Signs that shape the landscape of the healthcare industry

TRANSCRIPT

This is Michael H. Cohen, founder of the Cohen Healthcare Law Group.

Introduction

            Let’s talk about signs. I was driving with my toddler this morning and he was suddenly noticing that there were signs and once he started noticing that he realized that there are signs everywhere. So there are stop signs. There are yield signs. I’m looking right now at a sign that says dip. I guess there’s a dip in the road, so you wouldn’t know that. The sign has to tell you so you can anticipate it, no stopping at any time, truck route, all these road signs. He was fascinated by yield. The fact that the cars have to wait, some cars can go. And then, of course he really loves the u-turn. You can make a u-turn. So today we were also noticing that there’s a sign that says no u-turn.

So we got into this joke about it, this rhythm.. yes u-turn, no u-turn, yes, no. And I’m looking at the road and I realize that you can turn this way, you can turn that way, you can do this, but you can’t do that. There’s yes and there’s no. You get the metaphor, right?

            This is pretty much the landscape for healthcare law and regulation. Whatever your business, whatever your practice, whatever your healthcare enterprise, whatever your health industry venture, whether it’s telemedicine, a medical spa, some kind of arrangement that involves a venture or a business and a doctor where you’re worried about issues like corporate practice of medicine, stark, self-referral, fee splitting, any kick back rules, medicare exposure, up coding, billing issues, a medical management issues, those kinds of items that are typically on the plate…

All of those are rules that frame where you can go, whether you can turn right or left, whether you can stop or go, fundamentally, whether you can make a u-turn, whether you can engage legal counsel to help you make a u-turn or whether even with a healthcare attorney and FDA lawyer at your side, you could not make a u-turn.

Rules and more rules

You need to know the rules of the road. In fact, medicare has a seminal document for a physician, which is about the anti-kickback statute, and it’s called The Rules of The Road. And they have stop signs there, so probably that’s where I got the idea even though I thought that it was ingenious at the moment. Of course, there’s a wonderful book called the Anxiety of Influence, and we are all influenced by what we’ve seen in the past, so this might have influenced me. At any rate, it really is a road and you need to be able to see the signs and you need to be able to obey the signs.

And there are times when people will go a little over the speed limit. There are times when people will go past the yellow, but we know that you cannot run a stop sign. So you cannot double bill Medicare. You cannot engage in healthcare fraud, and you need to understand what the signs mean. By and large, the difference is the road signs are very black and white, literally. If the sign says speed limit 30 miles an hour, that’s the speed limit. Of course, there might be some tolerance for going beyond it, but if you go too far beyond it, especially if you have a red convertible, you’re probably going to get nailed, so especially if it says radar enforced.

When you’re looking at signs, there are unambiguous, right? This is this road, this is that road. There’s a camera and you cannot run the stop sign. You cannot run the red light. Healthcare is the same way. Some of the rules are unambiguous. Some of the rules contain some leeway, some room for interpretation. And the important thing is to know the difference.

Disaster waiting to happen?

Recently, we talked about a client that came to us where the company had started a line of products, let’s say dietary supplements, let’s say cosmetics, where at least the company thought that that’s how the product would have been classified. And they paid no heed to the kinds of claims that they were making.

And therefore, they mixed up all the regulatory categories so they made disease claims. They should have made structure function claims for the dietary supplements. They should have stuck to cosmetic claims for the cosmetics. And instead they made therapeutic drug or disease claims and that meant that FDA considered their products to be intended for use as drugs. Therefore, the products were misbranded, therefore FDA could issue a warning letter, seize the products, shut down the company, even in extreme egregious cases impose criminal penalties.

            And so the business owners that launched this healthcare products venture found themselves in deep trouble. As we said, they found themselves in trouble at this juncture not from FDA, but from a class action plaintiff’s law firm that was salivating to get a huge settlement and was able to cite every single violation, put the statutory authority behind their complaint, and really put the fear of God into these mom and pop business owners who unwittingly and without much forethought went out onto the market without getting proper FDA, legal and regulatory advice.

My example today is from another domain. This is one in the unlicensed practice of medicine area. We have had clients who’ve come to us from other countries and they want to have a US address, a prestigious US address for their business. Let’s say it’s a medical spa. Let’s say it’s an anti aging clinic. Let’s say it’s an integrative and functional medicine practice. Let’s say it’s a beauty business or a cosmetics business or a plastic surgery practice with a line of cosmetics attached to it, all beautifully branded and superbly marketed in their home country. The challenge is they want to create a beachhead in the US, but the principles in the foreign country are not US licensed physicians.

Yesterday, one of these clients sent us this question. “If our doctor from let’s say China comes and gives an assessment to one of the patients who is also from China, and all that occurs in a private room, and they’re only speaking Chinese, is this okay? Can we do it? Is it legal?”

It should be legal. This is the way the logic usually goes. It should be. Therefore, it is legal. Therefore, we’re not going to have any enforcement issues and we want you, the attorney, the healthcare attorney, to bless this arrangement. Well, it just doesn’t work that way. It doesn’t matter that they’re both speaking a foreign language. It doesn’t matter that they’re in a room. It doesn’t matter if that, for all intents and purposes, the room could be in China, in our physical reality. In this quantum reality, the room is here and there is this crime known as unlicensed practice of medicine. And a foreign physician, unless qualified and licensed here and they jumped through the necessary hoops, they cannot practice medicine here.

How do I practice medicine then?

That takes us back to the question of what does it mean to practice medicine? Any diagnosis, treatment, operation, prescription or cure or mitigation for any human ailment, disease, affliction, injury, deformity, blemish and so on … Those are the broad terms in which the statutes define the practice of medicine. And given the breadth of these statutes, it’s very easy to run afoul of the prohibitions against unlicensed practice of medicine. These are issues that go back to even the founding of this country when the regulators were trying to figure out what is medicine was not medicine.

If we put leeches on George Washington to help suck out the evil blood humors and get him back to health, is that medicine? Is that not medicine? So they were trying to figure out what could and could not be practiced. And in those days, they came up with the definitions of practicing medicine. And they came up with these very broad definitions which have lasted for 150 years or more as embodied in the statutes that came in the 18th century and late 19th century. If you’d like a deeper dive into this really rich history, you can look at my book, Complementary and Alternative Medicine, Legal Boundaries and Regulatory Perspectives. The book is still fresh after all these years because those rules haven’t changed in a century or two. And they certainly haven’t changed much in a decade or more. Very broad definitions of unlicensed practice of medicine are potent.

Typically, they affect practitioners. For example, your healer, your Reiki practitioner, possibly your hypnotherapist, somebody who wants to begin a practice that involves the interpreting and commenting on physical or emotional health. What we’ve seen in our law practice is that increasingly these issues affect businesses. And so for example, I mentioned the business from let’s just say China that wants to create a beachhead for its operations, with a clinical practice in the US.

The mega superstar physician from China cannot position himself or herself as a US medical doctor and cannot do medical consults here, even if those consults are coachless assessments, to put it in very narrow terms, still, it’s hard to escape the breadth of the statute. I have been watching this wonderful science fiction show on Amazon prime called The Expanse. And in The Expanse there is an alien life form or life force. And one of the things that it does is it controls inertia, it somehow can control physical reality. It slowed these ships down. So the ships slowly descend into the gravitational pull of this object, which is at the core of this blue Goo, which is this alien intelligence.

And that is what the practice of medicine statutes are. They are alien goo superimposed on your healthcare venture or market from the late 1800s, when we had just emerged from our colonial history and we had Native American medicine and a very vibrant and rich plant medicine tradition, and all sorts of different traditions, some of them valid, some of them not valid. We had “scientific medicine” trying to call everything else unscientific. And all of these debates were raging. And that is what shaped the licensing statutes.

Be aware of restrictions set forth by the FDA on your healthcare venture

Also, as I talk about in my book, Complementary and Alternative Medicine, Legal Boundaries and Regulatory Perspectives, I talk about how the AMA was a part of this history and they essentially tried to stamp out and squash and all other forms of “alternative healing”, including chiropractors. In fact, this resulted in a case called Wilk vs AMA, in which the Federal Court of Appeals actually found that the AMA had engaged in a “conspiracy” to wipe out a licensed profession. The MDs had tried to wipe out the chiropractors and they got busted by a US federal Appellate Court. The prohibition against unlicensed practice of medicine is the grandfather, if you will, the granddaddy of the prohibition against corporate practice of medicine. And again, all of this affects not only practitioners but also businesses.

If you are a telemedicine company, a mobile app developer with software with some kind of remote diagnosis that’s done by humans, a medical spa, almost any kind of healthcare venture that in some way, shape or form involves, I won’t say partners with, but involves physicians, medical doctors, you must be aware of the prohibition against unlicensed practice of medicine and corporate practice of medicine.

Conclusion

We have a lot of blog posts on our site about these prohibitions. You can reference those. You can read those in depth. Today, I wanted to give you another perspective, another flavor, on these rules. Even though the rules are ancient and somewhat archaic, they still affect how healthcare businesses operate today. Whatever your healthcare venture, always look out for these rules, always look out for unlicensed practice of medicine issues. Always look out for the blue goo that is slowly sucking in all of the spaceships. It’s there. You can resist its gravitational orbit. You will want the assistance of an experienced healthcare and FDA lawyer who deeply and truly understands how these archaic prohibitions with respect to the practice of medicine can affect, topple, impair or critically wound your business dream

An experienced healthcare and FDA lawyer can help you navigate these rules and come up with creative solutions, so that you can manifest your vision, so that you can see the road signs, so that you can interpret them, so you know where you can’t make a u-turn, yet on the other hand, where you can make a u-turn. And as you probably know, sometimes there’s a camera and there’s no sign telling you whether you can make a u-turn or not. In those cases, it’s especially important to have a capable professional legal advisor at your side because some of the signs are written, some of the signs are unwritten, and many of the signs are simply implied.

Contact Cohen Healthcare Law Group today if you’d like a read on your situation.