Legal Viewpoint: MDs Operating Web-Based Health and Wellness Businesses

By Michael H. Cohen, JD

Computer Key - Health with Stethoscope

Many physicians are dissatisfied with their medical practice and wonder whether they can legally open a side online health and wellness business–be it online health and wellness coaching, dietary supplement sales, Skype second medical opinions, or another health venture. The first thing to know about developing a side online, mobile, or virtual presence in the health and wellness industry is that usually, several interlocking legal rules will apply and there is not an easy determination of “legal” or “illegal.” Among the rules the physician must consider are:

  • telemedicine laws: who operates the sites and provides content? are the visits to the site considered clinical encounters, or merely visits to receive general information and education? is personalized healthcare advice being given? will the physician be obligated to have medical licensure in the state of the patient, as well as the home state or originating site? is a restricted telemedicine license available?
  • antikickback and fee-splitting: how is the medical doctor being compensated? are patient payments flowing from the patient to the medical doctor, with the intervening company taking a management and administrative fee, or, are monies being fed to the company with a payment “kicked back” to the clinician?
  • dietary supplements: is the physician splitting a discount on the dietary supplements between the physician and the patient? is this the kind of overt conflict of interest that is likely to trigger a medical board disciplinary investigation that could threaten the physician’s licensure?
  • privacy and security / HIPAA: are the encounters sufficiently private and secure? do they comply with HIPAA, if applicable, or with corresponding state laws?
  • corporate practice of medicine: is the physician employed by his or her own professional corporation, or is there an employment or independent contractor arrangement with another professional corporation (say, a chiropractic professional corporation) or a general corporation or LLC, triggering corporate practice of medicine concerns?

The second item to note is that these same questions will be relevant to other clinical providers–such as naturopathic medical doctors, chiropractors, and acupuncturists–as well as non-licensees who are starting a telemedicine venture that involves these providers.

Healthcare is one of those industries where a regulatory lawyer who can play a larger role as your counsel and regulatory / business consultant can steer the ship with you into safer waters, because legal riptides lurk at every shore. If it isn’t the medical board then it’s the psychology or nutrition board, if not the Board then it’s the FDA, and if not the FDA then the FTC, or a private plaintiff with a gripe and a rapacious attorney–and if none of those then maybe the District Attorney, Attorney General, or Office of the Inspector General (if Medicare/Medicaid is involved) will take a close interest in your healthcare compensation or other arrangement.

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Recently Samatha Selby MD (fictitious name), an integrative medicine doctor, came to our firm seeking legal counsel as to how to legally structure her integrative medicine practice, concierge medicine practice, telemedicine and m-health practice, and separate online health coaching practice. Dr. Selby asked a number of complex regulatory questions, very esoteric — which we love — and presented a complex regulatory puzzle. Our lawyers efficiently put together a compliant solution for her.

One of the question she asked was whether she needed a dba for the online wellness platform.

This question is more subtle than it appears. Anyone can file a dba – the county publishes rules about how to get one. But in a medical practice, physicians (at least in California), must obtain a fictitious name permit from the Cailfiornia medical board, if they plan to practice under a name other than their own. The rules here are a bit tricky, but the bottom line is that the fictitious name permit should be filed for each practice location; however, an online wellness platform if not a clinical practice, should not require a fictitious name permit filing.

The dba is usually required for a business at the county level if it operates under a different name than the one registered with the Secretary of State.

Dr. Selby also wanted to explore the idea of a membership “club” as a way to offer services. This has completely different implications–and one must always be sensitive to medical board perceptions and the possibility of discipline (or prosecution for aiding and abetting unlicensed medical practice, in certain scenarios), as well of liability from private plaintiffs and/or other regulators.

At our law firm, we understand that sometimes, the legal rules seem heavy – they are! – but they are lighter when tackled proactively at the outset, as we empower our clients with strategic thinking.

[Disclaimer: This is not legal advice or opinion, but simply an article describing legal rules and familiar situations. Engage an attorney for legal advice specific to your situation.]

About FON

FON is a leading integrative health and medicine business development and strategy consulting firm. FON specializes in custom solutions for growing patient volume, developing programs, and increasing product sales. Our practical business models are driven by innovative marketing, clear messaging, and customer engagement via branded storytelling.

Contact us today to schedule a complimentary 30-minute consultation to discuss your business development or personal brand needs.

Glenn Sabin Author: Glenn Sabin

FON’s founder, Glenn Sabin, is a nationally recognized thought leader with a reputation for successfully positioning integrative health organizations for sustainable growth. Combining media, marketing and business development expertise with an extensive professional and personal integrative health and medicine narrative, Glenn is deeply passionate about advancing the field as the new standard of care—accessible to all.
Read Glenn's story.

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