Telemedicine Startup Kickback & Fee-Splitting Laws

Telemedicine Startup Kickback & Fee-Splitting Laws

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    In today’s video, we discuss how Telemedicine Startup Kickback & Fee-Splitting Laws are going to shape your healthcare venture.

    Hi, I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We help healthcare industry clients just like you navigate healthcare and FDA legal issues so you can launch, or continue to scale, your health and wellness service or product.

    Today’s case study is a healthcare startup that focuses on telemedicine/telehealth.  From here there are lots of variations, lots of twists and turns, but essentially, we have a flow from the prospective patient through an intake process led by a registered nurse or RN, where in this scenario/model, the RN takes certain basic information and gets vitals and then uploads everything so the MD can review notes, order labs and prescriptions, and record diagnostic and treatment information in the online electronic chart.

    The entire system is very technologically-driven, and the software or app contains dashboards for the patients to self-monitor progress and then put their own data.

    This healthcare startup might focus on sleep disorders, or anxiety, or weight loss, fertility, anti-aging, geriatrics, brain care, men’s health, women’s health, reproductive health, sexual function, functional medicine, integrative health, athletic performance, or some other niche. The telemedicine company might have ancillary products and services and try to make money from labs, pharmaceutical prescriptions, consumer goods, juices, dietary supplements, exercise gear, we’ve heard a lot of variations. There might be injectables, HCG, testosterone pellets, IV cocktails, or some other variation.

    We are very familiar as attorneys with the many kinds of issues that these telemedicine startups raise in all their disguises.  We have kickback and fee-splitting issues to deal with, which we canvass on our blog,, and many of these videos.  We have your garden variety corporate practice of medicine issues, whenever you have “packages” that roll in a variety of services and products, those issues will crop up.

    We have scope of practice issues, depending on whether you include, for example, in addition to an MD, let’s say an ND or naturopathic doctor, a chiropractor, a veterinarian, dentist, nutritionist, or even a non-licensed provider like a health coach or some of those Reiki (pre and post pandemic of course if it’s in-person); and other issues, like if you are a psychologist or MFT, are you focusing only on health coach? Trying to differentiate from your professional role.

    Then there are structural issues.  For example, you might have an MSO structure for the telemedicine company, and a PC or Professional Corporation that is 100% owned by the MD, or, at least in California, majority or 51% owned by MDs and the minority share owned by certain other licensed clinicians, such as the RN.  If you do that, you’ll need a shareholders’ agreement, governing the relationship between the clinical shareholders and the PC, and another, governing the relationship between the MSO shareholders or, if it’s an LLC, the MSO Members.

    Again, we are familiar but there is a lot to think about, we’ve dealt a lot of telemedicine, mobile medicine, digital health. We’re talking about an MD, an RN, non-clinician, we have the MSO, the PC. We know how to draft a Management Services Agreement, or MSA, or sometimes it’s a technology platform licensing agreement to clarify the responsibilities of the business, as opposed to the professional, clinical services arm which is run by the MD, or the RN, or the chiropractor, acupuncturist, psychologist, and so on.

    We may have other forms that we draft, like Office Policies, Terms of Use, Privacy Policy, Consent forms, a bundle of other documents; and, we might draft a Membership Agreement by which we set out the terms under which the customers—who later become patients—agree to pay a fee for access to the professional services that they’re about to get via the platform.

    There is a lot to think about, which is again, why we pitch the Legal Strategy Session. It’s actually a great opportunity for our clients to have an entry-level conversation with an attorney, map out the issues or “issue-spot” and come away with a foundational recommendation that can really help shape the business model.

    Thanks for watching. If you still have questions, click on the link below,, to send us a message or book an appointment. Here’s to the success of your healthcare venture, we look forward to working with you soon.


    • I would definitely recommend. I needed direction regarding the FDA and how the rules would affect my business. Responsive, accessible, and knowledgeable.

      Richard Freedland
      Richard Freedland GRAMedical, CEO
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      James Riviezzo Practice On Your Terms

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