Thinking of Adding Infusion Therapy to Your Practice? Four Legal Issues to Address Before Partnering
As the demand for infusion therapy continues to rise, many physicians are being approached by infusion management companies offering new business opportunities – including offering to provide management services for an infusion therapy practice or to lease space in the physicians’ office for a brick-and-mortar infusion therapy practice. These arrangements can offer real advantages – expanded treatment options for patients, a new revenue stream, and a way to stay competitive as more infusions shift from hospital outpatient departments to physician offices. But before signing a management services agreement (MSA) or lease, physicians need to understand several key regulatory issues that can turn a promising partnership into a compliance risk.
1. Corporate Practice of Medicine (CPOM) Restrictions
In many states, only licensed physicians can own or control a medical practice. If an infusion management company provides clinical staff, procures medications, or exerts influence over patient care decisions, the arrangement may cross into the prohibited “corporate practice of medicine.” The key question is who exercises control over medical judgment – such as staffing, patient selection, or treatment protocols. Structuring the relationship to ensure that the physician retains clinical authority is essential to avoid CPOM violations.
2. Licensure of the Management Service Provider and Staff
A second issue is whether the management company – and its clinical staff – are properly licensed. Some states require licensure for nurse staffing agencies, if the entity employs or places nurses in a physician’s office. Others may be regulated as home health agencies, even if the infusion therapy is provided on-site. Physicians should confirm that the company’s licenses (and those of its nurses) are valid in the state and that any temporary staffing complies with local Board of Nursing rules.
3. Facility Licensing and Regulatory Classification
In addition to individual and corporate licensure, the practice itself may need a facility license. Some states require separate certification or registration for infusion clinics, particularly when sterile compounding, hazardous drug preparation, or certain infusion drugs are involved. Even when not formally licensed as a health facility, the site must comply with pharmaceutical compounding and may be subject to inspection by the Board of Pharmacy or Department of Health.
4. Kickback Risks
Physicians should also exercise caution when leasing office space or equipment to an infusion therapy provider. If rent or shared services are offered at below fair market value, regulators may view the discount as an inducement for patient referrals – potentially violating the federal Anti-Kickback Statute or similar state laws. To mitigate risk, leases should be set at commercially reasonable rates, documented in writing, and structured independently from any expectation of patient volume or revenue sharing.
A Growing Opportunity – With Growing Scrutiny
Recent reports show that payor mandates are accelerating the migration of infusion services to ambulatory sites and physician offices. Hospitals are losing ground to office-based infusion centers and home infusion providers, while new private equity – backed ventures are entering the market. This shift has created attractive partnership opportunities – but also new layers of operational and regulatory complexity for physicians.
Takeaway
Before entering into a MSA or lease with an infusion provider, physicians should conduct due diligence on four fronts: (1) ensure the structure respects CPOM limits; (2) verify all required staffing and facility licenses; (3) confirm the arrangement complies with payer and state oversight requirements; and (4) perform the necessary due diligence that an arrangement is fair market value. Being proactive can help physicians capture the benefits of in-office infusion therapy while staying compliant with state medical practice laws.
If you have any questions about partnering with an infusion therapy provider, please contact Evan Sampson at esampson@postschell.com or 856.301.2561.
Disclaimer: This post does not offer specific legal advice, nor does it create an attorney-client relationship. You should not reach any legal conclusions based on the information contained in this post without first seeking the advice of counsel.
