Can a Subscription-Based Healthcare Startup Legally Deploy the RN Profitably?
In today’s video, we address a subscription-model healthcare startup that has the RN or Registered Nurse do the heavy lifting when it comes to signing up patients, visiting them at home and getting them to do the paperwork, administering medication and injections, a whole lot more, basically turbo-charging the profitability of that healthcare startup.
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 grow, launch, scale your healthcare business.
Now, here is the business model we are talking about today. Tom’s healthcare startup advertises for clients who need some kind of health and wellness service—why don’t we say anti-aging and longevity medicine, hair loss (like Rogaine), sexual health (Viagra), bioidentical hormones, testosterone, estrogen, anything like that.
Basically, the client gets a questionnaire to see whether they are “qualified” for the startup’s services. Pretty clever. The business model is to send an RN (maybe a phlebotomist as well) to draw blood, check vitals, get the customer to sign consents, fill out other “legal paperwork,” send the blood out to labs, and administer injections or medication prescribed in some way, somewhere (that’s important!) by the physician somehow affiliated with the platform.
Naturally (pardon the pun!), the patients will be enrolled in a subscription or membership program where recommended medications and supplements will be automatically renewed. And they will have access to a mobile health and wellness dashboard.
As we explain in far more detail on our Healthcare & FDA Law Blog, this model appears (and can be) very profitable, yet it also presents considerable legal risk, and there’s things to do and don’t do, things you can do to that help mitigate legal and regulatory risk.
First and foremost, there is a medical doctor somewhere in the business model, yet their contact with the patient is a bit … roundabout. There is no good-faith prior exam before prescribing, there is only a questionnaire and then boom! get your RN visit to administer injections and medications, so this risks enforcement by the medical board, at the very least they can make a case potentially that there’s inadequate attention to standard of care. Deploying the questionnaire and the RN admittedly may be more economical, yet also more risky.
Many times, clients frame their questions in yes/no form, like, “is it OK to base the prescription on the questionnaire and then have the RN come out and visit the home?” As if there’s a binary yes/no, you know, robotic kind of answer. If there was, you could just look it up and the algorithm will tell you.
Well, some lawyers might say, “yes it’s OK if no one notices, but no it’s not OK if you get enforcement and it pulverizes your business into the ground.”
Everyone invested in Theranos when it was the latest and greatest and people try to jump ship as rapidly as possible once the media attention change the narrative and subsequent enforcement crushed the company and its key promoters.
So, you got to beware, it is worth paying attention to the legal and regulatory exposures that can significantly impact the business. As a quick tip, I would say the physician ought to be housed within a professional medical corporation; the venture structured like a technology platform; the company would mitigate issues around fee-splitting, kickbacks and corporate practice of medicine through some additional structuring; it should ensure there is a valid physician-patient relationship, with the RN operating under physician supervision. It all gets a little muddled the way I presented it earlier because these lines aren’t clearly drawn.
Again, we cover this kind of model in more detail on our Healthcare & FDA Law Blog, so simply search our website for content, or give us a call to schedule an appointment.
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