Mental and Behavioral Health Compliance and Business Issues

Mental and behavioral health providers have many of the same regulatory and compliance issues that general physicians and doctors who help treat physical injuries and diseases do. Mental and behavioral health providers also have unique regulatory issues that are governed by laws and by different medical boards. We also advise clients about business formation and operational issues.

According to the Bureau of Labor Statistics, California employed more than 15,000 mental health workers in 2016.

At Cohen Healthcare Law Group, PC, we represent many different types of mental and emotional healthcare providers including:

  • Addiction counselors and addiction treatment centers
  • Alcohol, drug abuse, addiction treatment centers
  • Advanced practice psychiatric nurses
  • Group homes
  • Licensed educational psychologists (LEP)
  • Life coaches and health coaches
  • Licensed professional clinical counselors (LPCC)
  • Marriage and family therapists (MFT)
  • Psychologists (PHD)
  • Psychiatrists
  • Sober living facilities
  • Social workers (CSW, MSW)
  • Substance abuse treatment centers and recovery facilities
  • Youth, educational, and family services
  • Other mental health care professionals

In addition, we represent faith-based mental and behavioral services.

Privacy issues

It is of paramount importance that all mental and behavioral healthcare providers and practices comply with the federal and state privacy laws. The communications between patients and physicians is considered sacrosanct. Communication of any patient communications may result in a disciplinary action and loss of license unless an exception applies.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA). Providers need to understand the core components of this law which protects patient information including electronic patient information. The three main compliance components of HIPAA are:

  • Privacy Rule. “This rule was enacted to “assure that individuals’ health information is properly protected while allowing the flow of health information needed to provide and promote high quality health care and to protect the public’s health and well-being.”
  • Security Rule. “A major goal of the Security Rule is to protect the privacy of individuals’ health information while allowing covered entities to adopt new technologies to improve the quality and efficiency of patient care.” The Security Rule applies to electronic-Patient Health Information (e-PHI).
  • Enforcement rule. This rule “contains provisions relating to compliance and investigations, the imposition of civil money penalties for violations of the HIPAA Administrative Simplification Rules, and procedures for hearings.”

Many states such as California have health privacy rules. California’s Confidentiality of Medical Information Act (CMIA) provides stronger privacy protections for medical information than HIPAA. Cal. Civ. Code §§ 56-56.37

Possible exceptions of HIPAA and state privacy laws may include information that is necessary for law enforcement to prevent future harm to anyone. Even here, there are standards that must be met. In some cases, court approval must be obtained to divulge communications that would otherwise be privileged. There are often balances and fine lines between protecting patients and protecting the public.

Fraudulent referrals

All physicians and health providers need to understand anti-referral laws such as Stark and the Anti-Kickback Statute (AKS). These laws are designed to ensure patients are obtaining medications and other services based on what is best for the health of the patient – and not the financial wealth of the people involved in the referrals.

For example, many psychologists obtain referrals from other physicians, from family lawyers, and from other mental and behavioral health providers. If the person or practice making the referral has a financial interest in the addiction center, group home, or medical practice that is providing the emotional healthcare; that referral may be illegal unless the referral meets Stark Law exceptions or AKS safe harbors.

Many people with mental and behavioral health issues are prescribed medications to treat anxiety, depression, or other emotional issues. If a drug maker arranges for the doctor who prescribes medications to receive any form of compensation – in order to recommend that drug maker’s products, the drug maker and the physician may be charged with violating the Anti-Kickback Statute.

Marketing and advertising

All health practices including mental and behavioral health practices need to communicate with patients honestly. The Federal Trade Commission (FTC), among other agencies, will review websites, social media posts, and print materials for claims that over-promise result, provide testimonials that aren’t supported, and other claims that may deceive consumers and patients. These claims may receive additional oversight since many of the consumers who review these sites have mental and behavioral health issues which means that some consumers may trust these claims more than healthier people would.

Legal services for addiction and substance abuse treatment centers

This area of health practice is especially complex because there are many new state and federal laws covering substance abuse treatment – in response to the opioid crisis. Physicians and health counselors who treat people with drug or alcohol abuse problems need to understand the laws and protocols that must be followed before treating any patients.

There are numerous laws according to the federal Substance Abuse and Mental Health Services Administration (SAMHSA) that govern substance abuse medications including:

  • Affordable Care Act
  • Children’s Health Act
  • Garrett Lee Smith Memorial Act
  • Mental Health Parity and Addiction Equity Act
  • Sober Truth on Preventing (STOP) Underage Drinking Act
  • Tribal Law and Order Act (TLOA)

There are also numerous laws that regulate testing in the workplace, emergency responses, opioid drug treatment programs, and many other arenas where people may need to be tested for drugs or where drugs may need to be administered.

These laws are enforced by agencies such as the Drug Enforcement Administration (DEA).

California has its own agency for handling drug abuse issues. It’s called The Substance Use Disorder Compliance Division (SUDCD) and is part of the California Department of Health Care Services:

  • “SUDCD oversees licensing and certification functions, monitoring, and complaints for Driving-Under-the-Influence Programs, Narcotic Treatment Programs, and outpatient and residential providers.
  • SUDCD also oversees conducts complaint investigations on certified Alcohol and Other Drug counselors.
  • SUDCD is also responsible for implementing the Drug Medi-Cal Organized Delivery System and Opioid STR grant, which aims to expand access to Medication Assisted Treatment to combat the opioid epidemic. The Division also ensures compliance with the statewide criminal justice treatment programs and counselor certification.”

“Our substance abuse facility lawyers can advise on licensing and certification to operate an alcoholism or drug abuse recovery or treatment facility, a narcotic treatment program (NTP), or other similar facility, and other compliance requirements by the Substance Use Disorder Compliance Division.”

Often, facilities that provide substance abuse counseling and treatment provide “incidental medical series” “to address medical issues associated with detoxification, treatment, or recovery services.” There are specific rules for providing these incidental medical services including the relationship between these services and California’s corporate practice of medicine laws.

Legal services for behavioral healthcare providers

We advise behavioral healthcare providers on a variety of laws, regulations, and legal issues including:

  • Business formation, corporate, and nonprofit issues
  • Employment agreements for clinicians
  • Informed consent requirements
  • Billing and insurance practices
  • Liability risk management
  • Medicare issues – including opt-out
  • Licensing and permit issues
  • Fictitious name permits
  • Disciplinary actions and board investigations

A few examples of behavioral health representation

In one case:

“One of our clients was a licensed psychologist who included energy psychology among her therapeutic modalities. Unfortunately, one of her patients with borderline personality disorder began alternating between idealizing and demonizing the psychologist, ultimately writing a detailed complaint to the Board.” We worked to defuse the concerns of the Board and to have the investigation dismissed.”

In another case:

“An MSW licensed healthcare provider wanted to partner with a clinical psychologist to create an intensive outpatient program (IOP) and partial hospitalization program (PHP). We helped the client navigate through a variety of legal issues including:”

  • “Prohibitions against the corporate (and unlicensed) practice of medicine and psychology
  • Scope of practice limitations on non-MD, behavioral health providers
  • Rules governing professional corporations
  • Legal rules relating to naming and branding the enterprise
  • Third-party reimbursement issues
  • Stark / self-referral and anti-kickback / fee-splitting concerns
  • Liability risk management; and
  • Privacy, security, and HIPAA issues”

Legal services for health coaches

This newer form of healthcare is supplementing traditional mental health series. Life coaches give advice on a variety of health issues such as nutrition, exercise, and lifestyle choices.

There are rules and regulations for when these healthy living types of advice can generally be done by MDs, NPs, RNS. Pas, and clinical psychologists who are properly licensed and when non-licensed coaches can provide the advice. There are many legal balances and ambiguities an experienced healthcare lawyer can explain.

Licensing requirements

Most healthcare professionals must meet minimum licensing requirements. Providers need to understand – if, when, and how, any staff members can speak with patients and when only the licensed professional can communicate with the patient. There are state licensing laws for many different types of mental and behavioral health practices.

There are also laws and Board policies that regulate how licensed professionals can communicate with the public. For example, California law regulates which words or phrases suggest a person is holding himself/herself out as a psychologist.

The practice of psychology has precise definitions:

Non-psychologists (pursuant to a carve-out) may perform:

“Work of a psychological nature consistent with the laws governing their respective professions … provided they do not hold themselves out to the public by any title or description of services incorporating the words ‘psychological,’ ‘psychologist,’ ‘psychology,’” and so on, and “do not state or imply that they are licensed to practice psychology.””

“California law authorizes non-licensed individuals to render services, so long as they do not: (1) conduct surgery or set fractures, (2) administer or prescribe x-rays, drugs, or controlled substances (or recommend discontinuance of the same); (3) diagnose and treat under circumstances that present a risk of great harm; (4) represent being a physician, or violate other enumerated proscriptions.

Supplementing all of these definitions, in California, there is a statutory carve-out for persons who are only rendering nutritional advice.”

Faith-based health care

Faith-based health care is a special type of mental healthcare that is exempted from the Affordable Care Act (ACA) mandates. In this type of healthcare, the members pay a monthly premium. Premiums are generally lower than standard healthcare premiums because if a member becomes sick or has an injury that requires care, the member’s “contributions cover the expenses, in conjunction with the collective input of fellow members.”

For example, SAMSHA’s website states it has been supporting Faith-based and Community Initiatives in substance abuse and mental health problems since 1992. Some of this support has come through.

  • A Community Substance Abuse Prevention Partnership Program which includes more than 800 faith-based community partners among its grantees
  • Block and formula grant programs through the states
  • SAMHSA-supported training programs do more than just “support substance use prevention, addiction treatment, and mental health services education for multi-denominational leaders of the faith community.” The program “also help create integrated, sustainable collaborations at the local level nationwide.”

Our skilled healthcare lawyers work to help faith-based organizations comply with the applicable laws and accreditation standards.

Our experienced healthcare lawyers work with individual doctors and other health providers, with medical practices, with addiction centers, and other people and organizations who help patients with mental health or behavioral health problems. Our review includes privacy issues, scope of practice issues, licensing issues, and other day-to-day legal issues. We understand and explain how to handle the various federal and state laws that apply to businesses that help people with psychological, substance abuse, social adjustment, and other mental and behavioral challenges.

Contact Cohen Healthcare Law Group, PC to review the business and regulatory compliance issues for your mental health, behavioral health, for faith-based healthcare practice or organization. Our skilled healthcare attorneys advise psychologists, clinical social workers, addiction centers, and many other emotional healthcare practices and facilities about their privacy, medication, licensing, and other requirements and business strategy issues.

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