In today’s video, we tell you about key legal challenges associated with a multidisciplinary, integrative healthcare practice that has an MD (medical doctor), and a DC (chiropractic doctor), and other practitioners like nurses, psychotherapists, behavioral health counselors, acupuncturists, naturopathic doctors, and other healthcare licensees.

I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We help healthcare industry clients navigate healthcare and FDA legal issues and launch or successfully scale their health and wellness product or service.

Let’s say you’ve got Jane who’s a chiropractor and she wants to partner up with a licensed medical doctor in an integrated or integrative healthcare clinic.  Jane specializes in joint injections and the MD does pain management.  The chiropractic care also encompasses rehab, let’s say there is an acupuncturist on board as well, maybe a nutritionist.

To keep the consistent branding, the integrated healthcare clinic uses a trade name.  Therapies include stem cell injections and regenerative medicine, personal injury (PI) rehab, and electro-stim and functional and integrative medicine, botanicals, supplements and herbal medicine. The clinic also plans to sell a branded skin care line as well. So, very ambitious project.

The chiropractor brings in all the patients and is the one responsible for marketing, because the chiropractor in our scenario is very accomplished, good marketer – hosts these dinners with seminars that advance the benefits these different therapies and the multi-disciplinary approach.

The first question Jane asks when she comes to us is whether she can have her professional chiropractic corporation call the shots and be in charge.  This would be a mistake.  The law considers the MD at the top of the food chain.  The MD can’t really supervise the chiropractor, but the MD can supervise mid-levels such as registered nurses.  The chiropractor can’t supervise the medical doctor, which is why the chiropractic professional corporation can’t call the shots.  I’m saying in the eyes of the regulators.

By calling the shots I’m talking about who is being seen as being in charge of the patient’s overall medical care; among other things, the chiropractor’s scope of practice can’t include medicine, and the arrangement shouldn’t trigger medical board investigations.  The medical board has warned about medical doctors “leasing their licenses” to others—particularly in medical spas, and these multidisciplinary, healthcare arrangements are particularly vulnerable.

A better model in my opinion is to have the professional medical corporation at the top of the decision-making, with the medical doctor having at least 51% of the shares, and the chiropractor, acupuncturist, registered nurses, psychologists, and others collectively can own up to 49%.  In other words, they can have a minority in interest, together.

Another important point we’ve made is use of the term “medical director.”  In a blog post, we heavily discourage use of this term.  It so happened that Jane not only wanted to have a medical director, but she also wanted this title for herself.  This would raise regulatory risk, because it would imply that: (1) Jane the chiropractor is practicing medicine, directing medicine, and (2) that the chiropractor or chiropractic corporation directs medical doctors or professional medical corporation.

The third thing to pay attention to is how the healthcare providers might share equity in the MSO that handles the business and administrative and marketing side of the whole operation.

Then of course there are all the corporate documents to draft, like shareholder agreements whenever the healthcare providers has shares in a company—somebody else, whichever company we’re talking about, need a shareholder’s agreement.

One thing Jane could do is get an early read from us on her business model, by scheduling a Legal Strategy Session with our Legal Team.  Before getting all the documents drafted, she would really want to work through some of the issues that I’ve talked about above and the regulatory exposures, because they’re significant.

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