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[Dana Porcalla]:

Hello everyone. We are so excited to welcome hundreds of registrants that were invited to this webinar by our collaborating team NursePreneurs. Welcome to our webinar community. Big thanks to Catie Harris and Casey McGovern for making this thing possible. And of course to our regulars, clients and friends, once again, welcome to another Cohen Healthcare Law Group webinar. We hope that this webinar would give value to you and to your venture. My name is Dana Porcalla, I am the marketing director of Cohen Healthcare Law Group. We also have your IT director, Oki Tjandrakusuma and our senior care team member Christian Maniquis. This webinar is the second part of the three part webinar series focusing on nursing businesses, IV clinics, medspa and other healthcare ventures for non-physicians. The title is Nurse Entrepreneur, how to Tackle Legal Challenges of Owning a Medical Spa or Other Healthcare Business.

Last webinar, we gave you an overview of how you’d be able to eliminate some of the risks involved in growing your business. You may click on the link that Christian will send you through the chat box to watch the full version of that webinar, but today we will dive a little deeper to understand the corporate practice of medicine and its implications for nurse owned business. Explore legal considerations and the right business structure, regulatory compliance with good faith exams and many more. So make sure that you tune in until the last part. So now please welcome our keynote speakers, two of our Of Counsel attorneys, starting with our attorney Chris Esseltine. Chris, would you please introduce yourself briefly to our audience?

[Chris Esseltine]:

Thanks and welcome everyone, glad to have you here. My name is Chris Esseltine. I am a 17-year attorney. I specialize in healthcare and FDA. I have worked in Washington DC for one of the largest firms in DC. I’ve represented very, very large companies and startups and pretty much everything in between. Happy to focus here on some of the questions that everyone has. I’ve been working in the MSO space, especially where nurses are concerned for quite a while. And in addition to all of the other experience, I have the experience of understanding a little bit about operations and business in general, not just the legal aspects of it. So combine that experience with the legal knowledge, I’ve had a great experience working with people like you out there attending this webinar in (and) what you’re trying to do, and I applaud you. I think it’s wonderful.

[Dana Porcalla]:

Thank you, Chris. And we’d like to take this opportunity as well to introduce to you our newest addition to our attorney team attorney Albert Meyer. Al. You might be on mute. Al, would you like to introduce yourself to the audience?

[Albert Meyer]:

Hi, good afternoon everyone. It is a pleasure to be here and talk about this important topic as you try to develop your medspa business. A little bit about me, I’ve been in practice for over 25 years. My practice is exclusively in the healthcare area. My experience ranges from representing some of the biggest physician groups to just one person, physician, shops and everywhere in between. One of the things that I really enjoy doing in my practice is helping people like you that have that entrepreneurial spirit, that want to go out and reach beyond their comfort zone and do something that not only is going to help people, but also bring to you the satisfaction and the financial rewards that you would get in putting together your own business. I applaud you for stepping out and taking that risk and look forward to talking to you all about some of the things that Chris and I have seen over the years. And again, thanks for watching. Thanks for allowing us to be part of your day.

[Dana Porcalla]:

Thank you so much for being with us today, Chris and Al. We will start with our presentation, after this presentation is our Q and A section. On the Q and A section, everybody is welcome to participate by using the Q and A icon that you’ll find below on your Zoom. Let me just remind everyone to please type in your questions using the Q and A feature and not the chat box. Thank you. We were able to gather some of the most common legal questions that nurses and other non-physicians would ask when starting or growing their business with the help, of course, NursePreneurs. Our attorneys will answer these questions for you today, but I think we have it on our slides. The first question that we have here, I think this one is for Al, what is corporate practice of medicine and how can it affect my business and does the regulation differ for each state?

[Albert Meyer]:

Sure. So corporate practice of medicine, I think a lot of you have heard of that term, and in some ways it’s really a bit of a misnomer because you’re not necessarily practicing medicine. It is really a prohibition of a corporation practicing medicine. And the basic tenants of the doctrine is it prohibits a corporation, a general corporation or an LLC, not owned by a medical doctor. It prohibits the employment or the engagement of a medical doctor or another professional to provide medical or other clinical services. And this doctrine is mainly a creature of state law. Each state is going to have a bit of a different nuance to the prohibition on corporate practice in medicine, what may be applicable in California is not necessarily going to be applicable in Florida or North Carolina. So really state law drives this thing. And so it’s important that just because you may know what goes on in one state, if you want to expand your business from a national standpoint, you need to know what’s going on in every state you want to get into.

So just a bit of background, the doctrines largely based from public policy concerns. There was cases back in the 1930s and ’40s where a lot of doctors were employed by optometrists, and there were court cases that said, “You can’t do that. You’re not a doctor, you can’t hire a doctor.” So a lot of the rationale is, “Okay, I’m going to hire a doctor. Well now medicine’s going to be commercialized.” Well, it’s kind of on a way to doing that anyway. I want to hire a doctor, but the people that frown upon this say that, “Well, you have an obligation to your shareholders and you’re going to put profits in front of patient care.” And then another area where this rationale is, if I employ a physician and I’m an entrepreneur, I’m going to take away the physician’s independence in their medical judgment. So that’s an uphill battle that we as lawyers are confronted with pretty much every day of our practices.

Okay, so we’ve got the corporate practice and medicine doctrine, and how is this going to affect my business as a nurse entrepreneur who wants to open some type of a medspa? Well, first we need to look at scope. The corporate practice and medicine doctrine is going to dictate whether or not you can own a clinic or a clinic entity. And Chris is going to get into that in a few minutes. So RNs need to be mindful of their scope of practice. And if you are going to be doing procedures like Botox, IV nutrition, injections, those tasks, those services are going to be considered practice of medicine. So it is important that the proper structure is employed, not only for a financial and business aspect, but one of the most important things is if one violates this corporate practice of medicine, it could really have a serious impact on your professional license.

And that’s the last thing we want to do, is to have your license in jeopardy. Just because you heard it from my friend Joe down the street, it doesn’t necessarily make it so. So it’s vitally important that you get an understanding of what the regulations are in a particular state. And to take it a bit further, even states without corporate practice in medicine prohibitions, you still need to review and have someone counsel you on scope of practice for your specific profession. So I presume we have a number of nurses, and I don’t know if we have any other disciplines in here, but not only does corporate practice and medicine prohibitions vary, but scope of practice in different states may vary as well. So it’s important that you check on each state and I would definitely engage the help of legal counsel when trying to navigate through these complex laws. So I’m going to turn it over to Chris. If Chris has anything else to add? If not, I guess we’ll go on to the next question.

[Chris Esseltine]:

Thanks, Al. Yes, one thing I will add is I’ve had a number of clients come to me, they’re nurses or nurse practitioners in some states, and they are looking for a medical director. The problem is they engage the help of recruiting companies. The recruiting companies will find them a medical director, they’ll do a lot of other things. Some of these companies even provide documentation, contracts and so forth. What I’ve found so many times, sadly, is that these companies don’t understand the corporate practice of medicine laws in each state. So they’re engaging a medical director, for example, where the nurse cannot hire a medical director and they’ve already paid this company to find the medical director and set up all the arrangements and documents. And it turns out to be completely illegal.

Some have contacted me after the fact, months and months later, and we’ve had to back everything up and cancel the original agreement. And some come to me luckily before they sign on the dotted line. So be aware to that if you’re reaching out to a company that wants to franchise something or find a medical director for you, be very careful and don’t just rely on the expertise of these companies. Because oftentimes they don’t have any expertise, they haven’t really looked into it, they haven’t sought out a healthcare attorney with that kind of depth and experience to let them know what’s legal and what’s not. So definitely come to us. I’ll won’t be ashamed to say, come to us and ask us before you get into anything and we can help guide you as to what the corporate practice of medicine laws might be in that particular state. That’s all I have to say on that topic. But Dana, maybe we can go to the next question.

[Dana Porcalla]:

Yeah, thank you so much Chris and Al. So the second question is, “I am a nurse entrepreneur. What ownership rights do I have?” This one is for you, Chris.

[Chris Esseltine]:

Yeah, and this is a tricky question because we live in the United States of America, we have 50 different states and 50 different laws about nurse ownership of a medical practice. And I should say 51 because the District of Columbia has its own laws as well. It really is tricky and it is a state by state analysis. It really depends. So for example, I’ll just give you a few examples. In California, a nurse cannot own a medical practice by him or herself. A doctor has to own 51% of any medical practice, and then a nurse can own 49%. In Texas, for example, a doctor has to be a part owner. There isn’t really a specific percentage given, but other licensees can be part owners. You can have a PA, you can have a nurse practitioner, you can have an optometrist, but nurses, for example, a registered nurse cannot be a part owner in that medical practice.

Shame on the state of Texas. But anyway, that’s the law there. In New York, only doctors can have any ownership whatsoever in the medical practice. So you really have to find out what the state is, what the state’s laws are, and how you can work around. When I say work around, I certainly mean legally, but you know how you can navigate that whole issue depending on the state that you’re in. Some states, absolutely nurses can own a hundred percent of a medical practice and can even employ a medical director. In other states, they can have zero ownership. So that’s why you have to do an MSO relationship if you want to have any type of profit sharing in that medical practice. So it really, again, depends on the state laws, what they specifically say, what your license is, what you want to do and how you want to do it. And again, come to us to find out so that you’re on the right track and you do it right from the get-go instead of having to shift gears in the middle of an operation that’s already been set up.

[Dana Porcalla]:

Okay, thank you so much, Chris. Let’s move on to the third question. What are the differences between sole proprietorship LLC and PLLC and which is truly the best option for various nurse businesses, Al?

[Albert Meyer]:

Yeah, so there’s a number of business entities that can be used in putting together your corporate structure. And I’m going to address this as if we have corporate practice and medicine prohibition issues. And this is how you may want to set up your MSO type of arrangement. So we know we have a corporate practice and medicine prohibition issue to deal with. We have the different ownership structures of a professional entity, and now we’re going to put together our MSO and we’ll be happy to explain that in further detail, either later or if you want to schedule a call with us. But there are four or five different types of entities that can be done here. Number one is a sole proprietor.

That just means that’s you, you own everything personally through your social security number, all the income, all the expense. And the most important thing that is going to affect you is all of the liability is going to be on your shoulders on an individual basis. So even if you buy something with another bank account or you have debts that are dedicated to the business, they’re going to be your responsibility. So that’s one entity set up, if you will, that I don’t recommend and will never recommend. Next, we have a partnership and a partnership is basically two or more people that are engaged in a business venture. So you can have equal rights, you can have things split up, ownership and profit distributions. However, just like a sole practitioner, there’s no personal liability protection.

And the worst thing about a partnership as far as assumption of liabilities are concerned, is if one of your partners goes out and borrows a million dollars and moves to France, well, you’re on the hook for that whole million dollars, whether you approved of it or not. So another type of business entity that I really wouldn’t recommend. Now here are now the couple entity options that should be employed when you are developing your clinic and your MSO entity. First is a corporation. We all know what a corporation is, and the basic definition is a legal entity that is separate and distinct from its owner. So unlike a partnership, and unlike the sole proprietorship, the corporation is treated as a separate person from the individual. It’s run by directors and shareholders.

And under the law, the company has the same rights and responsibilities of individuals, they can sue, they can enter into contracts, they can hire people, buy assets, and be subject to taxation as well. But the best thing about the corporate entity is the limited liability. As long as the corporate entity is properly set up, you are not going to be personally liable for any debts of the corporations. And that is the biggest benefit that one would have when deciding to run their business as a corporation. The next business entity choice is a limited liability company. And that, again, like the corporation is a business structure that separates the individual from the business. It gives the same type of liability protection as a corporation does. However, the limited liability company provides a lot more flexibility as to the division of ownership, how profits and losses are distributed and assumed and voting rights.

In a corporation there needs to be equal voting rights amongst the shareholders and equal distribution of profits based on the number of shares. A limited liability in most cases does not require that. So if you are going to expand your business and bring in other partners, partners who may just be investors, the limited liability company is probably a better way to go to protect yourself from liability and also to meet your business objectives. So one thing that I’m discussing here is from a liability and asset protection standpoint. One of the big advantages of an LLC or a corporation is the tax advantages. Now, I’m not going to go into the tax issues here, but there are some really positive tax advantages of forming these entities. So once you figure out what type of entity you want to operate your business under, it’s imperative that you talk to an accountant to make sure that that form of entity and the tax implications and advantages meet your particular situation. So that’s all we have.

[Dana Porcalla]:

Okay. Do you have anything to add, Chris?

[Chris Esseltine]:

That was very well done. The only thing I would add is it depends on the state that you’re in. Once again, those pesky 50 states as to what entity you’re even allowed to have as a medical practice. For example, in California, medical practices must be a professional corporation and nothing else. They can’t be an LLC or a PLLC or anything else. There are other states where you can do an LLC just fine. Some states where they don’t allow that, you can do a professional LLC but not a regular LLC. So it really depends on the state you’re in as to what they require and what they prohibit. But otherwise, Al said it just fantastically. You’ve got to weigh the different options, tax advantages and control and liability. And again, we can help you all with that.

[Dana Porcalla]:

Okay, well, being said that, let’s move on to the fourth question. What are the legal aspects of good faith exams, Chris?

[Chris Esseltine]:

So just to let everyone know what a good faith exam is, in case you don’t know what it is, it’s just a fancy term for an initial examination, which every patient has to have, regardless of what kind of medical practice it is. When you go in to talk to a medical provider for the first time, they get your history, they talk to you about what your needs are, what the purpose of your visit is, that’s an initial exam. And it can also be called a good faith exam. So in the medspa space, especially the term good faith exam has become very popular sort of a term of art. And it just means that you have to have an initial exam to make sure number one, let’s say it’s an iv, for example, the IV is medically appropriate or necessary.

That there are no contraindications, there are no red flags in your medical history that would prohibit it. So in almost every state in this country, good faith exams are not allowed to be done by nurses. They have to be done by a mid-level provider or higher. So a nurse practitioner, a physician’s assistant, or a physician. And the reason for that is, again, it depends on what every state’s particular scope of practice laws are, but essentially nurses, in most states, are not allowed to give medical orders. So they can take all the history, they can assist in taking vitals and all of that. But they’re not allowed to actually question the patient, look at the medical history and decide, yes, this treatment is medically appropriate or what have you.

So those orders have to be given under the direction of a medical director, not necessarily present, but under the direction of the auspices of a medical director, but by a mid-level provider or higher. So now the great thing about this is that so long as it’s appropriate, so long as in a provider’s medical judgment, it’s medically appropriate to do a good faith exam by let’s say telemedicine, then that can be done. So in other words, if you’re a nurse entrepreneur and you have an IV hydration clinic and you need a good faith exam done, that doesn’t mean that you have to bring in a nurse practitioner or bring in a doctor to enter the room and physically speak to the patient in person. These exams can be done over the phone by video conference and in most states, again, so long as it’s medically appropriate and it maintains the standard of care.

You can have a provider look at the collected data, so the medical history, the intake form, everything that is filled out by the patient beforehand. And the provider can look at that, review it, and if there’s no reason to speak to the patient directly, then that order can be given and then the nurse can carry out the actual procedure. Again, it’s state to state, so we have to determine what states allow it, but in most cases that’s the case. A telemedicine visit is just fine. Now people say, “Well, how long is that good faith exam good for? Do we have to do it every time the patient comes in? Is it good for a year? Is it good for two years?” So no, you don’t have to do it every time. When the patient comes in the first time it has to be done.

That establishes that provider patient relationship and gathers all the necessary information. Some companies have an internal policy of one year, right? This good faith exam is good for one year and in most states there really is no specific amount of time. In other words, the good faith exam could last the rest of their lives. You don’t need to do it again. But it’s always a good idea to update the information. In other words, I always recommend to my clients ask the patient, each time he or she comes in, “Has anything in your medical history changed?” So for example, if you ask that and the patient says, “Oh yeah, I just got put on blood thinners since the last time I came in. Well, that’s a really important piece of medical information and that could prohibit that patient from getting an IV. So that’s when the nurse would reach out to the medical director and ask, “Okay, what do we do here? What is your order?”

And it’s up to the medical director to make that determination. So while the good faith exam doesn’t necessarily need to be redone at a particular interval, it’s always a good idea each visit just to make sure you ask, “Has anything changed?” And if it’s something and your nurses and you have the expertise to know if something presents a potential problem, that’s when you reach out to the medical director who should be available by law, available during those office hours for a phone call to find out what to do. And again, it’s state by state. So some states do have particular laws about how often these exams should be done, et cetera, but the general rule has to be a mid-level provider or higher. It can only be done one time when you first see the patient. But again, always ask every exam or sorry, every visit, “Has anything changed with your medical history?”

[Dana Porcalla]:

Okay, thank you so much, Chris. Would you like to add anything, Al?

[Albert Meyer]:

Just one thing that I’ve seen in practice and I do think it rings similar to the work that you folks are going to be doing, but I represent a lot of chiropractors in my practice. And they have physicians on board with them or nurse practitioners, and somebody comes in with knee pain and wants to get an injection. And so a chiropractor, know who is knowledgeable in these types of ailments will go beyond his or her scope or practice. And the result is an accusation or allegation that that person was acting beyond the scope of his practice. And I’ve had a number of clients be subject to disciplinary actions by state licensing boards. So I really think the same premise would apply to the nurses listening here that want to provide IVs and injections. That it’s a fine line between doing a history and an intake versus making recommendations, making diagnosis, putting together a treatment plan. So keep that in mind when you start working with patients and make sure that good faith exam, as Chris put it so well, is directed to the appropriate license provider.

[Dana Porcalla]:

Okay. All right, let’s move on to the last question. What forms, disclaimers, liability releases, consents do we need and how often do we need to update it, Al?

[Albert Meyer]:

Well, I mean there really isn’t a complete legal requirement for medical practices to have these types of forms. However, if you do not have these types of forms and communications with your patients, you’re just asking for reliability in many respects. So one of the things is important is the history and your intake forms. You want to make sure that that patient discloses all the medications they’re taking, any histories of cancer, of diabetes, any chronic conditions. So if that particular patient comes and says, “Well, you know, gave me this treatment plan and it just spiked my diabetes.” “Well, you didn’t tell me you had diabetes.” So not only is it a good tool for your patient care, but it’s also a good risk management tool to make sure that that patient discloses everything you need to know before you administer any type of treatment. The next important form is probably the most important form is the informed consent.

And this form really should include a number of things. One, it should describe the nature of the procedure that the person is going to receive. Second, you can describe the benefits of the procedure. However, you shouldn’t go far as saying this is going to cure something. You’re never going to get sick if you’re going to… you’re going to give a Myers’ cocktail. And the risks, what could happen? Are there risks of infection? Are there risks from interactions from certain drugs you’re taking? And one thing that I see when I review a lot of these forms is one of the things you want to state is you state the risks, you state the benefits. But I want to make sure that you make it clear that you may not benefit from this at all. It may not hurt you, but you’re not going to get a positive outcome.

And a lot of patient complaints come from that fact that, “Well, Dr. Jones said I was going to get better. Dr. Jones said this was going to take care of my immune system and I get sick.” And that’s when people start complaining, “I want my money back, you told me this was going to work, I’m going to the medical board.” And by stressing these particular points, oftentimes you can maybe not prevent a complaint to a medical board or a nursing board, but give yourself solid defenses if that board comes calling on you. One of the other things that I really stress to my clients is don’t just give them a piece of paper and say, “Sign this.” Go over it. I know it takes some time and everybody’s in a rush. Take the time and go over the points with your patient. That way you could acknowledge that not only did I read it, but it was fully explained to me and I understand the benefits, the risks, and the possibility that I won’t get a positive outcome.

You can avoid a lot of problems by just taking a little bit of time to address these points with your patients. Another area that we also need to focus our attention on are privacy rules. And each practice should have a notice of privacy practices that is given to each patient to show how you as a practice are going to use their patient information. And to also stress that you’re not going to disclose it without patient consent or if there’s a need and there’s an exception under the law that would require the practitioner to disclose these records. Finally, policies and procedures, even though you may be a small practice and you’re going to be doing injections and maybe Botox and some other procedures, well have some procedures dealing with biohazard materials.

What is your sharps policy? How are you disposing of those needles? Infection control. How are you storing your meds? And are you keeping certain substances open in the open air where it could lead to an infection when it’s administered to a patient? And the other thing is, what do you want to do with treatment plans? For example, you may collect $5,000 for a three-month treatment plan. Well, what happens if the patient says, “I don’t want this anymore.” What do I do? And do I give them their money back? Do I say go pound sand? And a refund policy or a treatment plan policy should be put in place so the patient knows what’s going to happen if I decide I don’t want this anymore. So with those forms and there’s many others that can be included, but you would be off to a good start in your risk management type program. So Chris, if you have anything else to add?

[Chris Esseltine]:

Yeah, great points, Al. The one thing I would say is, and when you’re talking about being sued for malpractice or getting in some kind of legal trouble, that actually doesn’t fall specifically into what we call healthcare law. That’s sort of general tort law or liability. So the basic things you have to understand, if someone wants to claim, “Well, I didn’t know this was going to happen, or I didn’t know this was a possibility or I didn’t know they were going to do this to me.” If it’s in the consent form and it’s very clearly stated, that doesn’t mean you have to put 20 pages worth of material, but just to say, “Oh, you’re coming in for an iv, expect to get poked by a needle, expect this, this, here are the possible side effects.”

If that’s all in the consent form, then they can’t come back and say, “Well, I didn’t know.” And therefore there’s no basis to sue you. So basically just what’s going to happen and not every last step, “First we’re going to rub an alcohol swab on your arm.” but a basic overview of here’s what to expect in the treatment and here are the possible side effects. And if you have those in, then it takes the wind out of the sails of most lawsuits and you should be protected just fine.

[Dana Porcalla]:

And that concludes our presentation. Thank you so much Chris and Al for answering those questions. We will now begin with the Q and A section of the webinar. Again, please use the Q and A icon below for your questions. Would you like to start with that, Al or Chris?

[Albert Meyer]:

Yeah, I think Chris.

[Chris Esseltine]:

Yeah, I can start with one question here about standing orders. So the question is basically, what about standing orders? How do they apply with the good faith exams? Do they not apply standing orders? Do not replace good faith exams. So each patient does have to be seen either by telemedicine or in person before any kind of treatment is given. But there should be standing orders. So if you’re a nurse and you own this medspa, then you still have to have a medical director and that medical director does have to sign off on those standing orders. In some states, the standing orders are absolutely required. They have to be physically present in the clinic. I guess the state wants you to be able to have something to refer to if you get stuck. Now, in my mind, I don’t think you will ever get stuck. You’re nurses, you know how to put in an IV.

But in some states, in most states actually, you have to have those standing orders, they have to be written down, either printed in a binder somewhere or on an electronic file. And they have to be signed off on by the medical director. So that doesn’t mean that you have to burden your medical director with writing them, but you do have to at least have them. So you could write the standing orders, in other words, how is this done, how is that done? And give them to the medical director who signs and dates and then keep them on hand. If you’re a mobile IV clinic or you’re providing IV services mobilely, then keep it in a binder in the car or you could store it on your phone, just somewhere where you can pull them up if needed and most states have that legal requirement. But again, they’re not a replacement for the good faith exam. Those exams must happen first and then the standing orders are there just as a backup.

[Dana Porcalla]:

Okay, thank you so much, Chris. Al, have you picked any question?

[Albert Meyer]:

Yeah, I’ve seen a number of questions that are state specific as to whether or not I can own a medspa or any other type of clinic. And like I said earlier, that is driven by state law and I’ve dealt and formed MSO arrangements in most of the states. But I would be remiss in giving you specific answers without reviewing the law and making sure there has been no real changes in the laws governing corporate practice of medicine. So I’ll make some generalizations and I know there’s some states that you’re free to own whatever you want if it is something that is not reimbursed by insurance. There’s other states that I know off the top of my head, Ohio comes to mind, Louisiana comes to mind where pretty much anyone can own a clinic. But you need to hire the appropriately licensed professionals to do the work and you need to butt out of the provision of medical services. If you are, I’m talking somebody like me, I’m not a medical practitioner, but some of you nurses then would have to make sure that you’re practicing within your scope.

Let me look for some other… There’s been a couple questions about virtual health coaches and that is a really… you are just in a very gray area. What is the difference between health coaching and the practice of medicine? If you are doing any type of health coaching like we had talked about a little while ago. You need to make sure that even if you are qualified to make diagnoses and treatment plans, if you are doing virtual health coaching and you are in California and you are not licensed in Florida, well you cannot do a diagnosis. You cannot put together a treatment plan. The only things you can really advise on are just general health and wellness topics, vitamins, supplements, diet, and things of that sort. So if you’re going to embark on a health and wellness coaching venture, it is absolutely imperative to seek legal counsel if you’re going into that world.

[Dana Porcalla]:

Okay, thank you Al. Chris?

[Chris Esseltine]:

Yeah, just on that topic, I saw another question about what about alternative practitioners or alternative types of healthcare, Ayurveda medicine and some other things were mentioned. So it all depends on what the state considers the practice of medicine. So I know MDs who are focusing really on functional medicine, but they’re still MDs and they’re still diagnosing and treating an illness. The fact that they’re treating it mainly through a functional medicine approach doesn’t matter. They still have to do it under their license as an MD or a DO. But there are some practitioners who are, they specialize in what’s called plant-based medicine or some other alternatives. The states don’t consider those particular fields actual medicine under the definition of state law. So these corporate practice of medicine laws don’t apply unless what you’re doing would be considered the practice of medicine somehow under state law.

Now, the fact that you may be an MD nurse practitioner, what have you, and you want to do strictly health coaching or strictly plant-based medicines or whatever it is, that’s okay. So long as you’re not actually practicing medicine, then these corporate practice of medicine laws do not apply to you. Just make sure you don’t cross that line because it’s an easy line to cross. Even if you’re a health coach, someone could ask you, “Well what about this?” And your medical training kicks in and you start giving them medical advice, now you’ve switched over to being a doctor and establishing a provider patient relationship under the law. So just be very careful that you don’t cross that line. But if you’re not actually doing anything, diagnosing an illness or a condition, treating that illness or condition in a way that would be considered the practice of medicine under state law, then these laws don’t apply to you.

[Dana Porcalla]:

Okay. One last question to answer for you Al.

[Albert Meyer]:

There’s a few questions regarding compensation of nurses with the clinic and with MSO arrangement. First within the clinic is, can a nurse receive compensation that is based on a percentage of collections? And the answer is a yes, but a qualified yes. If that nurse is a bonafide employee of the practice, then in most states, and since we’re talking about mostly cash based services and no government payer or insurance payers, then state law would govern. So typically though, if a nurse is an employee, that nurse can receive a percentage of the services that he or she may be providing. There are ways to bonus providers based on productivity and discretionary bonuses. So the answer to that question in a nutshell is there are many different ways in which we can put together a compensation methodology for your providers that’s going to not only be beneficial to the providers. But also avoid any type of fee splitting and kickback issues because that’s the first thing that arises when you’re talking about any type of percentage compensation.

[Dana Porcalla]:

Okay, one last question for you, Chris.

[Chris Esseltine]:

Yeah, and before I answer that question, I just want to piggyback on to Al’s answer. There may be people out there wondering about compensation for MSOs as well. If you have an MSO, whether you’re part owner in the practice or you’re not allowed to be and you have an MSO, are there percentage arrangements for the MSO fee? And again, it depends on the state. New York absolutely prohibits any kind of percentage compensation for an MSO fee. California says, yes, you can do that, but it has to be on the gross. Washington state says, no percentage arrangement and other states percentage arrangement is just fine, gross, net, whatever. So again, seek us out and we can advise you on that on a state by state basis.

But there is a question here about nurse practitioner in… sorry, an RN in Pennsylvania and she wants to do telemedicine visits, but she also wants to provide that service to patients in New Jersey. Is that allowed? And so this is a general question about telemedicine. The rule is that you have to be licensed in the state where the patient is at the time of the visit. So if you’re a practitioner licensed in Pennsylvania and you are licensed also in New Jersey, you don’t live there. You’re not in New Jersey at the time of the patient visit, but you’re licensed in New Jersey, absolutely fine, you can see patients in New Jersey. If you’re not licensed in New Jersey, they can either cross the border into Pennsylvania or you essentially cannot see them. So again, just the general rule, you have to be licensed in the state where the patient is at the time of the visit.

[Dana Porcalla]:

Okay, great. Thank you so much Chris. And anything else Al?

[Albert Meyer]:

Just one little thing. Thanks Chris. There are an increasingly number of states that are allowing telemedicine or telehealth type registrations. So when looking for or wanting to start a telehealth business across state lines, that’s one of the things we can look at for you, is you may not have to go through the entire full-blown licensure process. I know here in Florida there is a registration process that is much more streamlined and quicker than having to go and apply for a full-blown license. So keep that in mind if you’re starting to expand outside of your home state.

[Dana Porcalla]:

Okay. As much as we’d like to answer all your questions, unfortunately we only have very limited time here. But please do feel free to reach out to our care team. You are always welcome to call us at (310) 844-3173 or contact us through our website contact form. Christian will send the details through chat. Also, please feel free to browse through our vast collection of online resources by visiting www.cohenhealthcarelaw.com. And that brings us to the end of this webinar. Thank you so much for your interest and attention. Please watch out for the webinar mailing of the third part of this webinar series. For the fresh names and first timers, thank you so much for joining us and we hope to see you again on the next Cohen Healthcare Law Group webinar. Bye for now.