP conduct a certain level of consultation, collaboration, and referral to other healing arts providers based on the clinical condition of the patient receiving care.” How can an employer, patient, or any interested party verify whether a licensee has been certified by the Board as a 103 NP or 104 NP? The authority to practice as a 103 NP or 104 NP will be “displayed along with their RN license status through DCA’s License Search,” an online search tool. Additional information about Assembly Bill 890 includes the following: Overview of Assembly Bill (AB) 890 (ca.gov) OPES Occupational Analysis for Nurse Practitioners (AB 890) BRN’s Proposed Regulations to Implement AB 890 Overview of Assembly Bill (AB) 890 – Presentation by Reza Pejuhesh, Board Legal Counsel California AB -890 authorizes two categories of nurse practitioners who can practice without physician supervision if specific criteria are met. A 103 NP can work in a group setting with at least one physician and surgeon, within the population focus of their National Certification.” A 104 NP may work without standardized procedures, outside of a group setting, within the population focus of their National Certification.” There are specific eligibility and practice requirements for both categories of NP – 103 and 104.
March 8, 2023
Healthcare
SB 994 and AB 2685: California’s New Naturopathic Doctors’ Laws
California, in 2022, passed two laws that affect naturopathic doctors – SB 994 and AB 2685. SB 994 allows naturopathic doctors to hire licensed vocational nurses (LVNs). AB 2685, Prior law, created “the Naturopathic Medicine Committee within the Osteopathic Medical Board of California for the licensure and regulation of naturopathic doctors.” AB 2685, titled the Naturopathic Doctors Act, renames the Naturopathic Medicine Committee as the “California Board of Naturopathic Medicine” and places the Board within the Department of Consumer Affairs. AB 2685 specifies that any reference in any law or regulation to the Bureau of Naturopathic Medicine or the Naturopathic Medicine Committee refers to the California Board of Naturopathic Medicine. The Naturopathic Doctors Act prohibits the board from “incurring any costs as a result of its name change beyond what is absorbable within existing resources.” What is naturopathic medicine? The Association of Accredited Naturopathic Medical Colleges defines naturopathic medicine as a field or practice “that combines the wisdom of nature with the rigors of modern science. Naturopathic doctors (NDs) are trained as primary care providers who diagnose, treat and manage patients with acute and chronic conditions, while addressing disease and dysfunction at the level of body, mind and spirit.” “NDs concentrate on whole patient wellness through health promotion and disease prevention, while addressing the underlying cause of the patient’s condition. Naturopathic physicians care for patients of all ages and genders, and practice in settings ranging from private clinics to integrative medical centers, urgent care clinics and hospitals.” NDs “provide individualized, evidence-informed therapies that balance the least harmful and most effective approaches in order to help facilitate the body’s inherent ability to restore and maintain optimal health. Naturopathic doctors are experts in natural medicine, and naturopathic medical education is the most efficient and direct way to train as a primary care doctor who specializes in natural medicine.” FAQs about SB 994 and AB 2685 The American Association of Naturopathic Physicians provides the following questions and answers about licensed vocational nurses who now, in California, can be hired by naturopathic doctors. What is a Licensed Vocational Nurse (LVN)? A California LVN is licensed and governed by the Board of Vocational Nursing and Psychiatric Technicians (BVNPT). LVNs have finished an approved practical nursing program. LVNs, through the direction of a California licensed Registered Nurse (RN), Nurse Practitioners (NPs), physicians, and other authorized healthcare providers – provide skilled nursing care and execute nursing interventions. SB 994 now provides that licensed naturopathic doctors in California can, effective January 1, 2023, direct LVNs in the same care and interventions. What is the scope of practice for an LVN working under the supervision of a California Licensed Naturopathic Doctor? An LVN in California is directed by a licensed ND, NP, RN, or physician – in the manual and technical skills learned in an approved school of vocational nursing. In addition to performing the same tasks as a naturopathic assistant, an LVN can: Administer IV therapy (vitamins, minerals and blood products only – no medications or herbs) Treat patients “carrying out the ND’s treatment orders without the ND needing to be present in the office at all times.” When directed and supervised by a naturopathic doctor, an LVN can also: “Administer medications by hypodermic injection.” Withdraw blood from a patient, if prior thereto such LVN has satisfactorily completed a prescribed course of instruction approved by the Board of Vocational Nursing and Psychiatric Technicians (BVNPT). “The LVN must have a certificate from a training provider approved by the BVNPT for both phlebotomy and IV therapy prior to performing these functions.” “Start and superimpose intravenous fluids under the supervision of a Naturopathic Doctor after completing a BVNPT-approved IV therapy certification course.” An LVN must be Board certified to perform IV therapy and blood withdrawal.“Important note: LVNs can be trained to draw blood in an office setting by an MD or DO, but not by an ND. Any LVN that [an ND] hires must take a BVNPT-approved IV and blood draw training. As a result of the passage of AB 2685, the LVN can obtain an Intravenous Therapy (IVT) Specialty license from the California Board of Naturopathic Medicine (formerly the Naturopathic Medicine Committee).” Can LVNs perform IV therapy? Yes – provided that the: LVN has the property Intravenous Therapy Specialty License The LVN has completed an IV certification course approved by the Board of Vocational Nursing and Psychiatric Technicians (BVNPT) “The supervising ND has ordered the IV treatment. (In other words, a new patient cannot just walk into the office and receive an IV treatment without the ND conducting an initial appropriate prior examination and ordering the IV with specific ingredients and dosages). The initial exam need not be performed before each IV – just before the first IV treatment – “and again if the patient’s health changes or the IV ingredients change and at appropriate intervals.” LVNs can only carry out an ND’s treatment decisions. LVNs cannot take over the care of a patient. Generally, provided the above requirements are met, LVNs can prepare IVs. LVNs can also start IVs – “but only peripheral lines. They cannot access ports.” What can LVNs infuse? “LVNs can infuse fluids, vitamins, minerals, nutrients and blood products. LVNs CANNOT infuse medications or herbs – so this means, for example, LVNs cannot infuse chelating agents, Zofran, curcumin, or other medications or herbs.” Can an ND give an order to an LVN to give someone medication or an injection or to perform an IV at a patient’s home? No, not at a patient’s home. The patient must be in the physician’s office or a health care setting, like a skilled nursing facility. Can LVNs give IM and SC injections? Yes. “LVNs can give IM and SC injections, such as vitamins and hormones under the supervision of a California licensed ND (*Note this does not include hormone pellets). However, the LVN cannot give IM and SC injections of any other medications unless the supervising ND has a supervising California physician (MD/DO) to allow the ND to prescribe such medications. In other words, the LVN cannot administer medications that the supervising ND is not authorized to prescribe or administer. Additionally, LVNs CANNOT inject glutathione.” There are additional options and requirements if the ND has a supervising MD/DO. Can an LVN administer vaccines? Yes. “Pursuant to the standing orders of the Naturopathic Doctor, if the Naturopathic Doctor has a supervision agreement in place with an MD/DO for prescribing vaccines. And the Naturopathic Doctor must ensure that the LVN demonstrates competence in the administration of the vaccines and knowledge of all the indications and contraindications and recognition and treatment of any emergency reactions.” Does the ND need to be in the office when the LVN is taking care of patients? Generally, the answer is no. However, the supervising naturopathic doctor “MUST be available by phone at all times that the LVN is providing patient care and must always be the one that does all diagnosis and ordering of treatments.” The LVN can’t determine what care to provide. Their job is just to carry out the supervising ND’s orders. Can LVNs do triage or answer a patient’s questions about their care? “No. Unlike NPs and RNs with appropriate standardized procedures, LVNs cannot triage patients or do assessments.” What Are the Legal Risks Involved With An IV Therapy Business? Doctors, registered nurses and EMTs should review with an experienced healthcare attorney – corporate practice of medicine issues, medical and business practices, and other legal issues before […] What Are the Legal Risks Involved with An IV Therapy Business? Part Two IV therapy owners and practitioners need to discuss with experienced healthcare lawyers who can prescribe IV therapy, who can prepare the solution, and who can administer the therapy. Additional requirements for naturopathic doctors who hire LVNs The LVN must be a supervising ND’s employee. There must be a written supervision protocol in place. This protocol can “be part of the LVN’s employment agreement or can be a standalone document separate from their employment agreement.” The written supervision protocol must: Describe the LVN’s duties and responsibilities Set forth specific policies and procedures that ensure adequate supervision of the LVN. These policies should include, among other policies, a communication line between the Naturopathic Doctor and LVN, “availability of supervision, location(s) of where services are to be provided, and availability of consultations between the Naturopathic Doctor and LVN regarding the services provided.” The policies and procedures should also set forth the training methods and “continuing evaluation of the competency and qualifications of the LVN.” What is LVN prohibited from doing? LVNs are NOT permitted to: Administer any botulinum toxin, dermal filler or glutathione injections Perform platelet rich plasma treatments Remove skin growths Perform any other cosmetic treatments outside of the scope of an LVN Administer laser, light, steam, or UV treatment therapies unless directed by the ND for a medically necessary purpose (not cosmetic) NDs can hire LVNs starting on January 1st, 2023. Can an ND hire an RN (registered nurse) and have the RN do only the things listed as in the scope of an LVN? “No, an ND cannot hire, direct or supervise an RN or NP under any circumstances.” “RNs can only perform patient care services ordered by and within the scope of licensure of a physician, dentist, podiatrist, or clinical psychologist, as defined by Section 1316.5 of the Health and Safety Code.” AB-2685 Naturopathic Doctors Act: California Board of Naturopathic Medicine and licensing requirements AB 2685, in addition to renaming the “Naturopathic Medicine Committee” as the “California Board of Naturopathic Medicine, placing the board within the Department of Consumer Affairs, and other provisions we discussed above; updates the requirements and prohibitions for appointing healthcare professionals to the new Board. According to Open States, AB 2685 AB 2685 also changes current law regarding naturopathic medicine as follows: The California Board of Naturopathic Medicine will be required to hire a full-time employee whose duties would include enforcement against violations of the new law. That staff position will be under the direction of the executive officer. Expand the current requirement that applicants for licensure “pass the Naturopathic Physicians Licensing Examination (NPLEX) or an equivalent examination approved by the North American Board of Naturopathic Examiners to pass any NPLEX elective examinations relevant to a licensee’s scope of practice in California.” Expands how applicants could meet their continuing education requirements. Expands the requirements for a naturopathic doctor to be certified for the specialty practice of naturopathic childbirth attendance. The law extends “the operation of the act until January 1, 2027, and would also make nonsubstantive changes to those provisions.” California recently passed two laws that affect the ability of naturopathic doctors to practice medicine. The first grants NDs the right to hire licensed vocational nurses. The second creates the California Board of Naturopathic Medicine. Healthcare professionals who work in these fields need to understand the new compliance issues for each profession including what tasks LVNs can and cannot perform. Naturopathic doctors can take pride in the creation of a new Board for their professions but need to understand the duties and obligations of their new Board. California’s New Scope of Practice Law for Nurse Practitioners – Part Two California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.”
February 28, 2023
Healthcare
Informed Consent and Risk Waivers
The doctrine of informed consent is based on the principle that adults of sound mind should have the right to decide what can be done to their bodies. Before making a decision about what treatments or procedures to consider, a patient should understand the pros and cons of any treatment/procedure – the benefits and the risks. The risks include any side effects and any complications. To ensure that the patient understands the benefits and dangers of any treatments or procedures, various states, agencies, and medical boards require that the doctor who is responsible for the treatments and procedures should obtain a written informed consent from the patient. The written document should list the benefits and risks of the treatment or procedure. By signing and dating the written informed consent, the patient is acknowledging he/she has been informed of the possible consequences – and agrees that the treatments and procedures can be provided to the patient. The treatments and procedures that require a patient’s informed consent include: Medical research. The Department of Health and Human Services (HHS) requires that researchers obtain the legally effective informed consent of the subject or the subject’s legally authorized representative, unless: The research is exempt under federal law There are appropriate waivers -if waivers are permitted for the type of research being conducted FDA has its own set of informed consent requirements Treatments and procedures performed by a doctor or another type of health provider who has the legal authority to provide the treatment or procedure. What is the relationship between informed consent and a risk waiver? By signing the waiver (if properly worded), the patient does more than acknowledge his/her understanding of the pros and cons of the treatment or procedure. The signature on the informed consent form generally will be used by the doctor, hospital, or another healthcare provider to protect the doctor, hospital or another healthcare provider from liability. The liability protection is generally confined to complaints by the patient that an adverse consequence occurred during the treatment or procedure – that was identified on the informed consent document. Essentially, medical professionals use informed consent forms for more than just providing information. The professionals use the form as a waiver of liability claims by the patient. Informed consent forms are also called liability waivers, risk waivers, medical release forms, release of liability forms, and other similar names. There is a reverse problem for doctors. The signing of an informed consent/risk waiver may protect the physician or healthcare provider that provides the treatment or procedure from a liability claim. Conversely, the physician or healthcare provider may be subject to a medical malpractice claim (for non-emergency treatments or procedures – if the patient suffers as a result of the treatment or procedure. The physician or healthcare provider may even be liable if the physician or healthcare provider does everything correctly – because the patient may argue he/she wouldn’t have had the treatment or procedure if he/she had known of the possible dangers. A physician or healthcare provider may also be liable – if there is a signed informed consent – if the treatment or procedure provided is different than what was identified in the informed consent document. Even with an informed consent, doctors may also be liable for other reasons – such as mistakes that were clearly avoidable such as leaving a surgical instrument in a patient after the surgery is complete. AVOIDING MALPRACTICE THROUGH STRONG INFORMED CONSENT PRACTICES Informed consent is critical in all areas of medicine; it takes on added importance with integrative medicine, functional medicine, anti-aging and aesthetic medicine, and non-mainstream […] When do healthcare providers use informed consent? Some of the common types of informed consent uses include: Surgeries. Generally, doctors and hospitals require that a patient sign an informed consent form before any surgeries are performed. Drug prescriptions. Healthcare providers may also request that a patient sign an informed consent/risk waiver before nonsurgical remedies. For example, doctors and pharmacies regularly require informed consents from patients before the doctor prescribes any medications and the pharmacy fills the prescription. Common risks with drugs include the possible side effects, the dangers involved with taking the prescribed amounts, the dangers with taking amounts other than prescribed amounts, possible interactions with other drugs, and many other adverse consequences. Research. Many doctors, universities, hospitals, agencies, and other entities conduct research on the effectiveness of various drugs and various treatments. The people who volunteer to participate in these clinical studies have the right to be informed of the possible risks and dangers. An informed consent may be required for many other types of reasons. Our experienced healthcare lawyers will explain when informed consents are advisable – whether a healthcare provider is performing surgery, conducting a telemedicine consultation, or for any other reason. HOW TO DRAFT A TELEMEDICINE INFORMED CONSENT In today’s video, we discuss whether you need a specific type of consent form to offer patients telemedicine or telehealth services. What happens if the patient cannot provide consent? Patients may not be able to provide consent for different reasons: During emergencies when the patient is in too much pain or is otherwise unable to give his/her consent When then patient is not mentally competent If the patient is a minor In these situations, the physician, hospital, or another healthcare provider will try to obtain the consent of someone with the authority to give their consent to the treatment or procedure for the patient. The authority may be based on: A power of attorney from the patient to another adult that authorizes an informed consent A guardian of the patient A parent of the patient Other people depending on the circumstances Informed consent and California law The duty to obtain an informed consent is generally defined by California case law – the decisions of judges in prior comparable cases. There are some statutes as well. For example, in our discussion of new healthcare laws for 2021, we discussed the following law: AB-1280 California Hospice Licensure Act of 1990 This law was signed into law on October 4, 2021. The law sets new requirements for hospice referrals. The law prohibits: Hospice providers (and hospice staff and agents for the hospice) from “paying referral sources for the referral of patients to the hospice.” “A hospice salesperson, recruiter, agent, or employee who receives compensation or remuneration for hospice referrals or admissions from providing consultation on hospice services, hospice election, or informed consent to a patient, patient’s family, or patient’s representative.” Certain authorized persons, such as a registered nurse or a medical social work can “complete the election of hospice, informed consent, completed signatures, and counsel on the election of hospice with a patient, patient’s family, or patient’s representative.” The new law also requires that that hospice give a patient or his/her representative a verbal and written notice of the patient’s rights and responsibilities – in a language and manner the patient or representative can understand – before providing any care. Doctors, nurses, and other healthcare providers should understand when an informed consent from a patient is required and the terms and explanations that must be set forth in the informed consent. The need for an informed consent doesn’t just apply to surgeons. The duty to obtain the medical consent doesn’t just apply to a doctor’s office. Nurses, acupuncturists, dentists, medical spas, and other types of health provider should review when an informed consent is necessary for their practice or business. CALIFORNIA HEALTHCARE LAWS THAT WERE PASSED IN 2021 Pharmacies, hospitals, mental health facilities, hospices, and substance abuse facilities need to understand how the recently passed California healthcare laws apply to their practice
January 22, 2023
Healthcare
Compliance Issues for Consulting Fees, Honoraria, Medical Directorships, and Other Types of Remuneration
Doctors need to be very careful about accepting consulting fees, honoraria, and other compensation and awards. Physicians need to know the source of the remuneration and why the fees and other benefits are being offered. Any payments or compensation that are paid in order to entice the doctor to refer patients to the source of the payments (such as a pharmaceutical company), may result in criminal charges that the doctor violated the federal Anti-Kickback Statute (AKS) or other anti-referral laws. The consequences for violations of the AKS and other anti-referral laws can be quite severe. In addition to being required to return the compensation or awards, the physician may be subject to fines. His/her medical license can be in jeopardy. Criminal charges could be filed which could result in imprisonment. Our skilled healthcare compliance lawyers review the following questions and concerns with physicians. What is the Anti-Kickback Statute? What are the statutory provisions of the AKS? What types of payments and awards may lead to AKS violations? What safe harbors are available for the AKS? Do you have any examples of AKS actions against physicians who wrongfully accept medical compensation or benefits? What laws other than the federal AKS regulate the acceptance of compensation or benefits? What is the Anti-Kickback Statute? The AKS was enacted to ensure that patient care is prioritized over the financial concerns of physicians and the entities the doctors work with – for services and products billed to federal healthcare programs. The law was also enacted to ensure fair competition among healthcare providers and companies. According to the US Office of Inspector General, there are four things physicians should know about the What transactions are illegal. The AKS makes it illegal to “knowingly and willfully offer, pay, solicit or receive anything of value to induce or reward for referrals of Federal health care program business.” While it may be OK in some businesses to have referral arrangements, referrals for federal healthcare programs such as Medicare and Medicaid are generally illegal unless a “safe harbor” applies. The AKS applies to both the physician who receives the compensation and the entity that provides the compensation. Illegal compensation (kickbacks) include the following among other types of compensation: Cash Gifts Vacations “Sham” consulting fees “Sham” medical directorships Bribes Rebates Sham essentially means that the payments are for services that aren’t offered or for payments that are above the fair market value of those services. The penalties for violating the AKS. The AKS is a criminal statute. A violation of the AKS is a felony. If convicted, a physician or an entity that offered the compensation can be imprisoned for up to 10 years and ordered to pay up to $100,000 (or both) for each violation. In addition, the US Department of Justice may file a False Claim Act claim (the FCA is a civil statute) demanding repayment of funds received from the government based on the illegal referral arrangement. In addition, the offender may be penalized up to three times the amount of money the government lost – plus $11,000 for each improper claim. The doctor may be precluded from submitting any future claims to the federal healthcare programs (for a period of time), such as Medicare and Medicaid, covered by the AKS. A civil complaint may also be brought through the Civil Monetary Penalties Law (CMPL). A physician may also be subject to disciplinary action by the state medical boards which could result in the loss of the physician’s license to practice medicine. The types of programs covered by the AKS. The AKS generally applies to federal healthcare programs. Another commonly used federal healthcare program, in addition to Medicare and Medicaid, is TRICARE – the medical program for military members and their families. CHAMPVA is another commonly used federal healthcare program. What safe harbors can be used so that the compensation is likely to be considered legal? The AKS does have safe harbors that do cover many types of referral arrangements. While you do not have to have a safe harbor arrangement, if you do – then the safe harbor can help protect you a physician from AKS legal actions. For example, there are AKS safe harbors for certain employment arrangements and for the leasing of office space or equipment – provided very specific conditions are met. Our skilled healthcare compliance lawyers understand when you may be able to use a safe harbor and the requirements to meet the safe harbor conditions. Other exceptions may apply which our healthcare lawyers will explain. What are the statutory provisions of the AKS? The US Department of Justice (DOJ) states that The Anti-Kickback Act of 1986 is codified in 42 U.S. Code § 1320a–7b. The prosecution must show the following conditions apply in order to pursue an AKS claim: The prohibited conduct. The Act prohibits attempted as well as completed “kickbacks.” Kickbacks include “any money, fees, commission, credit, gift, gratuity, thing of value, or compensation of any kind. The act also provides that the “inclusion of kickback amounts in contract prices is prohibited conduct in itself.” The purpose of kickback. The government must show that the “purpose of the kickback was for improperly obtaining or rewarding favorable treatment. It is intended to embrace the full range of government contracting. Prior to 1986, the “kickback” was required to be for the inducement or acknowledgment of a subcontract.” Covered class of “kickback” recipients. The AKS prohibits “kickbacks” to prime contractors, prime contractor employees, subcontractors, and subcontractor employees. Physicians are generally part of this covered class. The type of contract. The Act defines kickbacks to include payments under any government contract. Prior to this legislation, the statutes’ applicability was limited to negotiated contracts. A key part of an AKS prosecution is that the government must show that the defendant/physician “knowingly and willfully engaged in the prohibited conduct for the imposition of criminal sanctions.” OIG ADVISORY OPINION REGARDING POSSIBLE AKS VIOLATIONS. PART ONE. A pharmaceutical company sought an advisory opinion to determine if payment for travel, lodging, and other costs are an inducement that violates the federal Anti-Kickback Statute. What types of payments and awards may lead to AKS violations? Some of the many entities that have been involved with providing kickbacks or illegal compensation in return for the expectation a doctor will refer patients are – hospitals, nursing homes, pharmaceutical companies, medical device manufacturers, dialysis centers, diagnostic centers, and other healthcare companies. Illegal incentives include: Cash payments Paying doctors consulting fees or large salaries to serve as medical directors or consultants – where the doctors don’t do any work or very little work of any value or merit. Offering the physicians the opportunity to gain a financial interest in an ambulatory surgical center, joint ventures, or other investments – especially if the financial opportunities are based on the value of the referrals. Providing office space, support staff, and other benefits at below-market value Paying bonuses and salaries based on the volume of referrals Buying medical practices for prices above market value Paying kickbacks to pharmacies and doctors to get the pharmacies and doctors to use a specific pharmaceutical drug Expensive vacations and dinners The AKS can even apply to marketing and sales representatives and patients. What safe harbors are available for the AKS? A physician or other entity requesting payment from Medicare or any other federal healthcare program may be in violation of the AKS: unless there is a safe harbor, when pays for any of the purchase. Covered payments include ordering, or leasing of any service, good, or facility paid by the government – provided the request for payment is based on the improper remuneration. For example, the space rental safe harbor allows a provider to rent space to a potential referral source. Hospitals frequently lease space to independent physicians, pharmacies, or testing laboratories. Other safe harbors include: Bona fide employment Personal services contracts Discounts Copay and deductible waiver Other safe harbors Generally, the safe harbor arrangements must be in writing, be valid for at least one year, consistent with the fair market value, not tied into the amount of any referrals, and other specific requirements. Our healthcare lawyers will explain whether a safe harbor may be available and the very specific requirements for meeting the requirements. THE NEW STARK AND AKS LAWS Physicians and medical practices should review their MSO and referral arrangements to help comply with the new Stark Law and AKS changes. DO YOU KNOW THE KEY DIFFERENCES BETWEEN THE 4 AMBULATORY SAFE-HARBORS TO THE FEDERAL ANTI-KICKBACK STATUTE (AKS)? There are four types of ambulatory safe harbors in the federal Anti-Kickback Statute. We explain the key differences between the ambulatory safe harbors to the federal anti-kickback statute (AKS) Do you have any examples of AKS actions against physicians who wrongfully accept medical compensation or benefits? A few examples of AKS violations that have also resulted in False Claims Act actions according to the US DOJ included the following: Arriva Medical LLC and its parent, Alere Inc., a mail-order diabetic testing supply company settled a False Claims Act claim based on allegations that Arriva paid “kickbacks to Medicare beneficiaries by providing them ‘free’ or ‘no cost’ diabetic testing glucometers and by routinely waiving or not making reasonable efforts to collect their copayments for glucometers and diabetic testing supplies.” David McCollum and related laboratories and clinics paid $140 million and another $9 million civil consent judgment for paying unlawful kickbacks to providers “to include their referrals of urine drug tests.” Athenahealth Inc., an electronic health records technology vendor paid $18.25 million to settle allegations “it invited customers and prospective customers to lavish all-expense-paid sporting, entertainment, and recreational events to generate sales of its EHR product.” Other matters relating to kickback violations involved psychiatric hospitals and a substance abuse treatment facility (Oglethorpe Inc.), home health care agencies (BAYADA), hospitals (Akron General Health System, Texas Heart Hospital of the Southwest LLP, and Prime Healthcare Services), pharmaceutical companies (Biogen Inc.), diagnostic testing (Alliance Family of Companies LLC) and medical devices (Merit Medical Systems Inc). What laws other than the federal AKS regulate the acceptance of compensation or benefits? California has its own AKS statute. California, Welfare and Institutions Code; Kickbacks, Bribes or Rebates, Cal. Welf. & Inst. Code § 14107.2. Most other states also have some type of AKS statute. Any type of compensation to induce doctors to make referrals to the health companies that provide the compensation may violate the Anti-Kickback Statute – if the doctor or health company submits bills for payment to a federal healthcare program such as Medicare or Medicaid. Before you accept any payments, vacations, consulting fees, or other forms of remuneration that are based on referring patients, you should speak with an experienced healthcare lawyer. The compensation may lead to civil and criminal actions that could cost you much more than the amount of the compensation.
January 15, 2023
Healthcare
MSOs For Nursing Businesses
More and more, nurses are starting their own businesses. Some of these ventures include IV hydration, Ketamine infusion, holistic care, health coaching, medical spas, chronic care, concierge nurses, research, and other nursing professions. These ventures are exciting opportunities for nurses to own their own businesses while providing care to those in need. There are many laws that regulate medical businesses in California and other states. For starters, California has a corporate practice of medicine law that regulates who can own and run a medical practice in California. The law is designed to ensure that the health and safety of the patient is prioritized over the financial profits of those who own the medical practice. There are anti-referral laws, including Stark Law and the Anti-Kickback Statute, that regulate when and how referrals between the medical practice and other medical entities can be handled. Many referral arrangements are illegal. There are also privacy laws such as the Health Insurance Portability Accountability Act of 1996 (HIPAA) that govern the handling of electronic patient information. Our healthcare compliance lawyers understand the laws that apply to nursing practices. We’ll review your compliance requirements and the ways you can help show that you are in compliance with these various laws. One common way to address compliance issues is to use a Managed Service Organization (MSO). An MSO is an entity that handles the administrative side of your nursing business while the owners and staff handle the clinical/medical side of the business. In this article, we’ll discuss how an MSO can help your practice meet its compliance requirements. We’ll discuss: What are some of the different types of nursing businesses? What is the corporate practice of medicine doctrine? What is a Managed Service Organization (MSO)? How can an MSO allow your Nurse practice to coexist with your business needs? Can an MSO help a Nurse practice with the obligations of Stark Law and Anti-Kickback Statutes? What are some of the different types of nursing businesses? According to Nursepreneurs, new nursing businesses include: IV hydration clinics. This business provides medical care by licensed, professional concierge nurses. The treatments involve the intravenous injection of vitamin additives to help the client get the nutrients he/she needs. IV hydration may be used for arthritis, depression, dehydration-related illnesses, migraines, skin rejuvenation, and for other conditions. Concierge nurses. These nurses provide in-home care and custom nursing care for clients who generally pay for the nurse’s services out of their own pockets. Medical spas. There are specific California laws for the operation of medical spas. Some of the procedures include chemical peels, dermal fillers, botulinum toxins, and the use of laser, light, and radiofrequency devices. According to Selfemployed.com, some nursing businesses include: Nurse health coaches. These nurses teach clients how to care for themselves – such as through a holistic approach that reviews the client’s medical, work, environmental, nutrition, and mental health. Registered nurses may find this profession attractive. Fitness nurses. This nurse can work for corporations, spas, heart care rehabilitation, patients recovering from surgery, professional athletes, and others. A fitness nurse helps the client develop a program that includes exercise, wellness, and the prevention of diseases. Specialized care nurses. These nurses provide telehealth nursing, childbirth training, hospice care for end-of-life patients, in-home senior care, and other services. Nurses who teach continuing education classes What is the corporate practice of medicine doctrine? Most states have corporate practice of medicine (CPOM) laws. The purpose of these laws is to ensure that the medical side of a healthcare practice is distinct from the business side of the healthcare practice. California’s corporate practice of medicine laws include the following: Business and Professions Code, Section 2052 states that practicing medicine without a valid license is unlawful. Business and Professions Code Section 2400 states that: “Corporations and other artificial entities shall have no professional rights, privileges, or powers.” Generally, corporations cannot hire physicians because corporations don’t have a license to practice medicine. Corporations don’t have the education, training, and skills needed to obtain a medical license. Corporations are not able to develop a professional relationship of trust with patients. In short, California does not want business to run medical practices. California does permit licensed medical practitioners to incorporate and operate professional medical corporations (PMCs). The law that permits PMCs is the Moscone-Knox Professional Corporation Act. A PMC must generally be formed for a specific type of medical service, not a range of services. Registered nurses can be employed by a PMC. Registered nurses can also own up to 49% of the PMC (by themselves or with others) but at least 51% of the PMC must be owned by a physician or physicians licensed in California. In addition to the corporate practice of medicine laws, California has laws that regulate the supervision of healthcare providers by physicians – including recent laws regarding when supervision of nurses is not required. In California, “Because of the CPM doctrine, a non-physician in California cannot own a medical clinic or hire physicians. However, they can own a management entity which can serve as an administrative and non-medical, management services organization (“MSO”) for the clinic or medical practice, which is frequently organized as a professional medical corporation.” EXCEPTIONS AND ALTERNATIVES TO THE CORPORATE PRACTICE OF MEDICINE California has a strict corporate practice of medicine law. Physicians should consider a professional medical corporation. Doctors need to be aware of Stark Law and the AKS. An MSO may be advisable. CORPORATE PRACTICE OF MEDICINE, PSYCHOLOGY, PHYSICAL THERAPY RISKS TO INVESTORS In today’s video, we discuss how investors can profit from businesses that deliver clinical services—and where they get themselves in trouble. CORPORATE PRACTICE OF MEDICINE: MEDICAL MANAGEMENT ORGANIZATIONS AND PROFESSIONAL MEDICAL CORPORATION–WHO CONTROLS WHAT? The Corporate Practice of Medicine (CPM) doctrine continues to befuddle, beleaguer, and bewilder healthcare companies seeking to venture with physicians and non-physician entrepreneurs. What is a Managed Service Organization (MSO)? A Managed Service Organization is a business that nursing businesses can hire to do the administrative work of the nursing business while the nurses (and doctors) focus on treating the patients. An MSO can also be used to help address the issues raised by Stark Law and the Anti-Kickback Statute (AKS). These laws may apply when a nursing business works with drug companies, lab companies, hospitals, or other medical businesses. The laws address the concern that the nursing practice should refer patients to these other businesses – based on the best needs of the patient and not the profits of the nursing business. Stark Law prohibits referrals if the nursing practitioners have a financial interest in the other medical company (the one that is accepting referrals from the nursing business). The AKS prohibits medical companies from providing compensation or remuneration to the nursing practice in order to receive referrals from the nursing practice. Stark Law and the AKS generally apply when the physician or the related entities submit bills to federal healthcare programs such as Medicare and Medicaid. Our skilled healthcare lawyers will explain when and how an MSO can be used to address corporate practice of medicine concerns, Stark Law, and the AKS. We’ll help negotiate and draft the agreements between the nursing practice and the MSO. How can an MSO allow your Nurse practice to coexist with your business needs? In order to meet any Stark Law exceptions or AKS safe harbors, the financial relationship between the nursing practice and the MSO must comply with very specific requirements. For example, most relationships must be in writing, must be based on fair market value, cannot be based on the value or quantity of the referrals, and the relationship must last for at least one year. MSOs may also be useful to address other healthcare compliance laws such as the Health Insurance Portability and Accountability Act (HIPAA). Some of the Stark Law exceptions and AKS safe harbors and MSO may be able to satisfy include: Personal service arrangements Fair market value exceptions Office space and equipment leases Physician payments for items and services Compliance training Group practice arrangements with a hospital Incidental payments for medical staff Non-monetary compensation Risk-sharing arrangements The isolated transaction exception which can help raise capital for these new services. Some of the tasks that an MSO can do for a nursing practice include: Education and training. For example. An MSO can educate the owners and staff of the nursing practice about how to implement HIPAA, Occupational Safety and Health Administration regulations, the federal and state Family and Medical Leave Acts, and the Clinical Laboratory Improvement Amendments of 1988. Billing, coding, and collection. An MSO can do the bookkeeping and billing for the nursing practice. Rental leases for office space and equipment for the nursing practice. An MSO can help a nursing practice lease (or purchase) the office space and the equipment the nursing practice needs to run their practice. The credentials. The doctors need to decide what credentials their employees must have. An MSO can review whether the applicants have those credentials. The MSO can also help with the purchase of technology for the nursing practice, the administrative staff, quality assurance, disaster management, and other tasks. STARK LAW EXCEPTIONS THAT MIGHT APPLY TO YOU In today’s video, we discuss some exceptions to Stark Law, which deals with improper referrals by physicians and healthcare practitioners. Our law firm advises nurse practices about their federal and state compliance issues. These issues include the corporate practice of medicine, Stark Law, the Anti-Kickback Statute, HIPAA, and other laws. Our team will explain if an MSO is a good option for your nursing practice. We’ll negotiate and write the contracts necessary to implement the MSO.
January 8, 2023
Healthcare
MSOs For Oncology Practitioners
There are many different types of oncology practices and many different healthcare workers who work in each type of practice. Some of these practices include medical oncologists, radiation oncologists, surgical oncologists, geriatric oncologists, gynecological oncologists, hematologist-oncologists, and other types of oncologists. Ancillary oncology healthcare professionals include healthcare workers who provide acupuncture, aromatherapy, art therapy, guided meditation and mindfulness, massage therapy, reiki therapy, and yoga. Any type of oncology practice needs to be aware of several key legal issues starting with their state’s laws on the corporate practice of medicine. In California, for example, the corporate practice of medicine laws prohibits corporations from practicing medicine or hiring a physician to provide medical services. This rule was created to prevent the commercialization of the practice of medicine and prevent corporations from interfering with a physician’s medical judgment. In this article, we’ll explain: What is the corporate practice of medicine doctrine? What is a Managed Service Organization (MSO)? How can an MSO allow your oncology practice to coexist with your business needs? Can an MSO help an oncology practice with the obligations of Stark Law and Anti-Kickback Statutes? What is the corporate practice of medicine doctrine? Most states have corporate practice of medicine laws. These laws aim to separate the medical side of a healthcare practice from the business side so that the health and welfare of the patient are prioritized over the financial concerns of the business. California has its own corporate practice of medicine laws: Business and Professions Code, Section 2052 states that practicing medicine without a valid license is unlawful. Business and Professions Code Section 2400 states that: “Corporations and other artificial entities shall have no professional rights, privileges, or powers.” Together, these laws: “Are interpreted as a ban on corporations practicing medicine by employing physicians because corporations and other artificial entities are not granted licenses and therefore have no professional rights, privileges, and powers. Courts, California Attorneys General, and the legislature have since determined how this statute would apply to the practice of medicine. According to the Medical Board of California, limitations on the rights, privileges, and powers of corporate and other artificial entities are intended to prevent unlicensed persons from interfering with or influencing the physician’s professional judgment.” The corporate practice of medicine laws were enacted because corporations: Cannot have the training, education, and personal characteristics that are needed to receive a medical license. Are unable to develop the relationship of trust and confidence that is necessary for the relationship between a professional and patient or client Must not employ physicians because the physician’s acts would then be attributable to the unlicensed employer. An exception to the corporate practice of medicine laws, that applies to oncology practices as well as other practices, is the Moscone-Knox Act – which is the California law that grants physicians the right to incorporate and operate professional medical corporations (PMCs). These approved PMCs can charge patients for their services and hire or supervise what medical services are rendered – provided the PMC is at least 51% owned by a physician or physicians licensed in California. Up to 49% of the PC may be owned by registered nurses, physician assistants, and other healthcare licensees. A non-physician cannot own any shares of a PC. In California, “the prohibition against corporate practice of medicine imposes strict rules on contractual arrangements between physicians and non-physicians.” “Neither non-physicians nor lay corporations (corporations that are not medical professional corporations) nor limited liability companies (LLC) may contract to provide medical services. Nor may they contract with a physician to have the physician provide medical services, either as an employee or an independent contractor. (Business & Professions Code §§2052 and 2400.)” “Because of the CPM doctrine, non-physician in California cannot own a medical clinic or hire physicians. However, they can own a management entity which can serve as an administrative and non-medical, management services organization (“MSO”) for the clinic or medical practice, which is frequently organized as a professional medical corporation.” EXCEPTIONS AND ALTERNATIVES TO THE CORPORATE PRACTICE OF MEDICINE California has a strict corporate practice of medicine law. Physicians should consider a professional medical corporation. Doctors need to be aware of Stark Law and the AKS. An MSO may be advisable. CORPORATE PRACTICE OF MEDICINE: MEDICAL MANAGEMENT ORGANIZATIONS AND PROFESSIONAL MEDICAL CORPORATION–WHO CONTROLS WHAT? The Corporate Practice of Medicine (CPM) doctrine continues to befuddle, beleaguer, and bewilder healthcare companies seeking to venture with physicians and non-physician entrepreneurs. What is a Managed Service Organization (MSO)? MSOs are a way to separate the medical/clinical side of the practice from the administrative side. An MSO helps clarify that the business side of the practice is not engaged in the practice of medicine. The MSO is also useful to avoid complaints about fee-splitting and referrals which may violate Stark Law and the Antik-Kickback statute. With an MSO the oncology doctor and his/her team of medical care providers can focus on the cancer patient while the MSO pays the bills and performs other administrative tasks. Our experienced healthcare lawyers understand when to consider an MSO, how to implement an MSO, and what an MSO can and cannot do. The initial step in developing an MSO is preparing the contract between the PMC and the MSO. MSOs can benefit an oncology practice in the following ways: Help with numerous administrative tasks including:Patient scheduling Leasing space and equipment to the Professional Medical Corporation (PMC) Paying the bills and bookkeeping Submitting bills for physician and medical provider services Staffing – providing the MSO’s involvement is administrative and not medical. For example, an MSO cannot hire and terminate healthcare providers but the MSO can set up the payment arrangements An MSO can make it easier to establish offices in various locations within a state Help a non-non MD establish a health and wellness practice Help navigate the use of digital healthcare including telemedicine MSOs cannot generally provide any medical services. There are restrictions on the type of marketing of the practice the MSO can promote. The PMC must compensate the MSO at fair market value. The MSO cannot be compensated based on the amount of business the MSO brings into the PMC. An MSO cannot guide what services are available. Any referrals by the MSO to the PMC may violate Stark Law, the AKS, or the California Health & Safety Code, Section 445 (Medical Referral Services). Our experienced healthcare lawyers will explain how an MSO helps address these restrictions. How can an MSO allow your oncology practice to coexist with your business needs? Our skilled healthcare compliance lawyers will review the various legal compliance issues an oncology practitioner needs to review – such as the Corporate Practice of Medicine, Stark Law, AKS, HIPAA, and other federal and state compliance laws. We’ll explain whether an MSO is right for the oncology practice and any related services. For example, generally, an MSO can help Tom, who owns an oncology practice, in the following ways: Education and training. The MSO can explain the compliance issues to everyone involved in the practice, so the medical workers keep electronic patient records secure. The MSO can explain what steps the doctors, licensed healthcare providers, and non-licensed healthcare providers need to meet the requirements of various federal and state laws including: HIPAA (Health Insurance Portability and Accountability Act). Occupational Safety and Health Administration regulations The federal and state Family and Medical Leave Acts Clinical Laboratory Improvement Amendments of 1988 Billing, coding, and collection. The MSO can work with Medicare, Medicaid, other federal and state insurance agencies, and private insurers. Today’s MSO should have software that is readily compliant with all relevant federal and state privacy laws, referral laws (such as Stark Law, the AKS, and California’s referral laws), billing laws, and other related laws. Obtaining office space and equipment for the oncology practice. The MSO can help Tom select the best location for his practice and negotiate office rentals or purchases. The MSO can also help Tom obtain the medical equipment he needs for all the services he wants to provide. Credentials. The MSO can help review the licensing and certification requirements of each employee and contractor in the practice. Tom or another MD in the oncology practice must be the person who chooses which healthcare professionals to hire. Technology. The MSO can help choose the best technology (hardware, software, and other computer services) for Tom’s oncology practice and provide technical support – provided the HIPAA and any other regulations are met. The MSO cannot make any medical decisions about which technology to use. Many other services. The MSO can help with quality assurance, disaster management, and other services provided the MSO doesn’t engage in the practice of medicine. In addition, if Tom, an oncologist wants to help cancer patients with more than just diagnosis and the available treatments, an MSO can help Tom with those goals too. For example, Tom may want to help his patients feel better and hopeful while the patients are going through their treatments. He may want to bring in dieticians, nutritionists, people who make people look better when the patients lose their hair, and other healthcare providers. An MSO for these new healthcare services can provide many of the same services an MSO can provide for the oncology practice. We’ll also explain when and how the main oncology practice and the ancillary practice can work together – including addressing the relevant federal and state anti-referral laws. We’ll explain what the MSO can and cannot do and when separate MSOs may be required. Can an MSO help an oncology practice with the obligations of Stark Law and Anti-Kickback Statutes? As discussed, Tom wants to have working relationships other medical service providers. He wants to know what steps he can take to address the anti-referral provisions of Stark Law, the Anti-Kickback Statute, and California’s anti-referral laws. He knows that referrals are a common way of getting business and helping other boundaries – but he wants to make sure he’s in compliance with the anti-referral laws. Generally, Stark is a federal law the prohibits physicians from receiving from and referring to “designated health services” (DHS) that submit Medicare and Medicaid bills – where the doctor (or an immediate family member) has a “financial relationship” in the DHS. Our healthcare compliance lawyers will review whether the referral arrangements are legal or illegal. If they might be considered illegal, we’ll discuss how an MSO might be used to meet an exception to the Stark Law that may make the referral arrangements legal. Stark Law exceptions may be legal if an MSO performs the following tasks: Personal service arrangements Fair market value exceptions Office space and equipment leases Physician payments for items and services Compliance training Group practice arrangements with a hospital Incidental payments for medical staff Non-monetary compensation Risk-sharing arrangements The isolated transaction exception which can help raise capital for these new services. We’ll explain whether an exception applies and the very precise requirements for meeting each type of exception. Our healthcare lawyers will also explain if there are any “safe harbor” arrangements that can be used by the MSO to address concerns the business relationships may violate the Anti-Kickback Statute. The AKS generally makes referrals that provide payments or compensation in return for referring business to Tom’s practice STARK LAW EXCEPTIONS THAT MIGHT APPLY TO YOU In today’s video, we discuss some exceptions to Stark Law, which deals with improper referrals by physicians and healthcare practitioners. Our law firm helps oncology practices and other medical practices comply with federal and state healthcare compliance practices. We review corporate medical compliance, anti-referral law compliance, HIPAA compliance, and many other privacy and consumer protection laws. We’ll explain if an MSO is a good option for your practice. If an MSO is a wise choice, we’ll help negotiate the terms of the MSO for your practice including setting forth the terms, obligations, and available remedies. We’ll also help with any ancillary oncology practices.
January 1, 2023
Healthcare
Are Per-Patient Bonuses Legal?
In today’s video, we talk about the thorny question of whether bonusing staff on a per-patient business is legal or legally risky. I’m Michael H. Cohen. We help healthcare industry clients just like you navigate healthcare and wellness legal and regulatory landscape so you can launch, or scale, your business or product or service. Let’s say you have a medical office that does plastic surgery, a medical spa, a telemedicine practice, something else. You’re the physician and the Registered Nurse or Physician Assistant whom you supervise is super-personable and popular. Because of this mid-level, patients come back again and again. So, they come back for an IV infusion, or Botox, an injectable or laser treatment, hair removal, or some other aesthetic medicine or anti-aging, functional medicine, integrative medicine, or some other therapeutic procedure or approach. In fact, let’s just say it’s the RN or the PA that is responsible for 90% of your business. They are the magnet. They are expert at marketing and customer relations. You want to retain them long-term, obviously. Can you bonus them based on patient retention and return? Could you pay them as an independent contractor, with variable compensation depending on revenues? The answer is a two-letter word: No, you shouldn’t bonus clinical staff based on the financial story of their financial success with patients. Anti-kickback laws prohibit any compensation that varies based on the VALUE or VOLUME of patients. So, compensation that varies with the dollar revenue figure or number of patients returning, would violate these laws. And an employment arrangement is much less risky than an independent contractor arrangement for two reasons: first, bona fide employment is a safe harbor to anti-kickback law; and second, supervision implies control, and control means the person should be classified as an employee. Now, if you would want to bonus your staff person, what can you do? You can reward performance and productivity. The clearest way to do this, is to establish KPI, Key Performance Indicators. The KPI should not be tied to the value or volume of patients. So, for example, let’s take patient satisfaction. It’s a measure of performance. The more satisfied the patients the more likely they will return; you’ll have more revenue – but you are measuring satisfaction and not the number of patient visits or how many dollars they generated. You can apply this same approach to your marketing staff, and we’ve got blog posts on that. Set objective KPI that reward actual performance, not revenue results. And last, ensure that compensation as always reflects fair market value for the services rendered. Fair market value should be set according to performance—in other words, effort—not results. As one formulation of the black-letter law, in California, Business & Professions Code Section 650(b) requires that the bonus be: “for services other than the referral of patients” and “commensurate with the value of the services furnished.” Here’s to the success of your healthcare venture, we look forward to speaking with you soon. Testimonials
December 8, 2022
Healthcare
What Physicians Need to Know about Physician Contracts with Hospitals
Both physicians and hospitals need to be aware of the numerous legal compliance issues when these health providers enter into contractual relationships. Violations of the federal laws and state laws along with violations of local medical board requirements can result in fines, suspension of a medical license, and other consequences. Our experienced healthcare compliance lawyers review hospital/physician contracts before you sign the contracts. Often, we negotiate changes to help you meet your compliance obligations. We also advise physicians when problems arise for noncompliance with the laws, regulations, and the contract itself. Some of the many issues we review are the following: Stark Law and AKS compliance Stark Law and the Anti-Kickback Statute (AKS) are both laws that are designed to ensure physicians place the healthcare of their patients first – before any financial benefits for the physician are considered. Stark Law and the AKS apply when either entity seeks reimbursement from government agencies such as Medicare and Medicaid for health services. Experienced healthcare lawyers review when these laws apply, the consequences for non-compliance, and what exceptions or safe harbors can be included in the contract to help show the healthcare providers are in compliance. Stark Law is a civil law that regulates referrals by a physician to a designated healthcare facility – when the physician or a family member has a financial interest in the designated healthcare facility. A common example is the referral of patients to diagnostic centers or ambulatory service centers (ASCs). The AKS is a criminal law that regulates referrals to any entity in which the physician has received some type of financial incentive (cash, vacations, a directorship, or other benefits) in order to entice the physician to make the referral to that entity. A common example is when physicians recommend certain medications based on the pharmaceutical that made those medications paying the physician to recommend the pharmaceutical company’s drugs. Other compliance laws include the False Claims Act and the Civil Monetary Penalties Law. The False Claims Act governs the fraudulent/dishonest submission of medical bills to governmental agencies. The Civil Monetary Penalties Law regulates forms of abuse involving Medicare and Medicaid. Other compliance laws include the state corporate practice of medicine laws. The corporate practice of medicine laws are designed to separate the practice of medicine from the profit of medicine. Corporations that are subject to the corporate practice of medicine laws cannot hire physicians to provide medical services and the corporations cannot provide the medical services themselves. Can I Own a Medical Practice if I am Not a Doctor? An Overview of Corporate Practice of Medicine We spoke about a series of webinars talking about a trending topic in the legal aspects of corporate medicine, Management Services Organization. And with much anticipation, we bring you – Part II […] The Stark exception and AKS safe harbor exceptions for personal service arrangements Stark Law generally provides a specific exception for physician agreements with hospitals if the following conditions are met: In general, the remuneration from the hospital for physician services must be: In writing, signed, and must identify the services to be provided. The contract should cover all the services to be provided. The “aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement.” The contract must be for at least one year. The compensation should be set in advance, should not exceed fair market value, and except for physician incentive plans (defined in another part of the statute), and should not take into account the volume or value of any referrals or other business generated between the parties. The services should not involve “the counseling or promotion or a business arrangement or other activity that violates any State or Federal law.” Should comply with other requirements necessary to protect the program or patients from abuse.’ The Physician incentive plan exception. This provision of Stark Law provides that a physician incentive plant that “takes into account directly or indirectly the volume or value of any referrals or other business generated between the parties,” should meet the following conditions: “No specific payment is made directly or indirectly under the plan to a physician or a physician group as an inducement to reduce or limit medically necessary services provided with respect to a specific individual enrolled with the entity.” Many other conditions A ‘physician incentive plan’ means any compensation arrangement between an entity and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the entity [hospital]. Other requirements and conditions may also apply that experienced healthcare lawyers will review. Physician recruitment inducements Generally, Stark Law also provides for exceptions for hospital remuneration “to a physician to induce the physician to relocate to the geographic area served by the hospital in order to be a member of the medical staff of the hospital, if— “The physician is not required to refer patients to the hospital, The amount of the remuneration under the arrangement is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician, and The arrangement meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.” The AKS has a similar (but not identical) safe harbor for certain hospital/physician arrangements. Stark exceptions and AKS safe harbors which can benefit doctors if properly created and documented require that the contracts with the physicians be in writing – if the physician is an independent contractor. It is also good practice to also have written contracts between physicians and hospitals when physicians are employees of a hospital. We’ll explain what Stark, AKS, and practical legal issues apply to contractor and employment contracts. The terms of the physician-hospital contract In addition to addressing Stark and AKS issues, written contracts provide numerous other benefits such as determining the length of employment, when a physician can and cannot be discharged, how much the physician will receive in wages and other benefits, the duties of the physician, the duties of the hospital, the right to patient contact information, and many other issues. The contract should establish: Who the parties to the contract are. The contract should clarify whether the party to the contract is a hospital or a medical practice/physician group. Stark Law does require that the contract clearly identify when a practice group is providing the medical services and the relationship between the group and the individual doctors. Other types of contracts we handle include physician contracts with community mental health centers, long-term care facilities, school-based health centers, and hospices. The status of the physicians. The contract should specify whether the doctor who is performing the medical services is an employee or a contractor. The contract is an indicator of status but not conclusive. Generally, the IRS standards for determining employment status will control. A key factor is whether the hospital controls the hours and work performance of the physician. What services will be provided? The physician/hospital contract should set forth the clinical services, administrative functions, and other services the doctor will provide. The contract should identify when and how these services can be assigned to others. The times of service. The contract should set forth whether the physician works full-time, part-time, or when the doctor is needed. The ability to change these schedules should also be written in the contract. Where the services will be provided. The contract should clarify where the physician will work – especially when the hospital has multiple locations. Independent judgment. The contract should make clear that the physician’s primary duty is to the patient and that the physician should be able to use his/her independent professional judgment. This provision may help address any corporate practice of medicine issues. Intellectual property. Experienced healthcare contract lawyers help physicians keep the rights to any intellectual property the physicians generate during the scope of their employment. Credentials. Generally, the hospital will want the doctor to keep current with their medical requirements including board certifications, insurability, DEA registration, and the ability to participate in government programs such as Medicare. The doctor’s credentials may also include any restrictions on the right to practice, Stark or AKS complaints, or any other items on their medical record which might limit their ability to provide the requested medical services. Work performance. The contract should require that the physician and hospital comply with the appropriate rules and regulations, the proper standards of care, and payer requirements. The contract should also set forth the physician’s obligations to participate in various medical staff duties, comply with any investigations, and act on behalf of the patient first. Medical records. The hospital should require that doctors comply with the appropriate medical requirements – including compliance with the Healthcare Insurance Portability and Accountability Act (HIPAA). Doctors will be required to complete any open medical records when the contract ends in a timely manner. Other medical requirements may apply including compliance with the Social Security Act. The contract should indicate who owns the medical records. Supplies and staff. The duties of the hospital. The contract should provide terms for what equipment, supplies, and staff the doctor can use – along with what office and surgical space can be used.For example, the safe harbor provisions of the AKS provide that leasing agreements must be in writing and signed by the hospital and the physician. The lease must specify that premises and equipment that are included. “If access to the space or equipment is for periodic intervals, a schedule for the use and exact lease payments must be set out in advance.” The lease must be at least for one year. The lease payment obligations must be written in advance and based on fair market value. Compensation. Doctors deserve to be paid for their medical services. The compensation should, to comply with various federal laws and rules, be based on the fair market value of the services given the doctor’s qualification and experience. The compensation generally should not be based on the volume of the practice or the amount of any referrals. The contract should also document any signing bonuses, relocation expenses, loan repayments, and any other benefits the doctor is receiving. Hospitals, physician groups, and individual physicians should understand the Stark and AKS requirements. For example, generally, doctors cannot be paid by a hospital or physician group practice based on “ancillary services” such as lab tests that the doctor orders. There are many other considerations that affect the compensation part of the contract – such as tax considerations. Additional benefits. In addition to a salary, financial payments, and other cash considerations; the contract should include such benefits as insurance benefits, pensions and other retirement benefits, vacation time, and sick time. Another common benefit point is that Continuing Medical Education (CME) benefits (payment for the courses). Referrals. Stark Law may allow some referrals provided the specific terms of any exceptions are met. Any discussion of the referral arrangements should be in writing. Other physician/hospital contract issues include patient collections issues, liability insurance coverage, worker’s compensation payments, the contract term, indemnification issues, how the contract can be terminated, confidentiality requirements, and post-termination requirements. Generally, California does not authorize covenants not to compete (noncompetition clauses). Other states may authorize noncompetition clauses. The contract may also have a non-solicitation clause to ensure that the physician can’t solicit patients – though there are laws that ensure that the best interest of the patient comes first that we’ll explain. There are many other provisions we’ll review such as how disputes are resolved and other issues. Physician service agreements with hospitals must comply with Stark Law and the AKS. There are specific rules for physician service agreements in both statutes. Doctors should review with skilled healthcare lawyers the full range of legal, practical, and medical issues that each contract should address.
December 1, 2022
Healthcare
Healthcare Compliance Issues for Medical Drones
Advances in drone technology have begun to entice developers and medical care providers. There are numerous projects already in development that will use drones to help deliver medicine and medical supplies, help seniors, and a host of other possible medical uses. The legal issues involving how these devices will be regulated by the FDA (as a medical device or for other reasons) and other agencies are just beginning. This article explores many of the potential uses of drone technology. As with new innovations, developers and medical providers need to review the lines between the business aspect of this technology and the medical needs of the patients. Our experienced healthcare providers will review many different drone medicine issues including: Whether Stark Law, the Anti-Kickback Statute, or other anti-referral laws apply? When can and when can’t developers provide incentives to medical practices to use the developer’s drone technology? When can a physician have and when can’t he/she have an interest in a service that uses drone technology? Whether the corporate practice of medicine laws apply? Generally, only doctors can provide medical advice. To the extent the drones are considered medical, there will need to be a discussion about who can own the drone technology company. Who can prescribe and administer drone technology that has a medical component? Does HIPAA apply if the drone technology includes any electronic information about the patient? Many other legal questions depending on the scope and applications of the medical drone technology. DRUG AND MEDICAL DEVICE MANUFACTURERS NEED TO COMPLY WITH THE ACA’S SUNSHINE ACT – PART ONE The Sunshine Rule of the Affordable Care Act requires that drug and medical device manufacturers disclose to CMS any payments they made for the benefit of physicians regarding the drugs or devices. STARK LAW EXCEPTIONS THAT MIGHT APPLY TO YOU In today’s video, we discuss some exceptions to Stark Law, which deals with improper referrals by physicians and healthcare practitioners. CAN I OWN A MEDICAL PRACTICE IF I AM NOT A DOCTOR? AN OVERVIEW OF CORPORATE PRACTICE OF MEDICINE We spoke about a series of webinars talking about a trending topic in the legal aspects of corporate medicine, Management Services Organization. And with much anticipation, we bring you – Part II […] Drones and the delivery of medications or other health services Many publications such as Very Well Health have begun to review the benefits of drone technology for the practice of medicine. Very Well Health discussed the following pros and cons of using drones to deliver prescription medication to the homes to patients. For example, Zipline, a leading drone manufacturer is working with Magellan Health and Intermountain Healthcare to deliver prescription medications and medical supplies via drone to a patient’s home. The company is already planning to make deliveries in Charlotte, North Carolina and there are plans to service Salt Lake City, Utah – pending FAA (Federal Aviation Administration) approval. The drones, which are battery-operated can make medical deliveries in about 30 minutes – as compared to hours or days for more traditional services. According to Zipline, “autonomous aircraft are much more sustainable and fuel-efficient per delivery and also reduce congestion and wear and tear on the highways.” Zipline already is delivering medical products in Rwanda and Ghana. During the pandemic, Zipline was able to deliver personal protective equipment to North Caroline frontline healthcare workers. The company has also delivered, as of the date of the Very Well Health article, 650,000 COVID-19 vaccines. The benefits of drone medical delivery The advantages to drone delivery of medical products according to Very Well Health include getting necessary medical products to people who don’t have transportation or who cannot drive due to chronic health problems. The delivery services also mean deliveries can be made according to the patient’s schedule. Drone delivery is especially helpful in rural areas and any areas where the location may be hard to reach or difficult to traverse – such as islands, wetlands, or mountains. Drone delivery services help ensure the patient gets the medications promptly and with less personal contact which can reduce the possibility of spreading infectious diseases. Drone delivery could be especially useful when disasters happen. Drone delivery generally works by having a doctor, nurse, or health technician send a request to the drone company. The drone then delivers medications, vaccines, antivenoms, antibiotics, blood transfusions, and many other medical products. The product is dropped by parachute so that the product lands at a rate of speed that should prevent the medication or medical product from being damaged. The drone then flies back to the company launch site. Concerns about using medical drone services A few of the disadvantages of medical drone services include the following: Storage issues if the medications need to be kept at a certain temperature and a specific humidity level. “In 2021, Zipline partnered with Pfizer to complete the first long-range drone delivery of COVID-19 vaccines, which must be stored at extremely cold temperatures.” The expense of building and maintenance of the drone Equipment failure Training costs Possible damage or theft of the medications and other medical equipment Privacy concerns Weather-related challenges such as rain, snow, heat, cold, and wind Battery-related capabilities Fuel issues Drone propellor function There are regulations (or will likely soon be regulations) that monitor the path of the drone and the number of drones that can be in the sky. Drones generally land on a person’s front yard, backyard, or driveway. This strategy works well for homeowners. The strategy can require more work for apartment renters. “Another big disadvantage of drone delivery would be bypassing the ability for patients to speak directly with their pharmacist about any questions or concerns regarding their medications.” Many patients like to ask questions of their pharmacists when they pick up their prescriptions or medical supplies. Other concerns include insurance coverage, the cost of the delivery, and what happens if there’s a drone accident. Drone medical deliveries – the next stages Most Americans live within five miles of a pharmacy. While there would seem to be substantial benefits for people in rural or remote locations, the question begs how practical medical drones are for urban areas. Very Well Health adds that the delivery of medications and medical products “will require the involvement of multiple federal agencies including the FAA, Federal Trade Commission, Food and Drug Administration, Drug Enforcement Agency, and the Department of Health and Human Services.” Currently, the expectation is that medical drones will primarily be used to test their benefits and risks. Additional uses of medical drones According to Drones in HealthCare, medical drones are being developed for purposes other than delivering medications. Drones, like mobile apps, wearable technology, telemedicine, robots, and artificial intelligence are helping provide medical care throughout the country. In addition to helping people in their homes, drone delivery services could work with nursing homes that often, on average, how more patients in need of medical care than the general public. Drones could also help seniors stay in their homes instead of having to move into a nursing home. Drones could help deliver meals to people who can’t make their own meals Drones could help monitor patients with dementia. Drones could possibly help patients who are having cardiac problems and other medical orders that require a defibrillator.“Automated external defibrillators (AED) [could] fly to the patient in a public space to provide rapid defibrillation for ventricular fibrillation. No longer would a person have to obtain AEDs from a specific location that may be challenging to find in a rapid fashion. Simply summon the AED with the push of a button or smartphone app.” Drone deliveries can also be useful inside hospitals. Drones can make deliveries from floor to floor and building to building – faster the making the deliveries by walking or through pneumatic tube systems. Other factors that affect how well drone medical services work in hospitals are GPS signals and radio signals – which work outdoors but not as well indoors. As with most technology, there are concerns that drones can affect the jobs of various healthcare workers. Drones could be designed to deliver more than just medications. Drones could be programmed to sort laundry, grab a glass of water, or clean around the home. The psychology of having drones fly around a home needs to be considered. A drone is also referred to as an unmanned aircraft system (UAS). Forbes profiled a few other medical uses for drone technologies. One interesting possibility is to use drones equipped with cameras and a display screen so the patient can use telehealth services from their home or any other location to speak with a doctor. Drones can also be designed to enable patients to administer self-lab tests. In this way, the telehealth service could be combined with some diagnostic services. According to the US NIH: “Drones are used for surveillance of disaster sites, areas with biological and chemical hazards, and tracking disease spread. It has been shown that drones can gather information about the number of patients in need of care and triage in high-risk environments.” “Drone technology has been used to detect health hazards, such as heavy metals, aerosols, and radiation.” “The ability of drones to acquire real-time, high-resolution temporal and spatial information at low cost makes them viable for epidemiology research.” Drone technology is helping provide medical care in many ways. A primary way is the delivery of medications and medical supplies – especially to remote areas. Drone technology may also help when disasters strike, with medical research, and with the use of telemedicine. Drone manufacturers and medical practices need to understand when and how the FDA, the FTC, and other federal or state agencies may regulate drone technology. Companies need to review referral arrangements, medical supervision issues, and many other healthcare issues – with experienced healthcare attorneys.
October 15, 2022
Healthcare
What Are the Legal Risks Involved with An IV Therapy Business? Part Two
In our first article about IV therapy, we discussed what IV therapy is, why it’s popular, and who can own an IV therapy practice. There are many more questions that practitioners of IV therapy need to review with an experienced healthcare attorney. We’ll discuss some of the following IV therapy legal compliance topics below: Who can prescribe, prepare, and administer IV therapy? What referral laws apply to IV therapy? What rules and regulations govern the marketing of IV therapy? We strongly suggest you make an appointment to discuss the topics listed above – and all healthcare regulations that govern IV therapy in your state – with healthcare lawyers with a record of service in the healthcare industry. What is the business structure of the IV therapy practice – and does the business structure comply with the corporate practice of medicine laws? Does the manner and delivery of the IV therapy make a difference – in a hospital, at a medical office, at home, or through a mobile app? What notices, consent issues, and contracts are involved – between physician and patient? Does the Federal Drug Administration (FDA) have to approve the IV therapy solution? What state agencies and medical boards have oversight over IV therapy? IV practices also need to review any medical malpractice issues, business issues, contractual issues, and other health, financial, and legal considerations. IV HYDRATION THERAPY – LEGAL STRATEGIES In today’s video, we discuss some of the legal perils involving IV hydration therapy and potential legal strategies and solutions. Who can prescribe, prepare, and administer IV therapy? Generally, a physician prescribes the IV therapy, a pharmacist prepares the IV solution, and a registered nurse administers the IV therapy to the patient. The states differ on which other healthcare professionals can participate in each phase of the IV therapy treatment. Some orders can be delegated from one healthcare professional to another; but others may not. For example, an emergency medical technician may also (you need to check with your lawyer) administer IV therapy to a patient. Many states do not authorize EMT administration of IV therapy. Other agencies that have oversight over IV therapy include the US FDA, state medical boards, state pharmacy boards, and state health and human services departments. There are also additional rules for prescribing IV therapy through a telemedicine interview as opposed to an in-person interview of a patient. For example, Cal. Code Regs. tit. 16 § 2542.1 provides that: The Board will consider a licensed vocational nurse as competent to start and superimpose intravenous fluids via primary or secondary infusion lines who has completed one of the following: An approved intravenous therapy course A submitted certification that meets specific medical board and California Business and Professions Code requirements. According to the American MedSpa Association, in addition to the corporate practice of medicine issues, the chain of care (including prescription and administration of the IV therapy) must be consistent with the diagnosis and treatment requirements of the procedure. An entity that has the legal authority to provide IV therapy must conduct an examination of the patient to determine the health status of the patient. As we recently discussed, California has modified its supervision and delegation requirements for registered nurses. The American MedSpa Association also states that a non-physician provider can be a physician’s assistant (PA), nurse practitioner (NP), or registered nurse (RN). In some states, a licensed practical nurse (LPN) or a licensed vocational nurse (LVN) may also have the authority to administer the IV therapy. Just a few states authorize an EMT or a paramedic to administer IV fluids. Supervision rules can include being on the site while the IV solution is administered – to being immediately available in case there is an emergency. For example, [as we discussed above] in California, an RN may administer the IV therapy under the supervision of either a physician, PA or NP. An LVN will be considered competent to start and superimpose IV fluids via a primary or secondary line if the LVN has completed either a nursing board-approved intravenous therapy course or submitted certification to prove that the LVN has the knowledge, skills, and abilities to safely administer IV services. In New York, an LPN must be under the “direct supervision of a physician, PA, RN, or NP. LPNs must be trained to administer IV therapy.” CALIFORNIA’S NEW SCOPE OF PRACTICE LAW FOR NURSE PRACTITIONERS – PART ONE California passed a new law, effective January 1, 2023, that permits nurse practitioners in specific settings to provide care (under certain conditions) that does not meet “standardized procedures.” What referral laws apply to IV therapy? The medical practices that provide IV hydration/vitamin therapy must also comply with laws designed to place patient safety before the profits of the medical practice. The laws (some civil, some criminal) generally provide that a doctor must refer patients to related services such as diagnostic labs and IV therapy services based on what is in the best interest of the patient. Some of the laws that we’ve also discussed that govern medical referrals include: Stark Law. This law prohibits doctors from referring patients to a designated health service (one in which the physician has a financial interest or a family member has a financial interest) unless certain Stark exceptions are met. The Anti-Kickback Statute (AKS). This law prohibits medical practices, such as IV therapy practices, from providing incentives (such as cash payments, directorships, or vacations) in return for the physician referring patients to the medical practice. The AKS does authorize certain safe harbors which may make the referral legal. The False Claims Act. This law prohibits medical providers from submitting false bills to Medicare, Medicaid, and other federal agencies. The law encompasses both Stark Law and the AKS. This means that a medical practice that is charged with a Stark Law or AKS violation may also be charged with violating the False Claims Act. California has its own False Claims Act that generally applies to false claim submissions to Medicaid. What rules and regulations govern the marketing of IV therapy? There are different laws and regulations that govern how medical practices including IV therapy practices can market their product and services. One federal agency that regulates false advertising is the Federal Trade Commission (FTC). We have a short video on FTC oversight of IV therapy online. IV therapy mixtures generally contain water, minerals, vitamins, and amino acids – that are administered through an IV drip. So, for starters, the marketing must be truthful as to what products are in the IV solution and how the solution is administered. The FTC does review company websites, social media, and print marketing materials. A website or marketing brochure that claims, as one company did according to an FTC enforcement action in 2018, that their IV mixture can cure specific diseases such as congestive heart failure, diabetes, or cancer – without any scientific evidence to support the claim – will likely result in a warning letter from the FTC and possible enforcement action. A settlement with the company was reached that prohibits the company from making false or unsubstantiated claims that its IV cocktails: “Are an effective treatment for any of the diseases included in the complaint. Produce fast, lasting results. Cure, mitigate, or treat any diseases, unless the claim is supported by competent and reliable scientific evidence.” The settlement order also prohibited the company “from making any express or implied health, safety, or efficacy claims unless they are not misleading and are supported by scientific evidence.” FTC enforcement also can require that companies prohibit misrepresentations about the healthcare professionals involved in designing, testing, and approving the IV products. Companies that fail to comply with FTC warning letters can be forced to suspend production of their products – along with other consequences. IV therapy is becoming a popular treatment for many patients. While there are opportunities for profit for the medical practices that prescribe and administer the solutions and the pharmacies that prepare the solutions – there are numerous legal compliance issues. Medical practices need to understand who can prescribe IV therapy, who can prepare the mixture, and who can administer the solution. The practices need to understand when referrals are legal and when referrals are not legal. All marketing claims must be honest and comply with legal requirements. Our experienced healthcare attorneys advise physicians, nurses, pharmacies, and other healthcare providers about healthcare compliance laws and regulations.
October 1, 2022
Healthcare
Can a Chiropractor Employ a Medical Doctor?
Can a chiropractor employ a licensed medical doctor? The question reminds me a tee-shirt I once saw which said: “Can I pay my Mastercard with my VISA?” Hi, I’m Michael H Cohen. We provide legal strategy and regulatory advice to businesses like yours that accelerate health and wellness. The question about chiropractors employing licensed medical doctors brings up legal issues generally around multi-disciplinary healthcare practices, medical spas, wellness centers, IV hydration clinics, mental and behavioral health centers, addiction centers, and other types of healthcare group arrangements in which providers cross-pollinate. In California we’ve got the Moscone-Knox Professional Corporations Act, which allows a kind of mixing-and-matching among healthcare practitioners as owners, directors and employees within a professional corporation. Typically, it’s a professional medical corporation although it could also be a professional chiropractor corporation, nursing, psychological, acupuncture, or professional naturopathic corporation, and so on. One legal tip: simply because Moscone-Knox in California does allow a particular business structure does not mean that the business arrangement will pass scrutiny under corporate practice of medicine and anti-kickback prohibitions. For example, in California, a “strong” corporate practice of medicine State, non-physicians cannot hire and fire physicians, because this implies excessive control over the practice of medicine. The same restrictions over MSO practices would apply here to the chiropractor. Therefore, we would recommend structuring the venture so that the chiropractor is housed within a chiropractic corporation; the medical doctor within a medical corporation; then let’s say the chiropractor, our client, they could also own the MSO which provides MSO services to each professional corporation. Does this sound complicated? Not really. It’s the same MSO model we discuss over and over on the website, on the blog. The nuance is, we get a better structure than one that allows the chiropractor too much control over medical decision-making. Instead, the MSO is involved in management and marketing, basic business operations. It might include something as powerful as branding and marketing the entire center. Thanks for watching, if you have questions contact us, we look forward to working with you soon.
October 1, 2022
Healthcare
California’s New Scope of Practice Law for Nurse Practitioners – Part Two
This article is a continuation of our discussion about how California law AB 890 makes treating patients easier for nurse practitioners – without physician supervision or the need to comply with “standardized procedures.” In part one, we ended by discussing how NPs could meet the provisions of the new law by working in specific types of settings and organizations. This article continues that discussion by explaining the role of NPs in nursing corporations. NPs in Nursing Corporations California law already provided, before AB 890, that nurse practitioners could create nursing corporations: “2775. A nursing corporation is a corporation which is authorized to render professional services, as defined in Section 13401 of the Corporations Code, so long as that corporation and its shareholders, officers, directors, and employees rendering professional services who are registered nurses are in compliance with the Moscone-Knox Professional Corporation Act, the provisions of this article and all other statutes and regulations now or hereafter enacted or adopted pertaining to such corporation and the conduct of its affairs.” “With respect to a nursing corporation, the governmental agency referred to in the Moscone-Knox Professional Corporation Act is the Board of Registered Nursing.” 2776. This section states that violations of the act (indirect or direct attempts to violate the act, and other acts such as aiding in the violation of the nursing corporations statute, the Moscone-Knox Professional Corporation Act, or any regulations duly adopted under those laws – will be considered unprofessional conduct and a violation of this chapter. 2777. This provision provides that a nursing corporation is bound by the same statutes and regulations as a person holding a license under this chapter. 2778. This provision states that: “the name of a nursing corporation and any name or names under which it may render professional services shall contain the words “nursing” or “registered nursing,” and wording or abbreviations denoting corporate existence.” 2779. Except as provided elsewhere in the Corporations Code; “each shareholder, director and officer of a nursing corporation, except an assistant secretary and an assistant treasurer, shall be a licensed person as defined in Section 13401 of the Corporations Code.” Other provisions pertain to the income of a nursing corporation attributable to professional services rendered while a shareholder is a disqualified person – and what regulates can be adopted and enforced to carry out the objectives of the nursing corporation law. When AB 890 becomes effective in 2023, a nurse practitioner that meets the new scope of practice requirements (that permit an NP to practice in a setting/organization-specific practice – without standardized procedures) will: “Be able to practice independently with an additional three years of practicing in good standing (i.e., no discipline against the NP’s BRN RN license or NP certificate) in a setting-specific practice, for a total of six years (i.e., three years in TTP + 3 years practicing in good standing), to practice as an independent NP outside the setting-specific practices.” AB 890 also provides the following benefits and rights for nurse practitioners: Medical Staff Membership and Voting Rights. A nurse practitioner will be able to serve on “organized medical staff and hospital committees and adhere to all applicable medical staff bylaws in healthcare facilities.” In certain setting/organization practices, an NP will be eligible to attend department meetings. The NP will not be able to vote at a department, division, or other meetings unless their vote relates to the determination of NP privileges, peer review of NP clinical practice, certain licensee employment considerations, or the vote is “otherwise allowed by the applicable Medical Staff bylaws.” If an NP in a nursing corporation is eligible to join an organized medical staff (after January 1, 2023), the nurse practitioner will have the right to vote at all department, divisions, or other meetings. Referrals and evaluation of care. NPs should refer a patient to a doctor, surgeon, or another licensed health care provider – if the care that a patient need is beyond the skill and experience level of the nurse practitioner. According to the California Association of Long Term Care Medicine, NPs already are required to refer patients if the patient needs help above the skill level of an NP. NPs and other health care providers regularly make authorized referrals – such as “to a specialist Cardiology clinic for uncontrolled hypertension or Physical Therapy and Occupational Therapy in the Skilled Nursing Facility (SNF) setting for evaluation of a safe discharge.” For NPs in Nursing Corporations, NPs in SNFs Generally, most nurse practitioners who work in a skilled nursing facility (SNF) will be practicing within a setting-specific group – and will not require standardized procedures and physician supervision – once the California BRN creates new regulations. If a nurse practitioner in an SNF wants to create a nursing corporation, “they will then practice as an independent individual NP or NP group in 2023, under certain conditions.” Until the new law and new BRN regulations go into effect, nurse practitioners must enter into a written practice agreement with an individual doctor or a physician group: “Because the regulations governing SNFs require that a physician may not delegate a task when the regulations specify that the physician must perform it personally, which includes the initial comprehensive visit in an SNF during which the physician completes a thorough assessment, develops a plan of care, and writes or verifies admitting orders for the resident.” Medicare requires that the doctor cannot delegate the initial comprehensive visit in an SNF. Generally, non-physician practitioners may perform other medically necessary visits before and after the physician’s initial comprehensive visit. AB 890 should enable a better SNF workflow as NPs can practice without physician supervision and standardized procedures – and doctors will have a lighter workload and less paperwork. According to the California Association of Long-Term Care Medicine, “NPs in California have been working for over 20 years to get full practice authority. While there are still regulatory rules that need to be created, NP practices now have the statute for full practice authority.” How to Use a Management Services Organization for Profit if you’re a Doctor, Nurse, or Entrepreneur This video is excerpted from a Webinar held by Clara Salvai, Matthew Stokke, and Molly Fashola on April 14th, 2022. We are sharing some legal industry insights to the ever changing landscape of […] What Physicians and Investors Must Know About California Medical Corporations Doctors must comply with California’s Professional Corporation Act. A professional medical corporation provides many advantages over a partnership or sole proprietorship. Affordable Care Act creates scope of practice legislative scramble for healthcare practitioners Healthcare reform is creating incentives for even more legislative scrambles by different practitioner lobbying groups for favorable legislation that will protect, preserve, and expand their own […] What regulations may be needed to implement AB 890? According to the California BRN: The term “transition to practice,” will need to be defined. Currently, the term means: “Additional clinical experience and mentorship provided to prepare a nurse practitioner to practice independently.” “Transition to practice” includes, but is not limited to, managing a panel of patients, working in a complex health care setting, interpersonal communication, interpersonal collaboration and team-based care, professionalism, and business management of a practice. The board shall, by regulation, define minimum standards for transition to practice. Clinical experience may include experience obtained before January 1, 2021, if the experience meets the requirements established by the board. The BRN will need to determine process for Nurse Practitioner Advisory Committee to advise the Board on disciplinary matters* This regulation may or may not be necessary depending on the process used “Lower experience requirement to practice under 2837.104 for NPs holding a DNP (if desired*) (*This is not a prerequisite to full implementation of AB 890, as it is within the Board’s discretion to determine whether to lower this requirement).” “Establish certificate to practice under section 2837.104, and corresponding fee for certificate.” “Establish supplemental examination, if deemed necessary.” “The Board may consider whether other portions of AB 890 require a regulation in order to implement, interpret, or make specific any of the statutes in the bill.” What has the BRN done so far? Currently, the California Board of Registered Nurses is engaged in developing proposals and regulations to implement AB 890. Additional considerations by a local medical association According to the Alameda-Contra Costa Medical Association, there are some additional considerations: The California Medical Association (CMA) will be closely involved in the implementation of AB 890, monitoring and advocating during the regulatory process at the Board of Registered Nursing and at the Medical Board of California, as necessary. AB 890 allows Section 103 and 104 NPs to do the following: “Conduct an advanced assessment Order, perform; and interpret diagnostic procedures, as specified with regard to radiologic and clinical laboratory procedures Establish primary and differential diagnoses Prescribe, order, administer, dispense, procure, and furnish therapeutic measures including referrals, pharmacological agents, and nonpharmacological interventions, as specified Certify disability for state disability benefits Delegate tasks to a medical assistant.” AB 890 requires Section 103 and 104 NPs to do the following: “Verbally inform all new patients in a language understandable to the patient that the nurse practitioner is not a physician; Post a notice in a conspicuous location accessible to public view that the nurse practitioner is regulated by the BRN, including information about how complaints can be made; Practice only within the scope of their education and training; Refer patients to a physician in specified circumstances; and Carry professional liability insurance.” AB 890 Does Not End Physician Supervision. The bill does not prohibit the supervision of NPs – including the two new categories created under AB 890 – or otherwise seek to regulate or modify the operative law regarding the governance of nurse practitioners who do not receive additional training. Current arrangements regarding the practice and supervision of NPs are not regulated or changed by AB 890. AB 890 Requires Consultation and/or Referral. AB 890 requires “Section 10”’ NPs to refer cases beyond their training and education to a physician. AB 890 also requires “Section 104” NPs, who are practicing in facilities that may not have a physician on site, to consult with and refer patients to a physician in specified circumstances. AB 890 Explicitly Protects the “Corporate Bar.” AB 890 specifies that the corporate bar applies to Section 103 and Section 104 NPs. That means entities including hospitals may not hire, employ or otherwise control the Section 103 and Section 104 NPs unless one of the existing exceptions to the corporate bar applies. California AB 890 expands the ability of nurse practitioners in California to provide patient services without following “standardized procedures” in certain settings and through nurse corporations. The California Board of Registered Nurses is developing regulations to implement the new law. Our experienced healthcare attorneys advise doctors, nurses, and other health care providers about healthcare compliance laws and regulations.
September 1, 2022
Healthcare
California’s New Scope of Practice Law for Nurse Practitioners – Part One
The California Board of Nursing states that a new California law, AB-890 expands the scope of practice rules for nurse practitioners. The law is effective January 1, 2023. To take advantage of the new law, nurses must meet specific California requirements. Nurse practitioners who do meet the requirements may be able to practice “independently,” in some cases. Nurses who do not meet the requirements must comply with “Standardized Procedures, the mechanism for Nurse Practitioners to perform functions which would be considered the practice of medicine.” What were the standardized procedures that nurse practitioners needed to meet prior to AB 890? The standardized procedures are those set forth in California law. Standardized procedures mean either of the following: “(1) Policies and protocols developed by a health facility licensed pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code through collaboration among administrators and health professionals including physicians and nurses. (2) Policies and protocols developed through collaboration among administrators and health professionals, including physicians and nurses, by an organized health care system which is not a health facility licensed pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code. The policies and protocols shall be subject to any guidelines for standardized procedures that the Division of Licensing of the Medical Board of California and the Board of Registered Nursing may jointly promulgate. If promulgated, the guidelines shall be administered by the Board of Registered Nursing.” What duties do nurses perform? Nursing as defined by the statute means: “Those functions, including basic health care, that help people cope with difficulties in daily living that are associated with their actual or potential health or illness problems or the treatment thereof, and that require a substantial amount of scientific knowledge or technical skill, including all of the following: (1) Direct and indirect patient care services that ensure the safety, comfort, personal hygiene, and protection of patients; and the performance of disease prevention and restorative measures. (2) Direct and indirect patient care services, including, but not limited to, the administration of medications and therapeutic agents, necessary to implement a treatment, disease prevention, or rehabilitative regimen ordered by and within the scope of licensure of a physician, dentist, podiatrist, or clinical psychologist, as defined by Section 1316.5 of the Health and Safety Code. (3) The performance of skin tests, immunization techniques, and the withdrawal of human blood from veins and arteries. (4) Observation of signs and symptoms of illness, reactions to treatment, general behavior, or general physical condition, and (A) determination of whether the signs, symptoms, reactions, behavior, or general appearance exhibit abnormal characteristics, and (B) implementation, based on observed abnormalities, of appropriate reporting, or referral, or standardized procedures, or changes in treatment regimen in accordance with standardized procedures, or the initiation of emergency procedures.” Before the passage of the new law nurse practitioners (NPs) could also: Order durable medical equipment Certify if a patient is disabled Approve or modify a plan of treatment or plan of home health care Furnish drugs or devices “consistent with the practitioner’s educational preparation or for which clinical competency has been established and maintained,” under physician and surgeon supervision (§ 2836.1). Specific supervision requirements include: “collaboration on the development of the standardized procedure, approval of the standardized procedure, and availability by telephonic contact at the time of patient examination by the nurse practitioner.” Furnish or order buprenorphine. Why was the AB 890 legislation enacted? According to the California Association of Long Term Care Medicine, the California NP scope of practice law was enacted to help mitigate COVID-19. AB90 was one of many bills introduced nationwide to help healthcare providers respond to the pandemic. Other COVID bills passed in California included bills to: Provide minimum personal protective equipment (PPE) requirements Expand the ability of pharmacists to give vaccines for COVID-19 Create statewide peer support specialist standards AB 890 is still awaiting new rules which will be drafted by the California Board of Registered Nursing (BRN). What did Assembly Bill (AB) 90 do? The new law: Established Article 8.5 in the Nursing Practice Act – that provides when and how NPs can practice without the use of standardized procedures (sections 2837.103 and 2837.104). Established a Nurse Practitioner Advisory Committee within the Board of Registered Nursing. This committee will advise the board about nurse practitioner issues including disciplinary issues. “Extended the prohibitions of section 650.01 to NPs practicing independently under section 2837.103 or 2837.104 – which“Makes it a misdemeanor for specified healing arts practitioners to refer a patient to another practitioner/entity for certain services, if the licensee or their immediate family has a financial interest with the person/entity that receives the referral. In this respect, the AB 890 is akin to Stark Law.” Extends “the requirement of section 805 to NPs practicing independently under section 2837.103 or 2837.104. “Section 805 requires certain peer review organizations to file an “805 report” with the applicable healing arts board, providing information about adverse actions taken against certain healing arts licensees for medical disciplinary cause.” Directs the California Board of Registered Nursing to “work with the DCA Office of Professional Examination Services on an occupational analysis, an assessment of the competencies tested by the national NP exam, and a determination of whether a supplemental exam is necessary to validate competency for independent practice.” Assigns other duties to the California Board of Registered Nursing to implement the new law. The First Steps to Understanding Stark Law In today’s video, we will be introducing you to Stark Law. What are the nurse practitioner requirements to be eligible to practice independently? AB 890 essentially provides two ways for nurse practitioners to practice without standard procedures and physician oversight: Setting specific practices This part of the bill is effective in 2021 – only after the BRN creates the necessary regulations. The key provisions are that the: NP passes a national NP board certification examination. “The Department of Consumer Affairs, Office of Professional Examination Services (OPES) will complete an occupational analysis of NPs performing the functions in the scope of practice statute and will possibly create an exam to cover aspects of the scope of practice statute if the national NP board certification exams do not cover them.” The NP must be properly certified by “a national certifying body accredited by the National Commission for Certifying Agencies or the American Board of Nursing Specialties and those national certifications need to be recognized by the BRN.” The nurse practitioner must provide documentation to show their training was “consistent with current BRN standards and any applicable regulations as they specifically relate to requirements for clinical practice hours. Online educational programs that do not include mandatory clinical hours shall not meet this requirement in the new law.” The NP must finish a California transition-to-practice (TTP) requirement of three full-time equivalent years or 4600 hours – according to BRN regulations. “To expand their practice outside of these settings: “a nurse practitioner must practice within the limits of their knowledge, experience, and national certification and have practiced in good standing for at least three (3) years after meeting the requirements to transition to practice.” “Nurse practitioners who practice outside of the limited settings listed above “shall consult and collaborate with other healing arts providers based on the clinical condition of the patient to whom health care is provided and establish a plan for referral of complex medical cases and emergencies to a physician and surgeon or other appropriate healing arts providers.” NPs who complete the above steps and work at one of the following six settings/organizations can, pursuant to AB 90, practice without standardized procedures or physician supervision: Clinics as defined by the Health and Safety Code A health facility as defined by the Health and Safety Code – with exceptions for correctional treatment centers, state hospitals, and other types of facilities. A medical group practice, including a professional medical corporation… another form of corporation controlled by physicians and surgeons, a medical partnership, a medical foundation exempt from licensure, or another lawfully organized group of physicians and surgeons that provides health care services. A home health agency. A hospice Each of these settings is defined in more detail in the California statutes. In response to the COVID pandemic, California passed a law that makes it easier for nurse practitioners to treat patients. The law provides that nurse practitioners who complete specific requirements can practice in a medical group practice and other settings – without the requirement to follow standardized nursing procedures. 7 Reasons Why Nurses Lose Their License Registered nurses, nurse practitioners, nurse specialists, and all nurses need to understand HIPAA, fee-splitting and revenue laws, a doctor’s duty of supervision, and other legal issues that […] Did COVID Relax Telemedicine Laws? In today’s video, we discuss whether COVID relaxed telemedicine laws. Our experienced healthcare attorneys advise nurse practitioners, doctors, and others about healthcare compliance laws and regulations.
August 22, 2022
Healthcare
Drug and Medical Device Manufacturers Need to Comply with the ACA’s Sunshine Act – Part One
The Affordable Care Act includes a provision called the “Sunshine” Rule. More formally, the rule is called “The National Physician Payment Transparency Program: Open Payments.” The Centers for Medicare & Medicaid Services (CMS) announced the terms of the rule in 2014. The rule is designed to help patients and others understand when the medications and medical devices their doctors recommend come with a catch – that the doctor has a financial interest with the drug company that makes the drugs or the device manufacturer that make the medical devices. According to the CMS deputy administrator for Program Integrity, “Disclosure of these relationships allows patients to have more informed discussions with their doctors.” The rule applies to drugs, devices, biologicals, and medical supplies – that are covered by Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP). The manufacturers are required to report any payments or transfers of items of value that the manufacturers make to doctors and teaching hospitals – to CMS. CMS will post that information on its public website. The rule also mandates that the manufacturers and group purchasing organizations (GPOs) disclose to CMS any doctor ownership or investment interests. The aim of the rule is to provide increased transparency. The rule is designed to “help reduce the potential for conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers.” The rule become effective on August 1, 2013. CMS began disclosing the data on its website on September 30, 2014. The rule can be viewed at Federal Register: Federal Register Documents Currently on Public Inspection According to Health Affairs, the Sunshine rule, also called, “The Physician Payments Sunshine Act,” is based on section 6002 of the Affordable Care Act (ACA) of 2010. Why was the Sunshine Rule enacted? Drug and medical device manufacturers rely on doctors to refer their products to their patients. It’s one thing for a doctor to refer a drug or device based on an independent review by the doctor of all the appropriate drugs and devices (and the brands of each drug and device) – and another to make a recommendation based on a conflict of interest. Doctors should recommend medical products based on the best health outcomes for their patients and not on their own financial interests. The concern about a conflict of interest between the patient and doctor is so concerning that there are several federal laws that regulate referrals by doctors of all medical products in which the doctor has a financial interest in the product or has been given a financial incentive to recommend the medical product. Stark Law. Stark Law prohibits healthcare providers from making referrals to certain designated medical practices such as laboratories in which the physician or a close family member has a financial interest. Stark law applies to services and products that are ordered for Medicare patients. A financial interest includes compensation, investment, and ownership. There are some exceptions that generally do not endanger a patient’s health. The Anti-Kickback Statute (AKS). This law is a criminal statute that forbids medical companies from paying or providing financial incentives to physicians to refer the company’s products to the patients of the physicians. Some safe harbors do apply to the AKS. The drafters of the ACA were concerned about incentives such as free meals and speaker, or consulting fees paid to the doctors. According to Health Affairs, the financial relationships: “Can have many positive outcomes and–particularly in the context of consulting and research funding–are often a key component in the development of new drugs and devices.” However, they can also create conflicts of interest and in some cases can blur the line between promotional activities and the conduct of medical research, training, and practice. The financial interdependence between physicians and the manufacturers of medications, medical devices, biologicals, and medical supplies is far from minimal. According to a 2009 nationwide survey, nearly 84 percent of doctors had some type of financial relationship with the manufacturers. – of which, more than ½ were meals provided in the workplace. About 20 percent of doctors were reimbursed for attending a meeting or CME (continuing medical event). Less than 15 percent of doctors received payment for professional services. The numbers for the survey were lower than a similar survey taken five years earlier. One of the factors for the decrease, according to Health Affairs, “may be the growing awareness among researchers and policy makers of the ways that physician-industry relationships can bias physician decision making, encourage inappropriate prescribing that drives up health care costs, and undermine the independence and rigor of clinical research.” Professional bodies, academic institutions, and medical journals have all begun to implement conflict-of-interest protocols. Five states and the District of Columbia, prior to the ACA, had already passed laws mandating that the makers of drugs, devices, medical supplies, and biologicals report certain details of their financial relationships with clinicians. The US National Institutes of Health requires that all grantees disclose “Significant financial relationships with manufacturers.” The Food and Drug Administration (FDA) requires that “drug sponsors report on any financial ties with clinical investigators that reach certain monetary thresholds (which are higher than those set by the Sunshine Act).” Some drug manufacturers and medical device companies, prior to the Sunshine Rule, were required to disclose these relationships as part of legal settlements with the US DOJ (Department of Justice). In 2008 and 2009, respectively, the Medicare Payment Advisory Commission and the Institute of Medicine published influential reports on physician conflicts of interest – documenting the need for more transparency of physician-industry relationships. “Both documents also called for the establishment of a standardized, nationwide, mandatory public reporting program, which could supplement or replace the patchwork reporting system currently in place.” Senators Chuck Grassley and Herb Kohl first introduced the Physician Payments Sunshine Act in 2007. That initial version of the bill did not pass. The provisions were later amended and incorporated into the ACA as section 6002. STARK LAW EXCEPTIONS THAT MIGHT APPLY TO YOU In today’s video, we discuss some exceptions to Stark Law, which deals with improper referrals by physicians and healthcare practitioners. NEW PROPOSED RULES FROM THE CMS AND THE OIG-HHS ON STARK LAW AND FROM THE ANTI-KICKBACK STATUTE The CMS and HHA are proposing new rules, such as the Patients over Paperwork Initiative, where the focus of Stark and AKS will be on value-based arrangements What are the provisions of the Physician Payments Sunshine Act? The Sunshine Rule applies to manufacturers of drugs, devices, biologics, and medical supplies. The Rule applies to three different categories of payments when the bills for the payments are covered by Medicare, Medicaid, or CHIP. General payments or transfers of value. These include travel reimbursement, meals, and consulting fees. Ownership and investment interests, in manufacturing companies, by the physicians (or immediate family members). Ownership and investment interests in group-purchasing organizations (GPOs). GPOs are “entities that negotiate pharmaceutical contracts on behalf of health care providers.” All physician-owned distributors of medical devices are also expected to report. Research payments. This category includes payments for participation in preclinical research, clinical trials, or other product development activities. “To qualify as research under the final rule, it must be subject to a written agreement or a research protocol.” The amount of the payments will be handled separately “to reflect the fact that a research grant made to an investigator typically flows through a host organization and may not directly accrue to the physician leading the research.” Some exemptions from the disclosure requirement do apply. Drug and medical device manufacturers do not need to disclose payments under $10 – unless the individual payments add up to more than $100 for the year. Manufacturers are also exempt from disclosing payments for educational materials that are intended solely for the patients – or for product samples. However, manufacturers must still submit data to the FDA about the “identity and amount of samples requested and distributed to physicians.” Other exemptions may apply to products that are still in development and have yet to be approved by the FDA. Payments to a CME organization “to subsidize educational events will also be exempt from reporting, provided the event is accredited by a provider association (any one of five associations identified by CMS) and the manufacturer in question has had no direct role in the choice or compensation of the speaker(s).” Our skilled healthcare lawyers can explain whether any of these exemptions still apply in 2022. Generally, once the data is posted – the manufacturers, GPOs, physicians, and teaching hospitals have 45 days to review the data attributed to them and 15 days after that to dispute and correct the data. The Physician Payments Sunshine Act imposes the following penalties (our lawyers can explain any changes) for failing to comply with the ACA reporting requirements: The penalty for each payment a manufacturer or GPO doesn’t report is between $1,000 and $10,000. The maximum yearly penalty amount for non-compliance is $150,000. The penalties increase if the manufacturer or GOP “knowingly” failed to report a payment, for knowing violations, the penalties for each violation range from $10,000 to $100,000. The maximum penalty is $1 million. The CMS rules also provide that complying with the Physician Payments Sunshine Act (PPSA) does not protect the manufacturer, GPO, doctor, or teaching hospital from Stark Law, the AKS, the False Claims Act, or other healthcare referral laws. The reverse is often the case – meaning that the disclosure of the payments increases the likelihood of an inquiry into these civil and criminal laws. The Physician Payments Sunshine Act is part of the Affordable Care Act requires manufacturers, GPOs, physicians, and teaching hospitals to disclose certain payments and transfers of value to the physicians they work with or that receive the payments/transfers. These companies and practices should review the PPSA and other federal and state laws that regulate physician referrals and recommendations with experienced health care lawyers. There are specific requirements. Some exceptions may apply. There are severe penalties for failing to comply with the PPSA. AFFORDABLE CARE ACT CREATES SCOPE OF PRACTICE LEGISLATIVE SCRAMBLE FOR HEALTHCARE PRACTITIONERS Healthcare reform is creating incentives for even more legislative scrambles by different practitioner lobbying groups for favorable legislation that will protect, preserve, and expand their own […] Our experienced healthcare attorneys advise medical business practices about their healthcare compliance requirements and the dangers of non-compliance.
June 23, 2022
Healthcare
Can an MSO Operate a Medical Practice?
In today’s video, we talk about whether and how an MSO can operate a medical practice. I’m Michael H. Cohen. We help healthcare industry clients just like you navigate healthcare and FDA legal issues and launch, or continue to scale, your health and wellness service, products, software, or app. The key here is, what do we mean by the term, “operate?” Are we talking about the business side, the clinical side, something in-between? If you have a medical spa, a multidisciplinary clinic, a medical group, a telemedicine venture, psychology group, software or an app that involves MDs, psychologists, or you’re in a situation where the non-medical entrepreneur wants to control the venture, but can’t entirely hand it over, due to corporate practice of medicine and fee-splitting concerns, that is where you’ll want legal advice on what your MSO can and can’t do. When we say MSO or Medical Services Organization, we mean the business that provides management and marketing services to the medical aspect of your overall architecture. For example, the non-MD runs the medical spa, but doesn’t participate in clinical decision-making and clinical staffing. Some states are tougher on MSOs than others. When we say “tough”, we mean that they have a “strong” prohibition against the corporate practice of medicine, as opposed to the “weak” form of CPM, in which the only real prohibition is against the MSO having actual control of medical decision-making. In the weak form of CPM or CPoM, non-medical corporations CAN hire and fire medical doctors. In the stronger form of CPM, MSOs can make many administrative and marketing decisions, but the professional medical corporation has authority over hiring and firing of clinical staff, final authority over advertising, and other such control. We cover this in much more depth in some of our other videos and our healthcare law blog. Here are some questions posed and quick answers we’ve given about this relationship between the MSO and the Professional Medical, or psychological Corporation in a “strong” anti-corporate practice of medicine state. 1. Can a Physician be an officer of or own an MSO? Many of our clients do, in fact, give the medical doctor an equity stake in the MSO. It’s quite common. Technically having said that, it could be considered a conflict of interest: because every time the physician provides services, the MSO also makes money, as the MSO typically charges the physician or the physician’s professional medical corporation at fair market value for MSO services. This conflict of interest is an ethical violation, possibly a legal violation in principle, and at a minimum should be disclosed to the patient. Having said that, some risks are more or less intense as others, so part of it is evaluating the risk and it depends on the client’s risk tolerance. 2. Can the business model be such that all the customer payments go through the MSO – the software, the app, and from there a portion gets retained by the MSO and a part goes to the doctor? In the old days—I’d say about ten to fifteen years ago—this flow of payments would pose a problem. Technically, it’s fee-splitting, in the sense that it makes it seem as though the MSO is getting paid the professional fee and then splitting it up between the MSO and the doctor. Or the MSO or platform, software platform, telemedicine platform could be seen as giving the physician a kickback for the referral. But today, these arrangements are common, they are facilitated by software and it’s just seen as a way to split up what the MSO gets for its MSO services, and the doctor for their professional services. One thing that what would be a no-no is for the MSO to pay the physician a salary. At least in California, MSOs cannot hire physicians. MSOs cannot hire them as W2 employees or as 1099 independent contractors. So, we typically use an MSO Agreement to govern the relationship between the MSO and the physician of the professional medical corporation, otherwise there’s the CPM risk. 3. Can you bonus the MSO staff? You can, but bonuses must be tied to KPI, not tied in any way tied to the value or volume of patient referrals the staff generates. 4. The physician sells the medical practice, the professional corporation. Can they be generous and give money to the MSO or their staff? Not a great idea, that’s apples and bananas. The physician owns at least 51% of the professional medical corporation, and the MSO owner is not a healthcare licensee and can’t own the 49% because they’re not a nurse, not a chiropractor, acupuncturist and so on. Alright, I hope that clears some of the dust here. Here’s to the success of your healthcare venture, and we look forward to working with you soon.
June 9, 2022
Healthcare
More Anti-Kickback & Fee-Splitting Legal Basics
In today’s video, we discuss more basics of federal and state anti-kickback and fee-splitting prohibitions. Hi, I’m Michael H. Cohen. We help healthcare industry clients just like you navigate healthcare and FDA legal issues so you can launch, or continue to scale, your health and wellness product or service. PREVIOUSLY on Stark and Anti-Kickback Basics. I always flash back to 24: So, Previously on 24. Well, on this channel we talked about how Stark is the federal law that prohibits self-referral, how self-referral involves certain designated health services or DHS, and how state laws contain mirror-Stark provisions. For example, California has PORA, the Physician Ownership & Referral Act, which is like a state law mirror to Stark, the federal prohibition against self-referral. That is all codified in Business & Professions Code, Section 650.01. Just as Stark has exceptions, similarly, PORA has exceptions that allow certain arrangements or deem them unlawful or lawful. Then we discussed the definition of a kickback, how federal law prohibits unlawful referrals, and we mentioned some of the safe harbors that federal law offers to arrangements that federal law deems legitimate or not illegitimate. On the state side, we said that there are mirror laws prohibiting kickbacks and fee-splitting. California’s anti-kickback and fee-splitting prohibition is contained in Business & Professions Code, Section 650. Simply put, a kickback is an unlawful inducement to refer a patient for healthcare services. Business & Professions Code Section 650(a) says: “… The offer, delivery, receipt, or acceptance by any person licensed under this division or the Chiropractic Initiative Act of any rebate, refund, commission, preference, patronage, dividend, discount, or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring patients, clients, or customers to any person, irrespective of any membership, proprietary interest, or co-ownership in or with any person to whom these patients, clients, or customers are referred is unlawful.” There are 3 key parts: 1, there is an offer or acceptance by a licensed healthcare practitioner. 2, the offer or acceptance involves, basically, money or something valuable like money. The language Business & Professions Code Section 650(a) is: “rebate, refund, commission, preference, patronage dividend, discount, or other consideration, whether in the form of money or otherwise.” 3, the money or value is compensation or an inducement for referring that involve patients, clients, or customers to another person. Violating this prohibition, period, is unlawful, whether or not the person that’s doing the referring has shares or membership interest in the business to which the referral is made. While federal law provides a whole series of safe harbors, California law keeps it simple, just one: Section 650(b) which says, you can pay money for services OTHER than referring patients, as long as the referral is based on a percentage of gross revenue or similar type of arrangement at fair market value. Arrangements between entities, businesses, and persons, get complicated, so it is helpful to have your healthcare lawyer at your back analyze the arrangement for possible Stark, self-referral, anti-kickback, and fee-splitting issues. Thanks for watching.
March 23, 2022
Healthcare
Adaptogens and FDA/FTC Compliance
Adaptogens ingredients refer to supplements and herbs that are used in the practice of alternative medicine. The makers and sellers of products with adaptogen ingredients claim that the ingredients have properties that help to strengthen and normalize a person’s bodily functions. According to Michigan State University, adaptogenic ingredients can be found in “traditional Ayurveda and Chinese medicine and other holistic herbal alternative medicine practices.” According to the European Medicines Agency, adaptogen ingredients must include: An almost non-toxic response in the recipient. Non-specific pharmacological properties that increase an organism’s resistance to a broad spectrum of adverse biological, chemical, and physical factors. The ability to be a regulator by having a normalizing effect on an organism’s various organ systems or other profound pathologic changes in the organism. According to the Washington Post, consuming adaptogenic drinks in moderation has a low risk. Still, consumers need reliable advertising and marketing claims. The Post article states that adaptogens are a “broad class of herbs, botanicals, and mushrooms that have been associated with enticing effects — including relieving stress and improving mood — that are sometimes linked to the experience of drinking alcohol.” Adaptogens are being marketed as an alternative to alcohol. Nonalcoholic beverages promise some of the same reduced stress effects as alcohol drinks. Some nonalcoholic beverages from companies such as Kin Euphorics, Curious Elixirs, and Rasasvada include adaptogens. There isn’t any current research or scientific evidence that currently supports the efficacy of adaptogen ingredients. The ingredients do not qualify as drugs, according to the FDA definition of drugs because they do not “treat, cure, or prevent any known ailments or diseases.” FDA does review any claims by a manufacturer or seller that the adaptogen ingredients act as drugs. If a company markets products as drugs, the company will likely be sent a warning letter to cease any such claims on the grounds that the products are adulterated and misbranded. Adaptogens are considered dietary supplements. FDA has oversight over dietary supplements and dietary ingredients. Generally, FDA is limited in its ability to regulate supplements, according to Michigan State University, before the supplements are available for sale. While the manufacturers are responsible for the ingredients, FDA generally cannot recall the supplements until a sale has taken place and a consumer has filed a complaint. IS YOUR PRODUCT A DIETARY SUPPLEMENT OR AN FDA-REGULATED DRUG? (PART 2) In today’s video, we’ll talk about some more not so obvious ways that FDA can classify your dietary supplement as a drug. What ingredients are common in adaptogens? According to MSU, some common adaptogen ingredients include “Ashwagandha, Astragalus root, Bacopa Monnieri, cordyceps, Eleuthera, holy basil, licorice, maca, maitake, Rhodiola rosea (Arctic root), reishi, schizandra, shiitake, Siberian ginseng, and wild yam.” Common adaptogen claims Some of the statements that nonalcoholic drink companies make are: Kin Euphorics website says “BYE BYE BOOZE. HELLO COSMIC WONDER,” and advertises that its drinks have “mood-boosting” or “mind-calming” ingredients. Curious Elixirs describes its offerings as “complex booze-free cocktails infused with adaptogens to help you unwind.” Adam Perlman, a physician and integrative and functional medicine specialist at the Mayo Clinic says that. “Very often there is some science to back these claims, but the science is often not as definitive as we’d like it to be.” Mikhail Kogan, a geriatrician and medical director of the Center for Integrative Medicine at George Washington University says that adaptogens refers to a natural substance that “somehow protects against negative impacts of stress.” “Kogan said he uses tinctures of adaptogens himself, including schisandra, ginseng and rhodiola, and has recommended them to patients.” Norbert Kaminski, a professor of pharmacology and toxicology and director of the Center for Research on Ingredient Safety at Michigan State University says, “The idea is these adaptogens help maintain your body and equilibrium.” While the functions associated with the ingredients largely match the advertising language for nonalcoholic adaptogenic drinks, the claims are often vague. Kaminski said. “The things that they supposedly do often are very difficult to measure. You can’t quantify a lot of this.” Adaptogenic products such as herbs, plants, and mushrooms do have a history of healing abilities – “But while some scientific evidence suggests there are benefits to consuming adaptogens, experts said much of the research involved animal studies, and that the few human trials were limited by small sample sizes.” Do adaptogens actually meet the claims that these products reduce stress and balance systems? Adaptogen warning letters. The FTC also has oversight over false claims makers and sellers of adaptogen ingredients make. The FTC regulates how a manufacturer or sell can advertise and market its dietary supplements. Claims must be truthful and substantiated. Claims cannot be misleading. FTC can send warning letters to the manufacturers and retailers of the dietary supplements if the agency believes the supplements are harmful or if the claim about their efficacy is improper. For example, claims that adaptogen ingredients can cure, prevent, or mitigate COVID-19 symptoms will be met with FDA and FTC warning letters. benjaminmcevoy.com – 607149 – 05/14/2020 | FDA. FDA and FTC filed a joint warning letter against Benjamincovey.com claiming that the respondent sold products, including dietary supplements, through Amazon and promoted the products on the company website. The website includes claims “representing or implying that the products can mitigate, prevent, treat, diagnose, or cure COVID-19[2] in people.” The warning letter asserted that these claims cause the products to be classified as unapproved new drugs under section 505(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. § 355(a). The warning letters also stated that the products are misbranded drugs under section 502 of the FD&C Act, 21 U.S.C. § 352. Further, the warning letters said that the introduction or delivery of these products into interstate commerce violated the FD&C Act and that it was illegal under the FD&C Act “to do any act with respect to a drug, if such act is done while the drug is held for sale after shipment in interstate commerce and results in the drug being misbranded.” Some of the claims that the warning letter said were improper included: “Ashwaghanda [Amazon associate link] . . . Ashwaghanda is an adaptogen . . . which has many studied but yet to be understood positive effects on the immune system. Adaptogens reduce cortisol levels and improve immune response . . . You can learn more and buy ashwaghanda here [Amazon associate link].” The respondent was given a deadline to respond to the warning letter or face further action. A warning letter was filed against Red Moon Herbs. The warning letter was filed by FDA and the FTC. The letter stated that agencies reviewed the company’s website and social media accounts. The agencies found that the company sold numerous products that “are intended to mitigate, prevent, treat, diagnose, or cure COVID-191 in people.” The warnings made similar assertions to the previous warning letter (Benjamincovey.com) that the products are new drugs and are thus adulterated, misbranded, and violate various provisions of the FD&C Act. Included among the postings was the statement: “Immunomodulating herbs – my top go-tos which are showing up again and again in the building literature surrounding this pandemic are astragalus, any and all medicinal mushrooms (reishi, turkey tail, chaga, lion’s mane, and Mushroom Elixir are favorites), and adaptogens including ashwagandha and ginseng. Echinacea and usnea are both effective immune stimulants and usnea have an affinity for the lungs which may prove relevant here. Astragalus and reishi are particularly gentle and good for all ages and my three year old takes them daily.” The respondent was also given a deadly to reply or face further legal action. Claims about adaptogen products FDA and dietary supplements FDA regulates finished dietary supplement products and dietary ingredients. The FDA regulates dietary supplements differently than drugs or food. Under the Dietary Supplement Health and Education Act of 1994 (DSHEA): Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded. That means that these firms are responsible for evaluating the safety and labeling of their products before marketing to ensure that the products meet all the requirements of DSHEA and FDA regulations. FDA has the authority to take action (usually beginning with warning letters) “against any adulterated or misbranded dietary supplement product after it reaches the market.” According to the FDA, “FDA’s Center for Food Safety and Applied Nutrition (CFSAN) is responsible for the agency’s oversight of these products. The Dietary Supplement Health and Education Act (DSHEA) of 1994, which amended the Federal Food, Drug, and Cosmetic Act, created a new regulatory framework for the safety and labeling of dietary supplements. FDA is not authorized to review dietary supplement products for safety and effectiveness before they are marketed.” FDA and new dietary supplement regulation According to former FDA Commissioner Scott Gottlieb, M.D., ¾ths of Americans take a dietary supplement on a regular basis. 4/5ths of seniors take a dietary supplement. Based on those large numbers, FDA announced new goals for dietary supplement regulation. Since the Dietary Supplement Health and Education Act (DHSEA) was passed more than 25 years ago, the dietary supplement industry has grown from $4 billion to $40 billion and from about 4,000 products to at least 50,000 products. While most manufacturers and sellers are responsible, the number of companies “marketing potentially dangerous products or making unproven or misleading claims about the health benefits they may deliver” has increased. These proposed new goals apply to all dietary supplements including adaptogens. Commissioner Gottlieb stated for the FDA: The first priority is ensuring safety – that the products don’t cause harm. The second priority is “product integrity: we want to ensure that dietary supplements contain the ingredients that they’re labeled to contain, and nothing else, and that those products are consistently manufactured according to quality standards. “ The third priority is “informed decision-making. We want to foster an environment where consumers and health care professionals are able to make informed decisions before recommending, purchasing or using dietary supplements.” This last priority gets to another reason why it’s important to speak with an experienced healthcare lawyer. Skilled healthcare lawyers advise both the manufacturers and sellers of dietary supplements such as adaptogens and the physicians who recommend these supplements about their FDA compliance requirements. The key steps Commissioner Gottlieb announced (that logically apply to adaptogens) are: Better communication when there are concerns an ingredient is illegal, potentially dangerous, and shouldn’t be marketed as dietary supplements – including faster notifications about a product’s concerns to the public. Flexibility in evaluating product safety while promoting innovation -including “steps to foster the submission of new dietary ingredient (NDI) notifications.” “Working closely with our partners in industry to achieve our primary goal of protecting public health and safety. As the dietary supplement industry develops new products and ingredients, advances new delivery systems and innovates in other ways, the FDA must do more to leverage its existing resources and authorities to evaluate these products.” One step is the creation of the Botanical Safety Consortium, “a public-private partnership that will gather leading scientific minds from industry, academia and government to promote scientific advances in evaluating the safety of botanical ingredients and mixtures in dietary supplements.” Developing new enforcement strategies including sending warning letters, and continuing compliance and “enforcement efforts against firms that have shown persistent inability to comply with the current good manufacturing practice requirements for dietary supplements, and taking action to protect the public against unsafe imports and recalled products.” Many companies are making and selling products with herbs and other adaptogens that claim to relieve stress. These companies and any doctors who recommend adaptogens to their patients need to understand the FDA regulations that regulate drugs and dietary supplements. Skilled healthcare lawyers help clients take proactive steps to reduce the risk of FDA or FTC complaints and responsive steps if a company or doctor receives an FDA or FTC warning letter. Our experienced healthcare attorneys help physicians and health companies understand their compliance requirements.
March 1, 2022
Healthcare
Integrative Medicine and Nutrition – Compliance Issues
Integrative medicine encompasses many features such as homeopathy, cardiology, and acupuncture. Nutrition is another type of healthcare that physicians are using as part of their treatment plans. According to the American Board of Physician Specialties, integrative medicine means more than just recommending a standard dietary intake of vegetables, fruit, dairy, and protein. Integrative nutrition means “ascertaining the individual dietary requirements of patients in order to develop personalized plans that optimize macro- and micro-nutritional intake.” The Board states that dietary guidelines should consider the following: “Taking into account a patient’s lifestyle (sedentary vs. active). The influence of nutritional balance on overall health. How a mindful approach to eating patterns can contribute to better health. The ability of food (as opposed to nutritional supplements) to meet nutritional requirements.” Doctors who provide nutrition advice or work with nutritionists need to understand the federal and state rules that might affect this working relationship. Referrals between the doctor and a nutritionist practice may violate Stark Law or the Anti-Kickback Statute. Doctors and nutritionists need to understand how HIPAA affects the exchange of electronic patient information. Doctors and nutritionists need to understand what licensing requirements apply, the California law on the corporate practice of medicine, the unauthorized practice of medicine, and what type of supervision by the doctor is required. A failure to understand the compliance issues can result in fines and possible loss of license and liberty. How do physicians and medical practices incorporate nutrition into their medical treatments? There are many different nutritional theories and approaches. Integrative medicine generally moves beyond traditional approaches such as surgeries, medications, and physical therapy. Integrative medicine, according to Todays Dietician, seeks to combine conventional medicine with “complementary and alternative medicine (CAM). One school, the Institute for Integrative Nutrition, even combines the two concepts by using the term “integrative nutrition.” Alternative medicine generally includes “unconventional healing modalities ranging from acupuncture, aromatherapy, biofeedback, and reflexology to healing touch.” Integrative medicine also focuses on the mind and spirt as well as the body. Generally, nutritionists focus on a combination of food, vitamins, minerals and supplements to improve a patient’s health. For example, conventional medicine might use medications and therapy to treat depression whereas nutritional medicine focuses on herbs, dietary supplements, and diet. Today’s Dietician states that some of the components of integrative medicine include: Food-mood connection. Doctors and registered dieticians (RDs) examine how certain foods and supplements can affect emotional eating, depression, and behavior. Some studies show that a diet of fruit, vegetables, and healthy fats can “alleviate depression and decrease irritability among the elderly and adolescents compared with a diet high in processed foods and sugar.” Food cravings and addictions. RDs focus on examining the factors (the type of food, when cravings occur, the patient’s emotional state, and the “release of specific chemicals related to cravings and addictions”) that affect a person’s well-being. For example, there are studies that show that food addictions are similar to drug addictions. Dietary trends. Doctors and RDs keep current with the latest food trends such as raw food diets and the Paleo diet. Antioxidants and phytonutrients. “Nutritionists examine antioxidants and phytonutrients at the cellular level and how they relate to gene expression.” Dieticians also examine many broader food issues such as “food sustainability, food production methods, buying local food, organic vs. conventional farming practices, genetically modified foods, food marketing, and food labeling.” RDs should, according to the principles of quality integrative nutrition set forth in Today’s Dietician: Conduct an initial assessment that involves taking a thorough medical history Evaluate the client’s medications, including those sold over the counter as well as supplements. Examine the patient’s food habits Review the patient’s emotional relationship with food Discuss whether the patient has any food or medication allergies. Doctors and RDs should also consider evidence-based treatments such as pain management, gastrointestinal health, and autoimmune diseases – and migraine headaches and depression. Migraine headaches. Doctors and RDs work (often together) to determine the causes of migraine headaches which include caffeine, refined sugars, foods with monosodium glutamate (MSG), and other products. Unbalanced blood sugar levels and sinus problems may also cause migraines. Medical treatments and medical supplements are some of the possible remedies. Depression. Treatments often include medications, psychological counseling, and regular exercise. Nutrients “have a positive impact on the brain neurotransmitters norepinephrine, dopamine, and serotonin. Depending on the number of nutrients a client consumes, nutrients can influence the quantity of neurotransmitters produced. RDs who counsel clients suffering from depression should ask clients if they experience episodes of emotional eating since depression can cause it.” Some of the vitamin and mineral supplements that may help relieve supplements include:Omega-3 fatty acids Folic acids SAMe B vitamins Herbal supplements Turmeric Boswellia Other products including licorice and aloe vera. Anti-inflammatory foods help with depression and other medical disorders. Inflammatory foods are known factors in “arthritis pain, atherosclerosis, inflammatory bowel disease, and eczema.” Today’s Dietician states that: “Whether recommending herbal or vitamin and mineral supplements, it’s important for RDs to know how the supplements are absorbed and impact the body, and to consult with their clients’ physicians before recommending them or any aspect of an integrative plan.” “Dietitians should use supplements from only reputable sources because the supplements’ quality can influence tolerance and effectiveness.” “Dietitians need to know the contraindications and drug interactions associated with each supplement and be cognizant of how the nutritional treatments may affect patients with various other health problems. It’s also important to monitor patients for any side effects or adverse events.” Integrated medicine and nutrition – the unauthorized practice of medicine We’ve written about the broad legal issues involved with integrative medicine before. The discussion of the current uses of nutrition to help patients with a range of physical and emotional disorders shows that there is often a fine line between giving patients medical advice and giving patients nutritional advice. As a general starting point, doctors and registered dieticians (or other nutritionists) need to understand when physicians must control, supervise, monitor, or provide nutritional decisions. California has the following laws that apply to nutritionists and physicians who fail to properly their medical practice with the nutritionist’s healthcare practice: ARTICLE 3. License Required and Exemptions 2051. The physician’s and surgeon’s certificate authorizes the holder to use drugs or devices in or upon human beings and to sever or penetrate the tissues of human beings and to use any and all other methods in the treatment of diseases, injuries, deformities, and other physical and mental conditions. 2052. (a) Notwithstanding Section 146, any person who practices or attempts to practice, or who advertises or holds himself or herself out as practicing, any system or mode of treating the sick or afflicted in this state, or who diagnoses, treats, operates for, or prescribes for any ailment, blemish, deformity, disease, disfigurement, disorder, injury, or other physical or mental condition of any person, without having at the time of so doing a valid, unrevoked, or unsuspended certificate as provided in this chapter or without being authorized to perform the act pursuant to a certificate obtained in accordance with some other provision of law is guilty of a public offense…[Certain punishments apply]. In addition, the Medical Board of California regulates the practice of medicine. Failure to comply with these regulations may result in the loss of a medical license and other consequences. Our skilled healthcare lawyers explain the laws and regulations that apply to the integrative practice of nutrition. We also review what proactive steps physicians, registered dieticians, nutritionists, and other healthcare nutritional professionals should take to reduce the risk of non-compliance. 5 LEGAL ISSUES FOR INTEGRATIVE HEALTH PRACTITIONERS IN THE NEW YEAR With 2015 right around the corner, here are 5 legal and regulatory issues that integrative health practitioners need to know. The corporate practice of medicine and integrative nutrition California, like most states, requires that the patient care and the financial interests of the physicians be separated so that doctors are making decisions based on the best interests of the patient and not the financial interests of the medical practice. As medical practices expand the healthcare professionals who are part of the practice and the owners of the practice need to make sure that the practice is run by the physicians – and not by any nonphysicians such as non-physician nutritionists – and not by corporations or related businesses. The law that governs the corporate practice of medicine is the Moscone-Knox Professional Corporation Act. This law requires that only doctors licensed in California can own a medical practice. There is an exception which doctors and nutritionists should review with experienced healthcare lawyers. Provided the majority of the owners are state-licensed physicians, non-physicians can own a minority interest in the medical practice. Integrative nutrition and the Health Insurance Portability and Accountability Act (HIPAA) HIPAA regulates the electronic exchange of patient health information. HIPAA applies to healthcare providers, insurance companies, and other entities. The law applies to “claims, benefit eligibility inquiries, and referral authorization requests.” When doctors work with dieticians and nutritionists, there is often the need to share a lot of information. As discussed above, dieticians need to understand a patient’s medical history, what medications the patient is taking, and many other medical issues. Whether the doctor or nutritional practitioner is bound by HIPAA depends on how the patient information is shared and what the information is used for. Protocols should be set in place to properly share information while respecting the patient’s rights and privacy. One factor that may affect whether HIPAA applies is whether the nutritionist bills the insurance carrier for their medical care. Another factor involves the business relationship between the physician practice and the nutritionist – for example, whether the nutritionist is an employee of the medical practice or independent from the physician practice Integrative nutrition and Stark Law, the AKS, and patient referrals. Medical and nutritional practices need to understand how Stark Law (a civil law) and the Anti-Kickback Statute (a criminal law) apply to their business relationships. When a medical practice refers patients to a nutritional practice (and vice-versa), the referral must be based on what is the best medical care for the patient and not the financial health of the healthcare practices. Skilled healthcare lawyers explain what conduct violates Stark Law or the Anti-Kickback Statute (AKS), whether any exceptions/safe harbors apply, and what steps should be considered to meet the exceptions/safe harbors. Stark Law essentially prohibits physicians who bill Medicare or Medicaid from referring patients to a nutritional practice – if any physicians or the practice itself has a financial interest in the nutritional practice. Stark Law also applies to referrals from the nutritional practice to a medical practice. Stark Law exceptions may be permitted, if the proper steps are taken, to permit a nutritional practice (or medical practice) to lease office space, rent medical equipment, maintain bona-fide employment relationships, keep personal service arrangements from the other practice. Other exceptions may also apply. The AKS prohibits referrals based on any type of inducement such as cash, vacations, meals, or medical directorships. The AKS generally applies when bills are submitted to federal agencies such as Medicare, Medicaid, and TRICARE. The AKS uses “safe harbors” which are similar but not identical to the Stark Law exceptions to help justify certain financial relationships between a medical practice and a nutritional practice. Both Stark Law and AKS violations may result in the filing of a False Claims Act lawsuit. STARK LAW EXCEPTIONS THAT MIGHT APPLY TO YOU In today’s video, we discuss some exceptions to Stark Law, which deals with improper referrals by physicians and healthcare practitioners. RECENT STARK LAW AND ANTI-KICKBACK STATUTE CASES Medical providers must abide by Stark Law and the AKS. Referrals must be based on what is best for the patient. If profit is the driver, the providers will often pay a substantial settlement or […] Additional integrative nutritional compliance issues FDA does regulate dietary supplements. Doctors and nutritionists who prescribe or recommend dietary supplements should review the FDA dietary supplement regulations with an experienced healthcare lawyer. There are also regulations that govern the marketing and advertising of dietary supplements, medical practices, and nutritional practices. California generally requires that healthcare providers comply with the state’s informed consent requirements. Integrative nutritional practices offer more care options for patients and more opportunities for doctors and nutritionists. Physicians and nutritionists need to understand when the care they provide may constitute the unauthorized practice of medicine, may violate the corporate practice of medicine, may fail to comply with Stark Law or the AKS, and may violate other federal and state laws and regulations. Our experienced healthcare attorneys help healthcare providers understand and address their legal requirements.
February 22, 2022
Healthcare
Legal Compliance Issues for Homeopathy
Homeopathic medicine is a holistic system of treatment based on the thought that the substances that cause sickness can also cure people when given in the correct proportions. The general idea is that these remedies are believed to stimulate a person’s healing properties. Homeopathic practitioners refer to the drugs that are used in conventional medicine as “allopathy.” While drugs may have a different meaning for homeopaths, everyone who works with homeopathic products needs to understand that FDA approval of drugs is required for any product designed to diagnose, treat, mitigate, or cure a disease. Homeopathic practitioners also need to understand when their practice may violate state corporate practice of medicine laws. When providers and practitioners work with conventional doctors, everyone needs to understand when referrals of patients and products may be illegal. There are many other compliance issues that an experienced healthcare care lawyer can explain. What is homeopathy? According to the US National Institute of Health, homeopathy was developed in Germany in the early 19th century. Homeopathy is “based on two unconventional theories: “Like cures like”—the notion that a disease can be cured by a substance that produces similar symptoms in healthy people. “Law of minimum dose”—the notion that the lower the dose of the medication, the greater its effectiveness. Many homeopathic products are so diluted that no molecules of the original substance remain. Homeopathic products come from many different sources such as: Plants – Red onion, arnica [mountain herb], poison ivy, belladonna [deadly nightshade], and stinging nettle). Minerals such as white arsenic. Animals such as crushed whole bees. Homeopathic products are produced in many forms. The most common form is a sugar pellet placed under the tongue. Other forms include ointments, gels, drops, creams, and tablets. The treatments are unique for each person. “Homeopathy uses a different diagnostic system for assigning treatments to individuals and recognizes clinical patterns of signs and symptoms that are different from those of conventional medicine.” Homeopathy in the United States – FTC and FDA compliance The NIH states that based on a 2012 National Health Interview Survey, about 5 million adults and 1 million children used homeopathy in the prior year. A 2016 survey indicates that most adults who use homeopathic products “self-prescribe them for colds and musculoskeletal pain” instead of seeing a homeopathic practitioner. There are several compliance issues regarding homeopathic products: The US Federal Trade Commission (FTC) stated in 2016 that it holds the sellers of over-the-counter homeopathic drugs to the same efficacy and safety standards as the sellers of other products making comparable claims. The agency said that the FTC will require that the companies making health claims about homeopathic products must have “competent and reliable scientific evidence to support the claims – including claims that a product can treat specific conditions. The US Food and Drug Administration (FDA) in 2017 proposed more scrutiny of homeopathic products – especially the products with the greatest risks, including:Homeopathic products with reported safety concerns. Homeopathic products that are not taken by mouth or rubbed on the skin. Homeopathic products for vulnerable populations. Homeopathic products that do not meet “legal standards for quality, strength, or purity.” Homeopathic products intended to be used for preventing or treating serious and/or life-threatening diseases and conditions. HOW FTC COMPLIANCE WORKS: LABELING YOUR DIETARY SUPPLEMENTS In today’s video, we talk about more common labeling mistakes that dietary supplement manufacturers and distributors make when creating marketing claims for their products. The scientific analysis of the effectiveness of homeopathy The NIH states that: “A 2015 comprehensive assessment of evidence by the Australian government’s National Health and Medical Research Council concluded that there is no reliable evidence that homeopathy is effective for any health condition. However, it is important to note that studies included in the assessment of evidence were required to meet a number of rigorous criteria (e.g., having a sample size of more than 150 participants, the highest rating of methodological quality, and other measures). In total, 57 systematic reviews that contained 176 individual studies were included in this assessment. A new review of evidence by the Australian government is currently underway.” “Homeopathy is a controversial topic.” Homeopathic theory and basic scientific concepts are often at odds. “For example, homeopathic preparations can be so dilute that a substance considered to be the “active ingredient” becomes unmeasurable, which creates major challenges to the rigorous investigation of such products.” The US Centers for Disease Control and Prevention (CDC) says there is no credible scientific evidence to support claims that certain homeopathic products (called “nosodes” or homeopathic immunizations) are substitutes for conventional immunizations. “The National Center for Complementary and Integrative Health (NCCIH) supports the Centers for Disease Control and Prevention’s recommendations for immunizations/vaccinations.” The NCCIH provides information on numerous topics. Just the “A”s include: Acai Acupuncture Aloe Vera Alzheimer’s Disease Antioxidants Anxiety Are You Considering a Complementary Health Approach? Aromatherapy Asian Ginseng Asthma Astragalus Attention-Deficit Hyperactivity Disorder Autism Ayurvedic Medicine The NIH also states that: Even though many homeopathic products are highly diluted, some products (labeled or sold as homeopathic) may contain “substantial amounts of active ingredients, which may cause side effects or drug interactions. Negative health effects from homeopathic products of this type have been reported.” Some homeopathic products may cause adverse effects – some of which may be serious. “Liquid homeopathic products may contain alcohol. The FDA allows higher levels of alcohol in these than in conventional drugs.” Research on homeopathic aggravations is scarce. Homeopathic aggravations are worsening of a patient’s condition after taking a homeopathic prescription. FDA has issued warnings to consumers about homeopathic products. In one case, in 2017, FDA informed consumers that some homeopathic teething tablets had excessive amounts of the toxic substance belladonna. In another case, in 2015, FDA “warned consumers not to rely on over-the-counter asthma products labeled as homeopathic, because they are not evaluated by the FDA for safety and effectiveness”. SEPTEMBER 2020 FDA WARNING LETTERS FDA and FTC warning letters continue to find violations of the FD&C Act when companies boast their products can cure or treat diseases such as COVID-19. FDA and homeopathic products According to FDA, homeopathic products have “been identified through “provings,” in which substances are administered to healthy volunteers in concentrations that cause symptoms. “If a substance causes a particular symptom, individuals experiencing that symptom would be treated with a diluted solution made from that substance.” FDA has not approved any products that have a homeopathic label. This means that homeopathic products sold in the United States are not being marketed with FDA evaluation of the products’ safety or effectiveness. Homeopathic products are generally “marketed as natural, safe and effective alternatives to approved prescription and nonprescription products, and are sold online and in major retail stores.” What is FDA’s concern about homeopathic products? FDA is generally concerned: That some homeopathic products contain measurable amounts of active ingredients – which could cause patients significant harm. Some homeopathic products, after FDA testing, “were improperly manufactured, which can cause incorrect dilutions and increase the potential for contamination.” Some homeopathic products are marketed to treat serious health disorders and diseases. A few examples of FDA oversight include: FDA alerts consumers of Kadesh Incorporation’s voluntary nationwide recall of Puriton Eye Relief Drops due to non-sterile production conditions FDA alerts consumers of Sprayology’s voluntary nationwide recall of homeopathic water-based medicines due to microbial contamination FDA alerts consumers and pet owners of Silver Star Brand’s voluntary recall of homeopathic drug products FDA alerts consumers of HelloLife’s voluntary recall of Neuroveen, Respitrol, Thyroveev and Compulsin Homeopathy and the corporate practice of medicine Homeopathic practitioners and product companies need to review their FTC and FDA compliance issues with an experienced healthcare provider. Practitioners and product companies also need to review with a skilled healthcare lawyer how the California laws on the corporate medicine apply to their business. In California, corporations and related businesses cannot conduct the practice of medicine. California corporate practice of medicine laws were enacted to ensure doctors make health decisions based on the patient’s best interest and not their financial interests. The corporate practice of medicine law is called the Moscone-Knox Professional Corporation Act. Non-physicians cannot own a medical practice. An experienced healthcare lawyer will review the Moscone-Knox Professional Corporation Act and related issues such as the unauthorized practice of medicine by homeopathic practitioners. CORPORATE PRACTICE OF MEDICINE, PSYCHOLOGY, PHYSICAL THERAPY RISKS TO INVESTORS In today’s video, we discuss how investors can profit from businesses that deliver clinical services—and where they get themselves in trouble. Common questions about homeopathy in California A few common questions and answers about homeopathy in California, provided by the Naturopathic Medicine Committee, are the following. Your lawyer can help you understand how these questions and answers apply to your practice or business. “Do I need to be licensed to practice naturopathy or homeopathy in California? No. You do not need a license to practice naturopathy and homeopathy in California. However, you must disclose in your advertisements and on your client intake form that you are providing unlicensed healing arts services (Business and Professions Code sections 2053.5 and 2053.6). Can I advertise as a naturopath? Yes. You may advertise as a naturopath, traditional naturopath, or homeopath but you must state in your advertisements that you are not licensed by the State of California per Business and Professions Code section 2053.6 Do I need to tell my clients that I’m not licensed? Yes. Before you begin treatment, you must inform each client in writing that you are not licensed. All clients must confirm in writing that they were given information about your license status (Business and Professions Code section 2053.6). Am I allowed to diagnose as a naturopath? No, unlicensed individuals may not diagnose a physical or mental condition of any person. In addition, unlicensed individuals must comply with BPC 2053.5 and 2053.6. I am board-certified and hold a degree in naturopathic medicine but cannot get a license because my school is not approved. Can I still use the title ND, naturopathic doctor, or naturopathic physician? No. In California, you must be licensed by the Naturopathic Medicine Committee to use the titles ND or naturopathic doctor, or other titles, words, letters, or symbols with the intent to represent that you practice, are authorized to practice, or are able to practice naturopathic medicine as a naturopathic doctor. (Business and Professions Code section 3660). If I use the title “ND” or “naturopathic doctor” without being licensed, what will happen? If you use the titles illegally, the Committee may issue you a citation and fine (California Code of Regulations, Division 40, Title 16, Section 4254). If you violate these California laws, the Naturopathic Medicine Committee can refer your case to the Division of Investigation, Department of Consumer Affairs, where they may issue you a misdemeanor citation, as well. If someone is harmed by an unlicensed naturopath, “the Committee may forward an enforcement case to the District Attorney’s office for criminal prosecution.” Additional compliance issues Homeopathic practitioners need to comply with the Health Insurance Portability and Accountability Act (HIPAA) which regulates how a patient’s personal health information (in electronic form) is disclosed. Homeopathic providers and companies who work with conventional physicians need to review with a skilled healthcare law how Stark Law, the Anti-Kickback Statute, and other referral laws apply to their business relationship. Violations of these laws can result in substantial fines and, in AKS cases, may result in criminal charges. Other homeopathic integrative medicine compliance issues include informed consent issues, additional California Labor Code issues, and other federal and state compliance issues. Homeopathic medicine is an alternative medical practice that appeals to millions of people. Anyone involved with the practice of homeopathy needs to understand FTC compliance issues, FDA oversight including the illegal marketing of homeopathic as drugs, licensing, referral laws, and many other compliance issues. Our experienced healthcare attorneys help integrative healthcare practices including homeopathy.
December 22, 2021
Healthcare
Exceptions and Alternatives to The Corporate Practice of Medicine
While most states prohibit the corporate practice of medicine, many do have exceptions. Physicians need to understand which working relationships – with hospitals, other physicians, and with non-physicians – are permitted. Health care ventures that do research or provide ancillary medical services need to understand when their work might violate the corporate practice of medicine laws. An experienced health care lawyer will review the current laws and regulations. He’ll also help you explore and develop alternatives that may be permissible. The status of corporate practice of medicine laws Most states allow for corporations to hire physicians if physicians own the corporation – the essence of a professional medical corporation. Some states allow certain government, nonprofit, and corporate entities to hire physicians. According to a California Senate study, 28 states permit hospitals to hire doctors. 30 states give physicians the right to operate a medical practice as a limited liability company. The three states with the most robust bans against the corporate practice of medicine and the prohibition against the hiring of physicians (outside of limited exemptions) are California, Colorado, and Iowa. Many states that do have bans against the corporate practice of medicine include dentists in the ban. Exceptions to the California prohibition against the corporate practice of medicine There are some direct exceptions to the California laws that prohibit the corporate practice of medicine, such as creating a professional medical corporation. There are also strategies that can be used such as the use of a management services organization (MSO) to help ensure that the medical practice meets its financial needs while also ensuring that the care and treatments of patients is the priority. Aside from professional medical corporations, the entities that generally use an exception to the prohibition against the corporate practice of medicine in California are either nonprofits or government organizations. Generally, both nonprofit hospitals and hospitals owned by healthcare districts are subject to the ban. Conversely, medical school health systems, which sometimes compete with nonprofit and for-profit hospitals, are not subject to the ban. What Physicians and Investors Must Know About California Medical Corporations Doctors must comply with California’s Professional Corporation Act. A professional medical corporation provides many advantages over a partnership or sole proprietorship. Exemption for Professional Medical Corporation The California Senate California Research Bureau prepared a document called “The Corporate Practice of Medicine in a Changing Healthcare Environment” in 2016. The research discussed some of the exemptions to the California Practice of Medicine Law. One key exemption many doctors are now using is the Moscone-Knox Professional Corporation Act. Passed in 1968, Section 12400-13410 provides one exemption to the prohibition of the corporate practice of medicine. The exemption is common (though there are differences) in many other states. The law permits physicians, dentists, and lawyers to create professional corporations. Doctors, based on the act, can create professional medical corporations. The law was enacted to comply with the requirements of the Internal Revenue Service. To qualify for professional medical corporation status, the professional corporations must, in general, be engaged in providing medical services for a single profession. For example, doctors and lawyers, still “cannot serve as shareholders, officers, directors, or professional employees of each other’s corporations.” The Moscone-Knox Law, however, exempted medical professions. This means that “license holders in a variety of other health professions can also serve as shareholders, officers, directors, or employees of professional medical corporations. These include podiatrists, psychologists, nurses, optometrists, marriage and family counselors, clinical social workers, physician assistants, chiropractors, acupuncturists, naturopathic doctors, professional clinical counselors and physical therapists.” Exemption for Clinics and Hospitals Operated for the Purpose of Medical Education The Senate research document states that the original law, which was clarified in an appellate court decision, indicates that medical schools are not “subject to the corporate ban even if they are in competition with nonexempt organizations” – since every patient is a teaching case even though the patient may not “be seen by an intern, resident or other trainee.” Exemption for Nonprofit Community Clinics “A community clinic is a clinic operated by a tax-exempt nonprofit corporation that is supported and maintained by donations, grants, and government funds.” Generally, the patient pays for the services according to the patient’s ability to pay. Exemption for Nonprofit research clinics These entities are licensed by the California Department of Public Health. Nonprofit research clinics research medical diseases such as heart disease and prostate cancer. These clinics generally only provide care to patients through the results of their research. Clinics may generally hire doctors and charge for their professional services. A clinic “shall not interfere with, control, or otherwise direct the professional judgment of a physician and surgeon in a manner prohibited by Section 2400 or any other provision of law.” Exemption Licensed charitable institutions, foundations or clinics Pursuant to 16 California Code of Regulations, Section 1340, the Medical Board of California permits any licensed charitable institution, foundation or clinic to employ physicians and surgeons so long as the entity does not charge for professional medical services. In such a case, the physician or surgeon would directly bill the patient or the insurance company. Additional exceptions Other entities that may qualify for exempt status include: County hospitals State agencies Nonprofit research clinics Specialty pediatric hospitals Other medical entities Generally, according the California Senate study, HMOs are exempt from California’s ban on physician employment, (based on the federal Health Maintenance Organization Act of 1973). California’s Knox-Keene Act allowed HMOs to hire physicians if the HMO model was a staff model. Most HMOs are not staff models. Most HMOs are group or independent practice association models. Stark law and the hospital/physician employment exception In states where hospitals can hire physicians (under broad exceptions like many states or limited exceptions such as in California) there is another roadblock to the hospital/physician employment contract that must be addressed. Stark Law was enacted to ensure that patients weren’t being referred to a designated healthcare facility (such as hospital) because the physician was receiving a referral fee or benefit. Referrals should be made to hospitals based on the best interest of the patient and not the financial interest of the doctor. Recent Stark Law and Anti-Kickback Statute Cases Medical providers must abide by Stark Law and the AKS. Referrals must be based on what is best for the patient. If profit is the driver, the providers will often pay a substantial settlement or […] There are many exceptions to Stark Law including the physician employment contract – provided the terms of the Stark exception are met. An experienced Stark Law attorney can help draft the appropriate contracts. Stark law requires that the employment contract between the hospital and physician be a “bona fide employment relationship.” This means that any sums paid by the hospital to the doctor (or an immediate family member) who has a bona fide employment contract with the hospital for services may be allowed if the following conditions are met: The employment is for specific identifiable services The amount being paid under the employment contract should:Align with the fair market value for those services With limited exceptions, should not be based (indirectly or directly) on the volume of any referrals by the referring doctor. The payment/remuneration should be “provided under an arrangement that would be commercially reasonable even if no referrals were made to the employer.” A payment may be acceptable if the payment is in the form of a productivity bonus. Stark law has a separate section which sets forth when and how hospitals can use remuneration payable to the physician in order to recruit physicians to relocate their medical practice to a geographical area serviced by the hospital. The Anti-Kickback Statute and the hospital/physician safe harbor The AKS statute was enacted to ensure the integrity of the healthcare professions. The law prohibits the payments of kickbacks or inducements to encourage or pressure physicians to make referrals based on economic incentives instead of doing what’s best for the patient. In states that permit hospitals or clinics to hire physicians, the hospital and doctor must still comply with the AKS. Violations of the law can result in criminal charges and civil lawsuits. The AKs does have a safe harbor which an experienced healthcare lawyer can explain. One safe harbor that applies to hospital/physician employment is the safe harbor for “personal services and management contracts.” This safe harbor can help protect the hospital/doctor employment contract if: The agreement is set forth in writing and signed by the hospital and physician. The contract covers all the services the physicians will provide to the hospital. The contract provides the details as the length and schedule of services and the charges – if the arrangement is not for full time work, The agreement should be for one year or more. The combined compensation to the physician should be consistent with fair market value and shouldn’t be based on the volume or value of referrals between the hospital and doctor – “for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs.” The contract shouldn’t violate state or federal law The total services shouldn’t be more than what are “reasonably necessary to accomplish the commercially reasonable business purpose of the services.” As with Stark Law, the AKS safe harbor includes physician recruitment issues. The management services organization (MSO) – a practical exception In California, and other states, the managed service organization can be a useful way to address concerns about the corporate practice of medicine, Stark Law, and the Anti-Kickback Statute. An MSO is a way for non-physicians to own a management services organization (MSO) which is specifically designed to run the administrative and non-medical parts of the medical practice. An MSO is a way for physicians to focus on the business side of their medical practice while working to avoid any conflict with the independent medical judgment of the physicians. As we discussed in our article on when an MSO is the right choice for a medical practice, an MSO can “buy the assets of a practice (to provide capital) and then offer the practice essentials such as equipment or space.” The MSO can provide a range of services including: Educating and training staff Payroll and medical coding Managing equipment Office rental Staff credentials The information technology side of the business Marketing and sales Disaster management Insurance Many other non-medical judgment issues It is critical that the doctors not cede too much control to the MSO. If physicians do cede too much control, then these health providers may violate California’s (or another state’s) prohibition against the corporate practice of medicine. When Using a Management Services Organizations (MSO) Is the Right Choice for Your Medical Practice Managed Services Organizations help physicians focus on practicing medicine by freeing doctors from many administrative tasks. Failure to consult with an MSO healthcare lawyer can cause civil and […] An experienced healthcare lawyer can explain what exceptions to the corporate practice of medical laws apply and whether any of those exceptions can be used for your practice or your health venture. Even when health providers can pass the corporate practice of medicine test, there are other hurdles that must be addressed to such as fee-splitting and improper referrals – which are monitored by Stark Law and the Anti-Kickback statute. An MSO is a common strategy for separating the business functions of a medical practice from the business functions. Our experienced healthcare & FDA attorneys advise healthcare companies and healthcare providers ranging from medical centers, to integrative and functional medicine practices, cosmetics and supplement companies, and medical device manufacturers.
December 1, 2021
Healthcare
What Physicians Need to Know about the Corporate Practice of Medicine
The old days of getting a medical degree and hanging up a shingle by your office are long gone. Most doctors who have a private practice begin their medical career or advance their medical career by considering the best business formation. Formation possibilities include a solo practice, a partnership with other doctors, or working relationships with other hospitals and existing practices. Experienced healthcare lawyers will review the various options. They’ll also review what laws apply. Many states, such as California, prohibit the corporate practice of medicine. Some states allow for exceptions. Physicians also need to consider whether their business and medical relationship might violate Stark Law or the Anti-Kickback Statues. Decisions about business formation and medical practice issues become more complicated as physicians expand their medical service practices and expand who the physician works with. Developing a medical spa or acupuncture practice to complement a pain management practice, for example, may sound like a great idea, but if the employees at the medical spa aren’t licensed physicians, complications can arise. It’s more than just physicians who must understand the corporate practice of medicine issues. Any health venture that wants to set up a clinic or a venture that provides health services needs to understand how corporate practice of medicine applies to them as well. How Healthcare Ventures Can Craft a Corporate Practice of Medicine Legal Strategy Is the corporate practice of medicine a historical anachronism that’s going to be done away with over time or even in the very short term? The corporate practice of medicine concept across the United States The corporate practice medicine laws were designed for many reasons, according to the American Medical Association (AMA). These reasons include the following concerns: If corporations can hire physicians or practice medicine, then the practice of medicine will become commercialized. The obligation of a physician should be solely to his/her patient and not to company profits. Physicians should be able to make patient decisions based on independent medical judgment – what’s best for the patient. Corporations owe a fiduciary duty to their shareholders which may not comport with the doctor’s duties to his/her patients An overview of state corporate practice of medicine laws The AMA states that the corporate practice of medicine laws are generally based on a variety of issues: The individual state statutes Case decisions Opinions of the attorneys general of the various states The positions of the state medical licensing boards While most states prohibit the corporate practice of medicine, states do provide for professional medical corporations. Many states also have exceptions for employment of doctors by specific entities. These exceptions do vary from state to state. States the do permit professional medical corporations do regulate: How the corporation can be structured Who can be a shareholder Who can be on the board of directors Most state laws require that the owners, board of directors, and shareholders must be licensed to render the “same professional service as the professional corporation.” There are some states that permit non-physicians owners and shareholders – provided that the combined ownership interest is in the minority. “For example, Colorado’s statute provides that all shareholders of a medical corporation must be licensed to practice medicine in the state of Colorado except that one or more persons licensed by the board as a physician assistant may be a shareholder as long as the physician shareholders maintain majority ownership of the corporation.” In another example of broader ownership interest, in “Rhode Island; physicians, dentists, registered nurses, podiatrists, optometrists, physician assistants, chiropractic physicians, physical therapists, psychologists, and midwives or nurse-midwives can form a professional corporation in which they engage in a combination of their professions.” There are many states that have an exception for the employment of doctors by certain entities such as hospitals. Some states grant broad permission for hospitals to hire doctors. Some require that the hospital be a nonprofit. Others, like California, mostly prohibit hospitals from hiring doctors. When states do give hospitals the right to hire doctors, there is normally a requirement that the hospital cannot interfere with the “autonomy of the physician’s clinical decision making.” “For example, statutes in Texas allow critical access hospitals, sole community hospitals, and hospitals in counties with fewer than 50,000 people to employ physicians subject to certain protections, including a requirement that physicians must “retain independent medical judgment in providing care to patients at the hospital and other health care facilities owned or operated by the hospital and may not be disciplined for reasonably advocating for patient care.” According to the AMA, California, which has one of the nation’s strongest prohibitions against the corporate practice of medicine provides that some hospitals and clinics can hire doctors provided the hospital or clinic “doesn’t interfere with, control, or otherwise direct the professional judgment of a physician and surgeon.” In California, according to the DHHS Office of Inspector General, “the prohibition does not apply to clinics operated by university medical schools or to public hospitals.” Similarly, Indiana’s laws also permit hospitals and doctors from entering into employment contracts provided the hospitals don’t control or direct the doctor’s independent medical judgment. In Illinois, hospitals can employ doctors if the doctor signs a statement to the same effect – that the doctor’s judgment must be an independent medical judgment as to diagnosis, care, and treatment. Some states set forth the independent judgment in the state statutes and codes. In other states, such as Alabama, the state medical licensing commission and the state board of medical examiners authorized hospital hiring of physicians where the agreement specifically requires that the doctor makes all judgments concerning what medical services the patient should receive. Both doctors and hospitals need to understand that there are dangers in any employment relationship, which should be reviewed by an experienced healthcare lawyer. Professional agreements may also violate Stark Law and the Anti-Kickback statute unless it’s clear than an exception or a safe harbor applies. California’s law on the corporate practice of medicine California’s law on prohibiting the corporate practice of medicine is one of the strictest in the nation. The law on the corporate practice of medicine in California is fairly complex. Even the Medical Board of California has this advisory on its website. “Note: This area of law can be complicated, therefore physicians are encouraged to discuss their medical practices and business enterprises with appropriately knowledgeable legal experts. The Medical Board of California continues to receive complaints and inquiries about the law, and some repeating issues are presented here.” The two governing statutes on the corporate practice of medicine are: The Medical Practice Act, Business and Professions Code section 2052. This statute, provides: “Any person who practices or attempts to practice, or who holds himself or herself out as practicing…[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate…is guilty of a public offense.” Business and Professions Code section 2400, within the Medical Practice Act, provides in pertinent part: “Corporations and other artificial entities shall have no professional rights, privileges, or powers.” As with the other states, the core idea behind the prohibition is that if unlicensed doctors make any medical judgments that would constitute both the unauthorized practice of medicine and the corporate practice of medicine. It’s the link that’s the concern. Corporations shouldn’t be the people deciding medical issues because that would constitute the unauthorized practice of medicine. Decisions that are medical and not business or management decisions Examples of medical judgments that must be made by physicians include: Analyzing which diagnostic tests such as blood tests or MRIs are required for specific medical complaints and disorders Determining when a doctor needs to consult with a medical specialist or refer a patient to a medical specialist – or to another physician Deciding what treatment options are advisable and what overall medical care is required for the patient While the number of patients a doctor must see in a set time (day, week, and month) might seem like a business decision, the Medical Board of California states that the quantity of patients treated by a physician is also a medical decision. There are many decisions which physicians and medical practices make that may seem like they’re more business choices than medical choices. When the choices are clearly business choices, then an independent entity such as a management service organization (MSO) may be qualified to make them. The Medical Board of California requires that only a physician licensed in California make the following decisions: “Ownership is an indicator of control of a patient’s medical records, including determining the contents thereof, and should be retained by a California-licensed physician. Selection, hiring/firing (as it relates to clinical competency or proficiency) of physicians, allied health staff and medical assistants. Setting the parameters under which the physician will enter into contractual relationships with third-party payers. Decisions regarding coding and billing procedures for patient care services. Approving of the selection of medical equipment and medical supplies for the medical practice.” It “may” be permissible for a doctor to consult with an MSO or non-licensed physician about the above items but ultimately the licensed physician must make the final decision. Additional decisions that may appear business-related that are indeed medical and must be made by a physician include: A business relationship in which someone who is not a licensed California doctor owns or runs a company that provides an evaluation, a diagnosis, care, or treatment to the patient. Physicians cannot operate a medical practice “as a limited liability company, a limited liability partnership, or a general corporation.” While management service organizations (MSOs) can generally provide administrative staff and services for a medical practice, MSOs cannot arrange for medical services, advertise for medical services, or provide medical services. Physicians cannot act as a “medical director” unless the physicians own the medical practice. “For example, a business offering spa treatments that include medical procedures such as Botox injections, laser hair removal, and medical microdermabrasion, that contracts with or hires a physician as its “medical director.” Will Corporate Practice of Medicine Kill Your Healthcare Venture? Whether your healthcare venture involves digital health, mobile health, or a physical health and wellness center, strong vs. weak corporate practice of medicine prohibitions can be deadly. According to the Medical Board of California, “It is important to note that pursuant to Business and Professions Code section 2417.5, a business organization that offers to provide or provides outpatient elective cosmetic medical procedures or treatments that is not in compliance with the ban on the corporate practice of medicine is guilty of knowingly making or causing to be made a false or fraudulent claim for payment of a health care benefit pursuant to paragraph (6) of subdivision (a) of Section 550 of the Penal Code.” All states want to ensure that physicians are doing what is best for the patient. One of the ways states help to regulate a physician’s practice is to ensure that the doctor’s business relationships are managed so that the doctor or the medical practice only has one boss – the patient. The corporate practice of medicine laws generally require that doctors create professional medical corporations and that any working relationship with a hospital be based on helping the patient, not the financial well-being of the hospital. States like California take an aggressive approach that most health care ventures may cross the line into the corporate practice of medicine. Our experienced healthcare & FDA attorneys advise healthcare companies and healthcare providers ranging from medical centers, to integrative and functional medicine practices, cosmetics and supplement companies, and medical device manufacturers.
November 1, 2021
Healthcare
Legal Compliance Issues For Diagnostic Testing Centers
Diagnostic testing is the lifeblood of the medical profession. Doctors and hospitals constantly refer patients for various types of bodily fluid, imaging, genetic, and other tests. Tests are usually performed at diagnostic centers that are located separately from the physician’s office. Most hospitals have their own diagnostic centers but hospitals may also refer some patients to separate facilities too. Diagnostic tests are usually ordered for purposes of screening, to diagnose whether a patient has a disorder, to evaluate how severe a disorder is, and to monitor how well (or poorly) the patient is responding to treatment. Many disorders are treated after the diagnostic test but some, such as colonoscopies, are treated contemporaneously with the test. Physicians and diagnostic centers should speak with an experienced healthcare lawyer before starting any practice and before developing any new business relationship. There are numerous federal and state laws that regulate medical practices and services. What are the common types of diagnostic tests? Diagnostic tests include: Bodily fluid analysis. These tests include blood tests, urine tests, tests for the fluid that surrounds the spinal cord and brain, and synovial fluid (joint) tests. Physicians may also order tests for saliva, sweat, and gastric tract liquids. Imaging tests. These tests take take pictures of parts of the body. Common diagnostic imaging tests include:X-rays. CT scans (computed tomography) MRIs (magnetic resonance imaging) Other imaging tests such as “ultrasonography, radioisotope (nuclear) scanning, positron emission tomography (PET), and angiography.” This test uses a viewing tube to observe body organs and cavities. The end of the endoscope has a camera and light so the physician can observe through a monitor. Tools can be passed through an endoscope channel. An endoscopy is used to examine, among other organs – the nose, mouth, respiratory tracts, colon, bladder, and uterus. Sometimes the physician needs to create incisions to use the endoscope. Measuring bodily functions. Common examples include examining the electrical activity of the heart – an electrocardiography (ECG) and the brain – electroencephalography (EEG). This test examined tissues simples that are moved and then examined with a microscope. The physician or medical examiner is usually looking for abnormal cells that may show disorders such as cancer. Genetic testing. This type of testing generally involves examining cells (from a patient’s blood, skin, or bone marrow) to check for chromosome abnormalities and gene (including DNA) abnormalities. Genetic testing involves testing a fetus for a genetic disorder and children/adults for whether they are at risk for a disorder, and adults. There are some risks with every test. Test results are normally based on the average values within a healthy population. Physician supervision of diagnostic tests Medicare has different rules and regulations for different types of diagnostic tests. An experienced healthcare lawyer can explain how Medicare monitors and regulates various tests. One of the most common types of tests are imaging tests. The Centers for Medicare & Medicare Services (CMS) generally uses the standards set by the Joint Commission on Accreditation of Healthcare Organizations (JACAHO) for inpatient diagnostic imaging standards. The CMS requires that physicians must supervise imaging tests for outpatient diagnostic services. According to AAPC, only “a doctor of medicine or osteopathy legally authorized to practice medicine in his or her state of practice, as defined by §1861(r) of the Social Security Act,” may act as a supervisory physician. Generally, the following people do not qualify as a “physician” and cannot act in a supervisory physician capacity – for purposes of diagnostic tests: Nurses Physician assistants Clinical nurse specialists Certified nurse midwives There are also rules that your healthcare compliance lawyer can explain about – if and when a radiologist can order his/her own imaging tests. CMS “recognizes three primary levels of physician supervision” for outpatient diagnostic services: General supervision. Here, the medical procedure should be under the doctor’s control and direction. The doctor who orders the test is responsible for maintaining the testing equipment and training staff on how to perform the tests. The physician does not need to be in the room during the procedure. Direct supervision. The term “direct supervision” “varies according to the precise location at which the service is provided:”In the doctor’s office. Here, the supervising doctor must be physically in the office suite and readily available to provide aid and direction throughout the procedure. Hospital outpatient diagnostic services at an independent diagnostic facility. “The supervising physician must be present in the office suite and immediately available to furnish assistance and direction throughout the procedure’s performance.” The doctor cannot be performing another procedure that cannot be interrupted. He/she must be able to provide timely aid. There are additional rules for on-campus health providers. Personal supervision. Here, the doctor must be in the room where the procedure is being performed. The supervision requirements apply “to the technical component (the actual test administration) of a diagnostic service.” Doctors must always provide “the professional component (reading/interpreting of results) for diagnostic services.” If the physician fails to provide the necessary level of supervision, then CMS may not find that the service is reasonable or necessary – and, thus, may not pay the claim. CMS also has diagnostic imaging requirements for determining who can order medical imaging tests and who is qualified to administer the imaging tests. In addition to the CMS physician supervision tests, doctors may be bound by state law and the laws and regulations for their types. Diagnostic centers and Stark Law Physicians and diagnostic centers need to be extra careful when doctors refer their patients to a diagnostic center. It is commonplace for general practitioners and specialists to regularly recommend diagnostic centers to their patients. If, however, the doctor has a financial interest in the diagnostic center, then all sorts of red flags are raised. Stark Law is a civil law that regulates referrals of patients who use Medicare to any designated health service (DHS) where the physician (or an immediate family member) has interest in that DHS. A diagnostic center is a designated health service. CMS prohibits the DHS from presenting claims to “Medicare (or billing another individual, entity, or third-party payer) for those referred services.” Designated health services include: Clinical laboratory services. Radiology and certain other imaging services. Radiation therapy services and supplies. Durable medical equipment and supplies Other services. The core principle behind Stark Law is that doctors should refer patients to a DHS based on what is in the best health interests of the patient – and not what is financially beneficial to the doctor or the diagnostic center. CMS has numerous rules about referrals to a DHS. CMS also regularly publishes an updated list of codes in the Physician Fee Schedule for a relevant DHS “because our regulations define certain DHS by CPT and HCPCS codes.” An experienced diagnostic center lawyer can explain what services qualify as a designated health service. Some services may not be included. Stark law also provides many exceptions that have very precise definitions. Skilled healthcare lawyers help physicians, medical practices, and diagnostic centers understand when these exceptions may apply and what the requirements are. A general principle is that any financial arrangements between the physician and the DHS cannot be based on the volume, percentage, or amount of any referrals. What Stark Law exceptions may apply to the relationship between a physician/medical practice and a diagnostic center? Stark Law provides for different types of exceptions including ownership/investment arrangements, compensation arrangements, and exceptions involving both ownership/investment and compensation. Several of the combination (both compensation and investment) exceptions include the following. consider for referring patients to a diagnostic center. Physician services In-office ancillary services Preventive screening tests, immunizations, and vaccines Eyeglasses and contact lenses following cataract surgery Intra-family rural referrals Compensation exceptions (for Stark Law) include: Rental of office space Rental of equipment Bona-fide employment relationships Personal service arrangements Physician recruitment Non-monetary compensation Fair market value exception Medical staff incidental benefits Risk-sharing arrangements Compliance training Many other exceptions The in-office ancillary services exception is often considered for heart doctors, orthopedists, and other professionals who conduct their imaging tests in their office. Stark Law Exceptions that Might Apply to You In today’s video, we discuss some exceptions to Stark Law, which deals with improper referrals by physicians and healthcare practitioners. The Anti-Kickback Statute and diagnostic centers The AKS is a federal law that imposes criminal penalties for unauthorized referrals. Illegal referrals generally include any inducement – by an entity such as a diagnostic center that is made to a physician – to include the physician to refer patients to the center. Most doctors provide a list of centers the doctors work with to their patients and let the patient choose which one the patient likes best. When diagnostic centers provide the doctor/medical practice with a benefit, the referral is tainted – because the referral is based on the financial well-being of the doctor and not by what is healthy for the patient. Illegal inducements include financial payments, expensive meals, vacations, positions on various medical boards or organizations, and virtually anything of any value. Violations of the AKS may result in a criminal conviction, imprisonment, fines, and other consequences. Both violators of Stark Law and the AKS may be precluded from the ability to submit any future bills to Medicare or Medicaid. The AKS has “safe harbors” which can be implemented to help show a medical practice or diagnostic center is not in violation of the AKS. These safe harbors include many transactions and arrangements that are similar to the Stark Law exceptions. Experienced California healthcare lawyers explain how safe harbors work and when safe harbors should be considered for your medical practice. Additional legal compliance issues for diagnostic centers? Physicians and doctors need to be careful that the center does not order or provide tests that suggest the center is providing any medical advice or treatment. Doctors, health providers, and staff members must understand what actions may result in an unauthorized practice of medicine complaint. HIPAA (Health Insurance Portability and Accountability Act) is a federal law that generally regulates how electronic health records are handled. Physicians regularly submit electronic requests to diagnostic centers to perform blood tests, imaging tests, and other tests. In return, the diagnostic centers regularly send the results of these tests to the physicians that ordered them. An experienced healthcare lawyer can explain when HIPAA applies and what conditions (including obtaining consent from the patient) must be met – when exchanging patient health information. A failure to follow the strict legal compliance issues governing diagnostic centers and physician practices can result in fines, bills that will not be approved by Medicare and other healthcare agencies/entities, possible imprisonment, loss of license, and other consequences. Skilled diagnostic center compliance lawyers advise both physicians and diagnostic centers about Stark Law, the Anti-Kickback Statute (AKS), state anti-referral laws, Medicare requirements, the unauthorized practice of medicine, the corporate practice of medicine, the (HIPAA), the Medicare Anti-Markup Rule (AMR), and other compliance issues.
October 15, 2021
Healthcare
Legal Compliance Issues for Various Types Of Integrative Medical Practices – Acupuncture
Integrative medicine (also called complementary or alternative medicine) is the name for medicine that is not part of traditional standard care. Alternative medical therapies are currently being used in combination with traditional medicine as the safety and efficacy of these alternative therapies become clearer. Integrative medicine is often used with people who have cancer, fibromyalgia, chronic fatigue, and chronic pain. Common types of integrative medicine include: Acupuncture Aromatherapy Animal-assisted therapy Massage therapy Music therapy Dietary supplements Meditation Functional medicine Spiritual healing Ayurvedic medicine Coaching Generally, integrative medicine is offered to supplement conventional medical care – not to replace traditional medical care. Some types of alternative medicine are not advisable for certain conditions or people. The National Center for Complementary and Integrative Health (NCCIH) is a US agency that conducts scientific research on complementary and integrative health approaches. This research includes examining the usefulness and safety of these therapies in improving people’s lives. Some of the legal issues acupuncture practitioners and the doctors who work with them need to understand Integrative medicine providers usually operate independently from hospitals and medical practices. However, many physicians do recommend integrative medicine for certain patients with certain medical disorders. For example, an orthopedist surgeon may recommend that someone who just received a new hip may benefit from treating with an acupuncturist to help manage the pain while the hip heals. Many medical spas and chiropractors work with integrative medicine practitioners. How closely physicians and other medical practices work with integrative medical practices such as acupuncture can be problematic. If the relationship is too close or if there are improper incentives for referrals, the physicians and the integrative medication practitioners may be in violation of Stark Law or the Anti-Kickback Statute. Acupuncture practitioners and other integrative practitioners need to understand California’s or their own state’s laws on the unauthorized practice of medicine. Doctors who also have acupuncturists need to understand what duties they need to perform and what duties they can assign to any medical providers who are not physicians. California also has specific requirements on who can have an interest in a medical practice. An experienced healthcare lawyer can explain whether integrative medicine qualifies as the practice of medicine. Other legal issues for integrative practitioners including acupuncture practitioners include: Medicare and Medicare coding requirements FDA laws and regulations HIPAA compliance State licensing requirements State licensing requirements Every integrative practitioner needs to review with their healthcare lawyer the state licensing requirements for their practice area. Many professions such as acupuncture and chiropractic medicine do have state licensing requirements. All professions should have education and certification requirements. A license to practice a specific type of medicine may be valid in California may not be valid in another state – and vice-versa. Integrative medicine providers need to review the scope of their license. The providers need to understand when their services may cross over into unauthorized services – to the extent the providers could be charged with practicing a profession – such as psychology, medicine, or nutrition – without a license. Your healthcare lawyer will review which statutes apply to your practice, whether any medical boards regulate your practice, and whether any other rules apply. Your lawyer can also explain whether any exceptions apply. Generally, an integrative medical practitioner cannot make a diagnosis or order treatments for any disease, injury, physical, or mental condition – and cannot recommend any products to treat any disease or disorder. Integrative medicine providers also need to be careful when they order lab results or review the lab results – or that could be considered the practice of medicine too. For example, the California Board of Acupuncture regulates “the practice of Asian medicine through acupuncture in California and is the sole issuer of acupuncture licenses in the state.” The Board determines the standards for qualification – mainly through its licensing authority. As of 2021, there are more than 12,000 registered acupuncturists. The Board has the authority to investigate criminal conviction histories of applicants and licensees and to discipline licensees who “may jeopardize the health, safety, and welfare of consumers.” The unauthorized practice of medicine is a crime. Compliance with the Health Insurance Portability and Accountability Act (HIPAA) HIPAA regulates the disclosure of personal health information in electronic form by covered entities. Covered entities include: Healthcare providers. Health providers include any healthcare provider “who electronically transmits health information in connection with certain transactions. These transactions include claims, benefit eligibility inquiries, referral authorization requests.” Healthcare providers such as health insurance companies, Medicare, Medicaid, long-term care insurers, and other entities Health clearinghouses Business associates (other than a covered entity’s workforce) If an integrative healthcare provider is required to comply with HIPAA, it is normally because they fit into the “health provider category.” Your healthcare lawyer can explain if your integrative medical practice is considered a “health provider.” Part of the answer may depend on how the integrative healthcare provider bills his/her client. Many acupuncturists and other healthcare providers do not submit bills to insurance companies because the insurance often doesn’t cover the services. We have discussed whether HIPAA applies to acupuncturists before. There’s currently no clear-cut answer but there are many U.S. Department of Health & Human Services guidelines and discussions that suggest (again, there is no absolute answer) that acupuncturists are considered health providers who should comply with HIPAA – if and when they submit electronic health records. Your lawyer can also explain whether any state laws protect the disclosure of healthcare information. In California, the disclosure of healthcare information is governed by the California Confidentiality of Medical Information Act. Do acupuncturists have to comply with HIPAA when they share an electronic medical record? Whether HIPAA applies to acupuncturists who share a medical record, is one of those arcane questions our healthcare lawyers get. The answer isn’t all that easy to obtain. Like many healthcare & […] The corporate practice of medicine and integrative medicine California, like most other states, provides that corporations or related business entities cannot conduct the practice of medicine. The reason laws regulate the corporate practice of medicine is to ensure that the physicians are making decisions based on the best needs of the patient and not the financial needs of the business. Corporate directors should not be able to tell doctors how to treat their patients. The law is formally known as the Moscone-Knox Professional Corporation Act. The Moscone-Knox Professional Corporation Act requires that only state-licensed physicians are permitted to own a medical practice. The law also provides that non-physicians (for example nurses and medical technicians) cannot own a medical business. Non-physicians may generally own an interest in a medical corporation provided that the majority ownership of the corporation is in control of the physicians. Your California healthcare lawyer can explain whether an integrative medical practitioner can own shares in a medical corporation. Additional corporate practice of medicine issues include when a physician can act as a medical director of the corporation and when they can’t. The issue of who can own shares becomes more complicated when physicians and integrative health providers (licensed or unlicensed) work together. There are also issues that you need to review with a healthcare lawyer involving what acts constitute the practice of medicine. The lawyer will work to explain what boards and laws regulate the definition of the practice of medicine. One specific type of medical practice that can be especially problematic are medical spas. Medical spas often work with acupuncturists and other integrative healthcare providers. If you run or work for a medical spa, you need to review the proper boundary lines and regulations. The California Acupuncture Board’s – Laws and Regulations Relating to the Practice of Acupuncture. The Board Defines Acupuncture Corporations. “An acupuncture corporation is a corporation which is authorized to render professional services, as defined in Section 13401 of the Corporations Code, so long as that corporation and its shareholders, officers, directors, and employees rendering professional services who are acupuncturists are in compliance with the Moscone-Knox Professional Corporation Act, this article and all other statutes and regulations now or hereafter enacted or adopted pertaining to that corporation and the conduct of its affairs.” Regulates acupuncture corporation income. “The income of an acupuncture corporation attributable to professional services rendered while a shareholder is a disqualified person (as defined in Section 13401 of the Corporations Code) shall not in any manner accrue to the benefit of such shareholder or his or her shares in the acupuncture corporation.” The name of the acupuncture corporation. “The name of an acupuncture corporation and any name or names under which it may render professional services shall contain words ‘acupuncture’ or ‘acupuncturist’ and wording or abbreviations denoting corporate existence.” Referrals and financial relationships with integrative medical providers There are two federal laws that govern referral arrangements between medical practices and integrative medicine providers. Stark Law is a civil law. The Anti-Kickback Statute is a criminal law. Stark Law. Stark Law applies to physicians who treat patients on Medicare or Medicaid. The law prohibits physicians from referring Medicare or Medicaid patients to designated health services (called ancillary services) in which the physician (or a member of the physician’s family) has a financial interest. Doctors must work on behalf of the patient and not their own financial interests. Essentially, the doctor must recommend ancillary services based on what is best for the patient’s health – without consideration of any financial arrangement between the doctor and the service. Doctors need to be particularly careful when they align themselves with medical spas who often use a variety of integrative health services. There are numerous exceptions to Stark Law. These exceptions, in large part, center around the requirement that the relationship between the physician and the ancillary service should – not consider the volume or value of the physician referrals or business generated by the physician and the service. The exceptions also require that the financial arrangements be based on fair market value and commercial reasonableness. Some of the Stark Law exceptions include: Leasing office space Renting medical equipment Bona-fide employment relationships Doctor recruitment Personal service arrangements Other statutory exceptions The Anti-Kickback Statute (AKS). The AKS is a criminal statute the forbids inducements in order to obtain referrals from physicians. Inducements can include cash, vacations, meals, appointments to directorships, and other benefits that would not be paid or provided – except for the desire to obtain the referral. The AKS generally applies to any claim submitted to the federal government for payment including Medicare, Medicaid, and TRICARE. Violations of the AKS include civil and criminal penalties. Both the person or entity providing the inducement and the person or entity receiving the inducement can be charged under the AKS. The AKS does have “safe harbors” which can justify a financial relationship between a physician and an integrative health service. These safe harbors are comparable (but not identical) to the Stark Law exceptions. An experienced California healthcare lawyer can explain how safe harbors work and how they differ from Stark Law. Experienced healthcare lawyers will also explain how the Anti-Kickback Statute is similar to Stark Law and how it differs. In addition, the attorney will explain what state anti-referral laws apply to a medical spa practice. Skilled healthcare lawyers will also review whether the violations of Stark Law or the AKS can lead to charges the physician or practice violated the False Claims Act. We discuss Stark Law, the AKS, and California’s anti-referral (the Physician Ownership and Referral Act of 1993 in our article titled Quick Summary of Federal “Stark” Self-Referral & Anti-Kickback Law and California Self-Referral and Fee-Splitting Prohibitions. Additional integrative medicine compliance issues A few other of the many compliance issues integrative healthcare provides such as acupuncturists should review with their health care provider are: The informed consent requirements for procedures How the FDA regulates drugs, medical devices, cosmetics, dietary supplements, and other products How the FTC regulations the marketing and branding of your integrative healthcare practice Crucial Issues for Aesthetic Medical Practices – Part One The various California laws including the California Labor Code Integrative health practices include many different professions. Each profession needs to understand the applicable healthcare compliance issues. The doctors who work with integrative health practices also need to understand the full range of healthcare compliance issues. These issues include licensing, the corporate practice of medicine, the unauthorized practice of medicine, HIPAA, anti-referral laws, and other federal and California laws.
October 8, 2021
Healthcare
Do Health & Wellness Online Authors Risk Lawsuits?
If you’re someone who is publishing a book or e-book on health and wellness and you’re looking at a lot of media opportunities, and you’re concerned about your potential liability, then this video is for you. I’m Michael H. Cohen. We help healthcare industry clients navigate healthcare and FDA legal issues and launch or successfully continue to grow their health and wellness product or service. Today, I’m going to explain some of the key legal mis-steps that authors make when they put content out into the marketplace on health and wellness. By author, I mean someone who puts out content. You could be writing a book or e-book, PDF, broadcasting a podcast or hosting a YouTube channel, appearing on someone else’s website, blog or video series; or you could be a hologram emanating from the skull of Princess Leah- Virtual reality, whatever the technology brings. Whatever the format, here’s the deal: you’re the creator. You’ve gone on the hero’s journey. Maybe it was your health you saved, maybe the health and wellness of a loved one. You used a certain therapy, a certain method of healing, you followed some protocol, or you discovered or designed your own magical blend. Remember the movie, Lorenzo’s Oil? It came out a long time ago. But worth watching Susan Sarandon battle the doctors and motivate an industry to research and validate a therapy she pioneered to save her son. So, maybe that’s your story, and it’s the story of a lot of our clients and maybe you put this information out to the public. Can you do it without incurring too much legal exposure? What can you do to manage your liability risk? At first, this seems like a fairly simple question. Don’t engage in unlicensed practice of medicine. But, the question is how you will put it all together? That is the question. Are you embarking on a purely educational venture, or are you giving specific advice to individuals about their health and journey back to health? In the old days, a book was this physical thing you received in the mail. There was a lot of distance between the author and the reader. The point of the book was to draw you into the page, so you could forget that someone else had spent a lot of time in another space putting it together. These days, technology narrows the gap. You can be right there doing a Zoom call, or some other platform virtually alongside your client or customer. So, going back to my question, how are you going to put it all together without incurring undue liability? Consider these three points to help manage legal risk. First, in the eyes of the law, there is a difference between a purely educational venture, on one hand, and, clinical services on the other. The difference is super obvious if you think about a book on one hand, and a doctor’s visit on the other. Where the boundaries get blurred is where you use an online platform to access the customer. For example, if I text my therapist, clearly that is a clinical encounter. If I attend her webinar and raise my hand in the Chat box and ask about whether glucosamine is good in general for joint health, that is usually going to be considered education. But again, it depends on the facts and circumstances. Second, disclaimers are useful. You are not providing medical advice, you are not diagnosing and so on. But, disclaimers don’t tell the whole story. You need to make sure that what you are doing, is congruent with the disclaimers. You can’t put in a disclaimer saying, “this is not medical advice” and then give medical advice. For example, reviewing someone’s lab test would be considered clinical advice. Third, there is a lot of other legal language you can put in that could be protective. For example, a clause limiting your liability in case your general educational content doesn’t solve the customer’s health problem – General Liability Disclaimer. Beyond these three key points, there are a lot of nuances. For instance, do you take a medical history? In the eyes of prosecutors looking for unlicensed practice of medicine, the intake form itself could be a red flag, it could be evidence. And, different people have different risk profiles. Some want to take a lot of risk, some of our clients want to take little bit or risk, some are like goldilocks – it’s got to be just right. If you have a health and wellness startup, let’s say a telehealth or telemedicine app that connects patients to medical doctors or therapists digitally, you’re likely to have a different risk profile than, say, a lone MD who wants to style themselves a health coach. Thank you so much for watching. Here’s to the success of your healthcare venture, we look forward to speaking with you soon.
September 23, 2021
Healthcare
Health Compliance Issues for Dentists and Orthodontists
According to Colgate.com, dentists are professionals who complete four years of undergraduate school and four years of dental school. Dentists must then pass a written test and a clinical licensing exam before they can become qualified to practice. Dentists generally use one of the following designations. DDS (Doctor of Dental Surgery) DMD (Doctor of Medicine in Dentistry or Doctor of Dental Medicine) Orthodontics is a dental practice specialty that requires additional training. About six percent of all dentists are orthodontists. Orthodontists normally have to complete a two/three-year residency program. According to the American Association of Orthodontists (AAO), dentists: Provide regular checkups Diagnose and treat cavities Treat mild gum disease and oral hygiene problems. Extract teeth that cannot be saved Work on teeth by “applying bonding, veneers or crowns to teeth that are broken, chipped, misshapen or severely decayed.” Look for signs of oral diseases Give advice on oral health According to the AAO, orthodontists “specialize in aligning the jaws, and moving the teeth.” These professionals “correct crowded teeth, gaps between teeth, teeth that stick out, and jaws that don’t align properly.” Dentists use various medical products including “braces, lingual braces, and clear aligners.” Dentists usually work with X-rays and photographs. Dental practices usually include the dentist, dental assistants, dental hygienists, and dental technicians. While most dentists work in private practice, dentists also work in dental hospitals, the military, and prisons. Dentistry/orthodontist practice and illegal referrals. Kickbacks, and improper fee-splitting Professionals who work in dentistry, orthodontics, and other medical-related fields often work with other professionals. For starters, dentists often refer patients to orthodontists. Orthodontists work with various medical device companies. Dental professionals may work with diagnostic labs, medical suppliers, cosmetic companies, and other businesses. Dental professionals need to understand what financial relationships are permissible and what relationships may lead to charges the professional relationships violate Stark Law, the Anti-Kickback Statute (AKS), or other related laws. Many of the cases that the US Department of Justice settles in civil fraud cases involve the healthcare profession. These cases include hospitals, drug manufacturers, and many different types of healthcare practices. The best course for any type of dental practice is to consult with an experienced California health lawyer before starting the practice or starting any new professional relationships. Your lawyer will review which compliance laws apply to the dental profession. He’ll explain that referrals of patients to any entity the dental practice has a financial relationship or stake in – are especially suspect. The lawyer will also explain what exceptions and “safe harbors” to these laws can help protect your professional relationships – when the fees for services or products are paid by federal or state government programs. Many dental patients, for example, use Medicare or Medicaid to pay for their dental care. Your lawyer will review, among other compliance issues: What types of referral arrangements are permissible What marketing strategies can be used to entice patients to use your dental or orthodontist practice How a properly managed service organization (MSO) can be used to protect your practice. What do dental practices need to know about Stark Law? Stark Law prohibits doctors from referring patients who use Medicare from referring that patient to a “designated health service” with which the dentist has a “financial relationship.” The idea behind the law is that dentists should refer patients based on what is best for the patient’s health – and not what is best for the dentist’s finances. Stark law does provide numerous exceptions which we have discussed in many articles. There are specific requirements for each type of exception. Some of these exceptions include: In-office ancillary services Office space rental Preventive services Equipment rental Physician recruitment Many other relationships Dentists and dental practices who violate Stark Law can be held civilly liable. Civil liability means paying back to Medicare any improper payments. Civil liability also the possibility of statutory fines and exclusion from Medicare. Dentists need to understand that Stark Law is fairly strict. There’s no formal requirement that the government needs to show the dentist intended a violation of the law – in order for the dentists to be found liable. The establishment of the referral through Medicare and the designated health service is enough to hold the dentist liable. Stark law does apply to dentists – though there is a practical concern. Medicare generally does not cover dental payments which means most dentists do not submit bills to Medicare. What Medical Practices Should Know about the Stark Law The Stark Law is named after California U.S. Congressman, Peter Stark. It seeks to regulate how physicians refer Medicare and Medicaid patients. The law is part of the Omnibus Budget […] Exceptions to the Stark Law Prohibition of Medical Referrals The Stark Law governs what types of referrals doctors can make if they bill for Medicare and Medicaid. The presumption is that that referrals made by a doctor to a designated health service are […] What do dental practices need to know about the Anti-Kickback Statute The Anti-Kickback Statute also regulates the referral relationship. Generally, the AKS prohibits referrals that are based on providing anything thing of value to induce the referral – such as cash, free vacations, speaking engagements, and other items dentists might consider valuable. There are many similarities but also critical differences between the AKS and Stark Law. The AKS uses the term “safe harbors” instead of exceptions. The AKS applies to referrals of patients covered by Medicaid and other federal programs – in addition to Medicare. While Medicare generally does not cover dental services, most state Medicaid programs do cover dental services. The AKS is a criminal statute unlike Stark Law which is civil in nature. The AKS requires that the government show criminal intent. If convicted, a dentist or any physician can be sentenced to prison and ordered to pay substantial fines and penalties. Dentists who violate Stark Law or the AKS may also be in violation of comparable state laws. Dentists may also lose their license to practice dentistry or their dental specialty. Some of the AKS safe harbors include: The use of a Managed Service Organization (MSO) Renting space arrangements The sale of a medical practice Equipment rentals Personal service contracts Group purchase organizations Incentives for rural practitioners Use an MSO to Comply with Federal Anti-Kickback Safe Harbors What can an MSO, a Management Services Organization, do to augment your healthcare compliance? How are referrals between dentists and orthodontists reviewed? As a practical matter, many dentists refer their patients who need specialized dental care to orthodontists. Dentists and orthodontists should review their relationships with an experienced healthcare lawyer. The relationship may cause legal compliance issues if there is a financial relationship between the dentist and the orthodontist. It is generally permissible to refer patients to each other if the referral is based on merit and neither the dentist nor the orthodontist has a financial stake in the other’s business (which may indicate a Stark Law compliance violation)– and there is no quid pro quo or exchange based on the referral (which could indicate a violation of the Anti-Kickback Statute. Some of the issues that may indicate a Stark Law or AKS problem include: If one practitioner has an employment relationship with the other practitioner If one practitioner leases dental office space from the other practitioner These two examples and many other relationships may be more likely to be considered in compliance with these laws if the relationships are structured, with the help of a skilled healthcare compliance lawyer, to meet a Stark Law exception or an AKS safe harbor. HIPAA and dental care compliance issues Dental practitioners, orthodontists, and all other types of related practices need to consider HIPAA compliance requirements. All dental professionals need to ensure that they comply with HIPAA (Health Insurance Portability and Accountability Act of 1966). This includes understanding what records can and cannot be exchanged (and how the records can be exchanged) – if a dental practitioner refers a client to an orthodontist, diagnostic center, or other dental practice – or even if there is no referral. It is also a violation of HIPAA for a dental practitioner or dental specialist to offer an incentive (such as a discount) to a patient who uses Medicare or Medicaid – with the aim of influencing that patient to recommend the dental practitioner/dental specialist to other patients who use Medicare or Medicaid. The penalties include civil monetary penalties of $10,000 for each violation. An experienced healthcare compliance lawyer can explain the limitations of any type of incentive program. There are exceptions to the Medicare incentive law that your lawyer can explain. These include: Some inexpensive gifts with limited value Some items or services that fit within the statutory exceptions:Waivers of cost-sharing amounts based on financial need Properly disclosed copayment differentials in health plans Incentives to promote the delivery of certain preventive care services Any practice permitted under the federal Anti-Kickback statute pursuant to 42 CFR 1001.952 Waivers of hospital outpatient copayments in excess of the minimum copayment amounts. A skilled California healthcare lawyer will explain whether any of the referrals, incentives, or other transactions that may be permissible under a federal law exception or safe harbor – violate any California laws. Additional dental care compliance issues Some of the many other healthcare compliance issues dental practitioners need to review with a seasoned healthcare law are: FDA violations The Food and Drug Administration regulates: Drugs Medical Devices Food and nutritional products Cosmetic products Other products The regulations include determinations about: Whether the products are adulterated or misbranded Current good manufacturing compliance Introduction of unapproved drugs into interstate commerce Other regulations Dentists, orthodontists, and other health practitioners need to understand how FDA regulations apply to their practice. This understanding applies to different parts of their practice such as: The drugs, medical devices, and other products dentists use for their patients. The statements dentists make online and offline about the merits of any of these products to help patients with their oral health problems. FTC violations The Federal Trade Commission monitors the representations dental practitioners and dental supply companies make about the services and products they perform or use. These days, most dentists use websites, social medial, and print marketing to help promote their practice. The FTC has the authority to review your marketing and branding. If the FTC believes your promotions violate the Federal Trade Commission Act and FTC regulations or rules, the FTC can send a warning letter and take other appropriate action. The corporate practice of medicine In California, decisions about the practice of medicine (including dentistry) must be made by the physicians and not by the business. In California, a medical corporation can be formed by complying with the California Moscone-Knox Professional Corporation Act. The medical corporation is a separate legal entity that must be owned by one or more physicians. Non-physicians can have a minority stake in a professional medical corporation. Dentists can also practice as sole proprietors or in partnership with other dentists. An experienced healthcare lawyer can explain the pros and cons of each type of business structure. The unauthorized practice of medicine Dentists need to ensure they fully understand what tasks dentists can assign to their staff, which tasks dentists must perform themselves, and which tasks staff members can perform under their direct supervision. Dentists must also ensure that they and the people the dentists work with are properly certified and their continuing medical education requirements are being met. Generally, the Dental Board of California licenses and regulates over 100,000 dentists, registered dental assistants, and registered dental assistants in extended functions (RDAEF). The Board “has the responsibility for setting the duties and functions of unlicensed dental assistants.” Dentists, like other physicians, need to understand how Stark Law and the Anti-Kickback Statute apply to their practice and business relationships. Dentists need to understand their HIPAA compliance duties, and many other compliance issues such as FDA requirements, FTC requirements, and various California laws.
September 22, 2021
Healthcare
Stark & PORA Basics
In today’s video, we discuss the basics of federal Stark law, and the anti-kickback and fee-splitting prohibitions. Hi, I’m Michael H. Cohen. We help healthcare industry clients just like you navigate healthcare and FDA legal issues so you can launch, or continue to scale, your health and wellness product or service. Ted is a medical doctor, he works in a hospital 3 days a week and the rest of his time he runs his specialized clinic. Let’s say that Dr. Ted accepts Medicare patients (So he’s bound to Medicare and Medicaid rules) and he participates in commercial insurance with several plans. Ted’s partner in the clinic has his own medical corporation, and that medical corporation contracts as an independent contractor with Dr. Ted’s medical corporation. Their clinic also subcontracts a billing agency and pays the agency on a percentage of collections. Dr. Ted has questions about referrals between his hospital practice and his private practice. So he asks about Stark and anti-kickback law and here are some basics. One: when does federal law apply, and what does Stark prohibit? Two: when do state self-referral prohibitions apply, and what do they prohibit? First, federal law applies whenever physicians accept Medicare or Medicaid patients. The federal self-referral law, known as Stark, prohibits medical doctors from referring Medicare or Medicaid patients to so-called designated health services, or DHS. DHS include many of the ancillary services that family physicians provide, such as clinical laboratory services, outpatient prescription drug services and family and occupational therapy and imaging services (e.g., MRI, CT, ultrasound). Stark has several exceptions. A big one is referral to the referring physician’s “group practice.” This includes referrals by the doctor to the doctor himself or herself, or someone in the physician’s group practice, or someone supervised by a medical doctor in that practice. Another common exception is known as in-office ancillary services, or IOAS. Second, states have their own mirror-Stark laws, prohibiting what is known as self-referral. For example, California law contains prohibitions against self-referral in the Physician Ownership and Referral Act of 1993 (“PORA”), as well as California Labor Code Section 139.3, and some other statutes. California has its own definition of DHS. Third, it’s important to remember that where federal reimbursement monies are involved, federal anti-kickback law also can apply and it can apply to all practitioners, not just physicians. Fourth, self-referral prohibitions apply whenever a “referral” is made. This doesn’t necessarily require a referral in the sense of a phone call or written document. Enforcement authorities can look to the overall business model and conclude that there is something fishy, there’s a disguised unlawful referral arrangement. More typically, such a scenario would arise in a kickback situation rather than self-referral, which we’ll cover on a subsequent video. If you or someone you know could benefit from a Legal Strategy Session with one member of our Legal Team, let us know. Thanks for watching. Here’s to the success of your healthcare venture, we look forward to connecting with you soon.
July 23, 2021
Healthcare
Can Physicians Legally Do Health Coaching?
In today’s video, we talk about how physicians can tackle the legal and regulatory issues that often arise with health coaching. I’m Michael H. Cohen. We help healthcare entrepreneurs just like you navigate the very complex healthcare and FDA legal issues so you can launch, or continue to scale, your health and wellness service or product. And we’ve helped over a thousand clients in recent years. Health coaching as we know is a popular way to deploy all the gifts and skills that many people can bring to help clients in need of better health, be it physical, mental, or spiritual, environmental. And today, there are some large professional organizations devoted to health coaching and they are expanding the legal boundaries around what health coaches can do. The challenge is this. Back in the 1880’s, the States decided that they would license practices involving healthcare or health and wellness, and that anyone who said they were practicing “medicine” had to have a license from the State to do so. One practitioner and his name was “Dent” challenged these laws, the case went all the way up to the Supreme Court and he did not make a dent. The Court actually affirmed the State’s right to license medicine, and to decide who can and cannot get a license. That decision still holds today. The problem is that the definition of practicing “medicine” is very broad, and includes anything that could be considered diagnosis, diagnostic, treatment of any health conditions. So it’s very broadly written and interpreted that way. Many of the legal definitions in different states of “practicing medicine” do not depending on whether or not the practitioner charged a fee for their service. If you find some newfangled technique to help people get over this or that, and you think it’s miraculous when you limit yourself to family and friends, it’s still possible you might have crossed the line into the practice of “medicine.” These broad statutory definitions create a legal peril for the charge of “practicing medicine without a license.” This is where all my healthcare legal research started. This peril can affect at least two different audiences. One, if you’re a health coach and you’re not licensed, you could be at risk of unlicensed medical practice or practice of psychology or even possibly nutritionist and dietetics. But, if you’re licensed in your state but not others, and your client is in that other state, then you could be at risk of unlicensed practice of medicine in that State. Some of our clients are licensed providers, such as medical doctors, psychologists, and chiropractors. They present a strategic question: is it better to continue their coaching under their licensed practice—and try to get a license (typically for MDs) in the remote states where they want to offer telehealth services? I would say by in large, yes, because there are many vendors that will help you get a license in those states. But another idea is to have a hybrid model where they see the patients as a licensed provider in their home state, and then style themselves as a health coach in States where they are not licensed. This has some pros and cons. Using a hybrid model requires a bit of skill and savvy, and, an understanding of the legal and regulatory risks and how to mitigate them. I had someone say minimize, but we don’t minimize – we mitigate. Here are three of some risk mitigation strategies we might use. One: if you are functioning in a health coaching mode only, avoid diagnostic categories and language—such as, depression and obesity—so speak in coaching language, like talking about habits, motivation, and goals. Two, even if licensed, for example as an MD or a chiropractor or psychologist, prominently disclaim your role, often times with an asterisk or box on the Consent or Disclosure form or website bio or all of the above so that you qualify your use of a professional title such as “doctor.” Three, limit the kinds of services you offer, so that they do not cross the line into diagnosis and treatment of disease. For example, reviewing and commenting on lab tests. Health coaches want to do that all the time but I would consider that a clinical function in the eyes of a regulator. Whereas telling someone to keep a food diary, is just telling them to keep a diary. Thanks for watching. Here’s to the success of your healthcare venture, we look forward to speaking with you soon.
July 2, 2021
Healthcare
IV Hydration Therapy – Legal Strategies
In today’s video, we discussed some of the legal perils involving IV hydration therapy and potential legal strategies and solutions. Hi, I’m Michael H. Cohen. We help healthcare industry clients, just like you, navigate the complicated regulatory terrain of health and wellness, with all of its many issues and challenges, as you continue to scale or simply launch a new health and wellness product. Now, imagine that you’re a healthcare serial entrepreneur and your friend Doris is a licensed MD who worked part time at a medical spa. You ask Doris if you can hire her as a 1099 to do mobile IV hydration therapy clinic. She loves the idea and she says, “Sure. Are there any legal risks?” What should you do or not do? What do you tell her? Well, this is a very typical scenario that we’ve seen so many variations on a theme from our healthcare clients, many from our startups and they want it to provide mobile IV hydration therapies and other therapies. IV services are very popular also in the era of COVID-19. Some IV therapies have a immune boosting properties. Mind you, I’m not selling these therapies. I’m not promoting them. I’m simply responding to some of the legal issues that our clients are raising, who do want to provide IV hydration therapy. I’m not an academic, I’m just in the civilian space. I’m talking to you about the healthcare of entrepreneurial space and the legal issues that you might be battling. I’m also talking to you about how to anticipate some of the regulatory perils or the plaintiff’s lawyers who come to you after the fact. Now, there are in fact multiple legal and regulatory challenges. First of all, one question is, are you prescribing the IV or is the clinician prescribing, or is it simply an order, and does it make a difference? Remember, prescription is a legal term. Order, furnish, administer, these are all different terms. There’s questions as to whether your clinician needs to be in that state or can be licensed elsewhere. Second, who’s the clinician? Could it be a nurse? Could it be a paramedic or an EMT? What would they do? Would they have to be supervised? How would they be supervised by Dr. Doris? What about corporate practices of medicine concerns? What about supervision lines? Third, what’s the right structure? Would it be a corporation, an LLC, or maybe a professional corporation for the clinical staff? Who’s where under which structural house and how do you get this right? Fourth, could Dr. Doris get paid a percentage of production in terms of the number of IV units delivered, or would this itself create a kickback, fee splitting, or even Stark Law concerns? Fifth, does it matter what goes in the IV cocktail? What goes in there? Does the cocktail have to be FDA approved? Who can transport it? Some state licensing agency can get involved. Where do you find these rules? We do get very deep in the weeds into these issues and many more. Some of them we cover in various blog posts on our website. We have one called Independent Contractor, Physician Kickback or Compensation. Just one example how deep we go on our blog into corporate practice of medicine, FDA regulation of IVs, regulation of other substances, good business structures. When to you use the professional corporation or PLLC versus, for example, a general company that serves as an MSO. By the way, let’s talk about marketing. How do you market the services? Thanks for watching. Here’s to the success of your healthcare venture. We look forward to speaking with you soon.
June 10, 2021
Healthcare
What are the Compliance Issues for Veterinarians?
What are the Compliance Issues for Veterinarians? Veterinarians have unique compliance issues. Many of the rules and regulations these physicians follow are the same that govern medical practices that treat and care for humans. Still, there are also differences because animals are involved. Failure to comply with federal, state, and local laws as well as the ethical rules of conduct can result in the fines, penalties, and the forced closure of the business. Experienced healthcare lawyers can explain which laws, regulations, and ethical rules apply to a veterinary practice. Skilled healthcare attorneys understand which drugs and dietary supplements are regulated by the FDA. They understands what solicitation and promotional marketing is acceptable and what advertising may lead to complaints and litigation. It is advisable for veterinarians and veterinary practices to consult a skilled veterinary healthcare lawyer if they have not done so. It’s often much easier to address problems before they occur, rather than waiting until you receive a warning letter or are told you have just days to respond to formal actions. Telemedicine Telemedicine, also called telehealth, involves remote consultations and reviews. During the current pandemic, many medical practices and veterinary practices are using telemedicine more and more to avoid physical contact. Veterinarians use telehealth to: Review medical records about any pet or any email Review medical images Consult with the owner of a dog, cat, bird, or other pet that isn’t feeling well or with the owner of any livestock. These consultations may be face-to-face video. The consultations may also involve submitting questions by email or through a form and then waiting for a reply. Veterinarians who wish to use telemedicine should work with IT professionals to ensure they have the right equipment for communicating with clients. Veterinarians also need to understand the laws that apply to telemedicine. Traditionally, doctors in a broad array of specialties and practices consult with their patients in person so the veterinarians can see, touch, feel and speak to the humans and see, touch, and feel the animals the vets are taking care of. Telemedicine is a trade-off of convenience and, in the age of COVID-19, safety – for the inability to be in direct contact with the animal and the animal’s owner. To ensure that veterinarians maximize this trade-off so the veterinarians can provide quality care, the American Veterinary Medical Association (AVMA) and other veterinary organizations have developed guidelines for when and how telemedicine should be used. The starting point is that there should be an existing Veterinarian-Client-Patient Relationship (VCPR). Different organizations may define this term differently. Essentially it is the creation of a formal relationship in which the veterinarian agrees to provide medical care to the owner’s animal in return for compensation. According to the AVMA: “Telemedicine, which is client-facing, includes the delivery of information specific to a particular patient and is allowable only within the context of an established VCPR; and non-client-facing models that involve delivery of general advice, telemarketing, and advertising.” In non-client-facing models, the veterinary may be able to give general advice but not advice that applies to a specific animal. The participants in a veterinary telemedicine conference can include: The veterinarian The animal The client – generally, the owner of the animal A pharmacy or medicated feed distributor A specialist The healthcare team Telehealth includes: Telemedicine Teleconsulting Telemonitoring Teleadvice Teletriage E-prescriptions Mobile health The AVMA has guidelines for how to use telehealth/telemedicine. The guidelines are just advisory. Each state has its own veterinary licensing boards. For example, California has a veterinary medical board. The board regulates: Licenses to practice veterinary medicine. Licensees need to understand their continuing education requirements, their duties regarding controlled substances, and animal shelter issues. Enforcement issues. For example, veterinarians need to know if animal shelters are practicing safe veterinary medicine. Inspection issues. Some of the regulations of the California Veterinary Medical Board include: Telemedicine Animal Control and Humane Officer Training Fee schedules Consumer protection If there is a valid VCPR, veterinarians, in general, can offer and charge for telemedicine services – provided the veterinarian provides competent medical care. In most telemedicine consults, for animals and humans, it is helpful (and possibility mandatory) that the veterinarian/doctor have an initial in-person consultation with the pet/person. Anti-referral laws – Stark Law and the Anti-Kickback Statute Medical practices including veterinary practices are subject to the federal and state anti-referral laws. These laws are designed to ensure fair competition and to ensure that patients (including the owners of dogs, cats, cows, and other animals) are being advised based on what is in their best health interest and not on what is in the best interest of the physician. Both Stark Law and the AKS regulate how and when referrals can be made – and what exceptions and safe harbors apply. Stark Law Stark law prohibits doctors who have a financial relationship in a designated health facility from referring patients to the facility if that facility then charges Medicare for the services or products that are provided. A common example of a designated health facility is an ambulatory surgery center. A financial interest can be direct or indirect. Stark Law applies if the doctor or a member of the doctor’s immediate family has a financial interest or investment in the designated health facility. Stark Law provides for civil penalties in the form of reimbursement of any fees to Medicare, statutory penalties, and treble damages. Violations of the Stark Law are often also violations of the federal False Claims Act. The Anti-Kickback Statute This federal law forbids the use of any incentive to pressure or compel a physician to make a referral to the party providing the inducement. Common examples include the payment of cash or the creation of sham directorships by a drug company in order to induce physicians to suggest patients use the drug company’s products instead of drugs manufactured or sold by other companies. The AKS is a criminal statutes that includes fines and possible imprisonment. Violations of the AKS may also be violations of the False Claims Act. An experienced veterinary and healthcare compliance lawyer will review any referral arrangements the veterinary practice has with others. Some types of conduct and actions such as waving copayments, providing discounts, accepting reduced payments, and gifts raise red flags that the referral is not based on merit. Exceptions and safe harbors The lawyer can also explain which exceptions and safe harbors apply. Some of the exceptions to Stark Law include: In-Office Ancillary Services Exception. This exception allows a veterinary or other medical practice to make referrals for ancillary services such as laboratory services – if certain conditions are met. Fair Market Compensation Exception. This exception is useful if the arrangement for referrals is in writing, there’s a specific timeframe, the compensation is based on fair market value, and the transactions are not based on the volume or amount of the referrals – and other conditions are met. There are also Stark Law exceptions for the following, among others, if all the conditions are met: Physician services Referrals made to organizations that provide prepaid health services to enrollees such as HMOs and plans approved by Medicare Academic medical centers Preventive services Rental of office space Equipment rental Bona fide employee relationships Personal service arrangements Nonmonetary compensation up to $3,000 a year – if the veterinarian didn’t solicit the compensations and the compensation isn’t based on the amount of referrals Physician recruitment Medical staff incidental benefits There are AKS safe harbors which also offer protection. Many of the safe harbors are comparable to the Stark Law exceptions. An experienced veterinary healthcare compliance lawyer can explain the similarities, the differences, and the key requirements as far as Stark Law exceptions and AKS safe harbors are concerned. Exceptions to the Stark Law Prohibition of Medical Referrals The Stark Law governs what types of referrals doctors can make if they bill for Medicare and Medicaid. The presumption is that that referrals made by a doctor to a designated health service are […] California Medical Board Veterinarians cannot abandon their patients. If the veterinarian leaves a medical practice or is fired from the practice, the physician must inform the owner of the pet, that the owner will need to hire a new veterinarian. Veterinarians should also make the medical records of the animal available to the owner in a timely manner. FDA and FTC compliance Veterinarians and vet practices must comply with the FD&C Act and the FTC Act. These agencies will send out warning letters and file legal actions if any of the following are condoned by the veterinary practice. False, misleading, or deceptive statements are made on company websites, social media accounts, print advertising, and any other marketing. Examples of false statements and misbranding include claims that treatments or medications can provide relief, can cure diseases, can prevent diseases, or can reduce the severity of animal disorders – when the statements are not supported by scientific evidence and/or clinical studies. The veterinarian provides drugs or treatments that aren’t medically approved. The FDA works to “assure that animal food is safe, made under sanitary conditions, and properly labeled, that animal drugs, animal devices, and animal food additives are safe and effective, and in cooperation with other agencies that no harmful residues in food-producing animals enter the human food supply.” Additional veterinary rules and regulations Veterinarians are generally required to comply with the California laws that govern medical practices such as the: California Medical Practices Act, The Controlled Substances Utilization Review and Evaluation System (CURES) Various consumer protection laws The laws and principles of informed consent – where the owner of the pet should be notified of the risks and dangers of proposed medications, treatments, and medical procedures. The confidentiality of veterinary patient records Additional legal services for veterinarians Skilled healthcare lawyers also advise veterinarians on a range of other issues including: What type of business entity to use for the practice The use of managed service organizations Employment contracts Contract negotiation Non-solicitation and non-compete clauses Severance packages Billing and coding issues including issues of upcoding and of bundling of services Whether American Animal Hospital Association (AAHA) Accreditation is required When Using a Management Services Organizations (MSO) Is the Right Choice for Your Medical Practice Managed Services Organizations help physicians focus on practicing medicine by freeing doctors from many administrative tasks. Failure to consult with an MSO healthcare lawyer can cause civil and […] Veterinarians should consult with experienced healthcare attorneys before starting their medical practice and any time they expand their practice. A skilled lawyer will review the anti-referral laws, the telemedicine laws and guidelines, the federal and state laws and boards that regulate veterinary practice, and the practical and legal issues of complying with these laws.
May 8, 2021
