Smart Healthcare Venture, Smart Legal Choices


Hello, this is Michael H. Cohen, Cohen Healthcare Law Group and I want to tell you a sad story.

Long time ago, in a Galaxy far away, I was cheap. I couldn’t afford the air conditioning for my car, so I got a car and the salesman’s trying to sell me all these extras and I just said, “Hey, I’ll just roll down the windows.” Then I got really hot and I sweaty. I met somebody and I said, “How do you deal with it?” He said, “Oh, I just get in the car and I think cool.” And that person was remarkably able to keep cool. But the reality is, it wasn’t a great strategy. I mean, he sweat as well.

And so, here I am today, and I’m happy in my Daddy mobile and I’d never think twice about air conditioning. So, today, one of our clients asked us to do a label review and I said, “Sure, we’re going to review the label. Send me a copy of all of your claims on social media, and your website, and all of your marketing materials and so on.” I got this email back, “All we really need is a label review.” I tried to explain that you could have your label have the right font size. You could have everything technically perfect in terms of the hairline bar versus the double hairline bar, but this is not like me trying to sell of the accessories, and upselling and marking up. This is about what you really need because, frankly, you’re going to get completely screwed by FDA or FTC, or possibly a private plaintiff, if you don’t have your claims evaluated, if you don’t have good substantiation for your claims and if you make disease claims on a nutraceutical or a cosmetic product.


The Federal Trade Commission (FTC) won a $2.2 million judgment against health food marketer Wellness Support Network, Inc. (WSN) in federal court for the “Diabetic Pack” and the “Insulin […]


Substantiating claims matters whenever you bring a dietary supplement, cosmetic (or skin care product), or medical device to market – why?

And so I tried to explain this to the client. But the point is, don’t be cheap. Don’t be penny-wise and pound-foolish. A lot of people try this strategy. I mean, it’s a very entitled age. People think that they can get all the answers on the internet and I had a conversation today with a marketing professional and we were responding to this challenge which was articulate the greatest challenge in your industry. And he said, “Do you know, I’m concerned that someday marketing is going to be run by large companies fueled by AI, artificial intelligence, and big data. And they’re not going to rely so much on the professional healing touch.” And I see that. Much of business law is getting commoditized. You just go and build your fort online.

I think that’s a mistake. I think that there’s a place for professional judgment, but I would say that especially the regulatory lawyer is the last bastion of human professional legal intelligence. Because, you can’t find the answers on the internet. We had a situation the other day where another client, this one is a MSO healthcare startup, and they want to know whether, for example, they have to register the physician owner of a professional medical corporation in every single state where they operate and does that mean the physician has to be licensed there, and does the physician have to do so to supervise a nurse practitioner, or can the physician somehow be granted administrative duties. A slew of questions, a slew of healthcare legal and regulatory questions. And we answered them systematically.


Growing Pains in Your Healthcare Practice or Healthcare Venture? We’ve had many clinical practices and healthcare ventures come to us asking how to mitigate risk of anti-kickback and […]


Fundamentally, you’re worried about legal rules prohibiting kickbacks, fee-splitting, corporate practice of medicine, as well as Stark law; you don’t know whether the MSO or management structure […]

But, the reality is, there is… He said, “Find me a law that says that I can.” There’s no such law. But, if someone gives you the mandate to find, you have to search exhaustively. Then he said, “Find me a law that says I can’t.” Well, I can tell you there probably is no such law and most of the times there’s no law that says yes, and there’s no healthcare law or regulation that says no. There are a bunch of laws that go in conflicting directions and you have to interpolate in between. At this stage, you might have an AI that can have a face and have human emotions, and even check you into a hotel, but it cannot interpolate the law. Probably very soon we’ll something where the algorithm says there’s an 89.5% chance that such and such an answer’s correct, but I think for things like this, it’s going to be very hard for machine intelligence, at least in the short term, to take over those answers. And the point is, if you want to know definitively, exhaustively, comprehensively, it’s going to be a very satisfying answer and an expensive one.

If, on the other hand, you want more of a verbal, more of a check, more of a quick check, maybe a quick dip into the legal research, you’ll get more of a probabilistic qualified answer. If you just want to do it, that’s your risk profile. And if you’re 100% compliant, you’re afraid to do anything, that’s your risk profile too. It’s good to find a reasonable place where you can titrate your legal risk against the business opportunity, against the means and resources that you have to devote to the puzzle. Now that’s being smart, that’s being intelligent.


Medical doctors and health care companies who participate in kickbacks for referrals can face severe enforcement penalties.

Driving with your windows open so you can save on the AC, not a great idea. I’m cool today, but I would not be cool if I had a million dollars of FDA exposure for 30 million dollars is the case of a judgment from somebody who didn’t get our advice. We just found that one. It was somebody who didn’t take the advice. That’s a lot of exposure. After you seek and go against companies and individuals, with fines, with forfeitures, with criminal penalties, you just don’t mess with this stuff, whether it’s FDA, FTC, Federal and kickback laws, state fee splitting laws, corporate practice of medicine, HIPAA, the things we deal with day in and day out, that’s why there’s still a place for the human. And I hope that you hear the voice of the sane, mature, wise business professional, legal professional.

Don’t listen to the salesperson who’s trying to down sell you the car without the AC, or trying to upsell you a whole bunch of stuff you don’t need. You want to find that middle point. I think Aristotle said something in the range and there’s only one Aristotle.

So, have a great day, Michael H. Cohen, Cohen Healthcare Law, we’ll see you soon. We look forward to working with you. We have great passion for what you’re doing for your business. We want to see you make smart choices and we’re there with you every step of the way.

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