In today’s video, we talk about whether a healthcare startup that connects doctors and patients can charge patients a software access fee.

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 product or service.

Our healthcare startup in this scenario has purchased HIPAA-compliant software from a vendor.  The software is expensive, it also handles HIPAA issues for the healthcare startup’s app. There’s a texting service, the software cost varies by the number of patient customers.

Naturally, this healthcare startup wants to charge the patient every time the patient accesses the platform and connects with the physician.

On one level, this seems like a straightforward puzzle.  However, this particular client went to five different law firms and got five different answers, maybe even 7 different answers.  The company’s founders were really frustrated.

One law firm specializing in Stark, fee-splitting and anti-kickback issues had written a long and complex, lengthy Memo analyzing all the relevant OIG opinions and cases in the client’s home state. But, the client wanted to operate in all states, the memo was inconclusive and the client now did not want to go with the 50-state Memo.  The Memo told the client that federal law did not even apply, so the client wondered why there’s all federal law in the first place. It wasn’t explained very well, basically a big mystery.

The big law firm simply told the client, “we always look at federal law,” but, it seemed to the healthcare startup that the law firm had simply copied a big boilerplate Memo from another deal, and they didn’t know what to do.

If your healthcare startup’s business model or legal question is something like this scenario, and give you some tips to help move you forward.

First, don’t expect your healthcare attorney to make the go/no-go decision for you.  That requires business judgment, the law is not black and white.  What we can do is help you focus on identifying risks and providing risk mitigation strategies.  Based on that nuanced analysis, you then can be empowered to make the business call.

Second, just because some competitor is “doing it” doesn’t mean they have figured out some magical pathway through the regulatory labyrinth and legal maze.  Everyone shares the same set of laws, which are often filled with prohibitions and ambiguities.  It takes a good strategic head to navigate.  Find a legal expert that is used to working with out-of-the-box innovators. One size does not fit all.

Last, federal and state authorities have addressed the kickback issues inherent in per-click arrangements.  We’ll talk about these substantive law issues in other video, but there is some law there that we can work from.

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