Can You Beat Corporate Practice of Medicine Rules?

Can You Beat Corporate Practice of Medicine Rules?

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In today’s video, we discuss the subject of corporate practice of medicine.

Plenty of clients come to us having heard this very anachronistic term and ask us to help them understand what it means for them. Corporate practice of medicine, right? So it has something to do with the big healthcare companies, maybe the giants in healthcare industry? Not quite – but we’re going to unpack it together, make it very digestible.

I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We’ve advised over a thousand healthcare industry clients on healthcare and FDA legal issues.

Today, I’m going to explain the ideas that motivate the corporate practice of medicine prohibitions all over the country.  By the end of this video, you’ll have a much clearer picture of what they might mean for you, and particularly, what they might mean for you.

In the Unites States, state laws restrict, or sometimes outright prohibit, a non-licensed person’s ability to practice medicine. If you’ve watched some of our other videos, you might recall that we’ve used California laws as our examples, many, many times, since we’re principally here and many of our clients are here too.

But corporate practice of medicine rules exist in some form all over the country.  In some states, the corporate practice of medicine prohibition is contained in a statute; in other states, the prohibition is simply understood and enforced by regulators as an extension of the prohibition against unlicensed practice of medicine by an individual.

Let’s take this statutory definition of the “practice of medicine” as an example.  The “practice of medicine” is typically defined, in part, as:

  1. Advertising or representing to the public in any manner that the person is authorized to practice medicine;
  2. Offering or undertaking to:
    • Prescribe, give, or administer any drug or medicine for the use of another;
    • Prevent or to diagnose, correct, or treat in any manner, by any means, methods, devices, or instrumentalities, any disease, illness, pain, wound, fracture, infirmity, deformity or defect of any person;

These mean that a person cannot practice medicine without the valid state. The rationale for the prohibition of such a practice, which is called a corporate practice of medicine, is that unlicensed individuals or entities should not be practicing medicine or providing healthcare. The specific concerns include who has control over the medical decision-making, commercial exploitation of healthcare, and the potential conflict of interest between the healthcare provider’s loyalty to the employer instead of to the patients.

Okay, that’s public policy.

Here are some specific risk mitigation strategies we use for those who are not licensed as physicians or other healthcare practitioners.

If you are a non-licensed individual who is professionally involved with a healthcare business, it’s of vital importance to note that your role is clearly separated from any clinical, medical component of the business.

You must be careful not weigh in, or participate in treatment of any patients.

You may have unique experiences that provide valuable insights to the situation, but you must be careful to recognize the limitations of your role and take care to develop boundaries that ensure you are not perceived as practicing medicine – broadly speaking, doing any of the things from that list that we described earlier.

Some states do have carve-outs for non-licensees who provide healthcare or healing services.  For example, California has SB 577, or Senate Bill 577, which got codified into the California Business & Professions Code; and Minnesota has a similar law, which is actually known as the “Minnesota model” for non-licensed practitioners.  These carve-outs are important, and we can make use of them in disclaimers and other written forms to help protect practitioners.

We still have to be mindful, though, of the larger prohibition and definition of the practice of “medicine,” as this can be very broad.  So beware of things such as interpreting lab tests.

There are many more, this has been a quick jump into some of the laws affecting health coaches and other non-licensed practitioners.

Thanks for watching. Here’s to the success of your healthcare venture, we look forward to speaking with you soon.


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    Richard Freedland GRAMedical, CEO
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    James Riviezzo Practice On Your Terms

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