Compliance and Regulatory Issues for Technical Companies and Ventures

New technical hardware devices, new software products, and new ways to design and implement software (such as with artificial intelligence) are creating many new medical opportunities, especially in California. California is home to numerous start-up companies in Silicon Valley and other parts of the state. The COVID-19 pandemic has illustrated just how useful telemedicine and remote applications are to providing quality medical care to patients.

These new technologies are creating exciting opportunities but there are risks. There are federal and state laws that are designed to protect patient privacy, to ensure that patients are getting medical advice from licensed medical professionals, to ensure that the products are quality products, and to ensure that communications with patient are honest and not deceptive.

At Cohen Healthcare Law Group, PC, we represent clients in the following types of businesses:

• Digital & mobile health companies
• Telemedicine ventures
• Artificial intelligence software companies and companies working to monetize The Internet of Things.

With smartphones, new apps, the Internet, and the increased desire to communicate remotely; technology ventures will continue to expand. We advise technical companies on compliance issues, the regulatory issues that Impact the ability to market your product, and transactional issues that create business pathways for your products and services.

We advise technology businesses and also the medical providers who use and work this new technology such as:

• Physicians
• Dentists
• Chiropractors and acupuncturists
• Optometrists
• Medical spas
• Veterinary practices
• Beauty services

Digital healthcare legal issues

Digital health is desirable for the physicians who use technology for telemedicine. Doctors also recommend the mobile apps that are the foundation of digital health because the apps let both the patients and doctors monitor the health of the patient. In addition, insurance companies like digital health because of its convenience and its ability to use numbers to verify health data.

“This means that health and wellness is no longer the sole and exclusive domain of the healthcare professional or of ancillary business (such as MSOs) that service healthcare providers. Rather, online companies (and digital empires) are rushing into the competitive landscape that is converting healthcare professional services, into digital products.”

Digital health medicine lets patients have personalized medicine in ways that more traditional office visit services never could. Cohen Healthcare Law Group, PC helps business involved with:

• Robotics
• Machine learning and artificial intelligence
• Genetics
• Virtual reality
• Software
• Nanotechnology
• Other technology

Some of the many different types of advice our healthcare, FDA, and FTC compliance lawyers advise startups, existing technical companies, and healthcare providers includes:

• Contracts between the healthcare providers and the digital healthcare companies
• HIPAA compliance
• FTC compliance
• FDA compliance such as the requirements for FDA approval of mobile apps and wellness devices as medical apps – and what claims and activities may violate those requirements or lead to a misbranding of the software and hardware
• Stark law and Anti-Kickback statute compliance
• Analysis of state privacy, consumer, anti-referral, business, and healthcare laws and regulations
• The various ways to form a digital healthcare company
• Drafting disclosures to consumers
• Financing – including private, venture capital, and institution finance for digital health businesses and life science companies
• Identification and protection of intellectual property (IP) assets
• Strategic alliances and joint ventures
• “Mergers & acquisitions (M&A) of digital healthcare companies”
• Due diligence requirements
• Data protection, privacy and securing, and related agreements and requirements
• Licensing agreements, business operation contracts, and other transactional documents

Legal issues and laws for telemedicine ventures.

New laws have been enacted in response to the creation and development of digital health (telemedicine, mobile health e-health, and other products and services). Additional new laws are also being constantly added – part in response to newer and newer technology – and part in response to increased demand between health providers and patients.

Some of the many business, compliance, and regulatory issues we advise clients about (many of these issues apply to all digital health practice – but the following list particularly applies to telemedicine) include:

• “Advice to telemedicine companies on legal safe harbors such as the provision of information and education only.”
• Preparing contracts between the technology providers and the healthcare providers (hospitals, medical groups, medical practices, and physicians).
• Fraud and abuse laws – such as those that regulate referrals, kickbacks, and fee-splitting.
• Licensing issues. As more and more non-physicians speak with patients online – the state licensing laws and medical society regulations need to be reviewed. Generally, for example, only licensed physicians can order prescriptions for a patient.
• “National telehealth professional standards and governmental regulations”
• “HIPAA and privacy and security issues.”
• “FDA mobile medical app and medical device guidance.”
• Business law & transactions.
• FDA compliance. This includes responding to warning letters and enforcement actions.
• FTC compliance. This includes responding to warning letters and proactive compliance regarding communications with patients through online and offline advertising
• Contracts and other transactional (operational issues)
• Terms of use and privacy issues.
• Other regulatory analysis and compliance advice.

Key telehealth and telemedicine definitions

The Medical Board of California considers the following issues when physicians use telemedicine:

• The medical care should be provided by physicians who are licensed in California – to patients who are located in California
• The California doctor doesn’t necessarily need to be located in California – as long as he/she has a California medical license
• Physicians still need to obtain informed consent for medical treatments and procedures as if the patient was in the office. Likewise, physicians need to provide competent medical care, ensure privacy of medical information, and comply with other traditional office requirements

Generally, providing information by using email, a smartphone conversation, fax, or IM (instant messaging) – are not considered telemedicine in California.

Each state has its own set of telemedicine laws. There are also federal telemedicine laws and regulations. The laws that apply generally are based on either where the patient is located or where the physician is located.

Some venues mandate that the doctor (or someone with a proper license designated by the doctor – such as an NP or PA) first conduct an in-person examination of the patient. This first-person examination is also called a “good faith examination.”

Our digital health lawyers explain a range of telemedicine compliance concerns – including whether your state has a special telemedicine license.

California’s telemedicine regulations

According to the Medical Board of California,

“The standard of care is the same whether the patient is seen in-person, through telehealth or other methods of electronically enabled health care. Physicians need not reside in California, as long as the doctor has a valid, current California license.

“Physicians using telehealth technologies to provide care to patients located in California must be licensed in California. Physicians are held to the same standard of care, and retain the same responsibilities of providing informed consent, ensuring the privacy of medical information, and any other duties associated with practicing medicine regardless of whether they are practicing via telehealth or face-to-face, in-person visits.”

California updated the 1996 Telemedicine Development Act in 2011 with the passage of the Telehealth Advancement Act of 2011. According to Healthcare Innovation,

“Allows for the provision of a broader range of telehealth services, expansion of telehealth providers to include all licensed healthcare professionals, the expansion of telehealth care settings and the ability for California hospitals to establish medical credentials for telehealth providers more easily.”

In California, telemedicine supplements traditional medical care – it’s not a separate type of medicine. The standard of medical care is identical – whether the patient is seen online or in the office.

In 2015, the issue of informed consent was addressed in California. The law:

“Requires the practitioner to obtain verbal and written informed consent from the patient prior to delivering health care via telemedicine, and also requires that this signed written consent statement becomes part of the patient’s medical record.”

While California law is becoming clearer for physicians, there ae still open questions regarding telemedicine for:

• Acupuncturists and licensed Practitioners of Traditional Oriental Medicine
• Chiropractors
• Dentists
• Dieticians and Nutritionists
• Non-licensed, Health Coaches
• Veterinary practices.

Newer digital health technologies – the internet of things, AI, and wellness technology

Our healthcare lawyers are working to keep abreast of the newer ways digital health can be created and delivered. The possibilities are almost endless for how healthcare and wellness services will be provided in the short term and in the distant future. Already, there are apps for connecting your refrigeration, your pantry, your bathroom shelves, and your medicine cabinet to the Internet. There are an almost overwhelming supply of apps to monitor your fitness. Some companies are already using 3-D printing to print out medical devices. Some scientists already claim to have printed out an artificial heart. Other companies are constantly creating and upgrading a variety of software and hardware applications.

Most of the current technology pulls in data from various serious such as inventory or your blood pressure. This information can be sent to your food stores and to physicians. New technology may be able to take more active steps to monitor and control a patient’s physical and emotional behavior.

Newer forms of technology are and will continue to reduce the needs for in-office medical tests and medical visits. Additional forms of health and wellness technology that the Internet of Things (IoT) may monitor include:

• “Remote health monitoring (e.g., blood pressure and heart rate monitors, pacemakers, advanced hearing aids)
• Emergency notification systems (for example, for seniors)
• One-touch replenishment of medical supplies
• Traveling, microscopic or nanoscale diagnostic and surgical devices
• Robotic production of customized medical equipment
• Quantified self with sensor-based clothing tracking vitals and other health data
• Geospatial tracking of healthcare equipment
• Wearable user online interfaces
• Smart pill reminders
• Ingestible health technology such as the FDA-approved digital pills”

These technologies will need to comply with FDA law, FTC law, medical board bylaws, and many other types of federal and state regulations. Intelligent lawyers will help health companies and health providers keep current with the ever-changing digital health landscape, telemedicine laws, and Internet of Things possibilities.

We provide legal services to numerous biotechnology and life sciences companies. We help companies that are developing and marketing software apps, medical devices, and other forms of digital health products. Our lawyers review the types of business relationships you can form and which ones you can’t. We explain the privacy laws, telemedicine laws, and other laws that affect digital health practices. We explain the rights of the patients and medical practices you work with. Our lawyers draft contracts and review your transactional issues to help your business grow.

Whether you work in robotics, software development, nanotechnology, genetics, artificial intelligence, or other digital health platforms; our attorneys are ready to guide you’re through the legal challenges and hopeful rewards that your company will face.

Contact Cohen Healthcare Law Group, PC to review the regulatory compliance and business needs for digital health products and services including telemedicine. Our experienced healthcare attorneys advise companies working with robotics, virtual reality, artificial intelligence, telemedicine, and other digital healthcare products and services.