In this episode, hosts Michael Byrd and Brad Adatto share the story of entrepreneurs who open an IV Therapy Bar in Alabama and the legal challenges they faced after receiving a Cease and Desist from the state’s Board of Medical Examiners. Tune in as we share the intricacies of operating a compliant IV bar and the rules and regulations that impact compliance. We discuss the limitations of standing orders, the significance of the good faith exam, and the implications of the corporate practice of medicine.
Listen to the full episode using the player below, or by visiting one of the links below. Below is the episode’s transcript which has been edited for readability. If you have any questions or would like to learn more, email us at info@byrdadatto.com.
Transcript
Intro: [00:00:00] Welcome to Legal 123’s with ByrdAdatto. Legal issues simplified through real client stories and real-world experiences, creating simplicity in 3 2 1.
Brad: Welcome back to another episode of Legal 123’s with ByrdAdatto. I’m your host, Brad Adatto with my co-host Michael Byrd.
Michael: As business and health care law firm we meet a lot of interesting people and learn their amazing stories. Our clients commonly come to us, Brad, with the latest word on the street that they heard from a friend. This season, we will talk about stories with a common legal urban legend to them and seek to either prove or disprove the legend. This season’s theme is, fake or real?
Brad: All right. Well, Michael, as we’ve discussed in past shows, you know, I’m really the historian of the show.
Michael: Brad. Brad, I can’t believe you’re starting us off like that. Yes, I will acknowledge that you took history in college [00:01:00] and that you have a lot of useless information, but we’re not gonna give you something as scholarly sounding as historian.
Brad: Okay, okay, fair. Would you say that I keep up with current events more than you?
Michael: Yes, but that’s really not bringing you up to historian status. It’s just saying, barely above the 13 year old surface, but what does this have to do with your claim of being a historian?
Brad: Well, you know, as someone who studied history, during the Cold War, NATO countries were constantly looking out for Russian spies, and obviously trying to catch a Russian spy was a pretty big deal for the CIA, FBI, and other NATO partners.
Michael: And for those of you who are not as old as Brad and I, the Cold War is something that happened a long time ago. And since Brad’s a historian, he can educate you on it, but it was the standoff between the United States and Russia. And if you were a child during this time, you were terrified that a bomb [00:02:00] was going to go off in your city at any point, a nuclear bomb.
Brad: Right. Well, and obviously there’s a little bit of escalation going on the edge of Europe, a little war going on, which I won’t dive too much on, but also there’s a lot more articles appearing from other European countries trying to figure out what are the Russkies up to and do they have spies in their country?
Michael: Okay, well, keep going, Brad.
Brad: All right. Well, the country of Sweden might have identified the largest spy ever recorded, which of course the Russians are denying.
Michael: I speak Brad, so I think you might have skipped some words and should have said the largest Russian spying operation ever recorded?
Brad: Actually, generally, you would be correct, but this spy, his approximate weight is close to 3,000 pounds, and it appears this spy might be even trying to escape his Russian handlers when they noticed him.
Michael: Okay, I’m biting my tongue, Brad, but [00:03:00] just give me some context and tell me where you’re headed here.
Brad: Oh, did I fail to mention that this alleged spy is a tame blue-gray whale?
Michael: Yes, you did fail to mention that, Brad, although the 3,000 pounds eliminated most everything else in the world. Is there anything else you’d like to add?
Brad: Yes, the whale was first spotted off Norway’s coast in 2019 wearing a Russian harness.
Michael: Ooh, fancy.
Brad: Having spent years traveling slowly southwards from Norway far north, and the whale has sped up his movements outside of Norwegian waters in the recent months. The whale has first been seen approaching Norway about 250 miles from where a Russian northern fleet was based. The whale was wearing a harness fitted with a GoPro camera mounted and the clips bearing the inscription, Equipment of St. Petersburg.
Michael: Well, that’s not very natural sounding. Other than just his invisibility of being in the water and being a whale, all that equipment and the harness, I’m [00:04:00] picturing like a Russian uniform, kind of gives them away.
Brad: Yes. Well, and Norway’s domestic intelligence agency believes that this whale is likely to have been trained by the Russian army or military. And Russia, for its part, has never officially addressed the claim that the whale is trained by the Russian military. Apparently it has previously denied the existence of any program seeking to train sea mammals as spies.
Michael: Well this could be, you know, a pretty amazing episode of Punk’d if, you know, they’re dressing up a whale to look like a spy.
Brad: Yes.
Michael: So where are you going, Brad?
Brad: Well, let’s get started and see if this whale of a tale has any bearing for today’s story.
Michael: Boy, you just jumped off a cliff with that dad joke there. Okay, Brad, you’re starting to lose me here, but let’s hear today’s story and let’s try to minimize the dad jokes.
Brad: Okay, I’ll try. The main characters in today’s story are entrepreneurs named Boris [00:05:00] and an RN named Natasha who would like to start their own IV center, a therapy center and they’ve been speaking with Dr. Rocky and having him act as the medical director for the IV bar.
Michael: Okay, Brad, I think you’re dating yourself if you think anyone is going to know that these characters names are from the cartoon Rocky and Bullwinkle, which, by the way, was from the 1960s. And this show had a flying squirrel, Rocky, Bullwinkle, a moose, and they were chasing after two Russian spies, Boris and Natasha.
Brad: Actually, Michael, I believe they made a remake of this movie actually more recently.
Michael: Okay well, according to Siri, Brad, you are correct, they did make a remake 23 years ago so I’m really proud of you for being modern and really trying to squeeze the opening banter into [00:06:00] this story right here.
Brad: I think there was a thanks in there somewhere, right? So Boris and Natasha were staying in Vegas and both needed some help after partying a little too hard one night. They were staying at a high end hotel which offered IV therapy to its guests to help recover from a hard night of drinking lots of fluids.
Michael: Yeah, I mean, we are in Vegas a lot, speaking at different medical conventions and you can’t get on an elevator without seeing an advertisement for the IV hangover cure so that makes sense.
Brad: Yes. So when they returned to their home state, they decided to copy this exact format as they had seen in the hotel. Well, at least what they thought was the exact format as what they saw in the hotel.
Michael: Sounds like we have some foreshadowing happening here. Do we need to get Riley to cue up some horror music, Brad?
Brad: Maybe. Well, Boris put in the startup capital to launch this new venture, and Natasha was a trained RN, started seeing patients providing [00:07:00] IV for a host of treatments at the Beluga IV Therapy Bar.
Michael: Okay, seeing what you’re doing there with the old Beluga IV Therapy Bar, Brad.
Brad: Well, these treatments were for, you know, hangover helpers, or helping a patient recover from a flu, or a cold, or weakly, you know, because you were working out too hard. In these IVs, they had a, you know, host of additional supplements that depending on the need of the patient, the RN would work with.
Michael: Okay, Brad, it appears you’re skipping around a little bit today, but I’m trying to follow the bouncing ball. When Natasha was rendering all this care, what was Dr. Rocky’s job?
Brad: Oh, well, Dr. Rocky developed standing orders that Natasha had to follow so that when a patient arrived at the IV bar, Natasha would have this questionnaire that the patient would fill out, and she’d ask the patient, and depending on the outcome, the answers, Natasha would then follow these standing orders with the proper IV ingredients.
Michael: Well, I’m sure our loyal and longtime listeners are still [00:08:00] wondering when and who was conducting the good faith exam. And so, for those who haven’t heard this, the good faith exam is a part of the treatment process that applies in every state in the country. It’s not always called officially the good faith exam, sometimes it’s the initial exam. The essence of it is the requirement that if a medical treatment is being provided, that someone with the right scope of practice will see the patient’s history and physically examine and determine that a treatment is appropriate.
Brad: Okay, Michael. Apparently you didn’t hear the earlier part of the story. I said Natasha had standing orders from Dr. Rocky. So, you know, they decided they did not need a good faith exam at all. They didn’t have to have any PAs or NPs working at that facility.
Michael: I want to jump in and respond to that, but my context brain is going [00:09:00] off. First, tell me where this IV bar is located. What state are they in?
Brad: Oh, Alabama.
Michael: Oh, okay. And when did they start this business, Brad?
Brad: Approximately July of 2021.
Michael: Okay, this story is now starting to make a little sense, Brad. IV therapy in many states has been like the Wild West from a compliance perspective. People from different backgrounds have jumped into the IV therapy services industry so before I follow up on the standing order statement you made earlier, are there any other aspects of the story you want to add?
Brad: Sure I guess I’ll give some more context to you. So the first year went well for the Beluga IV Therapy Bar. It grew with clients and staff. And in fact, by July of 2022, they had grown so quickly, they were hiring a new RN. This one was named Bullwinkle for some reason. However, things came to a grinding end when they received a cease and desist letter from the Alabama [00:10:00] State Medical Board of Examiners noting that they were non-compliant with the state law and can no longer continue providing IV services.
Michael: Well, I guess I don’t need to directly respond to the standing orders thing based on that outcome, but I have a feeling we’re going to talk about that on the other side. Brad, why don’t we with that news go to break and learn what happened on the other side and talk about the elephant in the room or I guess I should say the whale in the room. Fake or real, I can use standing orders for my IV bar?
Access+: Many business owners use legal counsel as a last resort rather than as a proactive tool that can further their success. Why? For most, it’s the fear of unknown legal costs. ByrdAdatto’s Access+ program makes it possible for you to get the ongoing legal assistance you need for one predictable monthly fee. That gives you unlimited phone and email access to the legal team so you can [00:11:00] receive feedback on legal concerns as they arise. Access+, a smarter, simpler way to access legal services. Find out more, visit ByrdAdatto.com today.
Brad: Welcome back to Legal 123’s with ByrdAdatto. I’m your host, Brad Adatto. I’m still here with my cohost, Michael Byrd. Now, Michael, this season’s theme is Fake or Real. And you know, we have, as you said, a whale of a big question, I think something of that sort that everyone really, really wants answered Michael. Maybe you can kind of recap a little bit of the story.
Michael: Yeah. I can’t give you a hard time for the dad jokes. I threw one in as well at the end. So, you know, the story is a common one that we’re hearing more and more over the last several years. And that is, you know, the wild west of the Ivy bar scenario. And in our story today, we have two characters who were in Vegas and saw kind of the benefits of the hangover [00:12:00] cure for the IV.
Brad: And everyone’s doing it.
Michael: And everyone’s doing it. And so they received the services when they were there and then they went to their home state of Alabama to do it. And, you know, it’s super common whether we see it, you know, the call from the EMTs who put IVs in every day or the nurses at the hospitals, nurses that are in some other specialty. They see the opportunity for elective medicine and it intuitively makes sense because most of these IVs are, as you mentioned earlier, vitamins or something to that effect that will have some sort of moderate health benefit. And so it all feels like, you know, my word quasi medical type treatment. It’s kind of something they do all the time in the normal course of their business. And so they [00:13:00] go open a business that’s very retail feeling and that’s what happened here. And one of the things that you kind of alluded to during the story was that there were standing orders in place and essentially what that means is that the doctor has basically said, you know, here’s how you’re to do the IVs and the doctor signed off on it. And so the process, and I’ll say this to you to correct me if I’m wrong, in the story, was that someone came in off the street to get their IV and they would see the nurse and the nurse would probably take their patient history, but utilize and rely upon the standing orders to then go ahead and issue the treatment once the nurse said they were good to go. Is that accurate?
Brad: Yeah, and that’s fair and they call it a questionnaire, which is why I was using that term, but they were like here’s the questionnaire and depending on how the patient filled it out that standing [00:14:00] order then would reflect what to do.
Michael: Okay, so let’s unpack this a little bit, Brad, and I’ll have you start, if you don’t mind, give kind of a legal recap, starting at the baseline, what is the practice of medicine and why that is relevant here?
Brad: Yeah, and it’s very relevant to this situation and every state’s going to define the practice of medicine a little bit differently, but generally speaking, when there is a diagnosis or some type of medical treatment plan that needs to be put in place then you start falling into the practice of medicine. In some states, you go further in, meaning the moment you start actually affecting living tissue, that could be either the piercing of the skin, or the freezing of the skin, or the burning of the skin, again, lasers.
Michael: What about sticking a needle in your arm?
Brad: So sticking that needle in the arm, yes, is generally the practice of medicine because you’re piercing the skin. So good catch there, Michael. You’re paying attention. I’m very proud of you. I thought you were asleep there for a second. And [00:15:00] what happened in this particular case is, so that’s a general rule, and since this particular group is based out of Alabama, the state of Alabama, they actually went further in. So the state board of medical examiners there, they noted that the diagnosis of a patient’s condition and a recommendation of IV therapy actually constitutes the practice of medicine. Now, the important element there, Michael, is it’s not a, I think this could be because you pierced the skin. The board said, no, no, no, this is because there’s some condition here and because you recommend IV therapy, that is the practice of medicine. Additionally, because of that, that means that something has to occur. And I think you kind of hinted to this earlier when you were dejecting to something I said. You might have even mentioned the GFE, you know, the word in the street is called the GFE, kind of like your bicep says GFE for some reason, which is the good faith exam. And Michael, you kind of gave a general rule about what is the GFE, but the state of Alabama [00:16:00] medical board actually went further into it and noted for an IV treatment who could conduct the GFE.
Michael: Yeah and before I talk about the GFE, something that jumped out at me that Alabama did that we believe every other state would do is they made it super clear that IV is the practice of medicine and we’ve been screaming that from the rooftops ever since the IV therapy business started exploding and Alabama was the first state to confirm what we thought because of this broad definition that you were talking about that most states have. They made it super clear and then they also went further as you noted, to clarify, what is the good faith exam and what does that mean? In Alabama, only a licensed physician or physician assistant, a certified registered nurse practitioner or a certified nurse [00:17:00] midwife legally practicing with a physician may diagnose a patient, assess their symptoms and recommend an IV for the treatment of the patient’s condition. And so, you know, Brad, we generally, we get a lot of pushback from RNs when we mention this. And as I said, this is probably the rule in every state. We just have that clarity in Alabama, but talk a little bit about why do we receive that pushback from RNs?
Brad: Yeah. And this is a scope of practice issue, for audience members who’ve heard us talk about it, every single professional up and down the food chain in the medical industry, between your physician, your physician assistant, your nurse practitioner, your RNs, your LVNs, they all have a scope of practice which is defined either by state law or it’s defined by and normally fleshed out further by the medical board or the nursing board or sometimes the [00:18:00] cosmetology board, depending on what they’re allowing you to do. So the concept is that scope is what you’re allowed to do. And a lot of times we go into reading in many states, an RNs scope of practice. There’s three elements. I mean, there’s many elements they can do, but they can help take the, and you were caught talking about the good faith exam. So the good faith exam, audience members take a step back, the three elements are the medical, you know, in the very beginning conducting a physical examination, which if you look at the scope of practice and RN can do that. The next step is obviously reviewing the medical history, which again, if you look at the scope of practice and RN can actually do that. The third element of a good faith exam though, which they cannot do, is come up with the actual treatment plan. So that’s actually where an RNs scope of practice ends. They could do the first two steps and in several states it notes that an RN can start an IV [00:19:00] line. So they would assume, oh gosh, well if I can do the medical examination and I can do the review of the history, and I can put the IV in, therefore, I should be able to then determine what to put in there and that’s the case where a lot of RNs start pushing back, but the follow up question obviously is, well, what are you putting in there? Sticking the line in is just a piece of it. Putting the fluid, liquid therefore would mean you’re going further through it which means an RN could administer the IV therapy. However, again, in the state of Alabama, they said, yes, they could, but it has to be after the good faith exam had been conducted based on that, again, you described in Alabama, the appropriate medical provider who had to look at that. And today’s story really centers around that standing order. So we’ve established that they have this scope to actually do the actual IV and put it [00:20:00] in. So I think at this point in the episode, Michael, we’re going to have to answer the promise here that we promised that we’re going to answer. Fake or real, can I use standing orders for my IV bar?
Michael: The answer’s fake for what everyone thinks it is, Brad. It’s fake because people think standing orders can replace the good faith exam and that’s the danger. That’s why in the story today, they and many of their friends got shut down by the state of Alabama and why there’s risk in every other state. And so, I will pause to say, does a standing order have relevance? Yes, it does actually. So if you think, and this actually applies across the country, if you think about, how do you supervise and delegate medical treatments you have as part of this treatment process, you have the good faith exam conducted by [00:21:00] someone that has the scope of practice to exercise independent judgment. And so they do a treatment plan and they’ve got it and they’ve, they’ve determined that the IV is appropriate. And at that point in time, they can delegate that treatment down to someone in that state that has the scope of practice in virtually every state, if not, every state RNs can be delegated putting an IV in an IV bar type scenario. As a part of that delegation what every state requires is a set of written protocols or SOPs and guess what Brad? Standing orders is just a different name of the same thing. It is in writing this is how we do the treatment. So the standing orders in a sense can work if that’s the function as the written protocols that are signed off on by the supervisor, the supervising physician, [00:22:00] to say this is how we’re going to do these treatments. And that ends up being actually very protective to everyone involved. It is protective to the delegating physician, because it’s super clear. This is how we do things, and of course, presumably that’s within the standard of care, and it’s protective to the nurse doing the treatments because if they’re following their orders, then they can say, look, I’m just doing things in the way that we said they should be done. So, I think we have to stick with the answer of fake, Brad, because I know that the scenario we get is much like the story today where people come in and they think it’s a retail situation. The doctor’s not going to be present. And we want to have a quick way that someone can come in and get their IV started to cure their hangover and it doesn’t work that way.
Brad: Yeah and I think the other pushback that we hear on this, and [00:23:00] I agree with your answer, by the way, is that, well, I mean, it’s cash based. I mean, does the practice of medicine still apply if it’s cash based or it’s voluntary? They want this treatment because they’re hungover and therefore they should be able to waive that. And what’s fascinating about this particular situation is, it’s still the practice of medicine is what the state of Alabama said. It’s still the practice of medicine is what we’ve said over and over again. Yes, we understand that someone’s voluntarily coming in here. They’re asking for this. They’re paying with cash, but you still have to follow the same rules no matter what’s being paid by a commercial payer, the federal government, or someone just paying with cash. There are rules that have to be within the standard of care and what we just established and what the state of Alabama here establishes, those steps, and that’s why it’s so important to say fake in this particular answer, because using that questionnaire or standing order cannot get you around those elements of it. And I’m sure the audience members are trying to figure out what happened, I guess, with [00:24:00] the IV bar group. I’ll say Michael kind of hinted at this earlier, they weren’t the only ones. They got this nice little letter. I believe it was over a dozen different clinics got the cease and desist letter. And there is some confusion there, and we won’t dive too deep in it, but the big confusion was, in Alabama, anyone can own a medical facility, so they thought, just because I own it, therefore must be compliant. Again, cause it was cash based, they could do it. And this person had come from a hospital where they had certain standing orders in the ER. So there’s a lot of, if, if, if, you know, what if this happened, would this happen? And that’s the pushback. The concept ultimately at the very end is you have to remember that no matter where you fall in the spectrum, up and down the food chain your scope of practice, you can’t be delegated something outside of your scope of practice, and that’s what was happening in this particular case, and that’s why the state of Alabama came in so hard against this particular group. By the way, I’ll give you an [00:25:00] update. They’re actually reopened and they’re doing fine, but they obviously had to do telemedicine good faith exams, which I won’t go through too much of that today, but that’s not the point of the story. For you, Michael, what are some thoughts that you have before we go?
Michael: Well, I mean, I’ll say this that if you want to have a whale that is going to be your spy and you put a harness on it that has your country’s emblem on it and hang a GoPro on it, if you find that whale, it’s going to be suspicious, right? I mean, yeah, you’re going to think what’s going on here. It’s either a practical joke or a spy. Well, if you open a business that is treating patients, you’re sticking a needle into the arm, you can justify it in your own mind of I saw an advertisement in the hotel lobby in Vegas and was able to just walk in and get a treatment. And you can justify as cash based, as you said, or elective [00:26:00] medicine, as you said, but at the end of the day, you can’t get around the fact that this is the practice of medicine and the risk is real and the moment we all talk about, how are you going to get in trouble? Someone’s going to turn you in. A competitor or an employee or a patient and you have to answer to the medical board. And we believe that every state, like Alabama, would interpret IV therapy in the same way.
Brad: Well, that’s awesome. Well, thanks for clearing that up for everyone, Michael. And audience members, that’s all the time we have today, but next Wednesday we continue our quest to determine these legal myths, whether or not they’re fake or real. We’ll have series regular Jay Reyero joining us in the studio to help answer fake or real, the FTC has banned all non-compete agreements.
Outro: Thanks again for [00:27:00] joining us today. And remember, if you liked this episode, please subscribe, make sure to give us a five star rating and share with your friends. You can also sign up for the ByrdAdatto newsletter by going to our website at ByrdAdatto.com. 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 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.
