Understanding the Different Types of Nursing Jobs and Corresponding Compliance Issues – Part Three

In parts one and two of our discussion about healthcare compliance issues for nurses, we discussed the different types of nursing degrees and the different types of nursing professions. We also began our discussion of some of the healthcare compliance issues including HIPAA, telecommunications, and fee-splitting and referrals.

We will continue that discussion here by focusing on education and certification requirements, the unlicensed practice of medicine, the corporate practice of medicine, scope of practice issues, IV hydration, and other compliance matters. We will also discuss how a managed service organization can help address some compliance issues.

To review all your healthcare compliance needs, please contact our healthcare and nursing professional compliance lawyers today.

Education and certification requirements

Nurses must complete the proper courses and obtain the proper certifications for each type of profession (such as NP or RN) and for each type of business the nurses own or manage. The National Council Licensure Examination (NCLEX) and the National Council of State Boards of Nursing (NCSBN) evaluate various nursing qualifications.

The unlicensed practice of medicine

Nurses need to understand the boundaries between the type of work that nurses can do and the work the doctors can do. As an example, we discussed the following scenario:

“An RN could be charged with the unlicensed practice of medicine if she/he works for a doctor such as a plastic surgeon who performs plastic surgery, dermatology services, and aesthetic medicine. If the RN advertises on a website or in print, that he/she does the treatments the plastic surgeon does but doesn’t mention the plastic surgeon – then the RN could face an unlicensed practice of medicine complaint.”

The corporate practice of medicine laws

The corporate practice of medicine doctrine is a doctrine (enacted into law by most states such as California’s Moscone-Knox Professional Corporation Act of California) that prohibits corporations (general or LLCs) that are not owned by physicians from practicing medicine. Further, non-physicians can’t hire doctors or other healthcare providers to try to circumvent the law. The Moscone-Knox Professional Corporation Act regulates who can be shareholders, directors, or professional employees of a medical corporation.

The principle behind the corporate practice of medicine law is that patient care should come first – ahead of financial profit. Patients have the right to know that the advice their doctors provide is for the patients’ benefit and not the doctors. Doctors and nurses who violate the corporate practice of medicine laws could lose their professional licenses.

We discussed one nursing example involving the corporate practice of medicine doctrine recently. In the example, nurses or nurse practitioners in some states want to hire a medical director. The nurses/NPs hire recruiting companies who find a medical director. The problem is that the nurses/NPs cannot hire a medical director themselves because the hiring violates that state’s corporate practice of medicine laws.

In California, a registered nurse cannot own a medical practice on their own. The physicians need to own at least 51% of the practice. Registered nurses can only own, at most, 49% of the practice. One way that we’ve discussed to help manage corporate practice of medicine issues is for a medical practice to employ a managed service organization (MSO). This way the doctors can focus on the clinical side of the practice while the MSO focuses on the business side of the practice.


Nursepreneurs and our team are getting together to bring you this second part of the three-part webinar series focusing on nursing businesses and healthcare ventures for non-physicians.

Independent status/scope of practice

In California, based on Assembly Bill 890, nurse practitioners can practice independently if:

  • The NP passes a national board examination
  • The NP is certified by a national certification body that is properly accredited
  • The NP can verify, through documentation, that their training is current and meets appropriate standards
  • The NP completes a California transition-to-practice TTP program
  • The NP is in good standing for at least three years
  • The NP meets other conditions that may apply

As we discussed, California authorizes two types of nurse practitioners – 103 and 104.

California’s AB 890 is part of a nationwide trend toward giving Nurse Practitioners more practice autonomy.

“This is a sea change for Nurse Practitioners wishing to open a medical spa, IV hydration clinical, or health and wellness center.”

In states that haven’t legislation similar to California’s AB 890, nurses will normally need to practice

“either under supervision of or in collaboration with a licensed medical doctor, depending on the existing State law requirements.”

IV Hydration Therapy Business Regulatory Compliance

IV hydration therapy is a way of administering medications, fluids, or vitamins “directly into a patient’s bloodstream intravenously.” In hospitals, IV treatments help ensure that the patient’s body is replenished with critical substances that are lacking due to underlying medical conditions. In the past, IV treatments were administered in a hospital or an infusion center. Recently, independent providers have begun offering elective IV hydration and vitamin therapies. While there “may” be some benefits, there are many risks.

The following scenario which we’ve discussed raises a few questions. The scenario involves a nurse who wants to provide mobile IV hydration therapies for a medical spa owned and operated by a licensed MD. These questions include:

  • Who is prescribing the IV – you or the doctor? A companion question is – does IV hydration therapy require a prescription?
  • Who’s the clinician? Is the clinician a nurse, a paramedic, or an EMT? Does the nurse or other healthcare professional need to be supervised?
  • Are there corporate practices of medicine issues?
  • Is the proper structure for the business a corporation, an LLC, a professional corporation for the clinical staff, or some other structure?
  • Can the doctor receive a percentage of the number of IV units delivered – or would this violate Stark Law, the AKS, or other fee-splitting laws?
  • Is the IV hydration therapy FDA-compliant?

These questions need to be answered – before – the IV hydration business begins operations.


In today’s video, we discuss some of the legal perils involving IV hydration therapy and potential legal strategies and solutions.

Managed Services Organizations (MSOs) – a valuable tool for addressing many healthcare compliance issues

A managed service organization is a legal structure that is used to help medical practices run the clinical side of the business while experienced professionals run the business and marketing side of the business. Generally, the medical practice will enter into a contract with the MSO that specifies the services the MSO will provide.

MSOs are often a great way for nursing professionals to start their business such as a wellness clinic, IV hydration business, or a holistic care clinic – subject to the required oversight by a physician. Many physician practices already employ MSOs to help with marketing, front office services, leasing office space and equipment, billing, software, hardware, helping to meet a Stark Law exception or an AKS safe harbor, and for many other reasons.

Other MSO benefits include that the MSO can own some of the non-medical equipment and supplies. To some extent, an MSO can help with staffing with the caveat that medical decisions about staff members still need to be made by the physicians.

RNs and NPs in some states may be able to own the MSO – but, again, the MSO, cannot participate in the clinical side of the business.

There are many legal and business decisions that need to be reviewed when a medical practice contracts with an MSO such as how long the agreement will last and the terms and conditions for ending the MSO relationship.


This video is excerpted from a Webinar held by Clara Salvai, Matthew Stokke, and Molly Fashola on April 14th, 2022. We are sharing some legal industry insights to the ever changing landscape of […]

What additional compliance issues should nurses review with their healthcare lawyer?

Some other legal compliance issues our experienced healthcare lawyers review with nursing professionals include:

  • What constitutes a good faith exam in a medical spa or similar setting?
  • Who should initially examine the patient?
  • Mobile health and software applications.
  • The differences between sole proprietorship LLC and PLLC and which is truly the best option for various nurse businesses.
  • What forms, disclaimers, liability releases, and consents?
  • Pay and other benefits.

Nurses need to learn the laws that affect their medical practice, their license, and their business relationships. Nurses need to need and be able to verify their education, certification, and training qualifications. The laws that need to be followed include unauthorized practice of medicine laws, corporate practice of medicine laws, and scope of practice laws. One valuable tool that can help nurses and doctors meet their compliance obligations is a managed service organization which can run the business side of a nursing business or any other medical practice prosper while helping to protect the patients.

Nurses and nursing businesses should contact Cohen Healthcare Law Group, PC to discuss their legal and healthcare compliance requirements. Our experienced healthcare attorneys advise nurses, doctors, medical practices, and MSOs about healthcare compliance laws and regulations.

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