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
Before we begin . . . 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) @WAMedCommission WMC.wa.gov
Much like Marcus detailed in North Carolina . . . 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. @WAMedCommission WMC.wa.gov
CPOM Washington case law primer • 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). @WAMedCommission WMC.wa.gov
WASHINGTON MEDICAL COMMISSION • 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. @WAMedCommission WMC.wa.gov
Medical Commission: WHO- • 21 Governor appointed members • 10 physicians represent each congressional district • 3 “at - large” physicians @WAMedCommission WMC.wa.gov
Revised Code of Washington (RCW) • 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 our purposes here, this includes: • (10) Aiding or abetting an unlicensed person to practice when a license is required; @WAMedCommission WMC.wa.gov
Revised Code of Washington (RCW) – cont’d 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 @WAMedCommission WMC.wa.gov
The Unlicensed Practice of [insert profession here] • RCW 18.130.190 Practice without license — Investigation of complaints — Cease and desist orders — Injunctions — Penalties. • (1) The secretary shall investigate complaints concerning practice by unlicensed persons of 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. @WAMedCommission WMC.wa.gov
Washington State Department of Health jurisdiction and regulation • 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. @WAMedCommission WMC.wa.gov
Washington State Department of Health jurisdiction and regulation 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. @WAMedCommission WMC.wa.gov
Practically, what does that mean . . . @WAMedCommission WMC.wa.gov
Half Dental, Department of Health case no. M2014-442 Dr. Avery Harrison, M2015-115 • 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. @WAMedCommission WMC.wa.gov
Paul Wendler, M2013-574 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. @WAMedCommission WMC.wa.gov
Comfort Dental M2016-153, -154, -156 and -695 • 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. @WAMedCommission WMC.wa.gov
A brief closing thought @WAMedCommission WMC.wa.gov
Contact Info: 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 of 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. @WAMedCommission WMC.wa.gov
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