Crisis: Your IV Clinic Gets Shut Down

June 19, 2024

In this episode, hosts Brad and Michael share a cautionary tale for IV hydration clinics, recounting the story of a patient who tragically passed away at a clinic. Tune in for the essential compliance measures every IV hydration practice must follow. Discover how the good faith exam can make or break your practice, the requirements for supervising physicians, and the compounding issues seen in the medical community.

Listen to the full episode using the player below, or by visiting one of the links below. If you have any questions or would like to learn more, email us at


*The below transcript has been edited for readability.

Intro: [00:00:00] Welcome to Legal 123s with ByrdAdatto. Legal issues simplified through real client stories and real world experiences, creating simplicity in 3, 2, 1.

Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, my co-host, Michael Byrd.

Michael: As a business and health care law firm, we meet a lot of interesting people and learn their amazing stories. This season, we are riding the emotional rollercoaster of the crises that arise in the operating season of a business. Our theme this season is Running a Business.

Brad: Yes, Michael, and running a business is just one of the several seasons of a business. And for those who don’t know, Michael, what are the other seasons?

Michael: So we have the building season that we started the year with, and we’re in the operating season now, running a business. There’s the scaling season when you’re growing a business, and then the buying and selling season.

Brad: Perfect. Well, well done. And today’s mini story is one about the time that I had to go and make my first [00:01:00] argument in criminal court to a judge.

Michael: Oh, no, Brad. You have heard the expression that someone who represents themselves in court as a fool for an attorney?

Brad: Oh, Michael. Yes, and I was not representing myself.

Michael: Okay. Well, you did, I needed to hear that from you, because otherwise I just jumped straight to you defending yourself. Okay, well, now that makes me wonder this, Are you trying to one up me with your “criminal court” experience?

Brad: No, no, no. I will let you keep your title of being undefeated in your one traffic ticket case.

Michael: Winning!

Brad: Well, as we have discussed in the past, during law school, I clerked at the District Attorney’s office and during my third year of law school, I was basically working full-time there and mostly working on motion practice and briefs so that we get submitted to the court. Many times I actually got to attend the hearings where my motions were actually argued.

Michael: Sounds like a typical clerkship. [00:02:00]

Brad: Yep. Well, one day while I was sitting at my desk, I get a call from one of the assistant district attorneys, and they asked me to come down to the judge’s chambers based on a motion I had written.

Michael: Well, that does make me wonder if the judge could not understand the brief that was written in “Brad” language.

Brad: It’s a fair point. It is a fair point, but I did go down to the chambers and asked the District Assistant – DA what help he needed. He turns to the judge and says, “your Honor, this is Brad Adatto. He’s the one who wrote the brief. If you have any questions on it, please ask him.”

Michael: Wait, did you know you were going to get quizzed by the judge?

Brad: Nope, not a clue. I mean, the worst part is, I had written this brief like at least a month before back when I was working in the DA’s office. We were writing tons of different briefs for different courts so at first I had no idea what the brief even said.

Michael: I would definitely be sweaty at this point.

Brad: As the judge started to ask me questions on the case, I quickly remembered I had written a brief outline on why certain evidence seized by the police should be allowed into the hearing or in this case, into [00:03:00] the court and started to answer the judge’s question. As soon as the judge kind of got done with his first question that I had answered, the defense attorneys, and yes, there were two of them, both of them started jumping in and asking me questions. Basically they were aggressively pushing back on the statements of the case and how the cases I cited were not relevant. I was mostly in shock at this point.

Michael: So what happened?

Brad: It literally was like a movie, Michael. I had this out of body experience where somehow it all just came flooding back to me. It’s like the camera zoomed into my face, and all of a sudden I had this “aha” moment and I remembered the US Supreme Court cases I had cited, and I actually remember the facts of those cases, and I started applying it to this particular matter.

Michael: Well, I think this might be the third episode where I’m going to invoke Old School.

Brad: There’s nothing wrong with that.

Michael: But I’m picturing the debate scene in Old School where Will Ferrell gives this amazing speech and then nearly faints and says he thinks he blacked out.

Brad: [00:04:00] I think that’s exactly what happened to me because it felt like I was sitting there for 45 minutes going back and forth. It could have been closer to 10 or I don’t know, maybe five minutes. Then the judge finally said, yeah, he agreed with me, and he was going to rule in the state’s favor.

Michael: Okay. Well, I don’t want to burst your bubble, Brad. Well, I kind of do. But listening and I’m thinking the non-lawyers may not have caught this detail. This hearing was in judges’ chambers. And so it wasn’t actually a court hearing as you kind of painted early on. I’ll give you a little credit for arguing with the judge, but that was not a criminal court hearing.

Brad: Well, true but not true. I was standing in a criminal court building, and I did have this conversation with the judge, and the judge did rule in my favor. And here’s the funniest part, Michael, when we all got back in the courtroom, I did go and the left the chambers and I sit down with everybody else. The judge spent about 30 seconds ruling against the defense team and just moved on. There were no Fyreworks in the [00:05:00] courtroom. And this is the first time I had to learn how so much legal negotiations and back and forth all happened behind the scenes and actually not even in the courtroom.

Michael: Well, and I mean, all that knowledge you gained on criminal evidence just is so helpful today.

Brad: That’s so true.

Michael: Well, let’s jump into today’s story.

Brad: Well, today’s story starts like many ideas – hungover.

Michael: Well, I don’t know if this is a true statement for most people, Brad, because I know one of your superpowers is that you do not get hangovers. So maybe you don’t know what it’s like to be hungover.

Brad: That’s fair, that’s a fair point. But in today’s story, Billy McFarland was in Vegas at the Wynn and got an IV because he drank too much. And he thought, wow, why doesn’t my town have an IV hydration bar like this one?

Michael: I have actually heard a version of this so many times in the last several years, but that does raise the question, who is Billy McFarland?

Brad: [00:06:00] I don’t know, Michael. Just a name I pulled from the ether.

Michael: Okay. Well, I definitely don’t believe you, but I’m a little lazy right now to press you, so let’s keep going. Tell me more about Billy’s idea.

Brad: Well, Billy’s from Texas, and when he gets back to town, he starts scouting for a location that he can offer IV hydration services.

Michael: Okay, context question here, is Billy a doctor or some other type of medical provider?

Brad: Nope.

Michael: Entrepreneur?

Brad: Yes. He has this idea that since he’s near a university, many college students who are studying too hard might need IV hydration the next day to help them get back to class.

Michael: Well first, Brad, have you ever met a human in your life that studied so hard that they were dehydrated and needed an IV? Yeah, that’s what I thought. And of course, I know you’re from New Orleans so you’re probably actually trying to say that kids may have drank a little too much and need an IV so they can make it to class.[00:07:00]

Brad: I mean, you could say that, if there’s a difference. Okay, for today’s show I’ll go with this theory that maybe they were drinking too much.

Michael: Good. Well, I’m so relieved to win this theory argument that we’re having. Can we get back to the story?

Brad: Yeah. So Billy realized since he was not a physician, he needed a supervising physician to oversee the IV at this proposed IV Bar.

Michael: Well, so my little antenna went up when you said he was an entrepreneur. Are we going to get into corporate practice of medicine talk?

Brad: No, we’re going to skip CPOM talk for this show. But since you brought it up for the first time listeners who don’t know, what is CPOM?

Michael: Just at a high level, since I flagged it with an entrepreneur. There is a law, Texas has it as well, called the Corporate Practice of Medicine. It basically is a law that says, if you’re a business that’s providing medical services, you need to be doctor owned. Now, Texas, specifically has some exceptions where some others can co-own, but [00:08:00] it creates a whole line of structure considerations when you have an entrepreneur trying to own a business in the CPOM site, but that’s not focused today.

Brad: Not today, but thank you for those who didn’t know. Well, Billy finds this great location and he builds out the website and other marketing aspects. And more importantly, he finds this doctor to be his supervising physician and we’ll call him Dr. Thomas DeLong and he just goes by Dr. Tom.

Michael: I recognize that Thomas DeLong name, but I cannot remember why, so I guess keep going. I have a feeling you have a surprise for me.

Brad: Billy finally gets his business up and running and Dr. Tom arrived for the grand opening of the Fyre IV Bar.

Michael: Okay, Brad, I’m going to have a little early guess. I don’t know if you’re ready to give me the answer, but let me just ask for a hint. I won’t have a guess yet, when you said Fyre, does that happen to have a ‘Y’ in it?

Brad: Does it make a difference?

Michael: Well, [00:09:00] I think I know where you’re going with this. I’ll let you keep moving forward with the audience, but I’m onto you and I’m also now foreseeing a crisis if I’m right on my theory.

Brad: Okay well, we’ll find out. Well, Billy starts treating patients and things seem to be going well until one day EMS has to run into the Fyre IV bar because a patient is unresponsive after receiving an IV with a mixture of certain prescriptive medicine in that IV bag.

Michael: Brad, I’m not a doctor, but I think that’s bad.

Brad: Yeah, well, it’s about to get worse because the patient was rushed to the hospital where she was declared dead.

Michael: Yeah, that’s definitely bad. What happened? What did Dr. Tom prescribe to cause this event?

Brad: Well, that was just the first problem. We learned that Dr. Tom, who was practicing over a hundred miles away from the IV location, was not performing any Good Faith Exams on the patients. Furthermore, the Fyre IV Bar didn’t have any protocols or standard operating procedures or SOPs as they’re known in the street before these IV services. [00:10:00] The only person performing these IV treatments had no medical background. And finally, the patient received an IV infusion containing vitamin B complex and TPN electrolytes. The TPN electrolytes require a prescription to be administered, and that did not happen.

Michael: Was there anything that happened correctly?

Brad: Sounds like no so far.

Michael: Okay, well I think there’s a lot there. So let’s go into commercial and we’ll learn more about the story and the legal impact when we come back. As to the failure for all this litany of things, you talked about the GFE, the lack of standard operating procedures, and then compounding a mixture in an IV bag by a person without a medical background.

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Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto. I’m still here with my co-host, Michael Byrd. Now Michael, this season our theme is Running a Business, and we’re talking about real stories that pop up in the operating season of a business. And Michael I did change the name of today’s story, but this is actually based on a real story that arose in Texas where a patient died.

Michael: And I think it’s important, Brad, for our full disclosure, that this actually is not a client.

Brad: Nope, not of ours. It is not.

Michael: But we just had to go and share it on the podcast because this story is so – it illustrates the risk that goes into running an IV bar incorrectly. And I think we should [00:12:00] start with the first golden rule they broke, the lack of a Good Faith Exam. And we’ve spoken about this in other shows, but let’s talk about that for a minute. First, when we talk about a Good Faith Exam, we’re talking about a step in the patient treatment process. So when you have a new patient encounter, every patient needs to have a proper diagnosis. And part of what happens there in a Good Faith Exam is that you collect a patient history. And actually, most businesses have a patient history collected as part of the packet they fill out. The key is that someone with the right license needs to review that patient history and they need to physically examine the patient and then determine that whatever the treatment is appropriate. And once they’ve made that determination, they [00:13:00] actually issue a treatment plan into the record.

Brad: Who are those people that could make that decision?

Michael: Yeah. Well that can be done, generally speaking, I’m talking on a national generality, by a doctor, an NP or a PA. Now, there’s a couple of states that say like a PA can’t do that. But as a general rule, they have the scope of practice to kind of exercise that independent judgment of you are cleared for this, and this has other terms. Why don’t you talk a little bit about that? Because we’re using the term Good Faith Exam, but that’s kind of a term of art and there’s other words.

Brad: Sure, I mean, some people will call it the initial patient assessment or medical diagnosis. I mean, there are a lot of different terms. The industry goes with GFE – Good Faith Exam as a term of art. But to your point is, you are trying to determine is this person a good candidate for whatever the services we’re about to provide? And if so, [00:14:00] I’m going to make sure I have enough information on this individual prior to receiving this treatment.

Michael: Okay, I’m going to test you Brad, because this is a question we get a gazillion times every time we bring this up. Can I do this by telemedicine?

Brad: The answer is, it depends.

Michael: Oh, well that’s helpful.

Brad: And I would say generally speaking with a lot of these things, you can use telemedicine. The physical examination though, we generally would recommend video where they can see and hear you simultaneously, you can answer the questions, they get the informed consent and there are a lot of different EMR softwares that you can use or other platforms you can. But that would be our recommendation because that way, even when you’re using telemedicine in most states, the question is are you following up within the same standard of care as if you were in the room?

Michael: Yeah, that’s a great point. And to your point about it depends; each state’s laws are written a little bit differently, and so there often is this element to it where you have [00:15:00] to be able to see them.

Brad: Yeah, absolutely. Well, Michael, the next big issue that they didn’t have any protocols or standards or like on your bicep where it says SOPs, is how to handle the IV therapy. Talk about why SOPs are important.

Michael: So let’s start kind of broadly because there’s a lot of “paperwork” that’s involved in a practice. And you have patient intake documents where the patient history and the initial stuff they sign. Treatment protocols are what we’re talking about when we use the word SOPs. And that is kind of the, here’s the steps on how we do this treatment. And you’ll hear the term in Texas, written protocols is the name, but SOPs is another name. But what you’re getting is something that’s signed off on by the physician, the medical director or supervising physician that is saying, this is how we do it, and this is – because they’re the ones that [00:16:00] have made the determination that this needs to happen. And when you delegate a treatment, the people you delegate to have to carry out an order and how can they carry it out if they don’t know the steps they’re supposed to take? And this ends up being protective to everyone involved. So if you have someone who is the practitioner treating the patient and they go off script and don’t follow the protocol, that protects the physician, because you could say, well, I wasn’t negligently supervising because I gave them the standard of care of how you do things. And then the flip side is, if something happens and they’re just following the orders, then that’s on the doctor, not on the provider.

Brad: Yeah. That’s great points there, Michael.

Michael: I’ve been talking a lot during this kind of legal stuff. I’m starting to feel like Will Ferrell and you right now, so I’m going to turn it over to you for a second, [00:17:00] and gladly, with what my question’s about.

Brad: I’m scared now.

Michael: You talked about the stuff that was in the IV bag when you were sharing the story, explain compounding and the issues we’re seeing kind of in context to IV, hydration bars kind of what’s going on.

Brad: Yeah. So piercing an IV bag to mix other ingredients in is considered compounding in many states. And as such, you kind of need sterile compounding, it’s required under these circumstances.

Michael: Okay. Well you said the word sterile. What does sterile compounding mean?

Brad: I have no idea. I’m hoping Kennedy knows. No, sterile compounding has to be – it’s really a defined term about the combination of diluting and pooling and repackaging or are doing a lot of different things with drugs or bulk drugs and substance to create a sterile preparation. So there’s a lot of the mixtures [00:18:00] going on here, and several states have adopted the United States Pharmacopeia, if that’s correct, quality standards for products like medicines, dietary supplements, food ingredients and biologics, and that, they go by USP. So if you ever hear them talking about the USP rules, that’s what it is.

Michael: Well, that’s making my head spin a little bit, that’s some heavy stuff. So for our audience who may be with me on that and are having a hard time keeping up, you’re talking about pharmacy rules, right?

Brad: Yes.

Michael: Even though this is a medical practice?

Brad: Yeah. It gets very confusing as a USP is the standard for sterile compounding and requires facilities to meet certain standards. And there are arguments in many states if the USP standards cover medical practices or if they don’t. I don’t want to bore the audience to death with all of the pharmaceutical rules today, but understanding that adding mixtures to the IV at a facility will now be – it needs to be compliant [00:19:00] with another set of laws.

Michael: So I’m going to say it back to you in, in the way I’m following you. And that is, if you’re an IV hydration bar and you’re doing some compounding with your IV bags; it’s not just the medical rules, but pharmacy rules as well. Am I tracking?

Brad: Yes.

Michael: Okay, well thanks for not going too deep on this because I know that the rules can get super complicated, especially as it relates to how different the states are at this time.

Brad: Yeah and it’s exactly right. Some states are easier to know than others. For example, California has adopted the USP sterile compounding rules that a practice must meet while other states allow certain levels of grace to the physician’s IV order when determining what they should be added to the IV bag. And Michael, that brings up another huge issue with today’s story, which is not just the lack of the Good Faith Exam. And now we’re talking about the compounding, but we also had a non-medical person actually administrating [00:20:00] the IVs. Talk about how is that even allowed?

Michael: Yeah and I’m going to connect the dot a little bit to the written protocol SOP discussion a moment ago. So you perform this Good Faith Exam and you have this treatment plan. And so now the thing that’s given you authority as a practice to treat this patient is the license of the doctor, and the doctor’s not going to treat it, and so that needs to be delegated to someone. And so, the every state has rules about who can you delegate to. Texas has what we call a broad delegation statute, and so it basically puts the decision making onto the doctor. And so the doctor, their job is to basically determine if I delegate this treatment to this person, even if they’re not a licensed person, like our story here, do [00:21:00] I believe they have these sufficient training to be able to meet the standard of care, to be able to follow the written protocols that I’ve put in place and have the appropriate experience, et cetera, to do it. And so, technically speaking in Texas, it’s possible for this non-licensed person in today’s story to have been doing the IV. What we don’t know is if they have any training or what background they have.

Brad: Yeah and that’s a good point, and that’s going to be different in every state. For example, we know in like states like California, that you can only delegate medical procedures to basically an RN or higher. There’s some small exceptions for LVNs and California – won’t bore you with, but generally speaking, it’s really state specific on who you can delegate to. But we also have said in states where the physician does have the ultimate authority, just because you can doesn’t mean you should. So Michael, let’s talk [00:22:00] about the risk that supervising physicians when they are delegating to individuals that have no formal medical decision making.

Michael: Yeah. I mean in this…

Brad: Sorry, medical education.

Michael: Yeah, medical education. So you have in today’s story, someone that’s not licensed and you have a bad outcome. So now just kind of picture that doctor standing before the medical board and you’re in an extreme position of defense at this point because you have a hurt patient, and you are having to defend yourself that it was appropriate from a standard of care perspective that someone who’s had no anatomy training, no formal training has been allowed to do the things that happened in the story, which were being more than even just sticking a IV bag into the patient. But there was the mixture of chemicals, et cetera. And so, the boards are [00:23:00] going to look at this from a patient protection standpoint. And when you have a hurt patient, it does change everything and you’re going to – it creates extreme risk to the physician in these circumstances. And that also extends to the malpractice side of things when you have a lawsuit because you’re having to defend standard of care. So Brad, we’ve been focused on Texas, but have other states looked at this issue?

Brad: Yes, in the last few years we’ve had several states which have issued defined rulings or notices the public in the medical industry on how the state expects a compliant IV therapy practice to act.

Michael: I believe Alabama was one of the first states to clarify that IV is not retail therapy, but actually the practice of medicine.

Brad: Yeah. Gold star for you, Michael. Hopefully Kennedy’s keeping – you’re keeping track, right Kennedy? Yeah, thumbs up. She’s keeping track and you’re paying attention that these articles and other podcasts, we actually have spoken about this issue and many states [00:24:00] have filed this same blueprint issuing guidance by the medical or nursing boards on providing IVs including Mississippi and North Carolina and South Dakota and Oklahoma and Florida and even Arizona. In fact, South Carolina was one of the first states that we noticed that the Board of Pharmacy, the nursing and medical examiners collected all came together to issue a 10 page joint advisory opinion addressing IV therapy business model and the various issues related to this model in their state, which is almost unheard of, that they all agreed on how to regulate IV therapy.

Michael: This is not how it normally happens. It’s kind of refreshing to hear and see that happen because most often the boards that govern different licenses are kind of isolated, and so they have their own path. They don’t speak to each other, and that makes our world as compliance attorneys really difficult because you’re trying to reconcile completely [00:25:00] different rules a lot of times. And then even worse is sometimes they get territorial and they start trying to step on each other’s toes. And you can see that show up in enforcement where you have one board that thinks something is okay and another board that’s not okay with it and so they’re trying to enforce it, and you get into this battle of who has authority over that particular issue.

Brad: Yeah and that’s a great point, and it is frustrating in some ways, I know some of our IV clients may be listening, thinking, well, I don’t like the fact that South Carolina came out so hard against it, but as you said from a compliance perspective, at least you now know what the State expects of you. And that makes life easier from a functionality of how to be compliant. All great points there, Michael. The theme for all these that we’re running into that IV is the practice of medicine, therefore the Good Faith Exam is going to be required and proper delegation and [00:26:00] supervision to those who actually have the skillset to do it.

Michael: Yep, great points. So what happened with Dr. Tom and Billy?

Brad: Dr. Tom had his license initially suspended and Fyre IV Bar was shut down. What will ultimately happen to Dr. Tom and Billy is still up in the air, Michael. Michael, have you figured out what real life story I pulled the our characters’ names from today?

Michael: Yes, Brad. I was right early on, I believe for those who did not catch it. Brad, you were using the names from the documentary on the failed Fyre Festival in 2017, and that’s spelled F-Y-R-E.

Brad: Correct.

Michael: And the documentary, if I recall, allows a young entrepreneur named Billy McFarland – started coming back to me and the doomed Fyre Festival that from the beginning was going to fail due to bad planning. And I mean, I don’t even know if it’s right to say complete mismanagement of funds. It’s worse than [00:27:00] that. And I remember both Netflix and Amazon released documentaries on it. It was a disaster. None of the bands even ended up going because of lack of funds, but I’m remembering the story. I don’t remember Dr. Thomas DeLong.

Brad: Well, that’s because Thomas DeLong is the co-founder and was the co-lead vocalist and guitarist of the rock band, Blink 182. Blink 182 was listed as one of the bands that was supposed to play at the Fyre Musical Festival. They no showed, kind of much like Dr. Tom in our story at the Fyre IV Bar.

Michael: Well played Sir. Brad, final thoughts?

Brad: This story of Fyre in real life is a great entrepreneur example because it highlights that planning is key to everything. But most importantly, it can also serve as a warning sign for the medical entrepreneurs who fail to realize how important [00:28:00] and complex things can be and how necessary compliance is even in “retail medicine”. Michael, final thoughts?

Michael: Yeah. Kind of jumping on that because IV therapy is taking this long-standing type of treatment, people have been putting IVs in forever, right? And now they’re applying it in this kind of new setting, this elective setting. There’s a ton of misinformation out there about how to do this compliantly, and so there is a ton of non-compliance with IV bars. The states are catching up as we talked about today and recognizing that this treatment is the practice of medicine.

Brad: Awesome, Michael. Well, next Wednesday, we’ll have our last podcast for Season 16, which will also, audience members, be our 200th show when we bring on serial entrepreneur, Tim Sawyer. Thanks again for joining us today. And remember, if you like this episode, please subscribe, make sure to give us a five star rating and share with your friends.

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Outro: ByrdAdatto is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does it establish an attorney-client relationship. Reference to any specific product or entity does not constitute an endorsement or [00:31:00] recommendation by ByrdAdatto. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Please consult with an attorney on your legal issues.

ByrdAdatto founding partner Michael Byrd

Michael S. Byrd

ByrdAdatto Founding Partner Bradford E. Adatto

Bradford E. Adatto