Behavioral Health Law Is Exploding. Is Your Medical Practice Prepared?

For many reasons, many Americans are finding it difficult to cope with life’s stresses. They are turning more and more to health professionals to treat their emotional pain. Sometimes, treatment is a vicious cycle as the medications that are prescribed can increase dependencies and worsen the patient’s depression and anxiety.

National Institute of Mental Health research date shows that tens of millions of people nationwide need mental health care. The NIH believes that only about half of the people who need behavioral health treatment are getting the medical help they need. Recent estimates from the Mental Health in America report (2015), put the number of people who need mental health advice at more than 40 million, about 18% of the population.

These people need help for the following types of behavioral health problems, among many others,

  • Agoraphobia
  • Anorexia Nervosa
  • Any Anxiety Disorder
  • Any Mood Disorder
  • Attention-Deficit/Hyperactivity Disorder (ADHD)
  • Autism Spectrum Disorder (ASD)
  • Binge Eating Disorder
  • Bipolar Disorder
  • Borderline Personality Disorder
  • Major Depression
  • Obsessive-Compulsive Disorder (OCD)
  • Panic Disorder
  • Personality Disorders
  • Post-Traumatic Stress Disorder (PTSD)
  • Schizophrenia
  • Serious Mental Illness
  • Social Phobia
  • Specific Phobia
  • Suicide

The types of behavioral health medical providers that need legal advice

Health providers such as psychiatrists, psychologists, general practitioners, and pain management medical doctors need to understand what regulations apply to them. Likewise, insurers need to understand what treatments they are required to cover and what limitations may apply. Investors also need to understand their obligations.

Our law firm is experienced in handling the legal needs of:

  • Addiction Counselors
  • Alcohol, Drug Abuse, Addiction Treatment Centers
  • Group Homes
  • Licensed Educational Psychologists (LEP)
  • Life Coaches and Health Coaches
  • Licensed Professional Clinical Counselors (LPCC)
  • Marriage and Family Therapists (MFT)
  • Other Mental Health Care Professionals
  • Psychologists (PhD)
  • Sober Living Facilities
  • Social Workers (CSW, MSW)
  • Substance Abuse Treatment Centers and Recovery Facilities
  • Youth, Educational, and Family Services

A variety of factors are creating more work in the behavioral health sector for attorneys. At the front of the list is the opioid crisis. The Centers for Disease Control and Prevention states that “Around 68% of the more than 70,200 drug overdose deaths in 2017 involved an opioid.”

The leading federal agency that works to provide mental health policies is the SAMSHA, the Substance Abuse and Mental Health Services Administration. It is part of the US Department of Health and Human Services.

Relevant laws

There are many laws, old and new, that have been enacted to help those with various behavioral health problems. These laws include:

  • The Support for Patients and Communities Act, also called the “Substance Use–Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” regulates how Medicare and Medicaid are addressing the opioid crisis. This law, signed in October 2018, expands the treatment services for opioid use. The law also promotes telehealth services which allows patients to use mobile technology and digital information to access health care services from a distance.
  • The Affordable Care Act of 2010 was designed to make insurance more affordable for people and small businesses including providing insurance coverage for mental health and people with substance abuse difficulties.
  • The Americans with Disabilities Act (ADA) provides equal opportunity requirements for people with mental health and addiction disabilities, among other disabilities – across a wide variety of essential living needs. These needs include access to government services, transportation, public accommodations, and other essentials.
  • The Children’s Health Act of 2000, authorizes SAMSHA to incorporate the needs of children into its substance abuse and mental health programs. The law also helps SAMSHA and states work together through block grants and other grants to provide better services to communities.
  • The Garrett Lee Smith Memorial Act, which became law in 2004, focuses on funding for youth suicide prevention programs. This law affects states, tribes, US territories, and campuses. The law also provides that SAMSHA’s Center for Mental Health Services can administer the Garrett Lee Smith Suicide Prevention Program.
  • The Mental Health Parity and Addiction Equity Act of 2008, is a federal law that generally prevents group health plans and health insurance issuers that provide mental health and substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical coverage.
  • The Sober Truth on Preventing (STOP) Underage Drinking Act is aimed at helping stop and reduce alcohol use among children between the ages of 12 and 20.
  • The Tribal Law and Order Act, TLOA, Is a federal law focuses on alcohol and substance abuse prevention and treatment for the Indian community including requiring cooperation among several different federal agencies.
  • The Health Information Technology for Economic and Clinical Health Act (HITECH). This act encourages the use of electronic health records. Hospitals and physicians are encouraged, with financial help from the US Department of Health and Human Services to create and expand their information technology systems.


The Medicare Originating Site Fee is a perk for provision of telemedicine services. State law also may provide its own rules. Let’s look below at federal law and then California law.

Relevant regulations

Physicians, psychologists, mental health practices, and other mental health companies need to understand the federal regulations for mental health and substance abuse related to substance abuse and mental health services include:

  • Charitable Choice
  • Emergency Response
  • Protection and Advocacy for Individuals with Mental Illness Program
  • Synar Amendment and Tobacco Regulation for Substance Abuse Prevention and Treatment Block Grants
  • Federal Workplace Drug Testing
  • Certification of Opioid Drug Treatment Programs
  • Patient Record Confidentiality
  • Other federal regulations

California and other states have their own sets of laws and regulations that govern mental health and substance abuse practices.

Telecommunication and behavioral health

The role of telehealth medicine in providing behavioral health services is also expanding. Many people with mental health issues find it easier and more desirable to speak with physicians and counselors online because

  • Online services cost less money – there’s no need to pay the expense for car travel or public transportation
  • Telemedicine is more private – patients don’t have to see other patients or other people before speaking with their healthcare provider

Health providers who wish to expand their patient lists by offering a telehealth practice need to speak with an experienced behavioral health attorney first. Some of the legal issues the lawyer will review include:

  • Licensing requirements – in-state and for medical doctors who wish to advise patients in other states
  • The need to see the patient in person first before conducting telehealth services
  • The need for protocols if emergencies arise during the telehealth conferences – such as patients who may put their lives at risk by taking medications they shouldn’t.
  • Whether and how medicines can be prescribed.
  • That litigation may also increase as patients receive long-distance treatments and as they seek greater in-office help from their medical doctors.

Data privacy

Medical providers need to understand the limits of telehealth medicine and in-patient medicine if they are advising patients about their mental health and opioid problems. At the top of the list of concerns, medical doctors need to comply with the electronic record privacy requirements of the Health Insurance Portability and Accountability Act.

This law provides standards for protection electronic health records and personal health information. The law regulates how disclosures are made and who can see the records. The aim it to give patients control over their health information.

Health providers also need to understand what other federal confidentiality and state confidentiality laws apply.

Issues to address before opening or investing in a behavioral health medical practice.

Due diligence is required before any medical practitioner buys a medical practice that provides mental health or substance abuse services.

Physicians need to understand that some states, such as California, regulate the corporate practice of medicine. In California, physicians must create a “medical corporation” instead of a standard S or C corporation.

Physicians and mental health providers also need to review with experienced behavioral health and substance abuse lawyers on the following types of matters:

  • Corporate compliance programs
  • The proper ways to bill for and submit claims to Medicare, Medicaid, federal payors, state payors, and private insurance companies
  • Compliance with the federal False Claims Act and any state false claims acts
  • Disciplinary issues
  • Obtaining a fictitious name permit
  • Creation of a medical corporations
  • Opting-out and other Medicare issues
  • Professional corporation rules
  • Naming and branding of the practice
  • Laws involving the corporate practice of medicine
  • Prohibitions against the unlicensed practice of medicine and psychology
  • Security issues

For example,

“one of our clients was a licensed psychologist who included energy psychology among her therapeutic modalities. Unfortunately, one of her patients with borderline personality disorder began alternating between idealizing and demonizing the psychologist, ultimately writing a detailed complaint to the Board. We provided expert legal counsel to help defuse the Board’s concerns, and ultimately get the investigation dismissed.”

Referral and fee-splitting prohibition laws

Mental health physicians must be very careful about how they receive and obtain referrals from general physicians, pain management medical doctors, and other healthcare providers.

  • Stark Law. Stark law, applies to patients who use Medicare and Medicaid. It regulates physician self-referrals – the practice of referring a patient to a designated medical facility in which the physicians (or an immediate family member) has a financial interest. The aim is to make sure referrals are made for the patient’s medical interests and not the financial interest of the physician or the facility. A skilled behavioral health lawyer can explain what Stark Law exceptions medical providers can use.
  • Anti-Kickback statute. This statute is a criminal law aimed at preventing or limiting referrals for medical services or items that are reimbursed by federal health care programs – such as, but not limited to, Medicare and Medicaid. The aim is to preclude the making of referrals in return for some type of financial gain. The Anti-Kickback statute does provide for safe harbors. These safe harbors can allow certain types of financial relationships such as leasing of equipment and office space.
  • State anti-kickback laws
  • Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”). EKRA is another of several federal laws that regulate the use of referrals in the medical healthcare sector and is part of a Congressional effort to respond to the dangerous use of opioids which are taking many lives nationwide. EKRA also has exceptions that anyone who works with substance abuse needs to review with a knowledgeable healthcare attorney.

There is a lot of opportunity for medical providers to help patients who abuse alcohol, drugs, and other substances. Many people suffer from depression, bipolar disorder, anxiety, and a range of emotional problems.

Psychiatrists, psychologists, and other medical providers need to:

  • Make sure they comply with the federal and state mental health and substance abuse laws and regulations
  • Comply with telehealth laws and requirements if they are advising patients through the Internet or with mobile technology
  • Understand what privacy and security requirements apply
  • Create the correct business structures
  • Manage their billing and contracts correctly
  • Meet many other legal requirements

To understand what your medical practice, center, or facility must do to help patients with behavioral health difficulties, you need to speak with an experienced mental health and substance abuse lawyer. If you fail to follow the laws and regulations that govern you practice; you may face criminal and civil charges, may lose your license or suffer disciplinary actions, may incur additional legal and medical consequences. For help now, call Cohen Healthcare Law Group PC today at 310-844-3173 or by completing our online contact form to schedule an appointment.

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