Online Healthcare: States Must Be More Open-Minded - InformationWeek

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Healthcare // Policy & Regulation
08:06 AM
Jeremy Johnson
Jeremy Johnson
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Online Healthcare: States Must Be More Open-Minded

Telemedicine and online consultations from home hold great promise, if the law can get out of the way.

Two growing problems in the healthcare system are the steadily increasing overall costs of healthcare, and a particular lack of sufficient access to quality care. 

There is a critical need for the development of low-cost, convenient care delivery alternatives to the traditional face-to-face office visit. Technically sophisticated online clinics offer a compelling solution. Online care delivery models are relatively new, however, and state laws that contemplate traditional brick-and-mortar clinics are struggling to keep pace with the alternative models made possible through the use of today’s technology. 

Antiquated and inflexible state laws often present significant, sometimes insurmountable barriers to the expansion of online clinics to these states.

[ Some of the greatest need is here: Telemedicine Transforms Rural Care.]

We recently investigated the laws of a number of states pertaining to the myriad issues implicated by this model. When assessing these state laws we found a handful of champions of the online model, but more often we identified significant barriers that must be broken down for the online clinic model to thrive nationally.

Making corporate structures work
Many states prohibit what is commonly known as the “corporate practice of medicine” (CPM). CPM laws generally prohibit a business corporation from practicing medicine or employing healthcare providers to provide professional medical services.

Some states such as New York have a robust CPM doctrine that prohibits an entity other than a professional corporation from employing physicians and nurse practitioners, and the state actively enforces this doctrine and imposes felony penalties for its violation. 

Other states such as Utah and South Dakota appear to permit employment of physicians and nurse practitioners so long as the employer does not interfere in the individuals’ professional judgment. Missouri and Oklahoma are a couple of the states that do not have CPM prohibitions and therefore permit non-professional corporations to directly employ health care practitioners.

Different state laws with respect to CPM can also affect the expansion of an online clinic to residents of a state with a CPM prohibition. For example, a Missouri corporation that owns and operates an online clinic and seeks to expand its online operations to New York residents would be prohibited from directly employing the physicians or nurses that would treat New York-based patients online.

While there are ways to structure around CPM laws, improper corporate structuring and the resulting violation of a state’s CPM law can in some cases lead to criminal penalties including significant fines, and loss or suspension of the physician’s medical license.

Mid-level practitioners held back
State laws can vary significantly with respect to the scope of practice of mid-level healthcare practitioners.

Some states such as Arizona and Colorado permit nurse practitioners to practice autonomously and to prescribe without physician supervision, while others such as Georgia and Ohio require nurse practitioners to practice in collaboration or under the direct supervision of a physician licensed and physically located in that state. States that impose strict physician collaboration or supervision requirements present a particular difficulty for online clinics generally staffed by nurse practitioners.

It is often unclear how state laws imposing traditional supervision standards apply to an online model where nurse practitioners and supervising physician are not present at the same physical location, but where there are sufficient technological means to provide appropriate supervision through remote communication.

Even in states with supervision or collaboration requirements that do not require the physician to be physically located in the patient’s state, the burden of coordinating nurse practitioner supervision across state lines could be significant. 

There has been movement in some states to revise regulations to provide mid-level practitioners with greater autonomy, but until there is greater flexibility in scope of practice, collaboration, and supervision laws that recognizes the unique nature of the virtual clinic, many services offered online will be restricted.

Making safe, online prescriptions legal
The ability of a physician or a nurse practitioner to prescribe medication over the Internet is perhaps the most contentious issue from a legal standpoint and the one most likely to derail a proposed online clinic. Many states have laws that prohibit issuing prescriptions in the absence of an in-person physical examination of the patient. Arizona, the District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, and Massachusetts currently have such laws in place. 

There are numerous examples of state regulators aggressively prosecuting physicians for online prescription violations. While those examples have generally involved online "pharmacy mills" that prescribe enormous volumes of lifestyle drugs (e.g., Viagra) based on an unsophisticated online questionnaires, the laws designed to address this issue nonetheless pose a significant, and sometimes unintended, hurdle to the legitimate online clinic.

Despite laws that appear to strictly prohibit any form of online prescribing, we discovered that some state regulators recognize the value of the online model and are willing to make exceptions for online models that involve sophisticated online medical interviews of the patient. Most state regulators understandably approach the issue of online prescribing very cautiously given the great potential for abuse. But so long as the method of online-based diagnosis and prescribing is sophisticated, targeted, and integrates appropriate safeguards, the potential for more people to receive cost-effective and convenient care is arguably a greater concern.


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Lorna Garey
Lorna Garey,
User Rank: Author
12/4/2013 | 12:26:32 PM
Re: Do you have model legislation in mind for online healthcare?
Would a feasible workaround be to have a PA or nurse practioner to do the in-person exam, and the physician could be remote, or must the physician be on site?
Lorna Garey
Lorna Garey,
User Rank: Author
12/4/2013 | 11:59:18 AM
Re: Do you have model legislation in mind for online healthcare?
What's the reasoning for those laws? Wellbeing of patient or cutting down on physicians prescribing drugs in a shady fashion, or a bit of both?
Alex Kane Rudansky
Alex Kane Rudansky,
User Rank: Author
11/26/2013 | 10:19:40 AM
I've seen issues with online prescriptions and apps. With each state having different laws, the rollout process for some medical apps is extremely complicated. I wonder if we'll ever see standardized federal laws about this.
David F. Carr
David F. Carr,
User Rank: Author
11/25/2013 | 11:03:24 AM
Do you have model legislation in mind for online healthcare?
I'm wondering if there's a particular model you favor for opening up more possibilities for remote consultations, while still providing consumer and patient protection.

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