123s of Medical Entrepreneurs

Bradford E. Adatto | 2.11.19

1, 2, 3 of Medical Entrepreneurs

A recent article published by Vox, noted the growing number of physicians that are recommending their patients improve their health via CrossFit. Based on the article, CrossFit’s Founder and CEO Greg Glassman is actively recruiting physicians, through networking events, lectures, and CrossFit training courses, to open more CrossFit gyms and “disrupt the health care system.” CrossFit has also released a new initiative, titled “CrossFit Health,” and it is the future of the business.

This article highlights another example of entrepreneurs working in or around the medical industry as a ways to optimize the market.  As more entrepreneurs and non-traditional businesses enter into the medical industry, they must remember that this industry has a host of rules and regulations that must be followed.  Often, business do not even realize that they are practicing medicine as the services they are providing are just “cosmetic services” or “alternatives to medicine.”  However, in most states, the moment you pierce the skin, or develop a treatment plan, the business is likely practicing medicine.  (See our prior articles on Lasers, IV Bars, Emsculpting, and Coolsculpting).

Those that wish to provide these “cosmetic services” or “alternatives to medicine” must spend the time and energy to understand these federal and state regulations.  For example, the corporate practice of medicine doctrine limits who can own medical facilities, who can make medical decisions, and who can provide medical services.  In 2018, we witnessed the Federal Trade Commission (FTC) file its first ever enforcement action against a provider of IV therapy for making unsupported claims about the health benefits of their IV treatments.  Additionally, both the American Medical Association and every state has strict rules on medical advertising.  These rules basically prohibit false, fraudulent, misleading, or deceptive claims.

Finally, both the federal government and most states have resections on inducing physicians and other medical providers from referring patients to a facility.  This laws have both criminal and civil implications.  Some of these laws are payor indifferent, meaning they even apply to cash paying “customers” that are receiving the cosmetic services.

As such, it is important that entrepreneurs and non-traditional businesses entering into the medical industry find a compliance partner to advice on the ever changing health care laws.   For more information and guidance on these regulations please contact Bradford Adatto at Badatto@byrdadatto.com or (214) 291-3201.

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