Legal Challenges of Integrating Non-Medical Services into Physician Practices
For physician practices, integrating non-medical services like nutrition counseling, wellness programs, or aesthetic treatments can improve revenue and patient experience, but also come with associated legal challenges. New York has some of the strictest Corporate Practice of Medicine (CPOM) laws in the United States, so it is important to know what you can and cannot do.
The healthcare transaction attorneys at Daniels, Porco & Lusardi, LLP can help you incorporate lucrative non-medical services while protecting you against legal risk.
1. Corporate Practice of Medicine (CPOM) Restrictions
New York’s CPOM laws prohibit non-physicians and corporate entities from owning or controlling medical practices. Only licensed physicians are allowed to:
- Own a medical practice
- Employ other physicians to provide medical services
- Make decisions related to patient care
Non-medical professionals or companies are generally not allowed to manage or co-own a physician practice. It may be permissible if their function is limited to non-clinical services or administrative tasks. Some of the most common ways physician practices partner with non-medical professionals include:
- Billing services
- Bringing in outside investors
- Staffing needs
- Leasing office space and back-office services
There are many nuances to these rules, so speaking with a qualified healthcare compliance attorney is critical.
2. Fee-Splitting and Anti-Kickback Laws
New York law prohibits fee-splitting between physicians and non-physicians. This includes sharing revenue from medical services with individuals or entities that are not licensed to practice medicine. Revenue-sharing may be legal if formed correctly. Often, flat fee or fixed fee arrangements are permissible, as are fair market value structures. Percentage-based structures are typically problematic.
However, it could violate:
- New York Education Law §6530(18)
- Federal Anti-Kickback Statute (for Medicare/Medicaid patients)
3. Licensing and Scope of Practice Issues
Many non-medical services involve other professionals. These professionals might have their own legal and licensing requirements you have to account for, including:
- Registered dietitians
- Massage therapists
- Estheticians
- Acupuncturists
Each of these has its own scope of practice, as defined by New York law. If a physician practice employs or contracts with these providers, it must ensure:
- Services are performed within legal boundaries
- There is proper supervision
- There is a very clear separation between any medical and non-medical services
Mixing up or misrepresenting non-medical services as medical treatments could trigger malpractice claims or disciplinary action.
5. Branding and Marketing Risks
Doctors and other physician practices that offer non-medical services must be cautious in how they brand themselves. Certain terms, like “integrative clinic” or “medical spa” could be considered misleading or fraudulent in their descriptions.
With the help of a healthcare compliance attorney, your marketing materials can clearly distinguish between medical and non-medical service to avoid any implication that non-licensed providers are practicing medicine.
6. Liability and Insurance Considerations
When you add non-medical offerings to your medical practice, you also add new legal risks. In addition to misrepresentation of services, as discussed above, physicians may be held liable for negligence by non-medical staff or breach of patient confidentiality.
To offset these risks, you and your attorney can look at your malpractice and other insurance. You can also clearly outline employee duties and designations to prevent confusion.
Add Non-Medical Services to Your Practice With Confidence: Work with a New York Healthcare Compliance Attorney
With skilled legal representation, you can ensure your new offerings are compliant with federal and New York healthcare laws.
The attorneys at Daniels, Porco & Lusardi, LLP help physician practices incorporate non-medical services in a compliant manner. Contact us today for a consultation.