Functional Medicine Wellness Practices Gain Legal Traction

Functional medicine wellness practices must answer to similar legal rules as medical practices in general – only we tailor our legal consults to the needs of the particular functional medicine practice.

Legal challenges the functional medicine doctor faces

Whenever our law firm takes on a new client, we have the client answer a few simple, yet fundamental questions.  These include:

  1. What legal or business challenge brings you to our firm?
  2. What outcome would you ideally like?
  3. What have you done to resolve this so far?
  4. What will it cost you in terms of time, money or reputation if you don't successfully resolve your challenge?

These challenges usually get to the root of the problem.  The client can tell a long story, but ultimately there's a problem to be solved.

For example: I am a medical doctor who wants to set up a functional medicine wellness practice and I need legal advice to make sure I'm compliant.

There might be some additional detail.  For example:

Questions about licensure: I want to set up a telemedicine practice that is less dependent on brick-and-mortar, face-to-face visits with patients.  Do I need to get licensed as a physician in all states? What are the telemedicine laws that apply?

Questions about insurance practices: I plan on being a cash-based practice.  Does that change my legal pictureDo I have to worry about HIPAA?  Does it matter that my EMR is HIPAA-compliant?

Questions about liability: Do I have more, or less, liability as a functional medicine doctor than in my conventional, hospital-affiliated practice? 

Questions about Medicare opt-out: Will it help if I opt out of Medicare?  What medical services can I offer?  Do I need an opt-out affidavit?

 Questions about advertising: Can I advertise my wellness program in different states? 

The desired outcome normally has to with becoming more compliant, resolving legal worries, getting questions answered.

Clients typically have consulted other lawyers and gotten conflicting answers.  (A recent client was fired by her lawyer).

If they don't resolve their concerns, they can't practice, can't open their dream medical practice, can't expand past their brick-and-mortar limitations, and so on.

Functional Medicine Legal Issues

Functional medicine is a growing medical market.  According to the Institute of Functional Medicine:

Functional Medicine asks how and why illness occurs and restores health by addressing the root causes of disease for each individual.

The Functional Medicine model is an individualized, patient-centered, science-based approach that empowers patients and practitioners to work together to address the underlying causes of disease and promote optimal wellness. It relies on a detailed understanding of each patient's genetic, biochemical, and lifestyle factors and leverages that data to direct personalized treatment plans that lead to improved patient outcomes.

By addressing root cause, rather than symptoms, practitioners become oriented to identifying the complexity of disease. They may find one condition has many different causes and, likewise, one cause may result in many different conditions. As a result, Functional Medicine treatment targets the specific manifestations of disease in each individual.

We've previously addressed functional medicine in these posts:


·         Can chiropractors legally practice functional medicine?

·         4 Legal Tips for Setting Up A Functional Medicine Practice

While the legal issues relevant to functional medicine overlap with those involved in integrative medicine generally, functional medicine practitioners often need detailed legal attention, for two reasons:

  1. Many practitioners other than licensed MDs are embracing functional medicine.  This triggers scope of practice concerns and issues of legal boundaries between healthcare professionals.
  2. Functional medicine practitioners, including physicians, often wish to set up a wellness practice.  Sometimes this is medical, sometimes not.

A good resource for those interested in the legal difference between practicing medicine, and health coaching, is our e-course on Telemedicine Legal Roadblocks: Key Strategies to a Successful Practice.  Here we talk about, among other things, whether an MD or DO can remove the 'sticky hat' imposed by licensed as a physician; and where a non-physician crosses the line from 'health coaching' into unlicensed medical practice.

For those interested in issues of cash payment vs. insurance, and the legal implications of a membership model, we have our e-course, Creating a Membership Model for Your Medical Practice.  Among other things, we teach about creating a membership model for patients.

We also go through drill-down questions in a legal strategy session.

Moving Toward a Contract Model

A long time ago … in a galaxy far away … we learned in law school about a rather novel (at the time) legal thinker named Guido Calabresi. In his book, The Cost of Accidents, Calabresi argued that accidents in industry were unavoidable, but they had an economic price that should be accounted for in policy-making:

The central aim of tort law is not the absolute minimization of losses from individual accidents because the total accident cost of any economically fruitful activity/industry includes both the expected cost of the accidents that happen to occur and the actual costs expended in avoiding the accident.

One of the ideas promoted by Calabresi or one of his law and economics colleagues was that, without necessarily sanctioning negligent care, medical malpractice law could shift from tort or 'fault' model toward a contract model, in which patients could bargain for a level of care.

This contract model is a good description of what happens when the integrative medicine doctor, functional medicine, or physician advocating holistic health, does when the physician enters into an agreement with the patient for a defined kind of care for a period of time.

Some physicians call this a 'subscription agreement,' while others call it a 'program agreement,' 'wellness agreement,' or 'membership agreement.'

The idea is that the doctor and patient enter into a contract, by which the doctor agrees to provide certain services and the patient agrees to pay.  The physician, for example, might offer three months of nutrition and lifestyle advice, measuring results by taking and interpreting lab tests periodically.  The patient might pay monthly or quarterly.  Both might agree that while not waiving the standard of care, the physician's role is to act as a specialist—not as a primary care provider; and to provide targeted advice related to the patient's overall goals (wellness, less fatigue, weight loss, improved overall health, better mind-body satisfaction, etc.).

Both agree, for example, that they are operating outside the insurance reimbursement model and on a cash basis. The patient agrees that he or she will take responsibility for nutritional and lifestyle choices, and that there are no guarantees, yet the proposed approaches are based on good evidence and well-articulated approaches.

The contract model makes sense, because physician and patient are operating in a new arena: one liberated from defensive medicine, endless tests, over-prescribing and unnecessary surgeries.  Doctor and patient can embody their desires and expectations in a document to which they both agree, rather than waiting for disaster to strike and resolving later disputes in a lawsuit.

More about the Membership Agreement

Remember that the Membership Agreement is often the second step.  The first step is to vet the model.  If, for instance, the physician is still Medicare par- or non-par, it's critical to ensure that the services the physician intends to offer are Medicare non-covered.

See, for example, our prior posts:

How helps with legal review of concierge medicine services

Legal review of concierge medicine contracts is needed to handle regulatory issues & liability risks

Every Membership Agreement is different.

For example, Dr. Bob, a recent client, wanted to stay within Medicare but limit his concierge practice to 'wellness and coaching services.'  This included lifestyle advice, some nutritional consultations, and consults to boost performance (athletic, scholarly, etc.).

In stating what the services are, it's also important to state what services are not being provided.  For example, Dr. Bob's membership agreement let patients know that Dr. Bob's membership model does not offer:

  • an annual physical exam
  • the cost of recommended supplements
  • the cost of lab tests
  • emergency care
  • urgent care
  • prescription of controlled substances

The Membership Agreement our lawyers draft usually contains a provision articulating that the services being offered are not intended to be those covered by Medicare or private insurance.

There should be a section that clearly describes the fees the patient will be for the program – for instance, monthly, quarterly, or annually.

Often, if the Program calls for subscription or automatic renewal of the contract, the agreement must comply with any state law that applies to subscriptions or automatically renewals.  In California, this is covered by Business & Professions Code Section 17600.  Failure to comply can be to class action plaintiff law firms like blood to a shark.  Caution and careful drafting are advised.

17600 and similar statutes often require that the cancellation policy be explicitly and clear laid out.  It's a good idea to do so, anyway.

Then there is some boilerplate which, also standard, is nonetheless very important.  For instance, there is a disclaimer of warranties and disclaimer of liability.  There is mutual indemnification in case the other party is at fault.

The physician can claim intellectual property rights in any of their copyrighted and trademarked materials.

There has to be a provision for Notices.

We often see Agreements drafted by other attorneys who are unfamiliar with healthcare law; or by consultants and industry associations who claim that their 'magic language' will solve all the legal issues that might arise. These forms are often inadequate.

No one has a crystal ball, but careful crafting can help mitigate later potential risk.  Also, the clearer the agreement, the more likely the patient will abide by it.  Clear agreements are good legal defense and good energy.

The Bottom Line

Functional Medicine wellness practices gain legal traction by understanding healthcare laws that govern cash wellness practices, anti-kickback laws, telemedicine, and other legal rules.  Contact experienced functional medicine legal counsel when building a functional medicine practice, launching a health coaching business involving functional medicine, or otherwise marketing to potential patients or clients about healthcare services involving functional medicine.

Lead Magnet Cover

5 Legal Tips for Setting up a Functional Medicine Practice

Subscribe to our mailing list to receive your copy of 5 Legal Tips for Setting up a Functional Medicine Practice

    Contact Us

      Book your Legal Strategy Session now
      Michael H Cohen Healthcare & FDA Lawyers

      Contact our healthcare law and FDA attorneys for legal advice relevant to your healthcare venture.

      Legal Strategy Course

      Start typing and press Enter to search