Health Law

New York Seeks to Expand Prohibition of the Corporate Practice of Medicine

New York is currently considering Senate Bill S8442, which would extend the state’s strict prohibition on the corporate practice of medicine (CPOM). The bill would bar non-physician-owned Management Services Organizations (MSOs) or private equity firms from holding majority voting shares or controlling the board of directors in professional medical corporations. 

The History of the Corporate Practice of Medicine 

The roots of New York’s prohibition on CPOM go back over a century. The doctrine is derived from New York’s Education Law (§ 6509-a), which states only licensed physicians can own and control medical practices. Cases like People v. Woodbury Dermatological Institute (1908) and Stern v. Flynn (1936) revealed early concerns about corporations influencing medical decisions and eroding the trust between physicians and patients.  

New York’s CPOM prohibition is among the strictest in the nation. Only licensed physicians or physician groups can own medical practices in the form of Professional Service Corporations (PCs), Professional Limited Liability Companies (PLLCs), or Registered Limited Liability Partnerships (RLLPs) in the state. 

How New York Might Further Prohibit the Corporate Practice of Medicine 

Senate Bill S8442 would close one of the primary loopholes that non-physician-owned businesses have utilized to exert control over medical practices. Currently, physician-owned and physician group-owned practices can employ Management Services Organizations to handle non-medical functions like billing, accounting, or human resources.  

MSOs can, in turn, control governance and clinical operations by securing a majority of voting shares or board seats. Non-physicians can occupy officer roles on those boards, leaving open the possibility that MSOs can shape board leadership for their own benefit. Senate Bill S8442 would prohibit this workaround and ensure that medical practices are fully owned by physicians or physician groups.  

While New York State’s Education Law (§ 6509-a) does explicitly define professional misconduct in relation to CPOM, there is currently no statutory protection for whistleblowers who report such violations or unethical practices. Senate Bill S8442 would prohibit retaliation against these medical professionals—even if their report violates a nondisclosure or non-disparagement agreement. 

Recommendations for Physician Groups That Work with MSOs 

New York’s history of strict prohibition of CPOM suggests that this bill is likely to pass. To prepare for this eventuality, physician groups that work with MSOs must: 

• Examine their administrative services agreements to ensure MSOs do not cross into “clinical or operational control,” as the new law voids contract provisions that interfere with a physician’s professional autonomy or clinical decision-making. 

• Revise their board by-laws and Articles of Incorporation to align with Senate Bill S8442’s provisions on board structure and membership as well as rules governing the ownership of shares. 

• Inform health care employees of protection against retaliation for whistleblowing also included in the bill. 

To stay compliant with the provisions of this bill and other New York health care laws and regulations, physician groups should contact Bleakley Platt & Schmidt’s extensively experienced health law attorneys today.  

How Litigation Lawyers Protect Your Organization

In the dynamic and competitive business landscape, disputes are an unfortunate reality. Whether it’s a contract breach, a shareholder disagreement, or an environmental concern, litigation can disrupt operations, damage your reputation, and erode your bottom line. At Bleakley Platt & Schmidt, LLP, our experienced litigation lawyers understand the unique challenges faced by corporations and are dedicated to providing comprehensive solutions. 

What is Litigation?

Litigation is the legal process of resolving disputes through the court system. It involves various stages, including filing lawsuits, a discovery phase for exchanging information, presentation of arguments, trial, and appeal. While most cases ultimately settle through alternative means like negotiation, mediation, or arbitration, understanding the litigation process is crucial for effective dispute resolution.
Dive deeper into the field of litigation here. 

Bleakley By Your Side 

BPS’s business litigation attorneys have a proven track record of success in complex matters. Our team represents businesses of all sizes, from Fortune 500 companies to local startups. We offer a comprehensive approach, including: 

• Litigation Avoidance: We believe the best defense is a good offense. Our attorneys advise on contract formation, risk management, and negotiation strategies to minimize the chance of litigation. 

• Pre-Litigation Strategy: When a dispute arises, our litigation lawyers can assess the situation, develop a winning strategy, and guide you through every step of the process. 

• Cost-Effective Solutions: We understand litigation can be expensive, and work to achieve your goals while keeping costs in check. 

• Extensive Experience: Our attorneys have deep expertise in various areas of business law, including contract disputes, shareholder and partnership disputes, mergers & acquisitions, intellectual property, and class actions. 

Our litigation services, span more than a dozen practice areas. Here is a look at how BPS litigators apply their expertise to some of our largest practices: 

Health Care Litigation: Navigating Complex Regulatory Waters

The healthcare industry is subject to a complex and ever-changing regulatory environment. Disputes involving hospitals, nursing homes, healthcare providers, and other healthcare entities require specialized knowledge and experience. BPS’s Health Care Litigation Practice Group provides comprehensive legal counsel to protect your interests. 

Our attorneys represent clients in a wide range of matters, including: 

• Compliance and Regulatory Investigations: We help healthcare providers navigate complex regulatory compliance issues and conduct internal investigations related to Medicare, Medicaid, fraud/abuse allegations, and false claims. 

• False Claims Act: We have a strong track record of defending healthcare providers against allegations of fraud and abuse. 

• Medicare and Medicaid Reimbursement: We assist clients in maximizing reimbursement and resolving disputes with government payers. 

• Licensing and Certification Issues: We help healthcare providers obtain and maintain necessary licenses and certifications. 

Corporate Litigation: Protecting Your Business Interests

Corporate litigation encompasses a broad range of disputes involving companies, shareholders, directors, and officers. Our Corporate Law Practice Group has extensive experience handling complex business disputes, including: 

• Merger and Acquisition Litigation: We assist clients in resolving disputes related to mergers, acquisitions, and corporate control. 

• Contract Disputes: We help businesses enforce their rights and protect their interests in contract disputes. 

• Complex Commercial Litigation: We handle complex litigation matters involving multiple parties and high stakes. 

Environmental Litigation: Mitigating Risks

Environmental compliance and litigation are critical concerns for businesses operating in today’s regulatory landscape. BPS’s Environmental Law Practice Group provides comprehensive legal counsel to help you manage environmental risks and protect your company’s reputation. 

Our attorneys have extensive experience in: 

• Superfund Litigation: We represent clients in complex Superfund matters, including site assessments, remediation, and cost recovery. 

• Environmental Compliance: We assist clients in developing and implementing compliance programs to avoid costly litigation. 

• Permitting and Regulatory Compliance: We help clients obtain necessary permits and comply with environmental regulations. 

• Environmental Cleanup and Remediation: We provide strategic guidance on environmental cleanup and remediation projects. 

• Natural Resource Damages: We defend clients against claims for natural resource damages. 

Bleakley Platt & Schmidt: Your Trusted Litigators

At BPS, we are committed to providing exceptional legal representation and strategic guidance to our clients. Our litigation lawyers have the knowledge, experience, and resources to help you navigate complex legal challenges and achieve your business objectives. Contact our Litigation Practice Group today. 

How Healthcare Providers Can Prepare for DOJ’s Focus on Accessible Medical Equipment and Practices

The Department of Justice (DOJ) recently proposed significant changes to how the Americans with Disabilities Act (ADA) applies within the healthcare industry. The notice of proposed rulemaking (NPRM), made under Title II of the ADA, focuses on ensuring accessible medical diagnostic equipment and other accessibility practices for patients with disabilities. While the NPRM is focused on healthcare affiliated with state and local governments, providers should expect the rule, if passed, to apply to the broader healthcare industry soon. This article, therefore, explores the potential impact of the proposed rule on healthcare providers and offers steps to prepare for its possible implementation.

What Does the Proposed Rule Entail?

The NPRM centers on establishing enforceable standards for accessible medical diagnostic equipment (MDE) and other ADA compliance in healthcare. This includes examination tables, weight scales, x-ray machines, and other diagnostic equipment commonly used in healthcare settings. The core principle is to ensure patients with disabilities can independently access and utilize this equipment during examinations and procedures, to the greatest extent possible. Read the NPRM in its entirety, here.

How Will This Impact Healthcare Providers?

If passed, the rule will require healthcare providers to take a critical look at their MDE accessibility. Potential impacts could include:

• Facility Upgrades: Existing equipment might not meet the new accessibility standards. Providers may need to invest in acquiring MDE with features like adjustable heights, transfer assistance mechanisms, and compatibility with patient lifts.
• Staff Training: Operating new equipment effectively and safely requires proper training for staff. This includes assisting patients with disabilities in transferring to and from MDE, understanding specific equipment functionalities, and ensuring patient comfort during examinations.
• Review of Policies and Procedures: Facilities might need to revise internal protocols to accommodate patients with disabilities using MDE. This could involve scheduling additional time for appointments, ensuring clear communication regarding accessibility needs, and establishing protocols for using assistive equipment.

Preparing for the Potential Rule Change

Although the NPRM is still undergoing revisions, healthcare providers can proactively prepare:

• Stay Informed: Monitor updates from the DOJ regarding the rule’s progress. Bleakley Platt & Schmidt, LLP, can keep you informed and advise on specific compliance steps.
• Conduct an Accessibility Audit: Evaluate your current MDE for accessibility features. Identify areas where upgrades might be necessary to comply with the proposed standards.
• Research Accessible Equipment Options: Explore the availability of accessible MDE that aligns with your specific needs and budget. Consider factors like patient population, space constraints, and ease of use for both patients and staff.
• Develop a Training Plan: Start planning staff training programs to familiarize them with new equipment functionalities and proper techniques for assisting patients with disabilities.

The proposed rule on accessible medical diagnostic equipment and practices reflects a growing focus on ADA in healthcare. By proactively preparing, healthcare providers can ensure they deliver quality care that is accessible and equitable for all patients. Bleakley Platt & Schmidt’s Health Law Practice Group can guide providers through the compliance process and advise on implementing effective solutions. Contact Robert Braumuller at (914) 287- 6185 or rbraumuller@bpslaw.com to discuss your specific needs and ensure compliance.

DEA and HHS Again Extend Telehealth Controlled Substances Flexibilities

In a significant development for healthcare providers and patients alike, the rule permitting the telehealth prescription of controlled substances for new patient-provider relationships has been extended through the end of 2024. This marks the second extension to the rule implemented in 2020 by the U.S. Drug Enforcement Administration (DEA) and the Department of Health and Human Services (HHS) in response to the COVID-19 pandemic.

The DEA and HHS announced the second temporary extension on October 10, 2023. This move overrode the prior November 11, 2023 expiration and extends the application of the telehealth prescribing flexibility rule to December 31, 2024, irrespective of when the patient-provider relationship was established.

Before the onset of the COVID-19 pandemic, the Ryan Haight Online Consumer Protection Act of 2008 mandated an in-person evaluation of patients before healthcare providers could prescribe controlled substances. However, in response to the unique challenges posed by the pandemic, the DEA and HHS implemented temporary exceptions to this requirement, allowing healthcare providers to prescribe scheduled medications after conducting patient evaluations solely via telehealth.

The initial extension, issued on May 10, 2023, granted new patients the ability to receive prescriptions for scheduled medications through telehealth until November 11, 2023. For established patients, this privilege was extended until November 11, 2024. This second temporary extension expands telehealth prescribing flexibilities for all patient-provider relationships through the end of 2024.

The extension affords the DEA and HHS time to evaluate stakeholder comments received in response to two notices of proposed rulemakings (NPRMs) issued jointly in March 2023. These notices suggested allowing prescribers to provide a 30-day supply of medication to patients via telehealth. However, beyond this period, an in-person evaluation would be required to continue prescribing. Furthermore, certain medications would be exempted from telehealth prescribing, and an initial in-person visit would be mandated for prescribing Schedule II through V medications. Learn more about both the second temporary extension and the NPRMs, here.

The DEA and HHS emphasized their commitment to creating telehealth regulations that align with public health and safety, indicating that they are reviewing stakeholder comments to inform these regulatory measures. Additionally, the DEA has referenced plans to announce new standards by the fall of 2024, underscoring the evolving landscape of telehealth regulations and their critical role in modern health care delivery.

Bleakley Platt & Schmidt continues to track developments in telehealth policy and will post updates for our health care clients as information becomes available. To stay compliant with these changing rules, contact Robert Braumuller of the Firm’s Health Law Practice Group at (914) 287-6185 or rbraumuller@bpslaw.com.

New York’s Health Care Worker Vaccine Mandate Repealed

On October 4, New York’s COVID-19 healthcare worker vaccine mandate was formally repealed by the New York State Department of Health. The decision ends a more than two-year long COVID-19 policy and marks another tangible sign that New York has exited the public-health-crisis phase of the pandemic. Health care providers will no longer be required to track the vaccination statuses of their employees.

The emergency rule, adopted in August 2021 as 10 N.Y.C.R.R. § 2.61, directed hospitals, nursing homes, hospices, adult care facilities, and other identified health care entities to “continuously require” employees to be fully vaccinated. While it established a medical exemption, it did not account for religious beliefs, bringing forth challenges in court. The regulation caused conflict between labor and management over the implementation of its vague exemption standards. Its repeal will offer welcome clarity to employers and employees alike.

Even prior to the repeal, the Rule showed signs of weakening. A Department statement issued in May of this year declared that the state would not take any new actions to enforce the Rule. Less than six months later, 10 N.Y.C.R.R. § 2.61 is officially repealed.

Despite the political and social controversies surrounding vaccine mandates, from the state’s perspective, repealing the rule is a matter of practicality. The Department argues that, because COVID-19 does not yet have a fully established seasonality as does influenza, tracking employee vaccination statuses for both viruses would pose logistical challenges for providers. The continued evolution of the virus, variables surrounding future transmission rates, and anticipated changes to federal vaccine recommendations were also cited as evidence of the Rule’s impracticality.

The Department has stated that the repeal allows health care providers to make their own decisions regarding vaccine and mask mandates for employees.

As with all employment law matters, the attorneys of our Labor & Employment Law Practice Group are available to provide counsel. Contact Joseph DeGiuseppe, Jr. at (914) 287-6144 or jdegiuseppe@bpslaw.com.

DEA Re-Examining Proposal to Limit the Prescription of Controlled Substances Via Telehealth

On May 3, 2023, the DEA released a statement that it had received a record 38,000 comments on its proposed rule that would no longer permit telehealth providers to prescribe controlled substances if the patient never had an in-person examination, subject to limited exceptions (see our March 21, 2023 article on this and related issues). “We take those comments seriously and are considering them carefully,” the DEA noted in its statement. “We recognize the importance of telemedicine in providing Americans with access to needed medications, and we have decided to extend the current flexibilities while we work to find a way forward to give Americans that access with appropriate safeguards.” Pending a final determination on the issue, the DEA and HHS have jointly issued a draft Temporary Rule extending the Covid-19 telemedicine flexibilities for prescription of controlled medications. This Temporary Rule will become effective when it is published in the Federal Register, which of this writing has not yet occurred. The full text of the DEA’s May 3 statement can be found here: Click.