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Corporate practice of medicine, fee-splitting, and other legal issues in the aesthetic medical practice and medspa

By Michael H. Cohen, Esq.

If you're opening a medical spa or an aesthetic medical practice, watch out for lurking legal issues.

Corporate practice of medicine, fee-splitting, anti-kickback and other legal rules can ruin your aesthetic medical practice, medical spa, cosmetic medicine business, or integrative medicine clinic.

Mai Pham has written a good article summarizing these issues, with the following scenarios and admonitions:

SHOULD YOU BE WORRIED?

Here are some typical scenarios which may apply to you:

• A nurse or spa owner wants to open a laser clinic and approaches a physician to ask that physician to be his/her medical director. In exchange for being medical director, the physician will receive a percentage of all aesthetic medical fees collected.

Potential problem: Violating Corporate Practice of Medicine and Fee splitting prohibitions

• The spouse of a physician with an existing medical practice decides to open a medical spa with a lay business partner. The physician regularly refers patients to this medical spa, and the physician's spouse receives a 40% profit distribution from revenues collected at the spa.

Potential problem: Violating Self-Referral laws
 

• A spa regularly refers patients to a doctor's clinic for laser hair removal. The doctor charges the patient $200 per treatment and gives the spa a $25 referral fee.

Potential problem: Violating Fee-Splitting Prohibitions

• A non-professional lay corporation calls itself a 'Medical Spa,' advertises medical procedures, runs all aspects of the medical spa business without physician oversight, purchases medical equipment, and hires and trains medical personnel.

Potential problem: Violating Corporate Practice of Medicine

If you can believe it, many health care providers and entities want to "do it themselves."  They may "save" a little on legal investment here but pay in the long run.  Don't go to the dentist for 2 years and trust to thine own brushing and then see if the regulators raise an eyebrow.

Ms. Pham recommends:

To protect yourself from feesplitting prohibitions, be careful about monetary distributions, and try not to fashion financial agreements which disburse profits on a per-case or percentage basis. Make sure that payments to the lay entity related to medical services are clearly worded and are based on fair market value, monthly salary, or flat fee arrangement which is not directly connected with the volume of cases performed or the volume of referrals received.

If you are concerned about any of the issues raised in this article, consult with your healthcare attorney as soon as possible. Addressing potential problems before they arise will be much less costly than waiting until something happens.

Amen.

Please also see:

Drafting legal contracts for medical spa and integrative medicine clinics to address kickback and fee-splitting issues

Creating Legally Successful, Multidisciplinary Health Care Practices: Fee-Splitting, Kickbacks, Stark Analysis, Corporate Practice of Medicine, Unlicensed Practice, Employment, and Other Issues

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Michael H. Cohen is an attorney providing business legal advice to green entrepreneurs and companies, and health care law advice to businesses and physicians, acupuncturists, naturopaths, homeopaths and others in the holistic health, wellness, and green industries. As a founding attorney of the Global Vision Law Group, he represents businesses poised for vertical lift, whose leaders are conscious, intuitive, and committed to shaping a better world. Michael also advises medical spas and integrative medicine clinics, physicians, chiropractors, naturopathic physicians, massage therapists, energy healers, nutritionists and herbalists, dietary supplement and cosmetics companies, and businesses with bio-energy and other technologies and medical devices. Michael offers the Entrepreneur's Legal Toolkit as a series of legal guides to businesses. The first legal e-book deals with Contract Essentials, giving legal tips every business needs to negotiate its legal agreements; the second addresses legal issues faced by multi-level marketing companies and individuals involved in multilevel marketing and direct sales; and a HIPAA Regulations and Privacy Manual.

• Michael also sponsors Being Central, a Portal for Potential, which gives access to other, pre-paid legal services. 

  Read reviews of Michael's work on the Complementary Complementary and Alternative Medicine Law Blog. And visit the Flat Rate Legal Services page for information on legal services where a  flat rate or project fee can be discussed (such as incorporation for entrepreneurs, review and drafting of business contracts, trademark, and health law services for CAM providers and others).

  Michael's clientele  through the Global Vision Law Group includes businesses not only in California, New York, Maryland, Massachusetts, Washington, D.C., and other U.S. states, but also abroad.  Our firm also provides special expertise to attorneys and law firms whose clients are involved in wellness industry projects or who require guidance regarding fee-splitting, Stark, anti-kickback, medical board discipline, and other health law and regulatory compliance issues.

  To speak with a lawyer about health care law issues pertaining to complementary and alternative medicine, or to consult a business lawyer about laws and legal issues for entrepreneurs and new enterprises that are seeking legal advice, contact the Global Vision Law Group today. 

   

  

 

Full post as published by Complementary And Alternative Medicine Law Blog on August 11, 2010 (boomark / email).