DOES THE LAW STRANGLE ATTEMPTS TO SAVE COSTS THROUGH TELEHEALTH?
Telehealth can take different forms. It’s one thing to offer consultations and second opinions. But once this useful tool is utilized for diagnosis and treatment, the rules change.
How can a compnay offer telemedicine, including diagnosis, treatment and prescriptions in California? Does the physician have to be licensed? How does a telemedicine company avoid the corporate practice of medicine doctrine?
THE PHYSICIAN MUST BE LICENSED IN CALIFORNIA
California’s Medical Board describes telehealth as: “Telehealth (previously called telemedicine) is seen as a tool in medical practice, not a separate form of medicine. There are no legal prohibitions to using technology in the practice of medicine, as long as the practice is done by a California licensed physician.”
Telehealth is not a telephone conversation, email/instant messaging conversation, or fax; it typically involves the application of videoconferencing or store and forward technology to provide or support health care delivery.” One statute states: Any law allowing telehealth shall not be construed to alter the scope of practice of any health care provider.
THE CORPORATE MEDICINE DOCTRINE
California prohibits the corporate practice of medicine, which among other things, requires that business or management decisions and activities resulting in control over a physician’ practice of medicine, be made by a licensed California physician and not by an unlicensed person or entity. In order to avoid the direct violation of state prohibitions on the corporate practice of medicine. While there are legal structures that may promote non-physician investment in telehealth, (many companies use the so-called “friendly PC” model).
Enforcement by the medical board regarding the prohibition against the corporate practice of medicine generally is inconsistent.
Although there is no hard and fast rule as to when a given arrangement may be deemed to constitute corporate practice, the focus in any enforcement action likely will be on the level of control a physician exercises over the operation of the medical practice, specifically the professional judgment of licensed health care professionals. Where a high level of control exists, the arrangement may be found to be a sham intended to disguise the de facto practice of medicine by an unlicensed entity.
By Matt Kinley, Esq.