7 Reasons Why Nurses Lose Their License

Even the most competent and best-intentioned nurses can find themselves before a judge, being charged by a prosecutor, or finding that their career is in jeopardy – if they don’t’ understand the laws that apply to them. It’s not enough to understand the medical requirements. Practicing nurses need to be aware of many legal issues including a patient’s right to privacy, when fees can be split, when and how they can work for a medical spa. Nurse practitioners need to understand how managed service organizations (MSOs) should work. There are many laws that govern a nurse’s medical practice and any businesses they run or participate in.

An experienced healthcare nursing lawyer understands which laws apply for registered nurses, ER nurses, oncology nurses, practicing nurses, nurse case managers, labor and delivery nurses, and any other type of nurse.

HIPAA and the nurse’s duty to respect a patient’s privacy rights

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) imposed numerous requirements on federal agencies and everyone who works in the healthcare system to take steps to protect and secure patient records so that only approved people could see a patient’s medical and personal information. The Health and Human Services Department created two rules called a privacy rule and a security rule. Both rules set national standards for accessing and transferring protected patient information. The security rule specifically applies to electronic records.

While many doctors, nurses, and other health providers may initially accept written records or write down oral statements, today most providers use medical software (electronic records) to store and preserve patient information.

The protected information includes information such as name, address, and social security that identify the patient. Protected information also includes information about the patient’s diagnosis, test results, prognosis, and treatments. Most information about a patient that nurses read, write, or enter into a database must be protected.

Nurses must protect health records to ensure the “confidentiality, integrity, and availability” of the electronic records. They must protect against security threats and uses that are not permitted. An experienced nursing healthcare lawyer can explain how records should be kept, who normally manages the records within a hospital or a facility, what physical steps must be taken to protect records, and how nurses and health providers can show they are in compliance with HIPAA.

The attorney can also explain when and how information may be disclosed – such as to the physician the nurse works for – so the doctor can properly treat the patient.

What should nurses understand about splitting fees and business relationships with physicians

There are several laws that regulate fee splitting arrangements between doctors and others, how the fees can legally be split, and what exceptions or safe harbors apply. The Stark Law forbids fee splitting between a doctor and a designated health facility. The Anti-Kickback Statute (AKS) generally forbids any payment or remuneration in return for referrals. Both Stark and AKS generally apply to payments for Medicare and Medicaid. There are also state fee-splitting and referral laws.

While most nurses in hospitals and medical practices are paid a salary and benefits such as healthcare insurance and retirement benefits, there are many exceptions. Nurses who are involved in any form of remuneration in return for referring patients and nurse practitioners who are often involved in the financial end of a medical practice must speak with an experienced healthcare nursing attorney to understand the duties and protect their rights.

As an example, a registered nurse who works with a plastic surgeon should be careful about the following:

  • Unlicensed practice of medicine. An RN could be charged with the unlicensed practice of medicine if she/he works for a doctor such as a plastic surgeon who performs plastic surgery, dermatology services, and aesthetic medicine. If the RN advertises on a website or in print, that he/she does the treatments the plastic surgeon does but doesn’t mention the plastic surgeon – then the RN could face an unlicensed practice of medicine complaint.
  • Creating an MSO. An experienced healthcare and nursing law attorney will begin by explaining that the RN’s association with the plastic surgeon must be detailed and disclosed. The lawyer will likely then review whether the RN should form an LLC or a corporation. By creating an LLC or an S-corporation, the RN could possible receive revenue from the plastic surgeon for managing or marketing the doctor’s practice – as an MSO.
  • Fee splitting. An RN can’t split fees with the plastic surgeon. This means the RN can’t accept a fee from the plastic surgeon for referring patients to the plastic surgeon. The RN also can’t pay a fee to the plastic surgeon based on the number of patients the doctor treats.

The basic key that the attorney will explain to the nurse is that it is the physician who contracts with the nurse. The nurse works for the doctor under the doctor’s supervision. A nurse can’t hire a doctor.


An RN who is working on getting her NP recently called our law firm, asking whether he was engaging in illegal “fee-splitting” in her compensation arrangement with a physician. Physician […]

The nursing law attorney, will, if the nurse is practicing in California, explain that the California Business & Professions Code Section 2417.5 regulates outpatient elective cosmetic medical procedures or treatments and any invalid fee arrangements. Other applicable California laws and references the lawyer will review or direct the nurse to include:

In the RN/plastic surgeon example, an experienced healthcare nursing attorney would review the following points with the RN:

  • The agreement between the RN and plastic surgeon should make clear that the doctor is hiring and supervising the RN. This can help reduce the risk of complaints the RN is engaged in an unlicensed practice, fee splitting, or engaging in the corporate practice of medicine
  • The patients are under the authority and care of the medical doctor; not the nurse
  • Nurses can have websites but there are restrictions. A major restriction is that readers should understand the nurse is not practicing medicine.
  • There are usually legal alternatives to revenue-sharing that are legal and good business arrangements. An MSO is one such effective alternative
  • Other legal issues depending on the nature of the practice and the desired business relationship


Kudos to integrative medicine consultant Glenn Sabin for his bold post on integrative medicine standard of care – suggesting that integrative health should be the standard against which […]

Multi-Disciplinary relationships between physicians and nurse practitioners

There are many different combinations of healthcare practices that require review. The relationship between a chiropractor and a doctor is one such combination. A nurse working for a medical spa is another combination.

The general key in all multidisciplinary practices is understanding there are two key parts:

  • The clinical part which performs the diagnosis and treatment of the patient
  • The business/revenue side of the practice

Generally, healthcare lawyers recommend that a management services organization (MSO) run the business side of the healthcare practice.

Skilled healthcare nursing lawyers will review whether the MSO structure can be used by nurse practitioners. Many nurse practitioners look to expand their income and their work by starting their own business such as a wellness clinic or a clinic that provides holistic health care. They picture working with a physician who will guide the practice and other health providers such as chiropractors, acupuncturists, massage therapists, and other providers.

Essentially, the nurse wants to collaborate with a physician and also work as a manager for an MSO. Generally, with proper planning, the healthcare lawyer can explain the best way to use the MSO to fulfill her business/new practice dreams. For example, he’ll review the difference between an MSO and a professional corporation.

“(Again), the key point here to remember that those are two different boxes – the clinical side and the business side. So typically, practitioners on a clinical side stay within the clinical entity, whereas practitioners on the business side, not practitioners but service providers on the business side can be under the MSO.”


Hello, this is Michael H. Cohen – I am a healthcare and FDA attorney and the founder of the Cohen Healthcare Law Group. I am going to talk today about multi-disciplinary clinical healthcare […]

The Role of RNs in Medical Spas

Each state is different. California’s laws provide a good way to understand some of the key issues involving RNs working in medical spas – beginning with the requirement for physician supervision.

Some of the resources an experienced nursing healthcare lawyer will review are:

For example, the Cosmetic Treatments Q and A provides that doctors can use intense pulse light (IPL) devices and laser treatments. An RN (but not a licensed vocational nurse) can use IPL devices and perform laser treatments – under a doctor’s supervision. The RN can’t perform these treatments without physician supervision. The FAQs also provides that RNs, licensed vocational nurses, and physician assistants can inject Botox – again, under the supervision of a doctor. No unlicensed person can inject Botox even with professional supervision.

Generally, the Medical Board of California states that while laser treatments, Botox, and cosmetic filler injections might be considered cosmetic treatments by the public; anyone giving the treatment should understand when supervision is required. The MBC does state that using prescription drugs and devices is not cosmetic – it is the practice of medicine and physicians need to understand that concept.

As for microdermabrasion, the Cosmetic Treatments FAQs states that if “it’s a medical treatment that penetrates to deeper levels of the epidermis,” then it “must be performed by a physician, or by a registered nurse or physician assistant under supervision.”

The lawyer will review in more detail the difference between physician supervision and standardized procedures.

They are not the same. Many nurses and doctors believe it’s OK for nurses to perform procedures without supervision provided there are “standardized procedures” or “delegation of services” documents on file. The Medical Board of California specifically addresses the relationship between standardized procedures and supervision as follows:

 “Standardized procedures for nurses allow nurses to perform procedures while the physician is not on-site; however, they do not absolve physicians of their supervision responsibilities. Nor does the law allow nurses to set up a practice in a salon, hire a physician supervisor, or perform medical procedures independently. The law does not contain a legal definition of supervision, and therefore, absent a legal definition, the plain English definition applies. “Supervision” is defined as the act of supervising, which is to oversee, to direct, to have charge, to inspect, to provide guidance and evaluation.”

MBC provides the following example: “As an example, the regulations for “standardized procedures guidelines” require physicians to be responsible for ensuring the experience, training, and education requirements for performance of the delegated function – and this must be documented. The regulations require that a method of initial and continuing evaluation of the nurses’ competence be established.” (emphasis added).

The MBC, and linked article, reviews whether physicians need to be physically present when the nurse is using standardized procedures. The MBC also defines the type of facility required and when facilities and locations, such a salon or spa that isn’t controlled by the physician, fail to qualify.


FDA now requires a cyber security plan in your medical device submission. On June 14, 2013, FDA issued Draft Guidance on Content of Premarket Submissions for Management of Cybersecurity in […]

Additional legal issues nurses should review their healthcare attorney

The healthcare nursing lawyer will also review issues such as:

  • What constitutes a good faith exam in a medical spa or similar setting?
  • Who should initially examine the patient?
  • How being a nurse practitioner differs from being a registered nurse – with regard to the ability to perform delegated tasks using standardized procedures?
  • When and how a videoconference exam can be conducted?
  • The use of telemedicine?
  • Mobile health and software app?

Understanding the law can help mitigate your risks

Registered nurses, nurse practitioners, nurse specialists, and all nurses need to understand:

  • Fee-splitting and revenue laws
  • Multidisciplinary practices
  • What a medical corporation is
  • A doctor’s duty of supervision
  • How RNs can work in a medical spa
  • Other legal issues that affect their practice and their revenue

Speak with an experienced healthcare nursing lawyer who understands how to minimize legal risks and maximize your ability to earn a living and do the work you like

Nurses shouldn’t take their career for granted. They need to learn what laws affect their medical practice and their business relationships. An experienced healthcare lawyer advises nurses which federal and state laws apply to their practice. We will explain what compliance steps must be taken and review strategies that can be used to meet the laws obligations while maximizing your opportunity for profit.

Contact Cohen Healthcare Law Group, PC. to speak with an established healthcare lawyer. We understand the financial, medical, and legal risks and rewards of nursing duties, contracts, and business relationships.

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