A lot of wellness providers, functional medicine providers, chiropractors, health coaches and medical spa entrepreneurs wonder if they can or should hire a physician or nurse practitioner to help expand their services. Physicians and nurse practitioners, and sometimes depending on the state, physician assistants, have a broader scope of practice than most other types of licensed and unlicensed practitioners in the health and wellness space. So, a common question we receive at the Center for Health and Wellness Law, LLC is whether the wellness practitioner should hire an MD, DO, NP or PA to expand their own scope of practice, vicariously through the new hire. Specifically, many health and wellness practitioners want to order drugs or perform procedures that require a medical or NP license, such as botox injections or IV hydration therapy. Or, they want to be able to diagnose and treat certain conditions, like diabetes, depression, anxiety, heart disease, and more.
The answer to that question is usually a qualified “no.” No, because state law often prohibits hiring physicians and also because a practitioner who is not licensed as an MD, DO, NP or PA can’t supervise those individuals. Supervising a licensed practitioner with a broader scope of practice than your own would effectively be practicing the broader scope discipline without a license. That just doesn’t work. And it’s illegal.
All Hope is Not Lost
There are arrangements that can be crafted to allow those health and wellness practitioners with narrower scopes of practice to work with MDs, DOs, NPs and PAs. One arrangement is a Management Services Organization (MSO) and creating a Management Services Agreement (MSA) between the wellness practitioner and the MD, DO, NP or PA (or those licensed providers’ clinics). In an MSO arrangement, the wellness practitioner offers support services to the physician or nurse practitioner. There is an affiliation between the wellness practitioner and physician or nurse practitioner, but not control of the work done by the physician or nurse practitioner. These arrangements address healthcare compliance issues such as the corporate practice of medicine and state fee splitting laws, if done correctly. Wellness practitioners should work with a competent healthcare lawyer or health and wellness lawyer to properly structure an MSA.
Another option, again depending on state law, is to form a legal entity that includes the MD, DO, NP or PA as a partner, shareholder, or even as an independent contractor. The most common legal entity options for a health and wellness business include sole proprietorships, limited liability companies (LLCs), limited liability partnerships (LLPs), service corporations and professional medical corporations (PMC). Many of these legal entities elect -S-corporation status for tax purposes. A wellness practitioner who forms a legal entity with a licensed provider with a broader scope of practice may be able to offer more holistic or integrative healthcare services than by just going it alone. If you are wondering what legal entity might be right for you, check out our blog on the topic, or purchase our video on the topic. But at the very least, you should consult with your legal counsel and accountant to determine which legal entity option will fit best with your business goals.
Here’s an example of why investing in good legal counsel before you expand your health and wellness business is a great idea: We recently had a client who started a medical spa. After evaluating the client’s situation, we gave the client our recommendation, and they adopted those recommendations. Soon after launching the wellness business, a competitor in the client’s geographic area lodged a complaint against our client with the state licensing board. The client alerted us to the complaint, and we drafted a response, emphasizing that the client did their due diligence by contacting us before opening the business. In our letter disputing the complaint, we pointed out the laws that we considered and argued that the client was in compliance with the relevant state laws for this particular wellness business. A few weeks later, the licensing board dropped the case and our client was able to continue operating their business. Lesson learned: if the client had not consulted with a competent health lawyer before starting their business, the complaint would still have been lodged, but the client would not have had a solid defense against the complaint. So in this case, the investment in a good health and wellness lawyer paid off immensely.
In sum, while partnering with a physician, nurse practitioner or physician assistant may sound like an easy solution to expand your medical spa or health and wellness services, it is not straightforward from a legal standpoint. State licensing boards and competing businesses may be on the lookout for suspicious health and wellness business practices. Also, you want to make sure that the health and wellness services you offer are not only compliant, but safe for your clients. That is why it is vital to a successful health and wellness business to engage an experienced and passionate health and wellness law firm. Contact the Center for Health and Wellness Law, LLC to help you with your next wellness venture!