Compare and Contrast: Corporate Practice of Medicine in Washington - - PowerPoint PPT Presentation

Compare and Contrast: Corporate Practice of Medicine in Washington

Federation of State Medical Boards 2019 Board Attorney Workshop November 7, 2019 Kyle Karinen, Supervising Staff Attorney

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For reasons that will become evident as trundle along, some caveats: To the extent that the following contains opinions, they are my own and do not represent Medical Commission policy or sentiment. They also do represent anything of the like for the Department of Health, Health Systems Quality Assurance division, the Dental Quality Assurance Commission or the Unlicensed Practice Program. (Deep breath)

Before we begin . . .

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The regulation of the corporate practice of medicine in Washington usually arises in the context of the unlicensed practice of medicine. Unlike North Carolina, the regulatory framework for enforcement in Washington is splintered and complex.

Much like Marcus detailed in North Carolina . . .

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• The law has long prohibited certain professions from practicing through entities on the

theory only individuals (and not entities) can be licensed. In Washington, such learned professions include, without limitation, medicine (including physical therapy), dentistry, and optometry.

• Columbia Physical Therapy, Inc., P.S. v. Benton Franklin Orthopedic Associates, P.L.L.C.,

168 Wn.2d 421, 430 (2010) (holding that physical therapy is one aspect of the practice of medicine).

• State v. Boren, 36 Wn.2d 522, 219 P.2d 566 (1950).
• State ex rel. Standard Optical Co. v. Superior Court for Chelan County et al., 17 Wn.2d 323,

135 P.2d 839 (1943).

CPOM Washington case law primer

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• The WMC has 21 Commissioners who are appointed by the
• Governor. Appointees may serve two 4-year terms, and/or may

serve as Pro Tem members.

• The WMC Commissioners include 16 practitioners (MDs & PAs),

and 5 public members.

WASHINGTON MEDICAL COMMISSION

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• 21 Governor

appointed members

• 10 physicians

represent each congressional district

• 3 “at-large”

physicians

Medical Commission:

WHO-

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• RCWs applicable to WMC cases primarily draw from the Uniform

Disciplinary Act – RCW 18.130.

• UDA applies to all health care professionals.
• RCW 18.130.180 - Unprofessional Conduct outlines 27 conducts,

acts or conditions which constitute unprofessional conduct. For

• ur purposes here, this includes:
• (10) Aiding or abetting an unlicensed person to practice when a license is

required;

Revised Code of Washington (RCW)

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Other RCWs applicable to WMC Cases include:

• RCW 18.71 - Physicians-Scope of Practice, etc.
• 18.71.011 –A person who:
• (1) offers, undertakes to diagnose, cure, advise or prescribe for any human disease, injury,

pain by any means or instrumentality

• (2) Administers or prescribes drugs
• (3) Severs or penetrates the skin
• (4) Advertises on cards or other means using the title “doctor” “physician” “MD”, etc.
• RCW 18.71A – Physician Assistant-Scope of Practice, etc.
• 18.71A.030
• (1) A physician assistant can only practice with a delegation agreement that is approved by

the Commission

• (2) A physician assistant can only practice within the scope of their training and that which is

within the scope of practice of the supervising physician

Revised Code of Washington (RCW) – cont’d

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• RCW 18.130.190 Practice without license—Investigation of complaints—Cease and desist
• rders—Injunctions—Penalties.
• (1) The secretary shall investigate complaints concerning practice by unlicensed persons
• f a profession or business for which a license is required by the chapters specified in

RCW 18.130.040. In the investigation of the complaints, the secretary shall have the same authority as provided the secretary under RCW 18.130.050.

The Unlicensed Practice of [insert profession here]

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• On the administrative side, corporate practice cases typically come before the Department in one of

two forms:

• 1. A complaint that an unlicensed individual is practicing a profession for which a credential or

registration is required ;

• 2. A licensed individual is aiding an unlicensed person in practicing .
• The Unlicensed Practice (UL) Program is a unique creature within the Health Systems Quality

Assurance division of the Department of Health. The UL Program is administered by the Secretary even when there is a Board or Commission that holds jurisdiction over the profession in question. All decisions under the Uniform Disciplinary Act (UDA) – authorization of an investigation, formal disposition, and hearing – are taken by Department of Health staff on delegation from the Secretary. If a case is authorized for charging, The UL Program typically initiates legal action through a formal notice that it intends to seek a cease and desist order. The sole administrative remedies are a cease and desist order along with an administrative fine.

Washington State Department of Health jurisdiction and regulation

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The primary takeaway from the regulatory model in Washington is the Medical Commission has no authority over unlicensed individuals. The (untested) consensus is that this may lessen antitrust concerns under the North Carolina Board of Dental Examiners vs. FTC.

Washington State Department of Health jurisdiction and regulation

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Practically, what does that mean . . .

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• The Half Dental case involved a management contract with a dentist that included

control of all business records, billing and collection duties, the ability to hire support personnel, control over bank accounts, control over litigation in the dentist’s name, a 100-mile noncompete, and compensation based on revenue and profits.

• The case resulted in an agreed order wherein Half Dental agreed to stop all activity that

constituted the practice of dentistry in Washington and to refund all prepaid fees it had received from patients.

• In a companion case, the Dental Quality Assurance Commission brought an action

against an involved dentist for aiding and abetting the unlicensed practice of dentistry, which ended in an agreed order reprimanding the dentist and imposing a small fine.

Half Dental, Department of Health case no. M2014-442

• Dr. Avery Harrison, M2015-115

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Unlicensed individual hired an ARNP and a naturopath to provide medical marijuana authorizations for patients. The unlicensed individual set and collected fees, set the expiration dates for authorizations, and controlled the patient’s medical records. This latter aspect of control over the business included denial of a request from the naturopath to take patient records with her when she departed the practice.

Paul Wendler, M2013-574

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• The Comfort Dental case involved a franchisor entering into franchise agreements with
• dentists. The agreements restricted the vendors a dentist could use, required

participation in a marketing fund, had mandatory hours of operation, restricted the transfer of ownership of the dental practice, included a noncompete, and had compensation based on revenue.

• The state brought a number of actions alleging the unlicensed practice of dentistry,

which all ended in an agreed order containing a cease and desist requirement as well as a $340,000 civil fine.

Comfort Dental M2016-153, -154, -156 and -695

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A brief closing thought

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Kyle Karinen, J.D., LL.M. – tax, Supervising Staff Attorney, Washington Medical Commission Email: kyle.karinen@wmc.wa.gov Phone: (360) 236-4810 Kyle Karinen (B.A. Univ. of Michigan, J.D. Univ. of Montana, LL.M. Univ. of Washington) is the Supervising Staff Attorney for the Washington Medical Commission. Prior to joining the Medical Commission in 2017, he spent six years as a staff attorney in the Health Systems Quality Assurance division of the Washington State Department

• f Health where he handled cases for the state dental commission, state pharmacy commission and Unlicensed

Practice Program. Prior to joining the Department in 2011, he was in private practice specializing in corporate taxation issues and taxable estate planning. Additionally, acknowledgments to Luke Campbell from Montgomery Purdue Blankinship & Austin PLLC in Seattle, WA with whom I co-presented some of this material at a CLE.

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