In today’s video, we discuss legal strategy for a telehealth startup.

I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We help healthcare industry clients like you, navigate healthcare and FDA legal issues so you can grow, or perhaps start your healthcare business.

Let me give you a quick overview of the typical legal needs of a healthcare startup.  First, vet the business model, which means identify major legal roadblocks and proposed legal strategies or solutions, if available.  Second, draft documents, which could include for example bylaws for a professional corporation, employment agreements, MSO agreement, privacy policy, Terms of Use, and service agreements with the client or customers.

If the healthcare venture is founded by individuals who are not licensed MDs, psychologist, or other such clinical care providers, the MSO model might work best.  The MSO itself can be a S corporation or an LLC, while the professional clinical work should be housed in the professional corporation.

The professional medical corporation is the best to hire additional physicians, nurse practitioners or registered nurses, and physician assistants.  In California, the Moscone-Knox Professional Corporations Act does allow some mixing and matching of healthcare professionals, so long as, for example, in the professional medical corporation, the sum total of licensed MDs or DOs together have 51% or more of the shares.

A couple of typical FAQ for our typical healthcare startup client.

How much insurance should I get: that’s a question for your insurance broker.

Can you help us form the corporation? Sure, but it’s faster and more cost-effective to hire a vendor that does this a thousand times a day than to pay a lawyer for technical mechanics that a service can do.

Now, let’s get to the nitty gritty: the legal issues.

Should we have a Medical Director? No, bad idea: see our blog post, if Someone Asks You to be Medical Director, run!

Can the MSO help the professional corporation hire and fire staff?  Sure, but the ultimate decision has to rest with the professional corporation.  Otherwise you likely end up with a corporate practice of medicine problem.

Do healthcare providers need to be licensed in every state?  Typically, they have to be licensed in their home state, and in the state in which the patient is located.  Unless that State has an exemption, as some states do for healthcare services during the pandemic, which they consider a public emergency.

Thanks for watching. Please contact us with your questions and comments. Here’s to the success of your healthcare venture, we look forward to speaking with you soon.