In today’s video, we talk about a proposed partnership between a licensed medical doctor and a nutritionist, chiropractor, etc.  In this scenario, let’s just say the nutritionist is an expert marketer and proposes to bring a lot of patients to the doctor—and wishes to be compensated accordingly for the great marketing expertise.

We’ve seen this same scenario in a lot of different forms.  For example, sometimes it’s the chiropractor who is a great marketeer and organizes these “dinners” where prospective patients learn about how to rejuvenate, or stem cell therapies, or some other approach.  Sometimes you have a medical spa where the businesspeople, not the clinicians, bring in the patients (they’re marketeers) and want to call the shots. Sometimes it’s a software or app developer who wants to partner with the physician.

We’re very familiar with these arrangements and the extent that they raise corporate practice of medicine, anti-kickback, Stark, or other concerns. What are the legal strategies that healthcare ventures can deploy to mitigate legal and regulatory risk?

Hi everyone, as you may know, I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We help healthcare industry clients everyday just like you, navigate crazy healthcare and FDA legal maze so you can launch or scale your healthcare business.

First of all, in our hypothetical partnership between the nutritionist and the MD, you need to understand how the practice of nutrition is licensed in your State.  title.  In other states, it’s the activity of giving nutritional advice that is prescribed unless you have a professional licensure. So, you got to know which state you’re dealing with and what the rules are.

Next there is the concept of proposed “partnership.”  Typically, you’ll want to steer away from “partnerships,” especially because with medical personnel, “partnership” means that one partner can bind the other, and you’ve got uneven territory – you’ve got the non-licensee and the licensee.  In States like California which have a strong corporate practice of medicine prohibition, the physician should be housed within their professional medical corporation, and the you can have an MSO agreement (also known as an MSA) between the PC and the MSO, the management, the business and marketing side.

The next thing is, try to find out, ask who’s going to be ordering and interpreting labs. This is typically considered a medical activity for the MD or DO, not the MSO, nor another clinician such a nutritionist, LCSW or MSW, psychologist, or registered nurse.

Fourth, we have mentioned the anti-kickback issue.  Because this does not involve so-called “designated health services,” we’re more in the kickback arena than under Stark.  And we’re likely under State law if no federal reimbursement monies are involved.

Bottom line here, the nutritionist cannot be paid to refer patients.  The nutritionist might get a stake in the venture either as a shareholder in the MSO or in the professional medical corporation; but this involves careful strategy and a lot consideration, as shareholders have rights and are hard to get rid of.  Plus, on the professional side, at least in California in a Professional Medical Corporation, the physicians must own at least 50%.

Sometimes clients ask about a program or membership agreements, also known as subscription model (also known as the holy grail), and we talk about that elsewhere on these videos or on our Healthcare & FDA Law Blog.  We also talk about informed consent, standard of care, lots of other topics

Once again, thanks for watching. Please contact us with questions. We have helped hundreds and hundreds if not thousands of healthcare industry clients just like you get launched or scale. We look forward to helping you build your dream and helping you on your journey to success!