IVe Got Your Legal Back: A Guide to the IV Hydration Business

Credit: Adam Lusthaus

Starting an IV Hydration Business: Overlooked Items That Can Sink Your ShipAs an attorney specializing in healthcare law, I often see entrepreneurs excited to launch IV hydration businesses. While the demand is high, many overlook critical aspects that can lead to costly legal battles and even business failure. Here are some often-overlooked items:

  1. Scope of Practice:
    • Nurse Practitioner/Physician Assistant Limitations: If you plan to utilize NPs or PAs, understand the limitations of their scope of practice in your state. Can they independently order and administer medications? What supervision requirements exist?
    • Medical Director Overreach: While a Medical Director is essential, avoid situations where they are merely a “name on a page.” Active involvement is crucial, including regular on-site visits, protocol reviews, and availability for consultation.
  2. State Regulations:
    • Mobile IV Services: Many states have specific regulations regarding mobile medical practices. Ensure you comply with requirements related to vehicle inspections, equipment sanitation, and patient privacy in mobile settings.
    • Telemedicine for Prescriptions: If you plan to utilize telemedicine for initial consultations or prescription refills, understand the applicable state laws and any limitations on prescribing controlled substances.
  3. Staffing & Training:
    • RN Qualifications: Ensure your RNs are properly licensed and have the necessary experience and training in IV therapy.
    • Emergency Preparedness: Develop and implement comprehensive emergency protocols for handling adverse events, including anaphylaxis, allergic reactions, and phlebitis.
    • Employee Background Checks: Conduct thorough background checks on all employees, including criminal history checks and verification of professional licenses.
  4. Marketing & Advertising:
    • Truthful and Non-Deceptive Marketing: Avoid making unsubstantiated claims about the benefits of IV therapy. Ensure your marketing materials are truthful, accurate, and comply with relevant advertising regulations.
    • HIPAA Compliance in Marketing: Be mindful of HIPAA regulations when using patient testimonials or displaying patient information in marketing materials.
  5. Contractual Agreements:
    • Independent Contractor Agreements: If you utilize independent contractors (e.g., mobile technicians), ensure you have properly drafted independent contractor agreements that clearly define the scope of work, liability, and insurance requirements.
    • Supplier Agreements: Carefully review contracts with suppliers of medications, equipment, and supplies to ensure favorable terms and adequate protections for your business.
  6. Insurance & Risk Management:
    • Professional Liability Insurance: Obtain adequate professional liability insurance to protect your business from medical malpractice claims, negligence claims, and other potential liabilities.
    • Cybersecurity Insurance: Given the sensitive nature of patient data, consider obtaining cybersecurity insurance to protect your business against data breaches and cyberattacks.
  7. Staying Updated:
    • Regulatory Changes: Healthcare laws are constantly evolving. Stay informed about changes in state and federal regulations that may impact your business operations.
    • Continuing Education: Encourage your medical staff to participate in continuing education courses to maintain their knowledge and skills in IV therapy and related areas.

By carefully considering these overlooked items, you can minimize legal risks, ensure compliance with regulations, and increase the likelihood of long-term success for your IV hydration business.
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Consult with an experienced healthcare attorney for guidance on specific legal and regulatory issues related to your IV hydration business.

The Fine Print of Family Ties in Healthcare Compliance

By: Carlos Arce

The Healthcare Clinic Act offers several exceptions to the general expectation that healthcare clinics are owned by physicians. One of these exceptions allows non-physician ownership in specific instances involving family relationships. Whether it’s the spouse, parent, or child of an exempt healthcare provider, these provisions create pathways for non-physician family members to hold ownership interests under certain circumstances. This flexibility is needed for maintaining financial stability and practical continuity within healthcare practices, especially during challenging life transitions. 

Parent and Child Collaboration in Starting a Healthcare Practice 

One scenario involves a child who is a licensed healthcare provider looking to establish their own medical practice. Given the high costs associated with starting a clinic, it is not uncommon for a parent to provide financial capital to support the endeavor. 

Under the Healthcare Clinic Act, a parent can secure their investment in the clinic by holding an ownership interest, even though they are not a licensed provider themselves. This provision is particularly valuable as it allows parents to assist their children in bringing a professional vision to life while maintaining a legal claim to their investment. It also encourages collaboration between family members without compromising the legitimacy of the practice or breaching regulatory frameworks. 

For example, let’s say an experienced physical therapist wants to launch an independent clinic and their parent financially backs the venture. The parent’s support ensures that the clinic can secure equipment, lease office space, and manage operational costs. Through the Healthcare Clinic Act’s extended exception, the parent can claim partial ownership, ensuring their money is protected. 

Transfers of Ownership in the Event of a Spouse’s Death 

Another situation where this exception becomes crucial is the untimely passing of a healthcare provider who owned a clinic. Under such circumstances, their ownership interest in the clinic forms part of the deceased provider’s estate, requiring redistribution of their assets. Surviving spouses or partners often face the task of managing or redistributing these assets, especially in complex estates involving medical businesses. 

The exception within the Healthcare Clinic Act allows for the surviving spouse of the exempt healthcare provider to inherit or hold ownership of the clinic. This legal provision ensures that the business can continue to operate without disruption during the transition of ownership. Additionally, it helps the surviving spouse secure their financial stability, particularly when the clinic may represent a significant portion of their shared assets. 

Take, for example, a scenario in which a physician passes away unexpectedly, leaving behind a thriving clinic. The surviving spouse, who is not a licensed provider but has been intricately involved in the clinic’s operations, inherits part of the business. Instead of losing control or needing to relinquish ownership entirely, the exception allows the spouse to legally hold an ownership interest. This facilitates a smoother process for retaining or selling the clinic assets as part of the estate resolution process. 

Why These Exceptions Matter 

These exceptions under the Healthcare Clinic Act serve several critical purposes, including protecting investments, ensuring continuity of care, and accommodating natural familial transitions. Without such provisions, family members or financial supporters who are instrumental in launching and maintaining healthcare practices could be unfairly excluded from ownership due to regulatory restrictions. 

For families, these exceptions provide not only financial protections but also peace of mind. They allow for secure investment in building a legacy, whether by funding a child’s clinic or navigating the redistribution of a deceased spouse’s estate. Furthermore, these provisions reflect the real-world complexities of healthcare clinic ownership, where personal relationships often intersect with professional operations. 

Navigating Compliance Challenges 

While these exceptions provide valuable opportunities, it is critical to ensure full compliance with all legal and regulatory requirements when invoking them. For instance, any ownership arrangements must be clearly documented, transparent, and structured within the guidelines of the Healthcare Clinic Act. Consulting legal and financial professionals experienced in healthcare compliance is essential to avoid pitfalls. 

If your family is considering establishing a healthcare clinic or navigating an estate transition involving clinic ownership, we recommend seeking expert guidance to ensure that all terms meet legal standards while protecting the interests of all parties involved. 

By offering these structured exceptions, the Healthcare Clinic Act demonstrates a nuanced understanding of the foundational role family dynamics often play in the medical field. Whether you’re planning to launch a new practice or manage an unexpected transition, these exceptions offer crucial flexibility to safeguard your investment and provide continuity in care delivery. 

DEA’s New Telemedicine Rules Aim to Expand Access and Improve Patient Safety 

By Jeff Cohen

The rise of telemedicine during the COVID-19 pandemic revolutionized how patients access healthcare. To build upon those temporary measures and create structured long-term solutions, the DEA has introduced new telemedicine rules aimed at enhancing accessibility while prioritizing patient safety. These revisions reflect input from healthcare professionals, patients, and advocates, showcasing the DEA’s commitment to striking a balance between convenience and control.

Here’s everything you need to know about these new regulations and how they aim to shape the future of telehealth treatment.

A Pathway to Permanent Telemedicine Flexibility 

The DEA’s updated rules make permanent many of the temporary telemedicine flexibilities that were established during the pandemic. These changes ensure patients can access medical care remotely while introducing safeguards to prevent misuse. 

Key Highlights:

  • Patients who have already had an in-person visit with a medical provider can continue prescriptions via telemedicine without restrictions. 
  • Telehealth consultations without medication prescriptions remain unaffected by the new rules, meaning routine telehealth visits can proceed as usual. 

However, the new regulations primarily address cases where patients have never had an in-person visit with the prescribing provider and when controlled medications are involved. 

Expanding Access to Buprenorphine for Opioid Use Disorder 

One noteworthy development within the rules focuses on widening remote access to buprenorphine, a critical medication for treating opioid use disorder. Patients can now receive a six-month supply of buprenorphine after a telemedicine consultation. Beyond this period, individuals will need to consult their providers in person for ongoing prescriptions. 

What does this mean for patients battling opioid dependency? Greater ease in initiating treatment while maintaining safeguards for long-term care continuity.

Special Registrations for Advanced Telemedicine Prescriptions 

Another significant rule is the introduction of special telemedicine registrations. These allow medical professionals to prescribe Schedule III-V controlled substances without requiring an in-person evaluation. 

Even more restrictive substances, such as Schedule II medications, can be prescribed with special authorization by certified experts in fields like psychiatry, hospice care, and pediatrics. To strengthen security:

  • Online telemedicine platforms facilitating prescriptions must now register with the DEA. 
  • A National Prescription Drug Monitoring Program (PDMP) will be established, aiming to track patients’ medication histories and curb potential misuse. 
  • Public input is being sought to evaluate additional practitioner requirements, such as whether these providers must reside in the same state as the patient. 

The goal is clear—retain telemedicine as a viable option while implementing strict measures to protect both patients and public health.

Special Considerations for Veterans Affairs Patients 

Recognizing the unique healthcare needs of VA patients, the DEA, in collaboration with the Department of Veterans Affairs (VA), has created tailored exemptions. Once a veteran has had an in-person medical evaluation at any VA facility, their telemedicine provider relationships can extend across the entire VA network. This ensures continuity of care without added logistical hurdles for veterans.

Developed with Community Input 

The creation of these rules involved extensive collaboration. The DEA considered over 38,000 public comments and feedback during listening sessions in September 2023, ensuring the final measures were practical and balanced. This collaborative approach highlights the importance of healthcare professionals, patients, and advocates coming together to shape telemedicine regulatory frameworks.

What’s Next for Telemedicine? 

These rules represent a pivotal step forward. By retaining the convenience of telemedicine while incorporating measures to prevent misuse, the DEA has taken strides to modernize medical care delivery responsibly. 

The extension of temporary COVID-19-era flexibilities until December 2025 provides ample time for healthcare providers and patients to adapt to the new system. Moving forward, the National PDMP and stricter registrations for online platforms are expected to enhance transparency and accountability in telemedicine practices. 

Final Thoughts 

Telemedicine has evolved from a pandemic necessity to an integral part of modern healthcare. These new DEA rules reflect a progressive shift, providing both the flexibility patients need and the safeguards required to uphold public safety. Whether delivering medications for opioid use disorder or addressing mental health challenges via remote access, telemedicine continues to break barriers. 

For patients and providers alike, these are steps in the right direction—toward better healthcare accessibility, accountability, and innovation.  For providers, the need to consult with an advisor to sort through federal and state laws on the issue, which oftentimes conflict, will be essential to a go forward plan.  

What Should Peptide Manufacturers Do if They Receive an FDA Warning Letter?

By: Jeff Cohen

Receiving a warning letter from the FDA requires immediate and calculated action to avoid escalation to more severe enforcement measures, such as product seizure, injunctions, or even criminal prosecution. Below is a step-by-step guide on how peptide manufacturers can respond to an FDA warning letter effectively:

1. Acknowledge Receipt of the Warning Letter 

The first step is to formally acknowledge receipt of the warning letter with the FDA. This shows your intent to address the issues raised and establishes communication with the agency.

2. Review the Letter Thoroughly 

Carefully analyze the contents of the letter to identify the specific violations cited. Pay special attention to the following information:

  • Description of the violation
  • Regulatory references
  • Products or processes implicated
  • Required corrective actions

3. Consult with Experts 

Engage healthcare legal and regulatory compliance professionals experienced in FDA enforcement to guide your response strategy. 

4. Prepare a Detailed Corrective Action Plan 

Outline the steps your organization will take to address the violations, such as:

  • Modifying processes or practices
  • Conducting employee training
  • Updating documentation or quality control measures
  • Making necessary facility changes to meet compliance standards

Ensure that your corrective action plan is specific, actionable, and demonstrates a clear timeline for implementation.

5. Submit a Timely Response 

Submit your corrective action plan to the FDA within the specified timeframe (typically 15 working days). Your response should address each point raised in the warning letter and provide supporting documentation where applicable.

6. Follow Through with Implementation 

Implement your corrective actions promptly and thoroughly. Conduct internal audits to confirm that the changes are effective and sustainable.

7. Maintain Open Communication with the FDA 

Proactively engage with your assigned FDA contact to provide updates on your progress. Transparency and cooperation go a long way in demonstrating your commitment to compliance.

What Happens if Violations Are Not Corrected?

Failing to correct the violations outlined in an FDA warning letter can lead to serious consequences, including:

  • Product recalls
  • Injunctions preventing the production or distribution of goods
  • Civil or criminal penalties
  • Loss of market trust and reputation

For peptide manufacturers, non-compliance may also draw heightened scrutiny from regulators, impacting future operations and growth.

Peptide manufacturers with FDA compliance questions should seek guidance from healthcare business law firms and healthcare legal experts to address warning letters effectively and remains on track for long-term success.

8.  Use it to optimize

Knowing how to react to the FDA is a critical survival tool.  But using FDA action as a blessing to optimize a business requires some hard earned skill and commitment.  That means—

  1. Develop and implement a process to deal with reported concerns.  That means investigate, remediate, report and document the process.
  2. Consider what policies and procedures need to be developed and implemented, particularly those that are quality centric.

Knowing how to adapt to FDA action is a survival tool.  Using those actions to be better is the best way to ensure sustainability.  

Understanding FDA Warning Letters for Peptide Manufacturers

By: Jeff Cohen

Operating in the peptide industry comes with a critical responsibility to meet the standards set by regulatory authorities, particularly the U.S. Food and Drug Administration (FDA). A key aspect of this compliance landscape is understanding the implications of an FDA warning letter—what it means and how businesses should respond effectively. Whether you’re a compliance officer responsible for maintaining regulatory standards or an FDA-regulated business seeking clarity, this guide will equip you with the knowledge needed to navigate FDA enforcement actions with confidence.

What is an FDA Warning Letter?

An FDA warning letter serves as the agency’s first official notice to a business that its practices, processes, or products are in violation of the Federal Food, Drug, and Cosmetic Act (FDCA) or related laws. While the issuance of a warning letter does not constitute a formal legal action, it represents a critical juncture for the business to address compliance issues voluntarily before the FDA takes additional enforcement measures.

Key facts about FDA warning letters include:

  • They are issued when an FDA inspection identifies “regulatory significant” violations that cannot be overlooked. 
  • They typically follow findings shared in a prior FDA Form 483 (“Inspectional Observations”), which outlines objectionable conditions or practices observed during the inspection process.
  • The letter requires immediate action from the recipient,  a response is expected within 15 working days detailing how they plan to rectify the violations.

Receiving a warning letter is not merely a suggestion for improvement; it is a formal call to action that demands attention from peptide manufacturers and all FDA-regulated businesses.

How Does the FDA Operate? Understanding Its Structure and Process

The FDA, operating under the Department of Health and Human Services, has a multifaceted role, enforcing various laws and regulations aimed at maintaining the safety, efficacy, and quality of products such as drugs, biologics, food, and medical devices.

At its headquarters, the FDA is composed of five specialized centers, each focusing on specific product categories:

  1. Center for Biologics Evaluation and Research (CBER)
  2. Center for Drug Evaluation and Research (CDER)
  3. Center for Devices and Radiological Health (CDRH)
  4. Center for Food Safety and Applied Nutrition (CFSAN)
  5. Center for Veterinary Medicine (CVM)

The Office of Regulatory Affairs (ORA) coordinates the FDA’s compliance initiatives and oversees the activities of the agency’s regional offices, district offices, and resident posts. These district offices are primarily responsible for inspections of regulated firms. If violations are identified during an inspection, the investigator will issue FDA Form 483 to highlight areas of concern, followed by a warning letter if the concerns are deemed significant.

Compliance Review Process

  • Inspection: FDA inspects peptide manufacturing facilities to assess compliance with the FDCA and other applicable regulations.
  • Findings via Form 483: If objectionable practices or violations are found, they are documented and shared with the firm.
  • Review and Approval: Warning letters are issued by district offices but often require oversight and approval from FDA headquarters when violations are complex or critical.
  • Response Requirement: Recipients of warning letters must submit a plan of corrective action within a stipulated timeframe (typically 15 working days).

How Peptide Manufacturers Can Stay FDA-Compliant

Avoiding an FDA warning letter begins with proactive compliance management. Here are some best practices to incorporate into your operations:

  • Regular Audits: Conduct internal and external audits to identify and rectify compliance issues before an FDA inspection.
  • Employee Training: Ensure employees are well-trained in Good Manufacturing Practices (GMP) and other FDA regulations specific to peptide manufacturing.
  • Documentation: Maintain accurate records of all processes, quality checks, and corrective actions.
  • Mock Inspections: Simulate FDA inspections to evaluate your facility’s readiness and address gaps proactively.
  • Leverage Expertise: Partner with regulatory consultants who understand the unique requirements of the peptide industry.

An FDA warning letter is a serious matter, but it also provides an opportunity for businesses to demonstrate their commitment to regulatory compliance and product safety. For peptide manufacturers, developing a clear understanding of FDA processes and adhering to best compliance practices is essential not only to avoid enforcement actions but also to build trust and credibility in the marketplace.

Facing an FDA compliance challenge? Seek guidance from healthcare business legal experts to ensure your organization addresses warning letters effectively and remains on track for long-term success.

HIPAA Compliance in Dental Practices: Why In-Servicing Your Team is Essential 

By: Carlos Arce

When it comes to HIPAA compliance, many dental professionals assume it’s about keeping a manual tucked away on a shelf, pulling it out only when the word “audit” is mentioned. However, ensuring compliance with the Health Insurance Portability and Accountability Act (HIPAA) is far more dynamic and integral to daily operations than a static document filing responsibility. It demands active engagement, particularly through regular in-service training for your team. 

But why is this so important? Compliance is not just about avoiding fines and audits. It’s about protecting patient trust, ensuring the security of sensitive information, and maintaining high standards of professionalism in your practice. Regular and structured training brings life to otherwise dormant policies and transforms compliance into a proactive, rather than reactive, part of your operations. 

What is HIPAA Compliance and Why Does It Matter? 

HIPAA lays out a series of rules to protect patient health information (PHI). For dental practices, compliance encompasses several key components—each crucial in preventing data breaches and ensuring patient trust. 

  • Privacy Rule: This ensures PHI is used and disclosed appropriately. It also mandates that patients receive a Notice of Privacy Practices and that their data is safeguarded. 
  • Security Rule: Focused on electronic PHI (ePHI), this rule demands the implementation of administrative, physical, and technical safeguards to prevent unauthorized access or harm to patient information. 
  • Breach Notification Rule: If a data breach involves PHI, dental practices must notify the affected individuals and report the breach to the Department of Health and Human Services (HHS). 
  • Business Associate Agreements (BAAs): Every third-party vendor handling PHI, like billing services or labs, needs to sign a BAA confirming compliance with HIPAA regulations. 

Without fully understanding these components and how they apply to everyday operations, dental teams risk both patient privacy and hefty penalties. 

Why “Shelf Compliance” Isn’t Enough 

Simply owning a HIPAA manual does not equate to being compliant. A binder or document detailing policies will not protect your practice from a breach or satisfy regulators during an investigation. Real compliance happens when policies are actively implemented, and your team fully understands their roles in safeguarding patient information. 

Here’s why leaving compliance on the shelf falls short: 

  • Ever-Evolving Threats: The digital landscape is continuously changing, along with the sophistication of cyber threats. A stagnant policy manual isn’t enough to address these evolving risks.
  • People Are the Weakest Link: One unintentional error by an untrained employee—such as opening a phishing email—could lead to a major security breach. Active training helps prevent these mistakes.
  • Enforcement is Real: The Office for Civil Rights (OCR) enforces HIPAA and does not hesitate to levy penalties for non-compliance. Without proper training and implementation, your practice becomes vulnerable to fines. 

The Power of Regular HIPAA Training 

Training isn’t just a regulatory checkbox—it’s the foundation of effective compliance. Here’s why in-servicing your team regularly is vital:

  1. Empowers Employees with Knowledge 

Regular training ensures everyone in your practice, from front desk staff to clinicians, understands their responsibilities in protecting PHI. This includes how to handle patient information, the significance of electronic security measures, and how to respond in cases of potential breaches.

  1. Helps Identify Risks 

Training sessions often lead to open discussions, helping uncover potential vulnerabilities in your workflow or systems. For example, does your team know how to securely lock patient files at the end of the day, or how to spot telltale signs of a phishing attempt?

  1. Keeps Policies Alive 

HIPAA policies become effective tools instead of forgotten documents. Discussing and practicing them regularly reinforces their importance and normalizes best practices. 

  1. Builds Patient Trust 

Patients expect you to handle their sensitive information with care. When your team is well-versed in HIPAA compliance, you’re not just protecting patient data; you’re strengthening their confidence in your practice.

  1. Mitigates Risk of Breaches and Fines 

Breaches due to preventable errors can have a devastating financial and reputational cost. Regular training keeps your team updated on compliance requirements and reduces the chances of accidental violations. 

What Should HIPAA Training Cover? 

To make training effective and valuable, ensure it covers the essential topics related to HIPAA compliance. Here’s a quick checklist of what your training sessions should include:

  • Overview of HIPAA Rules 

Educate employees on the Privacy Rule, Security Rule, and Breach Notification Rule, and how these apply to daily operations. 

  • Specific Employee Roles 

Clearly define how each team member contributes to protecting patient data. Front desk staff, dental assistants, and even cleaning personnel have a role to play. 

  • Cybersecurity Best Practices 

Cover methods to recognize phishing emails, create strong passwords, and properly use encryption tools. 

  • Incident Reporting 

Include procedures for IT issues, data breaches, or suspicious activity to ensure prompt handling and compliance with the Breach Notification Rule. 

  • Patient Interaction 

Train employees on how to explain Notices of Privacy Practices and manage patient requests related to their health information. 

Beyond Training: Create a Culture of Compliance 

While training sessions are crucial, fostering a broader culture of compliance ensures long-term success. Compliance should be woven into your day-to-day operations and workplace culture. 

  • Leaders Set the Tone 

The dentist-owner and office managers must exemplify compliance, reinforcing that it’s a shared responsibility. 

  • Encourage Open Communication 

Allow staff to ask questions or report concerns about HIPAA compliance. When employees feel confident addressing potential issues, your practice becomes more resilient to risks. 

  • Document Everything 

Keep records of all training sessions, policy updates, and risk assessments. Documentation demonstrates your commitment to compliance and protects your practice if an OCR investigation occurs. 

HIPAA Compliance as a Competitive Advantage 

Investing in regular in-servicing and robust compliance practices does more than meet legal requirements—it can set your practice apart. Patients want to feel confident their health information is secure. By demonstrating your dedication to protecting their privacy, you foster trust, build a solid reputation, and gain a competitive advantage in a crowded market. 

Taking the Next Steps 

Don’t allow your HIPAA manual to gather dust on a shelf. Bring it to life through regular employee training, open discussions, and a proactive approach to compliance. Start small with regular in-service sessions, and grow it into a compliance culture that integrates seamlessly into your practice. 

Your patients’ trust and the security of their sensitive health information depend on it. Ensuring HIPAA compliance is not only the law—it’s a promise of professionalism and care your practice can be proud to uphold. 

The Evolution of Physician-Led Organizations in Healthcare 

By: Jeff Cohen

Throughout my 40 years of experience as a healthcare attorney and advisor, I have witnessed significant transformations in the business of medicine. Perhaps one of the most telling examples is the rise, fall, and evolution of Independent Practice Associations (IPAs), network models, and Management Services Organizations (MSOs). These structures embody how physicians and entrepreneurs have adapted to the complex and, at times, unforgiving healthcare landscape. Their development underscores a single truth I’ve consistently observed—success in the business of healthcare is not just about vision but about execution.

The Birth of IPAs and Early Ambitions

In the 1990s, IPAs emerged as a solution for independent physicians at risk of losing their seat at the table with payers. At the time, IPAs were owned and organized by panels of respected physicians. These physician-led associations presented themselves as a “one-stop” contracting solution for insurance companies. From a payer’s perspective, the value was apparent—contracting with one entity instead of managing contracts with hundreds of providers was far more efficient.

Yet, behind the curtain, the realities of managing such organizations exposed the limitations of their founders. Understanding concepts such as claims adjudication, medical loss ratio, third-party administration, or stop-loss insurance was, for many physicians, uncharted territory. While these knowledge gaps were of little consequence then, as many IPA panels were single-specialty and compensated primarily on a fee-for-service basis, the tides quickly began to shift. Capitated arrangements, which initially targeted lower-expense practices like chiropractic and podiatry, started to expand into broader specialties.

The Rise of Entrepreneurial Physicians

Unsatisfied with the status quo, entrepreneurial physicians began reimagining the structure and purpose of IPAs. They saw an opportunity not just in patient care but in carving a role for themselves in the “business side” of medicine. These visionaries began to lead network model IPAs, overseeing groups of physicians and charging administrative fees, typically 10-15%, off the top of managed contracts.

Utilizing third-party administrators (TPAs), and in many cases transitioning into TPAs themselves, network IPAs flourished during the ’90s. These were no longer groups of doctors bound by their clinical expertise—they were enterprises driven by efficiency, profitability, and scalability. For certain physicians, healthcare was no longer just a calling—it was a business model.

Enter Private Equity and Wall Street

With entrepreneurial physicians paving the way, it wasn’t long before private equity and Wall Street took notice. The business of medicine—and more specifically, its administrative side—had become a desirable investment. Concerns about physician autonomy and stable income streams were met with enticing offers backed by large private equity funds. Private practices were courted with promises of stability, cash infusions, and stock options.

The market recognized the potential early. MedPartners and similar entities flourished under this model, using public markets to rapidly acquire practices and infrastructure. NASDAQ amplified their success through quick amortization of acquisition costs, temporarily inflating financials and driving stock prices higher and higher. But as I’ve observed time and again, unchecked financial strategies often face regulatory reckoning. With the Financial Accounting Standards Board (FASB) mandating longer amortization periods, these companies faced financial strain, declining stock prices, and dried-up capital for acquisitions. For many entities, the collapse was inevitable.

The Emergence of the MSO

Among the fallout emerged a resilient structure—the Management Services Organization (MSO). Born out of necessity and survival, the MSO has become the dominant aggregation platform in healthcare today. While initially designed to ensure compliance with prohibitions against corporate practice, the MSO has grown into much more.

When executed well, MSOs represent a sophisticated administrative management model capable of delivering measurable efficiencies. However, not all MSOs are created equal. Many overpromise and underdeliver, leaving their clients frustrated and disillusioned. The reality is that the success of any MSO, or any physician-led organization for that matter, rests largely on the most challenging component of any business—execution.

Lessons on Execution and Sustainability

The dream of marrying financial success with the business of medicine persists because of its undeniable allure. But as history has shown us, sustainability in this space requires careful planning, a deep understanding of market forces, and operational excellence.

Managing physician-led organizations, whether they take the form of IPAs, network models, or MSOs, requires more than a good idea. It demands a well-structured strategy, a commitment to transparency, and actionable insights into the delicate interplay of clinical care and administrative management. Over the decades, I’ve seen promising ventures derailed not by a lack of vision, but by an inability to execute the finer details—the very aspects that define sustained success.

Moving Forward—Practical Guidance from an Industry Veteran

For healthcare professionals and medical entrepreneurs seeking to establish or grow their service models, my advice is simple yet uncompromising—prioritize execution over ambition. Ensure compliance frameworks are robust, stakeholder communication is transparent, and every decision is firmly rooted in long-term sustainability and value creation.

Organizations that recognize the importance of operational excellence and align their vision with prudent execution are the ones that stand the test of time. From my vantage point as a trusted legal and strategic partner, I have found that achieving this balance often requires more than legal expertise—it calls for an understanding of the practical, the aspirational, and the inevitable complexities of modern healthcare.

Functional Medicine Today; Primary Care Yesterday

By: Jeff Cohen

Medical training has historically been known for its rigor and demanding nature, pushing those in the profession to their physical and mental limits. While this approach was often criticized as “inhumane,” requiring extensive hours and extraordinary effort, it fostered a generation of primary care physicians with unparalleled depth of knowledge and skills. These physicians were not merely general practitioners—they adeptly navigated specialties such as allergy and asthma management, rheumatology, metabolic disorders, minor surgery, orthopedics, and even aspects of obstetrics and gynecology. They operated with confidence and autonomy, with no fear of challenges to their scope of practice from insurance companies, licensing boards, or legal adversaries. But that was “back in the day”—the landscape looks vastly different today.

A Shift in Training and Delivery

The late 1980s marked a turning point. Pressures to ease the burdens of medical training coincided with a broader movement to restructure healthcare delivery and management. The goal was clear—to cut costs and improve outcomes by implementing sweeping changes in care processes. This gave rise to:

  • Clinical Pathways: Standardized treatment plans, often criticized as “cookbook medicine,” that sought to create predictable outcomes.
  • Referral Restrictions: Efforts to limit the number of patients sent to specialist physicians.
  • Outcome-Based Pricing Models: A shift in payment structures aimed at rewarding outcomes rather than utilization.

The underlying hypothesis? Streamline care, reduce reliance on expensive specialties, and pay for results, not services. On paper, it was a compelling vision. But how does it hold up when compared to the realities of today? Has healthcare become less expensive, more effective, or better managed?

The Reality of Modern Healthcare

Despite technological advancements, particularly in artificial intelligence (AI) and machine learning for data collection and analysis, many would argue the experiment fell short. Costs have not decreased, care remains poorly managed, and the inefficiencies of the system persist. Instead of fostering better outcomes, the structure often rewards utilization over quality.

The root of these inefficiencies lies in a number of systemic flaws:

  • Understaffed Physician Workforce: Many teams are stretched thin, with recruitment falling short of demand.
  • Constrained Training and Responsibilities: Physicians are increasingly restricted by regulations, payer policies, and liability concerns, forcing them to operate within narrow confines.
  • Erosion of Leadership: Medical leadership is not cultivated by the current system—it is stifled instead. What was once celebrated as bold decision-making by skilled “quarterbacks” of care is now thwarted.

The result? A fractured system where initiatives to improve healthcare have inadvertently clipped the wings of innovation and leadership.

Where We Stand Today

Today’s healthcare landscape reinforces a widening gap between “healthcare” and “wellness.” Healthcare, dictated largely by insurance coverage, focuses on acute and catastrophic conditions—be it traumatic injuries or life-threatening illnesses like leukemia. But when it comes to helping people look, feel, and function better for longer, insurance falls short.

Wellness, on the other hand, is driven by consumer demand and paid for out-of-pocket. This has created fertile ground for the growth of functional and personalized medicine approaches such as:

  • Functional Medicine
  • Hormone Replacement Therapy
  • IV Vitamin Therapy
  • Regenerative Medicine

These modalities are designed to address issues beyond the reactive scope of traditional medicine. They appeal to a population that is increasingly skeptical of the status quo and willing to invest in proactive, preventative, and curiosity-driven health solutions.

The Rise of Wellness and Curiosity

The resurgence of wellness-based care signals a return to what makes practitioners truly exceptional—curiosity. Modern physicians and clinicians driving this movement echo the qualities of their predecessors from earlier eras. They question, investigate, and innovate, refusing to settle for passive consumption of conventional wisdom. They are independent thinkers, consistently pushing boundaries to improve outcomes for their patients, often despite resistance from regulators, payers, and liability concerns.

These thought leaders embody the virtues once seen in primary care physicians who fearlessly adapted to deliver comprehensive care for their communities. And they are thriving. If anything, the shortcomings of traditional healthcare models serve as a catalyst, solidifying wellness approaches as permanent pillars within the modern healthcare ecosystem.

A Perfect Storm or a New Beginning?

The emergence of wellness as a burgeoning sector underscores the systemic challenges facing healthcare today. Shrinking insurance coverage, growing consumer financial responsibility, and an apparent divide between treating illness and promoting vitality have all contributed to this shift. For many patients, functional medicine offers something traditional healthcare cannot—a proactive, attentive approach to their individual well-being.

Curiosity-driven medicine bridges the gap between the reactive healthcare system and the proactive pursuit of wellness. As long as the shortcomings of the healthcare industry persist, the growth of wellness-focused care will likely remain firmly rooted in public demand.

The question is no longer whether functional medicine has a place; it’s clear that it does. The real question lies in how healthcare as a whole can evolve to better serve both sides of this growing divide—and what lessons can be drawn from the success of functional and personalized medicine as they continue to rise.

The future of healthcare may well depend on finding ways to merge the efficiency of traditional systems with the passion and curiosity driving today’s wellness movement. It’s a balance we can’t afford to ignore, and one that holds the key to a more holistic and effective system for generations to come.