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Legal Issues with Offering Telemedicine as Part of Wellness Programs

The following article does NOT constitute legal advice and should not be used as such. It is for educational purposes only. Readers should retain legal counsel to obtain definitive answers.

We will be studying the fallout from COVID19 for years to come, but one change is already apparent: the increased use and popularity of telehealth. According to the CDC, there was a 154% increase in telehealth use from March 2019 to March 2020. According to McKinsey, in 2019, only 11% of consumers used telehealth. In 2020, 46% of consumers use it, and 76% are interested in using it going forward.

Because of this radical change in telehealth use and interest, wellness programs and practitioners are also jumping on the telehealth bandwagon, particularly as it relates to employers offering mental/emotional wellbeing support.

With this surge in telehealth comes regulatory considerations. Although the state and federal governments have relaxed the rules and regulations pertaining to telehealth because of the pandemic,1 there are still legal risks associated with using telehealth. This blog post highlights three of those risks.

1. State Licensure

Normally, just as with in-person visits, practicing a health or wellness profession may require a state-issued license. Traditional health care professions, such as medicine, nursing, physical therapy, pharmacy, and psychology, require licensure from the state in which the practitioner delivers the services. When practicing via telehealth, however, licensed providers may be tempted to expand their practice to patients out of state. However, many states require licensed providers to not only have a license in their “home” state, but also the state in which the patient resides (the “remote state”). Failure to be licensed in either state could result in the practitioner being accused of the unlicensed practice of a profession.

But what about health and wellness practitioners who don’t need a license to deliver their services, such as health and wellness coaches? No state currently issues health or wellness coaching licenses, so coaches are free to practice across state lines, and telehealth makes that type of practice a lot easier. A legal risk arises, however, when health and wellness coaches services cross the line into a licensed practice, such as medicine or psychology.

The definitions of what constitutes the practice of medicine or psychology will vary by state. However, the practice of medicine usually involves activities such as diagnosing, treating, prescribing, or operating, for any human disease or condition. One example of the definition of psychology is: [The] rendering to any person for a fee a psychological service involving the application of principles, methods and procedures of understanding, predicting and influencing behavior, such as the principles pertaining to learning, perception, motivation, thinking, emotions and interpersonal relationships; the methods and procedures of interviewing, counseling, psychotherapy, psychoanalysis and biofeedback; and the methods and procedures of constructing, administering and interpreting tests of mental abilities, aptitudes, interests, attitudes, personality characteristics, emotion and motivation. Wis. Stat. s. 455.01(5). Practicing medicine or psychology without a license is a crime in most states. Therefore, unlicensed practitioners want to be aware of each state’s licensure requirements and definitions of practice to ensure that their practice complies with the law. As noted earlier, COVID19 has relaxed rules in many states. The Federation of State Medical Boards has produced a current summary of each state’s actions on licensure rules. For example, through a series of executive and legislative actions, Florida currently allows health professionals not licensed in Florida to provide telehealth services to patients located in Florida under certain conditions. Health and wellness professionals should work with their telemedicine lawyer to determine what they can do and where with the least amount of compliance risk.

2. Corporate Practice of Medicine

It is not just licensed or unlicensed professionals who can get into trouble with licensing boards. Companies can get into trouble too. Wellness companies that hire licensed professionals to perform licensed health services must pay attention to the Corporate Practice of Medicine doctrine (“CPOM”). CPOM is violated when a company or corporation practices medicine (or some other licensed profession) by directly hiring or supervising the licensed professional. The purpose of CPOM laws are to prevent clinical decisions from being influenced by corporate interests, which are usually driven by profit and not necessarily the best interest of the patient. A related compliance risk when hiring licensed professionals is violating state fee splitting laws. Fee splitting laws have a similar purpose to CPOM: the state does not want an unlicensed person or entity sharing a fee for patient services with a licensed individual because the unlicensed person or entity may be unduly influencing the licensed person’s clinical judgment.

One state that has some specific guidance on complying with CPOM is California. In fact, the Medical Board of California has a webpage on CPOM and does enforce compliance with the doctrine. Examples of activities that violate the CPOM include:

  • Determining what diagnostic tests are appropriate for a particular condition.
  • Determining the need for referrals to, or consultation with, another physician/specialist.
  • Responsibility for the ultimate overall care of the patient, including treatment options available to the patient.
  • Determining how many patients a physician must see in a given period of time or how many hours a physician must work.

I have witnessed wellness companies in violation of CPOM, so the risk is very real. Wellness companies that want to include the provision of health services by licensed professionals must be very diligent in structuring their business to avoid compliance issues with CPOM in the various states. Working with a telemedicine lawyer at the outset of any wellness business venture is essential to reducing this risk.

3. In-Person Exams

A third compliance risk that can occur with telehealth ventures is failing to comply with a state’s requirement for in-person exams. Even if a provider has the appropriate license in a state, the provider must make sure they comply with any in-person exam requirements when using telehealth. States may have laws that require in-person exams for certain encounters, but not for others. For many states, in-person exams are especially important when prescribing drugs, particularly controlled substances.

Many wellness programs may incorporate telehealth and the administration of health questionnaires. States may have laws that state that prescribing or treating a patient through telehealth based on responses to a health questionnaire is not sufficient and that an in-person exam is required. For example, in Arizona, physicians must conduct an appropriate physical exam before prescribing any medication or device. See

Even if a state law allows prescribing based on responses to a questionnaire, the state’s medical board may still impose discipline on a practitioner who does so and does not meet the standard of care. For example, California law states as follows:

An appropriate prior examination does not require a synchronous interaction between the patient and the licensee and can be achieved through the use of telehealth, including, but not limited to, a self-screening tool or a questionnaire, provided that the licensee complies with the appropriate standard of care.” Cal. Bus. And Professions Code § 2242.

However, in the case In re Richard J. Holmes, M.D., the California Medical Board suspended the license of Dr. Holmes after he prescribed Ella and Viagra to two fake patients who used the Kwikmed portal. An investigator for the medical board created two fake personas, one to order Ella, an emergency contraceptive drug, for a friend who might be pregnant, and Viagra for herself (posing as a male patient). Dr. Holmes issued both prescriptions. According to the Medical Board of California:

The standard of care for the prescription of any drug requires an appropriate prior examination. The standard of care for the prescription of Viagra requires the physician to obtain a detailed history, including urological, neurological, cardiorespiratory, and psychological elements, and to make a good faith effort to confirm that history with physical examination. With respect to prescribing Viagra, an appropriate examination would be focused on determining the etiology of the erectile dysfunction, and on excluding contraindications to the use of a phosphodiesterase inhibitor such as Viagra. The standard of care requires a genital examination be performed, to exclude anatomic defects and to detect previously undiagnosed hypogonadism. The standard of care requires that vital signs be taken, to exclude undiagnosed hypertension or arrhythmia. The standard of care requires that a cardiopulmonary examination be performed, to exclude previously undiagnosed valvular heart disease or underlying lung disease. The standard of care requires that a neurologic examination be performed, to exclude peripheral neurological pathology (e.g., diabetic or alcoholic peripheral neuropathy.) The standard of care requires that a psychological history and physical examination be performed, to exclude psychiatric disease as an etiology for sexual dysfunction. For a new patient, measurement of serum creatinine is required prior to the prescription of Viagra to determine renal function. Respondent failed to obtain an adequate history or to perform any physical examination, thereby failing to perform an adequate examination with respect to his prescribing of Viagra. These failures, separately and collectively, represent extreme departures from the standard of care.

In re Richard J. Holmes, M.D., First Amended Accusation, Case No. 800-2014-008269, at 10.

The California Medical Board further found the physician’s process in identifying the patient was an extreme departure from the standard of care. Id. The Board stated:

With respect to the prescription of Viagra, Respondent failed to confirm that the Board’s investigator was indeed a man of a certain height and weight. The prescription of Viagra to an unknown patient of unknown demographics is dangerous, as Viagra is highly sought-after by some men, some of whom have been denied a Viagra prescription by their personal physician because of life-threatening contraindications. Respondent’s failure to attempt to confirm the Board’s investigator’s identity is an extreme departure from the standard of care.

So, in the case of Dr. Holmes, even though California allows prescribing based on responses to a questionnaire, the Medical Board of California did not believe Dr. Holmes met the standard of care when he did just that.

Wellness companies and employers that add telehealth to their portfolio of offerings must work with a competent telemedicine lawyer to ensure that they comply with various state and federal laws, such as the three legal areas discussed above.

If you have questions about the use of telehealth in your wellness offerings, please contact the Center for Health and Wellness Law for assistance.

1 These relaxed rules include: 1) Loosened restrictions from Medicare as to where patients can access telehealth; 2) HIPAA and DEA waivers to allow for more platforms and e-prescribing; 3) State Medicaid expansions for telehealth; 4) Less strict state licensing, online prescribing and written consent rules; and 4) improved commercial insurance reimbursement for telehealth services.

Barbara Zabawa

Barbara J. Zabawa

President of the Center for Health and Wellness Law, LLC

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