Wellness Check: Analyzing Regulatory Risk Facing Innovative Health Platforms

Wellness is the new trend in healthcare. For some bespoke providers, the emphasis on preventative care alleviates the crisis of chronic conditions and calls for innovation. For others, mental health is closely tied to a patient's perceptions of appearance and requires intervention. And for almost all providers, the emergence of telehealth as an industry staple over the last half-decade has signaled the ability to get people access to the weight management, mental and behavioral health and maintenance therapies they seek.

The wellness industry has experienced explosive growth in recent years, driven by consumer demand for weight management treatments, anti-aging therapies, hormone optimization, ketamine-assisted therapy, intravenous (IV) vitamin infusions, drips, hydration therapy and other wellness treatments. This growth has been fueled in part by the expansion of telehealth platforms, direct-to-consumer marketing and the proliferation of cash-pay wellness clinics that operate outside of traditional insurance-based models.

As a result of these sweeping industry trends, the regulatory environment for wellness providers has undergone a dramatic transformation over the past 18 months. Federal agencies and state medical boards are coordinating enforcement efforts targeting cash-pay wellness clinics, concierge medicine practices, telehealth platforms, ketamine clinics and IV therapy providers, including vitamin IV drip bars, infusion lounges and hydration therapy clinics. These enforcement actions reflect a growing concern among regulators that the wellness industry's rapid expansion has outpaced the regulatory frameworks designed to protect patient safety.

This blog post provides an overview of the key regulatory trends affecting wellness providers, summarizes recent enforcement developments, and offers practical compliance recommendations for brick-and-mortar clinics and telehealth platforms alike.

Recent Enforcement Actions and Regulatory Developments

State medical boards have become increasingly active in investigating and disciplining practitioners associated with wellness clinics and concierge medicine practices. Common areas of concern include:

• Standard-of-Care Violations. Medical boards have opened investigations into providers who prescribe weight management treatments or injectable wellness therapies without conducting adequate medical evaluations, including appropriate history taking, physical examinations and laboratory testing.
• Informed Consent Deficiencies. Similarly, medical boards have cited providers for failing to obtain adequate informed consent before administering wellness treatments, particularly where the treatments are being used for off-label or non-U.S. Food and Drug Administration (FDA)-approved purposes.
• Supervision and Delegation Concerns. In states with restrictive scope-of-practice laws, medical, nursing and physician assistant boards have investigated clinics where non-physician practitioners are prescribing or administering wellness treatments without appropriate physician oversight.
• Ketamine Clinic Oversight. Medical boards are investigating ketamine clinic practitioners for inadequate patient screening, failure to maintain proper monitoring protocols during ketamine infusions, and prescribing ketamine without proper psychiatric or pain management evaluations.

Similarly, ketamine clinics and IV therapy businesses combine controlled substance prescribing or invasive treatment delivery with significant scope-of-practice and patient-safety obligations. Regulators are increasingly examining the following issues:

• U.S. Drug Enforcement Administration (DEA) Enforcement. Ketamine is a Schedule III controlled substance. Clinics must maintain DEA registration, proper record-keeping, and compliant storage and security measures. The DEA has investigated clinics for diversion and improper prescribing.
• State Regulation of Ketamine Clinics. Several states have enacted or proposed specific regulations for ketamine clinics, including requirements for physician supervision during infusions, patient screening protocols, monitoring during and after administration, and facility licensing.
• IV Therapy Regulation. State health departments and medical boards are scrutinizing IV therapy businesses – including vitamin drip, hydration therapy and infusion providers – for operating without proper facility licenses, having unlicensed personnel administer IV treatments and failing to maintain appropriate medical oversight. Some states require these businesses to be licensed as health facilities or to operate under physician supervision.
• Adverse Event Concerns. Regulators and medical boards have flagged safety concerns including infection risk from improper IV administration, allergic reactions and the lack of proper patient screening before IV treatments.

From a marketing perspective, the Federal Trade Commission (FTC) has issued updated guidance through its Health Products Compliance Guidance and has brought enforcement actions against wellness providers and clinics that make unsupported health claims in advertising and marketing materials. The FTC has targeted claims related to weight management outcomes, anti-aging benefits and the efficacy of wellness treatments. Providers should be aware that the FTC applies a rigorous standard of substantiation and has the authority to impose significant civil penalties.

Finally, the regulatory landscape for telehealth prescribing has also tightened significantly. Key developments include:

• Expiration of Pandemic-Era Flexibilities. As discussed in a previous Holland & Knight alert, many of the telehealth prescribing flexibilities implemented during the COVID-19 public health emergency have expired or are scheduled to expire. Providers who relied on these flexibilities to prescribe wellness treatments via telehealth must ensure that their current practices comply with permanent federal and state telehealth requirements.
• DEA and Ryan Haight Act Compliance. The DEA has clarified its expectations regarding telehealth prescribing of controlled substances, including requirements for in-person evaluations under the Ryan Haight Online Pharmacy Consumer Protection Act. Though many wellness treatments are not controlled substances, providers who offer a broader range of services via telehealth must be attentive to these requirements.
• State-Level Telehealth Laws. Multiple states have enacted or amended telehealth statutes that impose additional requirements on providers, including establishing a proper provider-patient relationship, maintaining adequate medical records and ensuring continuity of care. Several states now require at least one in-person visit before certain categories of prescriptions can be issued or renewed.

Implications for Providers

Brick-and-mortar wellness clinics face a unique set of regulatory risks given their direct patient interactions and the direct delivery of wellness treatments. Key areas of concern include:

1. Prescribing Practices. Clinics should ensure that all prescribing practitioners are conducting thorough medical evaluations before initiating treatment regimens. Documentation of medical necessity, informed consent and ongoing monitoring should be maintained in the patient's record.
2. Advertising and Marketing. All marketing materials – including websites, social media accounts and in-office signage – should be reviewed for compliance with FTC standards. Claims regarding the efficacy of wellness treatments or weight management outcomes must be truthful, not misleading and supported by competent and reliable scientific evidence.
3. Corporate Practice of Medicine. Many states prohibit non-physician entities from employing physicians or exercising control over clinical decision-making. Clinics structured as management service organizations (MSOs) or that are owned by non-physician investors should review their organizational structure for compliance with applicable corporate practice of medicine restrictions.
4. Insurance and Liability Exposure. Providers should review their malpractice insurance policies to confirm coverage for the administration of wellness treatments, particularly those used for off-label or non-FDA-approved purposes. Some insurers have begun excluding or restricting coverage for certain wellness-related services.
5. Facility Licensing and IV Administration. Brick-and-mortar clinics offering IV therapies – including ketamine infusions, vitamin drips and related treatments – must confirm that they hold all required facility licenses, IV administration is performed by appropriately licensed and trained personnel, and emergency protocols and equipment, including a crash cart and appropriate monitoring, are in place.

In addition to the above considerations for providers with physical practice locations, expansive telehealth platforms and large-scale concierge practices face additional regulatory considerations, particularly given their reliance on remote patient interactions and, in many cases, multi-state operations.

1. Multi-State Licensure. Telehealth providers must hold valid licenses in each state where their patients are located at the time of the encounter. The patchwork of state telehealth laws creates compliance complexity, particularly for platforms that serve patients across multiple jurisdictions.
2. Establishment of the Provider-Patient Relationship. Providers must ensure that a valid provider-patient relationship has been established before prescribing wellness treatments. Several states have imposed stricter requirements for the initial establishment of this relationship, including requirements for synchronous audio-visual encounters.
3. Prescribing via Telehealth. As noted above, the expiration of pandemic-era flexibilities has narrowed the scope of permissible telehealth prescribing. Providers should review their prescribing protocols to ensure compliance with federal and state requirements, including any in-person evaluation mandates that may apply to the treatments being prescribed.
4. Ketamine-Assisted Therapy. Telehealth platforms offering ketamine-assisted therapy face particular scrutiny: DEA requirements for in-person evaluations before prescribing Schedule III controlled substances apply, many states prohibit or restrict initial ketamine prescribing via telehealth, and providers must ensure proper follow-up and monitoring protocols even for at-home ketamine treatments, including sublingual or nasal formulations prescribed after telehealth consultations.
5. Direct-to-Consumer Marketing. Telehealth platforms that engage in direct-to-consumer advertising face heightened FTC scrutiny. Marketing claims about the convenience, efficacy or safety of wellness treatments must be substantiated and should not mislead consumers about the nature of the products or services being offered.
6. Data Privacy and Security. Telehealth and concierge medicine providers handling protected health information must ensure compliance with the Health Insurance Portability and Accountability Act (HIPAA) and applicable state privacy laws, particularly as regulators increasingly focus on the data practices of digital health companies.

Practical Compliance Recommendations

In light of the current regulatory environment, the following proactive steps are integral for the wellness industry today:

1. Conduct a Comprehensive Compliance Assessment. Engage qualified healthcare regulatory counsel to conduct a thorough assessment of the practice's compliance posture. This assessment should cover prescribing practices, marketing materials, informed consent procedures, corporate structure and telehealth protocols.
2. Review and Update Prescribing Protocols. Ensure that the prescribing protocols require a thorough medical evaluation – including appropriate history taking, physical examination (or compliant telehealth equivalent) and relevant laboratory testing – before initiating any treatment regimen. Document medical necessity and informed consent in the patient record.
3. Scrub Marketing and Advertising Materials. Conduct a comprehensive review of all patient-facing materials, including websites, social media accounts, email marketing and in-office materials. Remove or revise any claims that are not supported by competent and reliable scientific evidence. Pay particular attention to claims regarding weight management outcomes, anti-aging effects or the comparative superiority of wellness treatments.
4. Ensure Telehealth Compliance. If the practice offers services via telehealth, review the telehealth protocols for compliance with current federal and state law. Confirm that providers hold valid licenses in all relevant jurisdictions, they are establishing provider-patient relationships in compliance with applicable requirements, and prescribing practices comply with post-pandemic telehealth rules.
5. Review Insurance Coverage. Contact a malpractice insurance carrier to confirm that the practice's policy covers the services being provided, including the administration of wellness treatments for weight management, aesthetic or other wellness purposes. Consider whether supplemental coverage may be warranted.
6. Implement Ongoing Monitoring. Establish a process for ongoing monitoring of regulatory developments that may affect the practice. This includes monitoring state medical board advisories and FTC enforcement activity. Consider subscribing to regulatory alerts from your legal counsel or relevant trade associations.
7. Conduct a Compliance Review and Training for Controlled Substances and IV Therapies. Conduct a focused compliance review of ketamine and IV therapy services. Verify DEA registration and controlled-substance protocols, confirm facility licensing for IV administration, review staff credentials and scope-of-practice compliance for IV therapy personnel, ensure proper patient screening and monitoring protocols, and maintain appropriate adverse event documentation and reporting. Additionally, implement a comprehensive training program for all clinical personnel involved in administering controlled substances and IV therapies. Training should cover proper venipuncture and IV insertion techniques, recognition and management of adverse reactions, emergency response protocols, infection control and sterile technique, patient monitoring requirements during and after infusion, and documentation best practices. Require periodic competency assessments and ensure that training records are maintained for all staff members.

Conclusion

The wellness industry continues to offer tremendous opportunities for healthcare providers, but the regulatory landscape has shifted significantly. Federal and state regulators have made clear that they intend to hold wellness providers to the same rigorous standards that apply throughout healthcare. Providers who take a proactive approach to compliance by auditing their operations, tightening their prescribing protocols and substantiating their marketing claims will be best positioned to thrive in this environment.

Holland & Knight's Healthcare & Life Sciences Team regularly advises wellness providers, concierge medicine practices and telehealth platforms on the regulatory issues discussed in this article. Contact the author to discuss how these developments may affect your practice.