Lately our firm has received a lot of inquiries from registered nurses who want to start an IV hydration business. Burned out from working in hospitals and long term care facilities, particularly in the aftermath of COVID19, many nurses are looking to use their skills in more satisfying and profitable ways. IV hydration businesses are becoming a popular way to put nursing skills to good use. Such businesses often focus on helping people recover from hangovers or just improve overall wellbeing through vitamin-infused injections. Nurses are often interested in mobile IV hydration clinics, where they can deliver the services at a client’s home, our in a mobile van.
Despite the popularity and convenience of mobile IV hydration businesses, there are some legal risks to operating such businesses. Moreover, many nurses have not been trained in business, so they are unsure about how to start such a business. Enter IV Hydration business platforms. A number of IV Hydration business platforms have popped up recently. These businesses promise a complete startup package for nurses and other individuals to begin delivering IV hydration services to clients. As tempting as a full-service, business startup platform sounds, there are definitely some legal risks to partnering with such companies. Based on our recent experience working with nurses in these very situations, here are some questions to consider before signing a contract with one of these companies:
Who is responsible for compliance with various state and federal laws? In our experience, many of these companies disclaim responsibility for complying with state and federal laws relating to IV hydration businesses. These laws can include state licensure laws for delivering the services as well as mixing IV bags with vitamins or nutrients. It is important to know a state’s “good faith exam” requirement, that is, who and how must conduct an exam of the patient before administering intravenous fluids. Federal standards by the Food and Drug Administration (FDA) are also at issue when it comes to drug compounding. After all, even saline bags constitute a prescription drug. In addition, there are state fee splitting and corporate practice of medicine (CPOM) laws to consider. These laws also implicate what type of legal entity must be formed to deliver IV hydration services. Can it be an LLC, or must it be a professional corporation? If the IV hydration company places compliance on the nurse, the nurse should retain legal counsel to understand legal obligations in operating such a business to protect his or her nursing license from being disciplined by the nursing board.
Who is the medical director, and will they be performing the proper level of supervision? One of the biggest challenges nurses face when starting an IV hydration business is finding a competent and willing physician or nurse practitioner to supervise the IV hydration services. Most state laws require a certain level of physician supervision of, and sometimes even ownership in, the IV hydration business. Many of the IV hydration startup platforms we have seen take no responsibility to ensure that the legally required levels of physician supervision are met. This is a huge legal risk for both the nurse and the supervising physician, as highlighted by a recent investigation by the Alabama Board of Medical Examiners. The Alabama Board of Medical Examiners (BME) investigated IV hydration businesses in that state and found that many of these businesses were using a physician’s National Provider Identifier number (NPI) to acquire IV supplies and additives and that the physician would issue “standing orders” directing administration of the IVs. The BME concluded that the standing orders were insufficient, and both the nurse and the physician were in violation of Alabama law governing the unlicensed practice of medicine (which according to the BME is a Class C Felony). In many of these businesses, the physician was not personally conducting an evaluation of the patient, either in person or via telehealth, before prescribing the IV medication. “Without an evaluation by the physician to create a physician-patient relationship, the RN is dispensing medical supplies and medications to a person who is not the physician’s patient. This violates both the physician’s and the RN’s legal authority to dispense or administer medications.” Id. (citing Ala. Code § 34-23-13).
Are you adequately covered by liability insurance? We have seen some IV hydration platforms claim to fully cover the nurse with liability insurance, but when digging further, that full coverage is cast into doubt.
Are you subject to an overly broad noncompete provision? Some IV hydration platforms restrict nurses from delivering IV hydration services anywhere, in any capacity, for a year or more. Although the Federal Trade Commission (FTC) has proposed rules to crack down on noncompete provisions, those proposed rules are not yet in effect. Nurses should seek legal counsel to understand how these restrictive covenants can impact their ability to gain the freedom they seek.
Is there financial disincentive to consult with the medical director? In some IV hydration platform arrangements there is a financial disincentive to consult with the medical director. That is, the nurse must pay the medical director every time he or she needs to consult with the medical director. The fewer times the nurse feels the need to consult with the medical director, the less the nurse will owe them. This financial arrangement is improper and encourages violation of state law. As demonstrated by the Alabama BME, above, the medical director needs to establish the patient relationship before the IV fluids can be administered. Under the financial arrangements we have seen, the nurse would pay the medical director a portion of the revenue from each patient. This of course cuts into the profits for the nurse. The financial arrangement doesn’t need to be this way, however. For example, a flat fee may be better.
There are just some of the questions and legal concerns that we have seen in recent IV hydration business models. While the convenience of these IV business platforms may be tempting, the legal risk may not be worth it. If you are considering entering into one of these agreements, please contact competent legal consultants who can evaluate the pros and cons of these arrangements. You can contact us here. If you have already signed an agreement with an IV hydration platform, contact us to see if there are things you can do to reduce your legal risk. We believe in wellness and the law, and we are here to help.