Addiction Treatment Centers, Behavior & Mental Healthcare Providers, and Life Coaches

According to the federal Substance Abuse and Mental Health Services Administration (SAMHSA), federal laws related to substance abuse and mental health services include:

• Affordable Care Act
• Children’s Health Act
• Garrett Lee Smith Memorial Act
• Mental Health Parity and Addiction Equity Act
• Sober Truth on Preventing (STOP) Underage Drinking Act
• Tribal Law and Order Act (TLOA)

And federal regulations related to substance abuse and mental health services include:

• Charitable Choice
• Emergency Response
• Protection and Advocacy for Individuals with Mental Illness Program
• Synar Amendment and Tobacco Regulation for Substance Abuse Prevention and Treatment Block Grants
• Federal Workplace Drug Testing
• Certification of Opioid Drug Treatment Programs
• Patient Record Confidentiality
• Other federal regulations

In California, the Substance Use Disorder Compliance Division (SUDCD) at the California Department of Health Care Services:

focuses on compliance with State and Federal statute, regulations, and other governing requirements.  SUDCD oversees licensing and certification functions, monitoring, and complaints for Driving-Under-the-Influence Programs, Narcotic Treatment Programs, and outpatient and residential providers.  SUDCD also oversees conducts complaint investigations on certified Alcohol and Other Drug counselors.  SUDCD is also responsible for implementing the Drug Medi-Cal Organized Delivery System and Opioid STR grant, which aims to expand access to Medication Assisted Treatment to combat the opioid epidemic. The Division also ensures compliance with the statewide criminal justice treatment programs and counselor certification.

The Substance Use Disorder Compliance Division’s role includes Licensing and Certification of facilities.  The Division notes that it licenses and/or certifies facilities:

providing 24-hour residential nonmedical services to eligible adults who are recovering from problems related to alcohol or other drug (AOD) misuse or abuse. Licensure is required when one or more of the following services is provided: detoxification, individual sessions, group sessions, educational sessions, or alcoholism or drug abuse recovery or treatment planning, incidental medical services.   Additionally, facilities may be subject to other types of permits, clearances, business taxes or local fees that may be required by the cities or counties in which the facilities are located. You may also want to check with your county alcohol and drug program office to ensure compliance with any requirements they might have. Many facilities licensed by DHCS are also certified.  Certification by DHCS identifies those facilities that exceed minimum levels of service quality and are in substantial compliance with State program standards, specifically the Alcohol and/or Other Drug Certification Standards.

Among other items, we have previously advised on the provision of “incidental medical services” by authorized alcoholism or drug abuse recovery or treatment facilities licensed by the Department of Health Care Services.  “Incidental medical services” means optional services provided at a facility by a health care practitioner, or staff under the supervision of a health care practitioner, to address medical issues associated with detoxification, treatment, or recovery services. IMS must be provided at the facility in compliance with the community standard of practice. IMS does not include general primary medical care or medical services required to be performed in a licensed health facility. This definition represents a change in the law in that the corporate practice of medicine doctrine historically barred most facilities in California, other than those organized as professional medical corporations, from offering medical services or hiring a physician. Our healthcare lawyers have counseled addiction treatment centers both preventatively and in the face of an insurance audit or enforcement action.  Addiction treatment and recovery centers turn to our healthcare attorneys for legal advise on a range of healthcare compliance issues, from anti-kickback and fee-splitting questions involving compensation of marketing personnel, to privacy and security / HIPAA, to involvement of psychiatrists and other medical personnel with the addiction treatment process.

In additional to counseling behavioral healthcare clients on legal transactions, our behavioral health attorney team also advises on healthcare regulatory issues, such as:

• Board Investigations and Disciplinary Issues involving behavioral healthcare professionals
• Clinic or Facility Licensing and Permits
• Fictitious Name Permit
• HIPAA, privacy, and information security compliance
• Incorporation – Professional Corporation
• Medicare Issues (Including Opt-Out)
• Other Regulatory Compliance Matters

As stated, we understand the needs of mental healthcare providers as they often diverge from the liability concerns of our physician clients.  For example, one of our clients was a licensed psychologist who included energy psychology among her therapeutic modalities. Unfortunately, one of her patients with borderline personality disorder began alternating between idealizing and demonizing the psychologist, ultimately writing a detailed complaint to the Board. We provided expert legal counsel to help defuse the Board’s concerns, and ultimately get the investigation dismissed.

Another client was licensed as an MSW and wished to partner with a clinical psychologist to create an intensive outpatient program (IOP) and partial hospitalization program (PHP).  We were able to navigate our client through the interlocking set of legal rules that that imposed constraints on the business structure, including:

• prohibitions against the corporate (and unlicensed) practice of medicine and psychology;
• scope of practice limitations on non-MD, behavioral health providers;
• rules governing professional corporations;
• legal rules relating to naming and branding the enterprise;
• third-party reimbursement issues;
• Stark / self-referral and anti-kickback / fee-splitting concerns;
• liability risk management; and
• privacy, security, and HIPAA issues.

State laws differ in the way they define the professional practice of psychology, marriage and family therapy, social work, professional counseling, and other behavioral and mental health disciplines.  In addition, a whole panoply of healthcare law rules can apply to a given business structure, so it is important that our healthcare attorneys be well versed in multiple areas of the law affecting healthcare practices and practitioners.

And health coaching can be done both by non-licensed practitioners (especially in states such as California, which have a statutory carve-out for non-licensed practice), and, licensed practitioners.  Where the licensed practitioner, such as an MD, chiropractor, NP or RN, PA, or clinical psychologist, attempts to “remove” the professional hat and operate as a “health coach,” there are additional legal ambiguities where strategic legal input can be valuable.

To give an idea of how dense are the statute and regulations defining professional practice, California law provides that a person represents himself or herself to be a psychologist when the person uses a title such as “psychology,” “psychological,” “psychologist,” “psychology consultation,” “psychology consultant,” “psychotherapy,” or holds himself or herself out as trained, experienced, or an expert in psychology.

In California, no person may engage in the “practice of psychology,” or represent himself or herself to be a psychologist, unless licensed.  The practice of psychology is defined as:

rendering or offering to render for a fee to individuals, groups, organizations or the public any psychological service involving the application of psychological principles, methods, and procedures of understanding, predicting, and influencing behavior, such as the principles pertaining to learning, perception, motivation, emotions, and interpersonal relationships; and the methods and procedures of interviewing, counseling, psychotherapy, behavior modification, and hypnosis; and of constructing, administering, and interpreting tests of mental abilities, aptitudes, interests, attitudes, personality characteristics, emotions, and motivations.

The application of these principles and methods includes, but is not restricted to: diagnosis, prevention, treatment, and amelioration of psychological problems and emotional and mental disorders of individuals and groups.

Psychotherapy within the meaning of this chapter means the use of psychological methods in a professional relationship to assist a person or persons to acquire greater human effectiveness or to modify feelings, conditions, attitudes and behavior which are emotionally, intellectually, or socially ineffectual or maladjustive.

The licensing statute provides a carve-out, which allows certain non-psychologists to do “work of a psychological nature consistent with the laws governing their respective professions … provided they do not hold themselves out to the public by any title or description of services incorporating the words ‘psychological,’ ‘psychologist,’ ‘psychology,’” and so on, and “do not state or imply that they are licensed to practice psychology.”

The list of providers includes “qualified members of other recognized professional groups licensed to practice,” “persons utilizing hypnotic techniques by referral from persons licensed to practice medicine, dentistry or psychology, or persons utilizing hypnotic techniques which offer avocational or vocational self-improvement and do not offer therapy for emotional or mental disorders.”

The statute also allows “activities of a psychological nature” by psychological assistants offering services within their scope of practice.  A psychological assistant, registered with the Board of Psychology, may be employed by a licensed psychologist, under the psychologist’s immediate supervision, to provide psychological services consistent with his or her training and experience.

California law also defines the practice of clinical social work, and other licensed professions (including LPCC (Licensed Professional Clinical Counselor) and MFT (Marriage and Family Therapy), which are regulated by the Board of Behavioral Sciences.

By way of contrast, California law provides that an individual practices “medicine” when he or she:

practices or attempts to practice, or … advertises or holds himself or herself out as practicing, any system or mode of treating the sick or afflicted in this state, or … diagnoses, treats, operates for, or prescribes for any ailment, blemish, deformity, disease, disfigurement, disorder, injury, or other physical or mental condition of any person.

California law authorizes non-licensed individuals to render services, so long as they do not: (1) conduct surgery or set fractures, (2) administer or prescribe x-rays, drugs, or controlled substances (or recommend discontinuance of the same); (3) diagnose and treat under circumstances that present a risk of great harm; (4) represent being a physician, or violate other enumerated proscriptions.

Supplementing all of these definitions, in  California, there is a statutory carve-out for persons who are only rendering nutritional advice:

This chapter shall not be construed to prohibit any person from providing nutritional advice or giving advice concerning proper nutrition. However, this section confers no authority to practice medicine or surgery or to undertake the prevention, treatment, or cure of disease, pain, injury, deformity, or physical or mental conditions or to state that any product might cure any disease, disorder, or condition in violation of any provision of law. For purposes of this section the terms “providing nutritional advice or giving advice concerning proper nutrition” means the giving of information as to the use and role of food and food ingredients, including dietary supplements.

Any person in commercial practice providing nutritional advice or giving advice concerning proper nutrition shall post in an easily visible and prominent place the following statement in his or her place of business:

“NOTICE”

“State law allows any person to provide nutritional advice or give advice concerning proper nutrition—which is the giving of advice as to the role of food and food ingredients, including dietary supplements. This state law does NOT confer authority to practice medicine or to undertake the diagnosis, prevention, treatment, or cure of any disease, pain, deformity, injury, or physical or mental condition and specifically does not authorize any person other than one who is a licensed health practitioner to state that any product might cure any disease, disorder, or condition.”

The notice required by this section shall not be smaller than 8 1/2 inches by 11 inches and shall be legibly printed with lettering no smaller than 1/2 inch in length, except the lettering of the word “NOTICE” shall not be smaller than 1 inch in length.

The statutory provisions are not all in one place.  It takes careful work to piece together the law that might affect a given healthcare practice; and understand what opportunities and potential legal limitations the practitioner—or a team of healthcare providers—might face. In addition to this mix of rules, California law regulates who can be a shareholder, director, officer, or employee of a professional corporation.  Under the Moscone-Knox Professional Corporation Act, which governs professional healthcare corporations, some practitioners can “mix and match” within a given professional corporation.  However, these are nuanced rules that require careful analysis for any given proposed business arrangement involving healthcare providers from different disciplines or professions.