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Michael H. Cohen: 

Hello, my name is Michael H. Cohen, and I’m founding attorney of Cohen Healthcare Law Group. Our firm began in 1999 with the same motto that would accompanies us today. We provide legal strategy and regulatory advice to businesses that accelerate health and wellness. In a few minutes, you’ll learn more about this selected topic for today’s webinar.

Share time with our attorneys and get to see more about who’s behind the scenes. We hope you enjoy our webinar, and we also look forward to seeing you back for upcoming webinars. By all means, reach out to our firm should you have any questions or comments. Again, it’s such a pleasure to have you here.

Welcome to our community. Visit our webpage if you have any other questions and we look forward to beginning in just a few minutes. Enjoy.

My Queen Dickens:

Hello and welcome. My name is My Queen Dickens. I go by Nurse Queen, and I am the founder of the Drip Success Formula. I created this program with one mission in mind: to guide aspiring IV hydration business owners to launch and scale their IV hydration business with clarity and confidence.

Whether it’s understanding the right business structure, legal consideration, sourcing reliable vendors, or creating a powerful marketing strategy, my program offers a step-by-step roadmap on how you can launch and start a successful IV hydration business. In this webinar, I’m super excited to be in collaboration with Cohen Healthcare Law Group, a trusted name in healthcare law, and a strategic ally. Their team has been instrumental in helping healthcare entrepreneurs stay compliant, protected, and on the path to success. You have a lot of valuable insight for you all today, so be prepared to take notes, ask questions, and take the next step into your IV hydration business journey.

Let’s dive in.

Christian Maniquis:

Hello, good afternoon everyone. Welcome to our pilot for the webinar series titled The Path to Success, overcoming Obstacles in the IV Hydration and Medical Spa Business. This is in collaboration with the founder and CEO of the Drip Success Formula, my Queen Dickens and the community thrive and hive.

For your speakers for today, it will be attorney Drew Barnholtz, and for a brief moment, I will turn over to Floor to Drew if you would like to make a quick introduction of yourself.

Drew Barnholtz:

Good afternoon. I’m Drew Barnholtz. I’ve been practicing healthcare law for, I don’t know how this happened, almost 30 years. I’ve been in private practice as well as an in-house counsel for a number of different healthcare organizations.

I’ve worked with a whole bunch of IV therapy companies starting from scratch and those that are established and I really look forward to working with you. Thanks so much for your time today.

Christian Maniquis:

Alright, next up, attorney Holly Little.

Holly Little:

Good afternoon everyone. So glad that you were here. My name is Holly Little.

I serve as of counsel, attorney to Cohen Healthcare Law Group. Very happy to be here. I too have 30 years of experience in both corporate and healthcare law and have helped a number of different IV hydration companies, med spas, healthcare providers to get set up and to run in a compliant fashion.

So it’s a little bit of a passion of mine, so I’m delighted to be here.

Christian Maniquis:

Alright, so next up, the topic of our discussions are actually frequently asked questions in the industry, which a lot of startup businesses in the IV hydration and medical spa business have. So let’s get started, shall we?

So first question, who is generally allowed to own an IV hydration business? And what factors influence ownership requirements? Holly, do you want to take this one?

Holly Little:

Absolutely. So who is allowed to own IV hydration business really depends on the laws of the state. So there’s something called CPOM laws or Corporate Practice of Medicine laws, and there are some states that do follow Corporate Practice of Medicine and others who do not.

So you would really need to check with the state regulations in your particular state to understand the guidelines that you’d need to follow.

Christian Maniquis:

Okay. Thank you for that answer. Drew, you wanna supplement that or we’re good to proceed?

Drew Barnholtz:

No, I think Holly hit the nail on the head. In those states where you’ve got the corporate practice of medicine prohibition, it’s basically saying that a business, a person can’t tell a, a provider how to treat people clinically, and so we’ll talk a little bit more about this, but there is a structure called a Management Services Organization or an MSO that will allow a provider that is not a physician to work with a physician and be able to be part of that business structure.

Holly Little:

That’s right Drew. So in states that have Corporate Practice of Medicine laws, you do have to be a licensed physician in order to own that type of medical practice. And so what we do at Cohen Healthcare Law is help you if you’re not a physician, to be able to set up an MSO in order to be able to run your business.

Christian Maniquis:

That’s a wonderful start of the conversation and the tackling the questions onto the next.

Next up is at what stage in the business journey do an IV hydration entrepreneurs typically seek legal guidance? And what are the some key considerations that you should be aware of? Holly, you mind taking this one again?

Holly Little:

Absolutely. Another great question. So really a entrepreneur should seek legal counsel in the startup phase, and that’s because it’s critically important to understand the laws of your state that govern IV hydration business.

For example, as we said in the initial question. Do you need to follow the corporate practice of medicine laws? What are the scope of practice rules within your state? Do you have a proper medical agreement? Do you have proper employee or independent contractor agreements in place? Do you have proper consents in place?

So I always counsel my clients that it’s better to start off with a good foundation, just as if you were building a house. And then build your business from there.

Christian Maniquis:

Should we go to the next Drew? Anything to add?

Drew Barnholtz:

Oh, look Holly knows what she’s doing here. It’s better to do things on the front end. So I’m not a, I’m not an attorney, that’s I don’t think Holly is either, that’s about scaring clients. And I know that, look, when you first start out money might be tight and things like that.

We’re, look, we’re a small firm. We understand entrepreneurism if there’s such a thing, and we will work with you to make sure that you have just the things you need right to be in place, to be compliant and then work with you as you grow to make sure that you remain compliant, but also understanding that that you’re going to grow by adding independent contractors and employees and different sites and locations.

You’re going to go into different states and we can help you address the laws and the needs for your business as you grow.

Holly Little:

Drew. And just to add on to that, I counsel my clients that, when you’re starting up your business, it’s an investment, right? So you’re going to want to invest in supplies, and you’re going to want to invest in good legal counsel that are aware of the healthcare rules. So it’s very important that you do seek out someone who specifically has experience in healthcare laws and not just any general corporate lawyer.

Christian Maniquis:

Okay, so onto the next.

So I think this one is you Drew. What is a good faith exam and why is it important in the IV hydration industry? How do state regulations impact its requirements?

Drew Barnholtz:

Yep. Good faith exam. My guess is everyone that’s a provider on the phone has heard of one of these, but it’s basically assessing whether a patient is an appropriate candidate for a certain treatment.

In this case an IV hydration therapy. And so you’re looking at the perspective of medical necessity and safety, contraindications, whether someone has a particular health condition that would cause an adverse reaction or a complication from the IV therapy.

The answer I’m giving isn’t going to be 50 state, a 50 state answer, because there are different answers in different states. In states that have that Corporate Practice of Medicine that we call it for short: GFE. Healthcare has lots of acronyms, right? But a good faith exam or a GFE is. You have to keep the business function and the medical function separate.

I know Holly alluded to that before. So the provider has to perform that function and typically it’s going to be an MD, a DO, an NP or a PA that will evaluate that patient and perform that good faith exam. The states, can vary as to who does it, but that’s typically one of those four people.

Sorry to the RNs on the phone. We know that you are the line workers getting it done, but that’s, maybe some protectionism for those different kind of providers. They have to do that. Many of the states will allow that. GFE, that good faith exam to be done via telemedicine, some mandate, an in-person exam.

We can certainly, help you weave through those requirements depending on what state you’re in. Usually you can do a good faith exam once a year. If you’re adding, though, a different treatment , you may need to perform a different, another good faith exam, maybe a, I’m gonna call it my words, not the law, a mini good faith exam, just to make sure that’s appropriate for them.

We’ll also talk about perhaps an additional consent for that. And and this dovetails into having a medical director that has set the clinical practices and protocols for good faith exams.

Christian Maniquis:

Elaborate question answered and onto the next question.

Oh, this one is very much related to what you answered earlier, Holly, so I think we should take this one. What types of legal documents, I’m sorry what types of legal documents are commonly used when starting and operating an IV hydration business?

Holly Little:

There are a number of legal documents that are commonly used when starting an IV hydration business.

And the first, of course, is your articles of incorporation typically in your particular state. And once you have your articles of incorporation, you want to have that both for your management entity if you need one, as well as for the Professional Medical Corporation. And once you have that, then you can get your EIN from the IRS, that’s your tax ID number.

And then we can also draft for you what’s called an operating agreement. And then after that we also draft what’s called a management services agreement or an MSA and then also as Drew alluded to, we draft a medical director agreement. Between you and your medical director, and that just really sets out the rules and responsibilities of each of the parties.

And then of course you want to have a consent, patient consent drafted. That’s also going to help protect you and your company and the patient as well. And then if you’re hiring any other independent contractors or employees, you’re going to want to have those, documents drafted as well. And then of course, in the IV hydration business, you also want to have really good policies and procedures in place for your company.

Christian Maniquis:

Okay. Next question. I think we’re going to get deeper and deeper into the weeds on this one. Yeah. What are the general responsibilities of a medical director in an IV hydration business? Drew, want to take this one?

Drew Barnholtz:

Yeah. The medical director is going to handle oversight of medical protocols, provider supervision, regulatory compliance, patient safety, compliance with state medical board, health department regulations, standing orders, the good faith exam that we talked about.

Then also personally performing and delegating those good faith exam, but also overseeing RNs, LPNs nurse practitioners, physician assistants, training in education in those corporate practices medicine states like New York, California, Texas, and it’s probably about half the states, I think maybe 27 or so states, something like that.

That IV hydration business, at least the clinic side of the business, not the management services organization side will be physician owned and physician affiliated. So that’s, the medical director will have an agreement with that clinic to provide all of these, this oversight, ordering medications, NPs within their scope of practice, can do that as well.

Emergency protocols as well as, handling some business and administrative support and then there are some state considerations, but that is generally the medical director’s role.

Christian Maniquis:

Alright, so I think we’re really speeding through this one and thank you guys for being able to answer those questions very efficiently. I would just like to remind those attendees that recently came in and joined the webinar that if you have any questions outside of what was discussed or, quick clarifications, we have a Q&A box at the bottom of the room, so you can click on it and then throw your questions there.

I’m not going to promise that the attorneys are gonna be able to answer all of them, but at the very least we’re going to try to take on the ones that actually are related to this topic, because this is a three part webinar series. All right. Okay. So onto the, last question.

Okay, so what are the different business entity structures? I’m not gonna name them, but typically we would hear LLC, PLLC that IV hydration business owners might consider and how these structures affect the business organization.

Drew Barnholtz:

So it depends which state you’re in. If you’re in one of those CPOM states, that Corporate Practice of Medicine, and you’ve got your clinic, which is where the actual services are being delivered, and you’ve got your business operations separate over here in your management services organization, you’re likely to have an LLC for the manager and a professional corporation owned by the physician for the clinic, right? So you’re going to have both, right?

If you’re in a situation where you’re in a non CPOM state, and there can be ownership or you’re in California where there, there can be both 51% ownership required by a physician and other 49 can be owned. This is for the professional corporation by certain other providers like PAs and NPs and RNs. You’re still going to have those two entities.

So, in short, you might be in a situation where the entity could just be an LLC, could just be a professional corporation, could just be a professional limited liability company. It depends on the state. I would say that a lot of the time when we are working with these corporate practice of medicine states, you have an LLC for the management services company, the MSO.

You have a professional corporation, which is typically required for physicians and providers to have for the clinic, which is where the services are actually, being delivered and all the clinical protocols are being upheld. And, the benefit of an LLC is it limits your liability.

It’s a to the assets within the business. It is a sole proprietorship or if it’s a partnership, you can get some tax benefits not get taxed at the corporate level and at the individual letter level. The professional corporation can also make what’s called an S-Corp election and save some money typically on employee or employment taxes.

When it comes to malpractice insurance, that’s generally it is what it is, right? You got to buy that and have that. And what we’ve talked about, and we can use some of the extra time to talk more about is the MSO allows those non-physicians to have more potential ownership, to benefit from that relationship to just call it what it is to, in a compliant manner, be able to to make money from the business. So that is how we typically structure things based on ownership, liability protection, compliance with the CPOM laws, taxation and operational complexity.

Holly Little:

And I would just add to that as well, that you do want to select a business entity to incorporate. I’ve seen people that just jump out there as a sole proprietorship, sign leases under their personal name, give personal guarantees when they don’t need to. So it is critically important that you do properly structure your business entity in your business name. And then you could also have what’s called a DBA or doing business as name once you set up your corporate structure.

Drew Barnholtz:

Yep.

That’s a great point, Holly. So you can make the business be the same across the board, meaning it, it doesn’t have to be. It’s against Dr. Jones, but Dr. Jones Medical Professional Corporation, Dr. Jones Medical Professional Corporation can also be Awakenings IV Hydration. A way of example, don’t why I called it awakenings.

Holly Little:

It’s a great name.

Drew Barnholtz:

Feel free. Would like awakenings go for,

Christian Maniquis:

Haven’t had a client use that name now. It’s been years. Okay, so I’m looking at the question and answer box. Seems the participants pretty much are satisfied with the questions. I do have here a question that is sent directly to me. And maybe this will be our quick question and answer portion.

We have a few minutes left why not have it?

So, I’m a nurse. Can I just hire a medical director?

Drew Barnholtz:

Yeah, for sure. For sure. You can. It, I want to know what state you’re in as to whether or not you, you’ll need a medical, you’ll need a medical director if you’re a nurse. So yes, you can hire a medical director.

There are, you can do that within your own network, meaning you can find a a general practitioner or an ER doc or something like that to serve as your medical director. Typically we would suggest that medical director form a separate professional corporation for this purpose, maybe not assuming that they are practicing independently.

If they’re an employed doc, let’s say they work for a health system or something like that, or big practice, they wouldn’t already have their own professional corporation for their practice that they already have a practice and have a professional corporation. That’d be nice to keep your. To keep that clinic for the IV therapy business separate, right?

Have a separate PC as we call it for that, and then for you to be able to not just benefit, monetarily and be part of the business from that standpoint, we typically would suggest you form that MSO, assuming that it’s required, but really. To avoid the anti fee splitting laws and kickback and various different things that we can discuss with you further, you form that MSO, which is an LLC, which you can be, the hundred percent owner of.

Christian Maniquis:

For the answer, drew, I think there’s a couple more in the question and answer box. I’ll leave you guys, Holly and Drew to perhaps choose the ones that are most related. Then just click on, those that would be discussed.

Holly Little:

Okay. I see one from Olivia Kizzy. She says, Hi, I’m an MD looking to open a mobile IV hydration business in Texas.

Go Texan. And I currently have an LLC for the business, but as you were going over, the entities is a PLLC necessary. So a great question. And in Texas, the great state of Texas what the law state is that you need to either operate a medical practice under the professional limited liability company, the PLLC, or what’s called a PA, a professional association.

Texas is a little bit different. We do things a little bit differently here in Texas. So they offer the professional association option to the PLLC, but in general the answer is yes, you should operate a medical practice, which an IV hydration company is considered performing medical services under a professional organization structure.

Christian Maniquis:

Thank you for that answer, Holly. I think we have time. Oh, Drew, yeah, go ahead.

Drew Barnholtz:

I’m licensed, I’m licensed in Ohio, so I can take the other one.

Holly Little:

There you go.

Drew Barnholtz:

Right? I actually live in Cleveland, originally from St. Louis. I’m licensed in Missouri, but I’m not the Texas, Texas Ranger. Leave all that. We’ll leave all that to Ms. Little, nothing’s little in Texas.

Holly Little:

Right, we do it big here.

Drew Barnholtz:

But the question I’ll repeat the question for everyone’s benefit is, hold on. Can you break down the MSA – Management services agreement more specifically in Ohio as an RN, making sure I get a hundred percent ownership?

Yes, I can, let me break that down for you.

So the management services agreement is the agreement that says the MSO, the Management Services Organization, which would be owned by you, the Ohio RN, is going to provide a whole bunch of business services, nonclinical administrative services to the, to professional corporations. So, marketing and advertising, billing, collections, facility the leasing of the office spaces, purchasing the IV therapy supplies, staffing in HR, the nonclinical staff, like front desk admins, unless you’re mobile and you don’t need all that, scheduling operations. Whereas the physician owned entity, the professional corporation, is going to do medical supervision, medical decision making, staffing of the RNs, NPs, PAs, administering the IV therapy.

This can be completely a hundred percent owned by you. There’s no legal requirement. In fact, it’s a nice split, right? Especially in the CPOM laws states, and Ohio is one of them where you cannot directly on the medical practice. What it allows you to do is own the MSO. And what you can do is charge a fair market value, commercially reasonable management fee, typically a flat percentage of gross adjusted collections.

And that way you can make money for services that you’re providing rather than splitting fees, which is frowned upon by, even though you’re not these are typically out of pocket or self-pay and not Medicare, Medicaid or Tricare, government funded still, frowned upon by regulators.

Look, our general suggestions are, set that fee and have it be fixed. Let it go for at least a year before you renegotiate that, make sure that you that you have that a hundred percent control over that, or you’ve got at least the majority, ’cause that’s gonna be your, your stake in the business.

So yes, you can own a hundred percent and that’s the way that we would structure that and that MSA.

Christian Maniquis:

Thank you very much for attending. Guys, we’re running a little bit short on time. Your guest speakers or your speakers actually have appointments that are from your community, so we will see you there.

We would like to invite you to our next webinar series, which is on the 9th and the third, and not necessarily the last will be on the 16th. Again, we will continue the discussion and go further down the line, tackling those frequently asked questions and giving little snips of what it really takes to start a business.

Okay. So thank you everyone for joining. We have the link on our webpage, on the chat box. We would like to see you on the next webinar series, and again, thank you. For your support and looking forward to working with you.