RETAIL HEALTH CLINICS EXPANDING BEYOND THE FLU SHOT AND CHALLENGING TRADITIONAL MODELS OF CARE PAUL W. PITTS PARTNER REED SMITH LLP SAN FRANCISCO, CALIFORNIA EMAIL: ppitts@reedsmith.com CATHERINE DOWER DIRECTOR, NATIONAL NURSING RESEARCH AND POLICY KAISER PERMANENTE OAKLAND, CALIFORNIA EMAIL: catherine.dower@kp.org I. What are Retail Health Clinics? (a) (b) (c) Clinics located in retail settings such as pharmacies (e.g., CVS, Walgreens, etc.), supermarkets, and big box retailers (e.g., Wal-Mart, Target, etc.); Staffed by nurse practitioners (NPs), practice nurses, physician assistants (PAs), typically supervised by physicians, and; Offering medical services under a limited scope of practice (e.g., simple medical conditions and basic preventive care). II. Market Size / Industry Characteristics / Growth Trends (a) (b) More than 1,600 sites and growing Major Retail Clinics: (iii) (iv) (v) (vi) (vii) CVS s MinuteClinic (http://www.cvs.com/minuteclinic) Walgreen s Take Care Health (http://www.walgreens.com/topic/pharmacy/healthcare-clinic.jsp) Walmart s Care Clinic (http://www.walmart.com/cp/care- Clinics/1224932) Rite Aid s RediClinic (http://www.rediclinic.com/riteaid/) Target s Clinic (http://www.target.com/c/clinic-health/-/n-54x94) Kroger s The Little Clinic (http://www.thelittleclinic.com/pages/home.aspx) Clinic ventures between retailers and health systems (viii) Clinics owned by health systems, e.g. Aurora QuickCare Clinic (ix) Clinics owned by weight loss, e.g. Lindora Health Clinic - 1 -
(c) What has sparked their demand? Retailers Enter the health and well being market Increase foot traffic Consumers (C) (D) (E) (F) Accessibility Evidence-based care Reduced cost Transparent pricing High satisfaction Brand recognition (d) Changing Market (iii) Significant growth in number of retail clinic locations Growth in the number of competitors entering the market Expansion in the type of services provided (C) Telemedicine see e.g. MinuteClinic using telemedicine to expand access (http://www.advisory.com/research/medical-groupstrategy-council/practice-notes/2014/april/how-minute-clinic-isupping-its-cool-factor-and-expanding-access) Primary Care see e.g. Walmart s FAQ stating that Walmart Care Clinic is a primary care clinic, which encompasses diagnosis and treatment of chronic and acute illnesses, as well as preventative services, such as immunizations, physicals and additional health screening. Our expanded scope of services enables us to be your primary medical provider. http://www.walmart.com/cp/care-clinics/1224932. Mental health - see e.g. QCare Clinic inside Philadelphia ShopRite offering behavioral health screening (http://www.bizjournals.com/philadelphia/blog/healthcare/2014/08/contest-winners-debut-their-behavioral-health.html) (iv) Increasing collaboration between clinics and other providers - 2 -
(v) (vi) (vii) Partnering with employers to offer workplace clinics Escalating debate over scope of practice State regulation of retail clinics III. Retail Health Clinic Models (a) Levels of Retailer Control (Greatest to Least) Ownership Clinic is owned by the retail store, an affiliated entity, or joint venture. This is the most common approach. It gives the retail store the greatest control over the operations, profits and losses. Practice Management This is a hybrid model where the clinic is principally operated by an independent health care provider with the retail store providing space, equipment, furniture, trademarks and non-clinical staff. This approach gives the retail store limited control over the business with the independent health care provider supplying the clinical services. (iii) Lease Arrangement Clinic is operated by an independent health care provider that leases space in the retail store. The retail store has little to no involvement in the operation of the clinic. IV. Medical Community Reactions/Concerns (a) (b) Qualifications of licensed vocational nurses, nurse practitioners and other practitioners staffing most clinics to accurately diagnose maladies and potential to miss serious symptoms. Retail care interrupts the relationship the patient has with his or her primary care provider, who may not be kept in the loop. (c) The retailers interest is in selling products 1 (d) (e) American Academy of Family Physicians (AAFP) opposes the expansion of the scope of services of retail clinics beyond minor acute illnesses and, in particular, opposes the management of chronic medical conditions in the retail setting Physician groups have promoted the adoption of specific practice guidelines: 1 http://www.healthleadersmedia.com/page-3/qua-310516/as-retail-clinics-surge-quality-metrics-mia - 3 -
(iii) (iv) (v) (vi) (vii) Well-defined and limited scope of practice consistent with state law Standardized medical protocols and evidence-based practice guidelines Direct access to, and supervision by, MDs / DOs, consistent with state law Ensure continuity of care Establish a referral system Inform patients of the health care practitioners qualifications Encourage patient relationships with primary care physicians (f) (g) Other physician advocates are more vocal in their opposition to the retail clinic model. The American Academy of Pediatrics has voiced its opposition to retail clinics as a source of primary care for pediatric patients, citing concerns over fragmented care. AAP also opposes payers offering lower copays or financial incentives for patients to receive care at retail clinics in lieu of their pediatrician or primary care physician Nursing advocates are generally supportive of the model and promote independent practice and unlimited prescriptive authority in their scope of practice. Nursing advocates generally supported by the Convenient Care Association, trade association of retail clinics. CCA adopted specific Quality and Safety Standards applicable to its members, available at http://ccaclinics.org/about-us/quality-of-care. V. State Regulations with the Greatest Impact on Retail Clinic Development (a) Corporate Practice of Medicine State corporate practice of medicine prohibitions impose restriction on the ability of a corporation or other business entity to provide medical services to the public through employment of a licensed medical professional. Although many states have such prohibitions, the scope and manner in which the prohibitions apply vary widely. An analysis of the application of a corporate practice of medicine restriction or prohibition is highly fact-specific. The corporate practice of medicine restrictions are generally found in the practitioner licensing statutes or regulations, and as a consequence, practitioners who are found to have violated the corporate practice of medicine prohibition may be subject to professional discipline. Officers or directors of corporations that violate the doctrine may also be subject to criminal penalties. In addition, there may also be a risk of private action. For example, in 2012, a Texas court entered final judgment in a lawsuit related to the state s optometry practice statutes. Specifically, in Forte v. Wal-Mart Stores, Inc., No. 07-cv-155 (S.D. Tex. July 13, - 4 -
2012) 2, several optometrists who leased space in Wal-Mart stores alleged that Wal-Mart attempted to control their optometric practice by striving to influence the optometrists office hours in violation of the Texas Optometry Act. Before structuring or financing any arrangement between physicians and laycontrolled entities, it is important to ascertain: (1) to what extent the corporate practice of medicine doctrine is enforced within a state; and (2) what exceptions to the doctrine does the state recognize. Note that not only do corporate practice restrictions vary by state, but they can vary by practitioner-type. So, for example, the corporate practice of medicine may apply to physicians in a particular state, but not nurse practitioners. State CPOM requirements vary Louisiana allows CPOM so long as the corporation does not interfere with the physician s independent medical judgment. But California requires physician ownership of health clinics. (iii) (iv) (v) Degree of physician involvement required remains unclear Restrictions might also apply to NPs and PAs (i.e., TN) Some states allow exceptions for health care facilities (i.e., NJ and IN) Fee Splitting In addition to corporate practice of medicine restrictions, many states prohibit certain licensed medical professionals from splitting or dividing professional fees ( fee-splitting ) with other individuals or entities. These fee-splitting prohibitions essentially act as a limitation on employment and a restriction on other financial arrangements a medical professional might have with a retail clinic. In some states, variable or excessive management fees from medical practices have been found to violate state "fee splitting" laws or to result in a determination that the medical practices were "fraudulently incorporated" which, among other things, may enable a health insurer to deny payment for services. 3 In some instances, the physicians for whom the corporation provides management services will be treated as independent contractors vis-a-vis the corporation. In many states, the efficacy of management service contracts in avoiding the corporate practice prohibition appears to be great. In fact, even the strict corporate practice doctrine of Texas permits 2 Affirmed by Forte v. Wal-Mart Stores, Inc., 763 F.3d 421 (5th Cir. 2014) (Wal-Mart s attempt to control optometrists who leased space in Wal-Mart stores hours violated the Texas Optometry Act). 3 See, e.g., State Farm Mut. Auto. Ins. Co. v. Mallela, 4 N.Y.3d 313 (2005). - 5 -
certain types of management service contracts that are based upon an independent contractor relationship. (b) Scope of Practice Scope of practice laws and regulations determine the range of health care services that various health care professionals are licensed to provide in a particular state. These rules establish both the range of services APRNs may deliver and the extent to which they are permitted to practice independently, or without direct physician supervision. Scope of practice laws limit the supply of health care services by limiting what services particular practitioners are licensed to provide. These limitations raise serious competition issues in primary care where the rules grant one group of health care professionals a monopoly over the delivery of certain services. These anti-competitive effects must be balanced against patient safety. Scope of practice regulations vary widely from state to state. These restrictions may limit the APRN s ability to prescribe medication, order tests, perform tests or treat certain clinical indications. These restrictions may also focus on the type of patient APRNs may treat. In addition, many states require that APRNs be supervised in some manner by a physician. A 2011 policy analysis of the Institute of Medicine, The Future of Nursing: Leading Change, Advancing Health, found that APRNs scope of practice varies widely for reasons that are related not to their ability, education or training, or safety concerns, but to the political decisions of the state in which they work. 4 Independent practice versus collaborative practice or physician supervision Physician Supervision (C) (D) (E) At all times (i.e., MD) Permit supervision via off-site telecommunication (stalled indefinitely in IL Assembly) Regulate physician/non-physician ratios (i.e., FL, TX, PA) No physician supervision required (~22 states + DC) But may require customer notice (i.e., AZ) (iii) Authority to prescribe 4 Inst. Of Med., Nat l Acad. Of Sciences, The Future of Nursing: Leading Change, Advancing Health 98-103, 157-61 annex 3-1 (2001). - 6 -
(iv) (v) Authority to order tests or refer to specialists FTC s Anti-Competitive Concerns Policy Perspectives: Competition and the Regulation of Advanced Practice Nurses (March 7, 2014) available at http://www.ftc.gov/system/files/documents/reports/policyperspectives-competition-regulation-advanced-practicenurses/140307aprnpolicypaper.pdf. The FTC has raised concerns regarding the potential competitive harms that may result from certain type of scope of practice restrictions, noting professional shortages and lack of access to basic health care services. The FTC cites research supporting its position that [r]elaxing the regulatory limits on APRN scope of practice will tend to expand the supply of providers who are willing and able to offer those services at any given price. 5 Competition Advocacy Comments 5 Federal Trade Commission, Policy Perspective, pg 26. (1) FTC Staff Comment Before the Mass. House of Representatives Regarding House Bill 2009 Concerning Supervisory Requirements for Nurse Practitioners and Nurse Anesthetists (Jan. 2014), http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm= 1&source=web&cd=1&cad=rja&uact=8&ved=0CB4QFjA A&url=http%3A%2F%2Fwww.ftc.gov%2Fsites%2Fdefaul t%2ffiles%2fdocuments%2fadvocacy_documents%2fftcstaff-comment-massachusetts-house-representativesregarding-house-bill-6-h.2009-concerning-supervisoryrequirements-nurse-practitioners-nurseanesthetists%2f140123massachusettnursesletter.pdf&ei=q 1e1VJ6TNsipyASN24LADQ&usg=AFQjCNG62wprvMxq GzgcCMYkYa27tpslVQ (2) Comment from FTC Staff to the Hon. Theresa W. Conroy, Conn. House of Representatives (Mar. 19, 2013), http://www.ftc.gov/os/2013/03/130319aprnconroy.pdf. (3) Written Testimony from FTC Staff to Subcomm. A of the Joint Comm. on Health of the State of W. Va. Legislature (Sept. 10-12, 2012), http://www.ftc.gov/os/2012/09/120907wvatestimony.pdf. (4) Comment from FTC Staff to the Hon. Thomas P. Willmott & Hon. Patrick C. Williams, La. House of Representatives - 7 -
(Apr. 20, 2012), http://www.ftc.gov/os/2012/04/120425louisianastaffcomme nt.pdf. (5) Comment from FTC Staff to the Hon. Paul Hornback, Commonwealth of Ky. State Senate (Mar. 26, 2012), http://www.ftc.gov/os/2012/03/120326ky_staffletter.pdf. (6) Comment from FTC Staff to the Hon. Rodney Ellis & Hon. Royce West, Senate of the State of Tex. (May 11, 2011), http://www.ftc.gov/os/2011/05/v110007texasaprn.pdf. (7) Comment from FTC Staff to the Hon. Daphne Campbell, Fla. House of Representatives (Mar. 22, 2011), http://www.ftc.gov/os/2011/03/v110004campbellflorida.pdf. VI. State Spotlights (a) Massachusetts The Massachusetts Public Health Council created regulations for the operation of retail health clinics (called limited services clinics ) in Massachusetts. These regulations stipulate what medical conditions can be treated, what age groups can be treated, medical record keeping procedures, medical referral procedures, treatment of repeat patients, and regulate the sale of tobacco products if the retail clinic is located in a retail location that sells such products 105 CMR 140.1001 outlines the Massachusetts s policies and procedures for limited services clinics. Massachusetts requires limited services clinics to develop policies and procedures that identify and limit their scope of practice. (1) Limited service clinics can only provide services for which it is licensed. The clinics must refer patients outside of their scope to a primary care physician (2) No limited service clinic may provide childhood immunizations (excluding flu vaccine) unless the clinic is a satellite of a licensed health care practitioner or entity that provides primary care to the patient seeking the immunization. - 8 -
(3) No limited service clinic may treat a child less than 24 months old. (C) Each limited service clinic is required to develop a set of clinical practice guidelines for diagnosing and treating patients in each of its limited service categories. The clinic must also develop guidelines to determine when patient needs exceed the scope of services provided by the clinic. Each clinic must follow staffing guidelines outlined by 105 CMR 140.310 through 140.315. These guidelines require the limited services clinic have a clinic administrator, professional services director, physician supervisor, nursing, and health care staff. (1) Physician Supervision, 140.313 At least one physician shall be present at the clinic whenever medical services are provided, unless these services are provided pursuant to written protocols or guidelines by a physician assistant or a nurse practicing in an expanded role in accordance with the regulations of the appropriate registration board. (D) (E) (F) (G) (H) Limited services clinics are required to maintain a roster of primary care physicians and community health centers in the clinic s geographic area who are willing to accept referrals from the limited services clinic. Limited services clinics are required to develop policies and procedures to reduce the number of repeat encounter individual patients. Limited services clinics are required to provide each patient with a copy of their medical record for each visit and with patient approval, provide the report to the patient s primary care physician, if any. These must be done at no charge to the patient If the clinic is located within a retail location, the clinic must have a set of policies and procedures that ensures that clinic personnel do not promote the use of services provided by the host retail location. Limited services clinics must post disclosures mandated disclosures. (1) Limited services clinics must post a list of the services provided and a statement that the patient should seek care from his or her practitioner or an emergency provider for all other complaints or conditions. - 9 -
(2) Clinics may not post advertisements that are false or misleading. (3) If the clinic is within a retail location, they must post a statement that informs the patient that they may obtain prescriptions at any location. (4) If a limited services clinic is located within a retail location that sells tobacco products, the clinic shall prominently post information regarding tobacco usage (I) (J) (K) If the clinic is located within a retail location, the clinic must have a set of policies and procedures that ensures that clinic personnel do not promote the use of services provided by the host retail location. The limited services clinic may not use any name that implies it provides a full range of medical services. Each clinic shall make interpreter services available that are appropriate for the population served. (b) Illinois Rep. Michael McAuliffe introduced HB 1885 - Retail Health Care Facility Permit Act on 2/23/2007. Act was held in committee; did not pass House as of 10/30/08. As of 1/13/09, status of HB 1885 was session since die adjourned for indefinite period. Rep. McAuliffe also proposed HB 5372 on 2/14/2008. As of 1/13/09, status of HB 5372 was session since die. HB 1885 (1) The proposed act would have required a permit for the operation of retail health clinic. Permits would have been issued by the Department of Public Health. (2) Required clinics to pay $2,500 per location for permit. (3) Requirements: have 1 physician supervisor per 2 nurse practitioners, allow patients to fill prescriptions at pharmacy of their choice, and notify patients' physicians about visit details. (4) Link to text of HB 1885: http://ilga.gov/legislation/fulltext.asp?docname=09500hb 1885&GA=95&SessionId=51&DocTypeId=HB&LegID=3 0721&DocNum=1885&GAID=9&Session=&print=true - 10 -
HB 5372 (1) Sets forth regulations for patient safety and follow-up care (2) Requires a medical director for retail health care facilities (3) Prohibits advertisement of fee comparison (4) Prohibits locating retail health clinics in host facilities that sell alcohol or tobacco products (5) Prevents insurers from negotiating different co-payments, deductibles, co-insurance rates with different retail health clinics (6) Link to text of HB 5372: http://www.ilga.gov/legislation/fulltext.asp?docname=&s essionid=51&ga=95&doctypeid=hb&docnum=5372& GAID=9&LegID=36672&SpecSess=0&Session=0 FTC Advisory Letter to the Illinois Assembly FTC staff comment regarding HB 5372 to Representative Elaine Nekritz of the Illinois General Assembly. May 29, 2008. Link: www.ftc.gov/os/2008/06/v080013letter.pdf. Quotes from Letter: (1)...may be an undue and potentially costly limitation on the organization and operation of retail clinics. (2)...could prohibit or chill consumer access to truthful and non-misleading information about prices for basic medical services. (3)...could limit the supply of retail clinics and the basic medical services they would provide if retail stores were to decide sales of tobacco and alcohol were more profitable than having a retail health clinic. (4)...could reduce the benefits of competition that Illinois health care consumers would otherwise enjoy. (c) Florida Florida Statutes 458.348 (HB 699- Passed and signed into law by governor on 6/20/06.) - 11 -
Prohibits primary care physicians from supervising more than one office facility. Also limits the number of health care professionals (nurse practitioners and physician assistants) a primary care physician is able to supervise to four. (C) Link to Florida Statutes 458.348: http://www.leg.state.fl.us/statutes/index.cfm?mode=view%20statu tes&submenu=1&app_mode=display_statute&search_string=4 58.348&URL=CH0458/Sec348.HTM (D) Link to HB 699: http://www.myfloridahouse.gov/sections/bills/billsdetail.aspx?bill Id=32669 Health Care Clinic Act; Florida Statutes 400.900-400.995, (C) (D) Legislature passed law that required Corporately-owned clinics to be licensed by the state; practitioner-owned clinics are exempt from this requirement. Corporately-owed clinic licenses must be renewed every two years; license fee is $2,000. Renewal process consists of field visits and inspection regarding business side of clinic. Concerns regarding care are sent to the state medical board. Applicants must provide evidence of sufficient assets, credit, and projected revenue to cover liabilities and expenses for the first 12 months of operation. Medicaid does not recognize retail clinics as a separate type of provider; instead. Medicaid reimburses NPs and PAs working in retail clinics under their own Medicaid provider numbers (E) Link to Florida Statutes 400.900-400.995: http://www.leg.state.fl.us/statutes/index.cfm?app_mode=display_ Statute&Search_String=&URL=Ch0400/PART10.HTM (iii) Scope of Practice Retail clinics can be owned by Nurse Practitioners; but must be closely supervised by physicians. Physicians may supervise NPs and PAs at no more than four satellite offices, in addition to their primary practice - 12 -
(C) Source: National Academy for State Health Policy s Analysis of State Regulations and Policies Governing the Operation and Licensure of Retail Clinics, Pg 13 (1) Link: http://www.nashp.org/publication/analysis-stateregulations-and-policies-governing-operation-andlicensure-retail-clinics (d) Rhode Island Rhode Island Department of Public Health Decision (May 2014) Link to Decision: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&sour ce=web&cd=3&cad=rja&uact=8&ved=0ccsqfjac&url=http%3 A%2F%2Fwww.health.ri.gov%2Fnews%2Ftemp%2F201405Minu teclinic.pdf&ei=ypymvoenh8gpyatu94cgaw&usg=afqjcn HqG8aiMQ21wVTPlJxdn8SIYM771Q Decision approving pre-licensure of MinuteClinics, provided that MinuteClinic agrees to 22 stipulations: (1) Maintain a current roster of primary care practitioners and health centers who are willing to accept referrals from a minute Clinic to serve as a primary care provider. (2) Provide each patient who does not have a primary care provider with a referral from the roster. (3) Can only treat Children 18 months and older (4) Report to the Department if there are no available primary care providers within a five mile radius accepting patient referrals at any time during the Calendar year from MinuteClinics each Calendar year (5) Contribute $25,000 annually to the Rhode Island Physician s Loan Replacement Fund for each MinuteClinic where the MinuteClinic cannot locate a primary care provider within a five mile radius (6) If purpose of visit is for immunizations, MinuteClinic must counsel parents on the importance of establishing a relationship with a primary care physician for their child. (7) Each clinic must enroll in the Kidsnet vaccine system. - 13 -
(8) Limit each patient to three repeat encounters each year for the same treatment condition or illness (9) Limit scope of clinic s practice to what has been permitted by Rhode Island. (10) CVS must have Department s approval before adding any items to clinic s scope of practice. (11) Must provide medical records to patients free of charge at end of each visit and, if patient desires, fax or electronically submit a copy of medical record of visit to patient s primary care physician. (12) Clearly post signs outlining scope of services provided at each clinic in both English and Spanish. (13) Have a collaborating licensed physician available on-call during MinuteClinic hours (14) Must be enrolled in EMR (15) CVS post signs informing patients that they are not required to purchase prescription medications from CVS. (16) Have a collaborating licensed physician available on-call during MinuteClinic hours (17) Provide uncompensated care to patients with documented eligibility for charity care (i.e., >200% FPL) (18) Must be enrolled in EMR (19) Comply with other provisions (C) The approval constituted a pre-condition for licensure of the MinuteClinic facilities. To obtain official licensure, CVS Caremark must complete additional forms for submission to the R.I. Office of Facilities Regulation. (D) Prior to MinuteClinic decision, Rhode Island HB 7676 (2008) prohibited health clinic on same premises as a pharmacy licensed to compound and dispense prescriptions. VII. Telemedicine Services Telemedicine is being used to expand the scope of services in the retail space and to offer services outside of the clinic location. In 2013 Rite Aid became the first retailer to enter - 14 -
telemedicine first rolling out its NowClinic program to in-store health clinics in Boston, Baltimore, Philadelphia, and Pittsburgh. NowClinic is a 24/7 online service that allows members to connect with health care professionals through secure webcam, chat, or phone. Other retail clinics appear to be following this model. VIII. Privacy and Security Issues Retail clinics must consider the impact of HIPAA and state privacy laws on the use and disclosure of PHI in an environment of increased regulation and enforcement. How do these rules restrict marketing activities across the retail and clinic operations? Is the retail clinic a hybrid entity / health care component of the retailer? Privacy and security issues must be consider as retail clinics expand the interoperability of their systems. MinuteClinic announced in March of 2014 that its clinics will switch to the Epic EMR. MinuteClinic expects the Epic EMR will help promote continuity of care with primary care providers. IX. Malpractice Considerations Our research identified no reported malpractice liability claim against a retail health clinic to date. While APRNs and other health care professionals practicing within a retail clinic have certainly had claims filed against them, no reported case has implicated the retail clinic to our knowledge. The structure of retail clinics pose a risk to physicians involved in their operations so long as state scope of practice laws restricting APRNs from independent practice. Although most retail clinics are staffed exclusively with APRNs and other mid-level practitioners, limited physician involvement is often necessary in order to satisfy state scope of practice requirements. As a result, physicians face potential liability from allegations related to failure to meet the standard of supervision or collaboration with an APRN and/or vicarious liability resulting from substandard care provided by the supervised or collaborating APRN. The extent to which these risks to physicians increase or decrease as the retail clinic model grows may be dependent on whether state legislatures expand the ability of APRNs to practice independently and without the supervision or collaboration of a physician. - 15 -