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Retail Health Clinics: How the Next Innovation in Market-Driven Health Care is Testing State and Federal Law

Published online by Cambridge University Press:  06 January 2021

Kaj Rozga
Kaj Rozga*
Affiliation:
Boston University School of Law, University of California, San Diego
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Extract

The emergence of in-store retail health clinics (RHCs) has sparked a debate that pits quality of care concerns against the advantages of consumer choice in the marketplace for health care. RHCs appear in pharmacies, grocery stores, and big-box retailers like Wal-Mart, offering basic health care services on a walk-in basis that are administered primarily by nurse practitioners (NPs). Proponents of these clinics hail their pro-market effects: convenience and cost-savings associated with consumer-driven health care; lower prices from increased competition between providers; and increased access to basic health care. Critics of RHCs raise concerns that quality of care is hindered by the lack of physician oversight, disruption of the “medical home,” and the conflicts of interest arising from prescribing drugs at pharmacy-housed clinics.

Type
Article
Information
American Journal of Law & Medicine , Volume 35 , Issue 1 , March 2009 , pp. 205 - 231
Copyright
Copyright © American Society of Law, Medicine and Ethics and Boston University 2009

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References

1 See William D. White, , Market Forces, Competitive Strategies, and Health Care Regulation, 2004 U. Ill. L. Rev. 137, 151-54 (2004).Google Scholar

2 See John D. Blum, , Beyond the Bylaws: Hospital - Physician Relationships, Economics, and Conflicting Agendas, 53 Buffalo L. Rev. 459, 463-64, 482-83 (2005)Google Scholar. See generally John G. Day, Managed Care and the Medical Profession, 3 Conn. Ins. L. J. 1, 48 (1996).

3 See Uwe E. Reinhardt, The Rise And Fall Of The Physician Practice Management Industry, 19 Health Aff. 42, 50 (2000), http://content.healthaffairs.org/cgi/reprint/19/1/42.pdf.

4 Id. at 50-51.

5 See William M. Sage, , The Wal-Martization Of Health Care, 28 J. Legal Med. 503, 508-10 (2007)Google Scholar.

6 For an overview of consumer-driven health care, and its positive impact on costs, access, convenience, and information, see Regina Hertzlinger, Consumer-Driven Health Care: Implications for Providers, Payers, and Policy-Makers (2004).

7 FECs provide the same primary level of care offered at hospital emergency rooms. Though they focus on providing basic primary care, they are capable of handling major trauma and often expected to be “prepared to medically respond to any life or limb threatening condition.” Mitchell Katzman, Freestanding Emergency Centers: Regulation and Reimbursement, 11 AM. J. L. & MED. 105, 107 (1985). FECs are often located in consumerfriendly places like shopping center. Id. at 105.

8 See Robin Weinick & Renee Betancourt, No Appointment Needed: The Resurgence of Urgent Care Centers in the United States 7-9 (California Healthcare Foundation 2007), http://www.chcf.org/documents/policy/NoAppointmentNecessaryUrgentCareCenters.pdf. Urgent care clinics operate during extended hours, offering short waiting times for consumers coming in on a walk-in basis. Id. at 14. They provide services similar to the acute care typically administered by primary care physicians at their private offices, and also more complex episodic care administered at hospital emergency rooms, such as on-site radiology, care of simple fractures, “point-of-care testing,” urinalysis, pregnancy tests, hemoglobin testing, and diagnosis of chest pains, among other things. Id. They do not, however, offer a full suite of emergency room-type treatments. Id. at 5. This is the primary means by which I differentiate urgent care centers from FECs. This distinction becomes important when discussing state regulation of these clinics, which varies depending on the degree of care provided at them. In the case of both FECs and urgent care centers, I primarily refer to independently-owned facilities. Hospital-owned FECs and urgent care centers would fall under various state laws and regulations governing hospitals, making them poor comparisons to RHCs, which are mostly owned by non-hospital corporations.

9 See Bill Hendrick, Doc in the Box: Urgent Care Explosion, Atl. J. & Const., June 29, 2008, at 1F, available at http://www.ajc.com/search/content/business/stories/2008/06/29/boxdocs.html.

10 Laura Landro, The Informed Patient: Options Expand For Avoiding Crowded ERs, Wall St. J., Aug. 6, 2008, at D1, available at http://online.wsj.com/article/SB121798121529515219.html.

11 Also known as store-based health clinics, walk-in health clinics, limited services clinics, convenient care clinics, retail-based clinics, and even “McClinics.” See generally McClinics: “Convenient Care” Clinics are Taking Off, 383 Economist 74 (2007).

12 Maria Finarelli & Nivi Pillai, Retail Health Clinics, Hosp. & Health Networks, May 15, 2007, http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG/Article/data/05MAY2007/070515HHN_Online_Finarelli&domain=HHNMAG.

13 Both PAs and NPs provide health care services to patients in various environments and receive their own respective types of licenses to practice medicine. NPs are more specialized in their expertise and deal with the bedside care of patients, while PAs perform the type of services that physicians do, diagnosing and treating illnesses. See Robyn E. Mitchell, Evaluating the Clinical Preparation of Physician Assistant Versus Nurse Practitioner Students and the Characteristics of Their Preceptors, 4 Internet J. Acad. Physician Assistants (2004).

14 Common treatments include: bladder infections, strep throat, poison ivy, pregnancy tests, vaccination, removing stitches, writing prescriptions, colds, sunburns, wart removal, sprained ankle care, ear infections, minor burns, etc. See Jennifer Griffin, Retail Approach to Health Care Coming Under Increased Scrutiny, Birmingham Med. News, Sept., 2007, http://birmingham.medicalnewsinc.com/news.php?viewStory=996; Anne D’Inocenzio, Retail Health Clinics – and Their Critics – Growing, Oakland Trib., Aug. 12, 2007, available at http://findarticles.com/p/articles/mi_qn4176/is_/ai_n19476786; Liz Kowalczyk, State Open To In-store Clinics, But Delays CVS Decision, B. Globe, July 18, 2007 at B4, available at http://www.boston.com/news/local/articles/2007/07/18/state_open_to_in_store_clinics_but_delays_cvs_decision.

15 Griffin, supra note 14. Wait time at emergency rooms, in contrast, averages 222 minutes nation-wide. Tom Costello, NBC News, Hospitals Work to Improve ER Wait Times, Nov. 20, 2006, http://www.msnbc.msn.com/id/15817906.

16 RAND Corp, Retail Clinics Attracting Those Without Regular Doctors, Wash. Post, Sept. 10, 2008, available at http://www.washingtonpost.com/wpdyn/content/article/2008/09/10/AR2008091001849.html. RHCs are also proliferating abroad, including Britain. See McClinics, supra note 11.

17 RAND, supra note 16.

18 Press Release, Most Adults Satisfied with Care at Retail-Based Health Clinics, Harris Interactive, Apr. 11, 2007, http://www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=1201 [hereinafter Retail-Based Health Clinics].

19 One clinic operator stated, “[w]e're learning every day about consumers and the retail world … making these changes has required a mindset shift.” Mary Kate Scott, Health Care in the Express Lane: Retail Clinics Go Mainstream 12 (Cal. Health Care Found. 2007), available at http://www.chcf.org/documents/policy/HealthCareInTheExpressLaneRetailClinics2007.pdf.

20 Compared to the HMO model, “retail clinics offer a trusted brand at the point of service, not at the point of insurance enrollment. This difference opens up many more innovative possibilities regarding customer service and quality.” Sage, supra note 5, at 513.

21 In 2005, the AMA established the “Scope of Practice Partnership,” a nationwide initiative to restrict non-MD scope of practice. See Edward L. Langston, Scope of Practice: Need for Continuing Dialogue, Am. Med. News, Jun. 6, 2008, http://www.amaassn.org/amednews/2008/06/02/edca0602.htm.

22 For a discussion of these debates, see generally Tine Hansen-Turton et al., Convenient Care Clinics: The Future of Accessible Health Care, Convenient Care Association 6-10 (2007), http://www.ccaclinics.org/images/stories/downloads/whitepaperfordistribution.pdf.

23 Joseph Annis, Report 7 of the Council on Medical Service: Store-Based Health Clinics 6 (2006), http://www.amaassn.org/ama1/pub/upload/mm/372/a-06cmsreport7.pdf.

24 Id. at 2.

25 See Andis Robeznieks, Look Who's Buying Retail, Modern Healthcare, Nov. 19, 2007, http://www.accessmylibrary.com/coms2/summary_0286-33521424_ITM.

26 See Robert L. Phillips Jr. et al., Can Nurse Practitioners and Physicians Beat Parochialism Into Plowshares?, 21 Health Affairs 133, 137 (2002), available at http://content.healthaffairs.org/cgi/reprint/21/5/133.pdf.

27 Jim Ritter, Who Needs Doctors? Physicians Wary of Retail Clinics Staffed by Nurse Practitioners, Chicago Sun-Times, Jun 21, 2007.

28 See Kowalczyk, supra note 14.

29 D’Inocenzio, supra note 14.

30 See generally Stephen Berman, Continuity, the Medical Home, and Retail-Based Clinics, 120 Pediatrics 1123 (2007), available at http://pediatrics.aappublications.org/cgi/reprint/120/5/1123.

31 See Annis, supra note 23, at 4-6.

32 See John W. Saultz & Jennifer Lochner, Interpersonal Continuity of Care and Care Outcomes: A Critical Review, 3 Annals Family Med. 159, 164 (2005), available at http://www.annfammed.org/cgi/reprint/3/2/159.

33 See Hansen-Turton et al. supra note 22, at 11.

34 See Robeznieks, supra note 25.

35 See Sage, supra note 5, at 513.

36 See generally Chip Means, Retail Clinics’ Economics Eyed, Healthcare Finance News, Sept. 1, 2007, http://www.healthcarefinancenews.com/printStory.cms?id=6950. Pharmacies are open about their goals to increase prescriptions through their RHCs because pharmaceuticals are a high margin item and “core to their economic model.” Scott, supra note 19, at 15.

37 See D’Inocenzio, supra note 14.

38 Retail-Based Health Clinics, supra note 18, at 3.

39 See Kathy Robertson, Study Debunks Theories on Retail Health Clinics, Sacramento Bus. J., Sept. 11, 2008, available at http://www.bizjournals.com/sacramento/stories/2008/09/08/daily51.html.

40 See Convenient Care Association, Convenient Care Quality & Safety Standards, http://www.ccaclinics.org/index.php?option=com_content&view=article&id=6&Itemid=13 (last visited Feb. 12, 2009).

41 Keith Darce, Are Retail Clinics a Healthy Choice?, San Diego Union-Tribune, Nov. 7, 2007, available at http://www.signonsandiego.com/uniontrib/20071107/news_1n7clinics.html. Note that under such a model, it becomes clear why RHCs are willing to adopt the CCA standards: market conditions already dictate to RHC operators that it is in their financial interests to limit their scope of practice, build electronic record keeping systems, and refer patients to local primary care providers for major treatments.

42 See Sage, supra note 5, at 511.

43 See Scott, supra note 19, at 4.

44 See D’Inocenzio, supra note 14; McClinics, supra note 11. RHCs were found to be “most cost-effective” in a comparison of providers of strep throat treatments. Hansen- Turton et al. supra note 22, at 17.

45 Marcus Thygeson et al., Use and Costs Of Care In Retail Clinics Versus Traditional Care Sites, 27 Health Aff. 1283, 1289 (2008), available at http://content.healthaffairs.org/cgi/reprint/27/5/1283. The same study found a trend of increasing costs at RHCs over a four-year period of time, though the same effect was calculated in emergency rooms, urgent care clinics, and doctors’ offices. Id. at 1289.

46 See Hansen-Turton et al. supra note 22, at 17.

47 Scott, supra note 19, at 19-20.

48 Retail-Based Health Clinics, supra note 18, at 4.

49 RAND, Press Release, Retail Medical Clinics Attract Patients Who Do Not Have Regular Health Care Providers (Sept 10, 2008), http://www.rand.org/news/press/2008/09/10.

50 See Scott, supra note 19, at 18.

51 See Annis, supra note 23, at 3.

52 National Health Expenditure 2007 Highlights, Centers for Medicare & Medicaid Services, available at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/highlights.pdf.

53 See Thygeson et al., supra note 45, at 1290.

54 Id.

55 One report summarized it aptly: “retail clinics challenge consumers, clinicians, governments, employers, and carriers to address the shortcomings of the traditional health care system by investing in primary care and integrating the lessons they offer for providing better, faster, easier, and cheaper care.” See Scott, supra note 19, at 23.

56 Griffin, supra note 14.

57 Mark V. Pauly, Competition in Medical Services and the Quality of Care: Concepts and History, 4 Int'l J. Health Care Fin. & Econ. 113, 117 (2004) (“improvements in information level that are combined with more competition will generally lead to improved outcomes.”).

58 See Leon Wyszewianski et al., Market-Oriented Cost-Containment Strategies and Quality of Care, 60 Health & Soc’y 518, 520 (1982).

59 Michael R. Pollard, Fostering Competition in Health Care, 33 Proced. Acad. Pol. Sci. 158, 159 (1980).

60 See id. at 159-60.

61 See id. at 160.

62 See Uwe Reinhardt, Economists in Health Care: Saviors, or Elephants in a Porcelain Shop, 79 Am. Econ. Rev. 337, 339 (1989).

63 See Sage, supra note 5, at 515.

64 See D’Inocenzio, supra note 14, at 2.

65 See Sage, supra note 5, at 512.

66 See Ateev Mehrotra et al., Retail Clinics, Primary Care Physicians, and Emergency Departments: A Comparison Of Patients’ Visits, 27 Health Aff. 1272, 1279 (2008).

67 Annis, supra note 23, at Executive Summary. For a further look at how primary care physicians are responding, see Berkeley Rice, In-Store Clinics: Should You Worry?, Med. Econ., Sept. 16, 2005, http://www.memag.com/memag/article/articleDetail.jsp?id=179078&sk=&date=&pageID=2.

68 Scott, supra note 19, at 19.

69 Kowalczyk, supra note 14.

70 See D’Inocenzio, supra note 14.

71 Zachary Seward, States Boost Scrutiny of Drugstore Clinics, Wall St. J., Aug. 6, 2007, available at http://online.wsj.com/article/SB118661845968892421.html.

72 See Sage, supra note 5, at 515.

73 Joyce M. Mann, et al., A Profile of Uncompensated Hospital Care, 1983-1995, 223 Health Aff. 227, 227 (1997); D’Inocenzio, supra note 14.

74 See Sage, supra note 5, at 517.

75 Retail-Based Health Clinics, supra note 18.

76 Mehrotra et al., supra note 67, at 1280.

77 Pollard, supra note 60, at 160.

78 Hansen-Turton et al., supra note 22, at 13.

79 Carla Johnson, Fewer US Med Students Choosing Primary Care, Wash. Post, Sept. 10, 2008, available at http://www.washingtonpost.com/wpdyn/content/article/2008/09/09/AR2008090902001.html.

80 See Christopher J. Conover & Frank A. Sloan, Does Removing Certificate-of-Need Regulations Lead to a Surge in Health Care Spending, 23 J. Health Pol. Pol'y & L. 455, 455- 457 (1998).

81 See Nursing Home of Dothan, Inc. v Alabama State Health Planning & Dev. Agency, 542 So. 2d 935 (Ala. App 1988) (nursing home); Humana Med. Corp. v. State Health Planning & Dev. Agency, 460 So. 2d 1295 (Ala. App. 1984) (hospital).

82 See Auburn Med. Center, Inc. v. East Alabama Health Care Auth., 847 So. 2d 942 (Ala. Civ. App. 2001) (ambulatory surgical center); State Health Planning & Development Agency v. Baptist Health System, Inc., 766 So. 2d 176 (Ala. Civ. App. 1999) (rural health clinic).

83 Ky. Rev. Stat. Ann. § 216B.020 (1998).

84 N.H. Rev. Stat. Ann. § 151-C:13 (2005).

85 Sarah E.B. Stanton, Survey of State Certificate of Need Programs 9 (2006), http://dls.state.va.us/GROUPS/COPN/meetings/102506/SurveyPPT.pdf.

86 Setting up an RHC costs between $75,000 to $250,000, depending on location, size, and scope of services offered. See Christina Rogers, First Retail Health Clinic Opens in Area, Roanoke Times, Jan. 13, 2008, http://www.roanoke.com/business/wb/146862. Given that most state CON thresholds are over $1 million, RHCs will not be required to satisfy state CON laws.

87 For list of typical “regulated services,” see Certificate of Need: State Health Laws and Programs, National Conference of State Legislatures, August 21, 2008, http://www.ncsl.org/programs/health/cert-need.htm. See also Katzman, supra note 7, at 112. Recently, urgent care centers in Michigan, New York and Maine had to obtain state CONs before opening their doors. See Jay Greene, St. Joseph's to Open Urgent Care Centers, Crain's Detroit Business, Feb. 20, 2008,http://www.crainsdetroit.com/article/20080220/SUB/401893169; Carolyn Norton, Fox Hospital to Open Center for Urgent Care, Daily Star, Mar. 12, 2002, http://old.thedailystar.com/news/stories/2002/03/12/urgent.html; Meridith Goad, Mid Coast Hospital Proposes Expansion, Portland Press Herald, Sept. 5, 2008, http://pressherald.mainetoday.com/story.php?id=208478&ac=PHnws.

88 An increasing number of RHCs are being opened by traditional health care providers. See generally Robeznieks, supra note 25.

89 Barry Furrow et al., The Law of Health Care Organization and Finance 529 (2004); Mary H. Michal et al., Center to Advance Palliative Care, Corporate Practice of Medicine Doctrine 50 State Survey 2 (2006), available at http://www.nhpco.org/files/public/palliativecare/corporate-practice-of-medicine-50-statesummary.pdf.

90 Michal et al., supra note 90, at 2.

91 James C. Robinson, The Corporate Practice of Medicine: Competition and Innovation in Health Care 13-15, 20 (University of California Press 1999).

92 Michal et al., supra note 90, at 2.

93 See Weinick & Betancourt, supra note 8, at 7.

94 See id. at 13.

95 Sage, supra note 5, at 504.

96 It is important to note, however, that some states with CPOM prohibitions on the books do not enforce them. See Michal et al., supra note 90, at 2.

97 See Scott, supra note 19, at 22-25.

98 For an example of such a relationship, see Tyler Chin, On-call Goes Retail: Defining the Doctors’ Role, American Medical News, Sept. 11, 2006, http://www.amaassn.org/amednews/2006/09/11/bisa0911.htm.

99 Michal et al., supra note 90, at 2, 10. Other states include: Indiana, Mississippi Iowa, Louisiana, New Mexico, Ohio, Utah, and Tennessee. See id. at 6-17.

100 See Cal. Bus. & Prof. Code § 2400 (West 2003); Darce, supra note 41; Scott, supra note 19, at 24.

101 Ronald Schmidt et al., Convenient Medical Clinics: Reshaping the Healthcare Landscape, Health Financial Management, June, 2007, http://findarticles.com/p/articles/mi_m3257/is_6_61/ai_n19311747/pg_1.

102 07-116 Op. Tenn. Att’y Gen. 2, 3 (2007), available at http://www.attorneygeneral.state.tn.us/op/2007/OP/OP116.pdf.

103 N.J. Admin. Code § 13:35-6.16(f)(4)(i) (2009) (New Jersey: “health care facility or health care provider”); Ind. Admin. Code § 25-22.5-1-2(a)(22)(E) (2009) (Indiana: “health facility”).

104 Furrow et al., supra note 90, at 79.

105 Randall G. Holcombe, Eliminating Scope of Practice and Licensing Laws to Improve Health Care, 31 J. L. Med. & Ethics 236, 240 (2003).

106 See id.

107 In addition to providing basic care, PAs can prescribe medication in all 50 states. See Am. Acad. Physician Assistants, Information About PAs and the PA Profession, http://www.aapa.org/geninfo1.html (last visited Mar. 3, 2008).

108 See Hansen-Turton et al., supra note 22, at 9, 13. One state that recently attempted to buck this trend, Georgia, ultimately rejected a bill that would have prohibited NPs from practicing in retail settings. H. B. 603, 2006 Gen. Assem., Reg. Sess. (Ga. 2006), available at http://www.legis.ga.gov/legis/2005_06/pdf/sb603.pdf.

109 See Phillips Jr. et al., supra note 26, at 135-36.

110 Ann Ritter & Tine Hansen-Turton, The Primary Care Paradigm Shift: An Overview of the State-Level Legal Framework Governing Nurse Practitioner Practice, 20 Health Law. 21, 25–26 (2008).

111 Hansen-Turton et al., supra note 22, at 10.

112 Hooker, Roderick S. & Daisha J. Cipher, Physician Assistant and Nurse Practitioner Prescribing: 1997–2002, 21 J. Rural Health 355, 355 (2005).Google Scholar

113 See Scott, supra note 19, at 26.

114 H.B. 1253, 2007 Gen. Assem., Reg. Sess. (Pa. 2007), available at http://www.legis.state.pa.us/cfdocs/legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2007&sessInd=0&billBody=H&billTyp=B&billNbr=1253&pn=1548.

115 Gregory Lopes, AMA's Backing to Boost Retailer Health Clinics, Wash. Times, December 22, 2007, at A01.

116 Id.

117 Some clinics are moving towards offering a “full suite of acute and preventive care.” Scott, supra note 19, at 6. Clinical services at RHCs are expected to “expand as new medical devices enable rapid, accurate, binary diagnoses.” Id. at 3. Some examples mentioned include: imaging devices services, disease management, and “wellness” services (including “school physicals, diabetes screening programs, nutrition counseling, hearing tests, and asthma medication.”) Id. at 29, 30.

118 States with such limitations that are not mentioned below also include: Alabama, South Dakota, Illinois, and Virginia. See Antoinette Alexander, Retail Clinics Contend with Regulations, Drug Store News, Sept. 24, 2007, http://findarticles.com/p/articles/mi_m3374/is_12_29/ai_n21053464.

119 Scott, supra note 19, at 22.

120 See discussion above supra Part III(i).

121 “It is attached to the old model of providing healthcare services with the idea that the doctor is in their office with the nurse practitioner all of the time, and it is very different from our members’ model where you have one nurse practitioner in many different sites.” Alexander, supra note 119.

122 See Phillips Jr. et al., supra note 26, at 137.

123 See Annis, supra note 23.

124 H.R. 669, 2006 Gen. Assem., Reg. Sess. (Fla. 2006), available at http://www.flsenate.gov/data/session/2006/House/bills/billtext/pdf/h069900.pdf. The Board subsequently limited the number to four licensed health care practitioners per supervising physician. See Kevin B. O’Reilly, Physicians Pushing State Lawmakers to Regulate Burgeoning Retail Clinics, Am. Med. News, Jun. 4, 2007, http://www.amaassn.org/amednews/2007/06/04/prl10604.htm.

125 O’Reilly, supra note 125. Georgia recently considered a law that would have specifically prohibited NP prescription authority at clinics housed in retail locations with an on-site pharmacy. Scott, supra note 19, at 22.

126 The regulations affect any “free-standing urgent care center,” which is defined as “a location, distinct from a hospital emergency room, a physician's office, or a free-standing clinic, whose purpose is to diagnose and treat illness or injury for unscheduled, ambulatory patients seeking immediate medical attention.” Md. Code Regs. 10.09.77.01 (2008).

127 See Ariz. Rev. Stat. Ann. § 36-432 (2003).

128 14-090-010 R.I. Code R. § 10.0 (Weil 2008), available at http://www2.sec.state.ri.us/dar/regdocs/released/pdf/DOH/DOH_3495.pdf.

129 16-4000-4404 Del. Code Regs. § 10.1.2 (Weil 2008), available at http://regulations.delaware.gov/AdminCode/title16/4000/4400/4404.shtml.

130 See H.R. 1096, 80th Gen Assem., Reg Sess. (Tex. 2007), available at http://www.legis.state.tx.us/tlodocs/80R/billtext/pdf/HB01096I.pdf.

131 See Physician Assistants Act 46, 63 Pa. Cons. Stat. § 13(e)(5) (2007).

132 105 Mass. Code Regs. 140.313 (2008).

133 H.R. 5372, 95th Gen. Assem. (Ill. 2008), available at http://www.ilga.gov/legislation/BillStatus.asp?DocNum=5372&GAID=9&DocTypeID=HB&LegId=36672&SessionID=51&GA=95.

134 See Alexander, supra note 119.

135 Griffin, supra note 14.

136 See Katzman, supra note 7, at 111-12.

137 See 210 Ill. Comp. Stat. 50/32.5 (2004).

138 Defined as a facility separate from a hospital that displays itself to the public as offering “immediate medical treatment” for “life-threatening medical condition,” and is “capable of treating all medical emergencies that have life-threatening potential.” 16-4000- 4404 Del. Code Regs. § 1.0 (Weil 2009).

139 Id. at § 9.0.

140 The process includes demonstrating a commitment to maintaining “safe and adequate treatment” and a high quality of care. R.I. Gen. Laws § 23-17-3 (Weil 2008). An FEC is defined broadly as any non-hospital facility providing “prompt emergency medical care.” Id. at § 1.1.

141 Id. at § 5.0.

142 Id. at § 7.0, 8.0, & 9.0 (requiring a governing board, administrator, and medical director).

143 Id. at § 15.0-18.0.

144 Id. at § 19-21.

145 Defined as a non-hospital health care facility with a “separate staff functioning under … a clinic administrator or health officer” which provides “ambulatory health services.” Md. Code Regs. 10.09.08.01.

146 See Md. Code Regs. 10.09.36.02 (2008).

147 See Md. Code Regs. 10.09.08.02 (2008); Md. Code Regs. 10.09.77.02 (2008).

148 See Md. Code Regs. 10.09.08.03 (2008); Md. Code Regs. 10.09.77.03 (2008).

149 A freestanding urgent care center is defined as an “outpatient treatment center” that is open 24-hours and provides “unscheduled medical services that are not otherwise routinely available in primary care physician offices.” Ariz. Rev. Stat. Ann. § 36-401(A)(21) (2003).

150 See Ariz. Rev. Stat. Ann. § 36-432 (2003).

151 See Weinick & Betancourt, supra note 8, at 22.

152 See Katzman, supra note 7, at 112.

153 Speaking of physician licensure in the context of FECs, one author noted that “licensure regulations do not address the adequacy of the facility, equipment, or ancillary personnel.” Id.

154 Massachusetts Secretary of Health and Human Services, Judy Ann Bigby, on drafting RHC-specific licensing in her state: “[i]t became clear from our review that the current Department of Public Health regulations governing medical clinics don't address the operation of medical clinics with limited scopes of services. Rather than considering applications that require numerous waivers, we believe we should consider an alternative set of regulations that, if approved, will make the application process for operating limited service medical clinics transparent to any entity that feels they have a role in their community.” See Alexander, supra note 119.

155 105 Mass. Code. Regs. 140.1001 (2008), available at http://www.mass.gov/Eeohhs2/docs/dph/regs/105cmr140.pdf.

156 Id.

157 H.B. 5372, 95th Gen. Assem., Reg. Sess. § 25(a) (Ill. 2008), available at http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=51&GA=95&DocTypeId=HB&DocNum=5372&GAID=9&LegID=36672&SpecSess=&Session=.

158 Id. § 25(a)(1).

159 Id. § 25(a)(2).

160 Id. § 25(a)(4).

161 Id. § 25(a)(5).

162 Id. § 25(a)(6).

163 Id. § 45.

164 Id. § 50.

165 See discussion supra in Part III(ii).

166 Id. § 105.

167 See discussion supra in Part III(ii).

168 See Letter from Maureen K. Ohlhausen et al., Federal Trade Commission, to Hon. Elaine Nekritz, State Representative, State of Illinois 5 (May 29, 2008), available at http://www.ftc.gov/os/2008/06/V080013letter.pdf.

169 Id. at 8.

170 Id. at 6.

171 Id. at 7.

172 Id. at 1-2.

173 See H.R. 1885, 95th Gen. Assem., Reg. Sess. § 25(a)(3) (Ill. 2007), available at http://www.ilga.gov/legislation/95/HB/PDF/09500HB1885lv.pdf.

174 Id. § 25(a)(8).

175 Id. § 25(a)(9).

176 See Elizabeth Cooney, First Retail Clinic Opens in Medway Drugstore, B. Globe, Sept. 17, 2008, available at http://www.boston.com/news/health/blog/2008/09/first_retail_cl.html.

177 See discussion supra at Part III(i).

178 See H.R. 1484, 2008 Gen. Assem., Reg. Sess. (New Hamp. 2008), available at http://www.gencourt.state.nh.us/legislation/2008/HB1484.html.

179 42 U.S.C. § 1395nn (1998) (Stark II); 42 USC § 1320a-7b (1994) (anti-kickback).

180 In analyzing the impact of Stark II and anti-kickback law on RHCs, it should be noted that those choosing not to accept Medicaid and Medicare reimbursements fall outside the reach of both statutes.

181 Theodore N. NcDowell, The Medicare-Medicaid Anti-Fraud and Abuse Amendments: Their Impact on the Present Health Care System, 36 Emory L. J. 691, 692 (1987).

182 Neither the Centers for Medicare and Medicaid Services nor the Health and Human Services Office of Inspector General have yet issued any advisory opinions regarding RHCs.

183 Clinic Operators Tout Quality Care After AMA Complaint, Drug Store News, Sept. 24, 2007, http://findarticles.com/p/articles/mi_m3374/is_12_29/ai_n21053480.

184 42 U.S.C. § 1395nn(a)(1) (1998).

185 Id. § 1395nn(a)(1)(B).

186 Id. § 1395nn(a)(1)(A).

187 However, some states have passed comparable laws for non-federal programs. See Am. Coll. Radiology Bulletin, Anti-Kickback Law and Suspect Financial Agreements: FAQ, http://www.acr.org/SecondaryMainMenuCategories/BusinessPracticeIssues/FeaturedCategor ies/AntiKickback/AntiKickbackLawandSuspectFinancialAgreementsFAQDoc3.aspx (last visited Nov. 25, 2008).

188 Mehrotra et al., supra note 67, at 1272.

189 For a list of the DHS, as released by the Centers for Medicare & Medicaid Services, see HHS.gov, List of CPT1/ HCPCS Codes Used to Describe Certain DHS Categories, http://www.cms.hhs.gov/apps/ama/license.asp?file=/PhysicianSelfReferral/downloads/2008 CodelistpublFR1-15-08.zip (last visited Mar. 3, 2009).

190 See Rice, supra note 68; Hansen-Turton et al., supra note 22, at 5.

191 ”… if a nurse practitioner employee is free to refer to the entity of his or her choice, and the nurse practitioner independently chooses to refer to an entity in which her or her employer has a financial relationship, it is not clear that a Stark violation has taken place. The Office of the Inspector General has said that in such a case it would evaluate the specific facts of the situation.” Carolyn Buppert, Nurse Practitioner's Business Practice & Legal Guide 141 (2d ed. 2004).

192 “Moreover, referrals made by nonphysician practitioners generally do not implicate section 1877 of the Act, which focuses exclusively on referrals by physicians. However, if a referral made by a physician assistant or nurse practitioner (or other nonphysician) is directed or controlled by a physician, we are treating the referral as an indirect referral made by the directing or controlling physician, who is, in fact, the ‘referring physician.’ This interpretation is necessary to prevent the use of nonphysician practitioners to circumvent section 1877 of the Act.” Medicare and Medicaid Programs; Physicians’ Referrals to Health Care Entities, 66 Fed. Reg. 856, 880 (Jan. 4, 2001). When I use the term “physician” hereinafter, I also mean NPs and PAs imputed to a physician.

193 Scott, supra note 19, at 4.

194 The exception requires that the compensation agreement be written out, detailing the services to be provided by the referring physician, for a specific period of time, and the amount paid to be fixed at fair market value and to not vary with the volume or value of the referrals. See 42 U.S.C. § 1395nn(e)(3) (1998).

195 The exception requires that payments made to the lessor be detailed in writing, the space allocated be a reasonable size, the term be over one year long, the rent amount fixed and at fair market value, and that the “lease would be commercially reasonable even if no referrals were made between the parties.” See id. 42 U.S.C. § 1395nn(e)(1)(A). The last element may be the most difficult to prove because it seems doubtful that pharmacies would house RHCs if not for the anticipated revenue from drug prescription referrals.

196 See Scott, supra note 19, at 12.

197 Among other requirements, the compensation arrangement with the employed physician has to be for fair market value and cannot be affected by the volume or value of referrals. See 42 U.S.C. § 1395nn(e)(2) (1998).

198 See 42 U.S.C. §§ 1320a-7b (1994).

199 See Nicole Huberfeld, , Be Not Afraid of Change: Time to Eliminate the Corporate Practice of Medicine Doctrine, 14 243, 261 (2004).Google Scholar

200 See Lopes, supra note 116.

201 The employee/employer exception does not apply to independent contractors. See 42 C.F.R. § 1001.952(i) (2008); 42 U.S.C. § 1320a-7b(b)(3) (1994). Hospitals contracting with physicians as independent contractors, therefore, must rely on the “personal services” safe harbor, which requires that the compensation arrangement be detailed in writing, for a term longer than a year, and the amount fixed at fair market value and not varying with the volume or value of the referrals. 42 C.F.R. § 1001.952(d) (2008).

202 A 1989 OIG Fraud Alert details the anti-kickback concerns of joint ventures: insufficient risk and attracting, retaining, and compensating physicians in the joint venture based on past or anticipated referral volume. See Publication of OIG Special Fraud Alerts, 59 Fed. Reg. 65372- (Dec. 19, 1994).

203 See Jeff Sinaiko, Retail Medical Clinics: Issues for Consideration, Drug Store News, Nov. 6, 2006, http://findarticles.com/p/articles/mi_m3374/is_15_28/ai_n16865108.

204 For further details on the space rental safe harbor, see 42 C.F.R. § 1001.952(b) (2008).

205 Sage, supra note 5, at 514.