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Ketamine and the Business of Health Care

Ketamine infusion clinics deliver health care services and operate in a closely scrutinized and highly regulated industry. Harris Sliwoski helps clinic operators, managers and investors understand and comply with complex federal and state-level rules. These include:

Ketamine infusion clinics deliver health care services and operate in a closely scrutinized and highly regulated industry. Harris Sliwoski helps clinic operators, managers, and investors understand and comply with complex federal and state-level rules. These include:

Bans on Fee-Splitting: Fee-splitting arrangements involve one doctor referring patients to a second doctor and receiving a percentage of the fee charged by the second doctor. To reduce incentives for recommending unnecessary medical care, state laws bar fee-splitting, though fee-splitting can also cause issues under federal law. These rules can apply in complicated ways to benign business arrangements, such as those between ketamine clinics and the management services organizations (MSOs) they pay to handle their administrative needs. An MSO is a service organization of an integrated delivery system/hospital that provides management services for multiple affiliated physicians/clinics. In some states, laws may prohibit MSOs from referring patients to a ketamine clinic associated with that MSO.

The Anti-Kickback Statute: It is a federal crime to give or receive compensation for referrals of patients whose care is reimbursable by federal health care programs. One example of a prohibited kickback is drug businesses paying kickbacks to pharmacies to encourage them to switch patients’ prescriptions. While ketamine infusion therapy is generally not covered by government health care programs, it is still vital that a ketamine clinic not provide anything of value to doctors in exchange for patient referrals. MSOs and other businesses involved in funding or managing ketamine clinics must also comply with these laws.

The Corporate Practice of Medicine (CPOM) Doctrine: To prevent business decisions from influencing patient care, many states have laws barring non-healthcare businesses from providing medical services. For instance, Texas physicians cannot allow their MSOs to select the medical staff with whom the physician works, which directly affects patient care. Relationships between a physician providing ketamine therapy and their MSO must comply with these rules.