Are you planning to start a business in the healthcare sector? Maybe you’ve already set up a healthcare business, but regardless of its status, you need to be aware of several legal pitfalls that could take you unawares.
The healthcare industry is full of different legalities and regulations that you must know about at all times. Accidentally violating one of these can lead to expensive lawsuits that drain your business of all its money or leave you unable to perform your services. You should absolutely consult a lawyer to walk you through all of the different legal issues when starting a healthcare business – but this post will show you a few of the most prominent woes.
Read through them to understand what you should be aware of and how to prevent serious legal problems!
Too many healthcare businesses are guilty of fraud. This comes in many forms, though it usually manifests as:
Now, you might not intend to commit fraud like this, but it happens all the time. Why? Because some healthcare companies don’t keep track of their expenses or billing processes. This leads to accidentally billing patients for services that weren’t performed or charging extra by mistake. It’s especially common if you accept deposits for services and then forget the patient paid a deposit and charge them again.
Fraud is a serious offense that will lead to lawsuits and could make you lose operational licenses. If you commit it by mistake, then there’s a chance a Health Care Fraud Defense Attorney can help you get out of this sticky situation. It’s always good to have an attorney on standby because you can always be accused of things like overbilling, even if you didn’t. Patients may not understand what they’re charged for and can think you’re taking advantage of them when you’re not.
You need to start taking medical malpractice seriously. The National Institutes of Health ran a study in 2024 that discovered medical errors are the third leading cause of death in the US. That’s an extremely worrying statistic – it means negligence happens way too often, which is bad for both patients and healthcare businesses.
Medical malpractice doesn’t mean someone dies; it can be a misdiagnosis or an injury caused during treatment. When anything like this happens, your healthcare business will be liable, and the patient (or their family) can sue.
It’s almost impossible to win a battle against medical malpractice unless there’s clear evidence that your staff did everything by the book. Instead, you’re better off trying to avoid lawsuits like these through proper training and documentation. In particular, you must ensure that patients sign consent forms explaining what they’re getting into and all the things that could go wrong.
For instance, if they’re undergoing surgery and sign a consent form that states the surgery may result in long-term mobility problems, then they usually can’t sue you if that happens. It’s incredibly complicated, so make sure you have medical malpractice insurance to protect your business in case these lawsuits arise.
The Health Insurance Portability and Accountability Act is one of the most crucial laws for all healthcare businesses to follow. In essence, the law helps to protect patient’s sensitive health information. It determines how you store and share their data, ensuring everything is kept as private as possible.
As you can imagine, this leads to frequent HIPAA violations by healthcare businesses across the country. You’ll be targeted by the various governing bodies and charged for these violations – you’ll also be forced to change the way you handle sensitive information.
In all honesty, it can be a massive problem for a small healthcare business to deal with. That’s why you need to align with HIPAA Compliance at all times. It’s probably even beneficial to hire someone who’s an expert on these things to maintain data privacy compliance and avoid ever running into costly HIPAA issues.
Healthcare businesses need to follow regulations outlined by the FDA regarding things like medical devices and prescription drugs. If you prescribe medication to patients, then you must ensure that all the medication is licensed and passes FDA regulations. You cannot, for example, prescribe a non-FDA-approved drug to patients without being at risk of lawsuits and sanctions.
The same goes for any medical devices or equipment used throughout your business. If you sell medical devices, then they must be FDA-approved. Similarly, all the devices you use need to pass FDA checks. The FDA will happily hit you with fines and massive sanctions if you’re caught using a non-approved device to treat patients.
Make sure you know all the latest FDA regulations and be careful when procuring devices or medical products for your healthcare business. If they’re not FDA-approved, then they’re not worth the risk.
A healthcare business must abide by basic anti-discrimination laws relating to caregiving. This guarantees that everyone has equal access to care, regardless of their gender, race, disability, etc.
You must treat all patients equally and prescribe the same level of care to them. You also need to accommodate patients with disabilities, or you can violate the ADA. One clear rule to live by is that you should never deny treatment to anyone who can afford it. If you stop someone from getting treatment or don’t make the right accommodations to keep them comfortable, then you’ll quickly be in the firing line of a huge lawsuit.
Avoiding this is all about training. Train your staff and be knowledgeable of all the anti-discrimination laws to understand how to make your healthcare company accessible to all.
Truthfully, healthcare businesses face more legal pitfalls and hurdles than other businesses. It’s the nature of this industry, so you need to learn how to navigate the various legalities and regulations. The best ways to do this are by hiring individuals with specialities in certain areas to ensure compliance, or working closely with legal experts to make sure you toe the right line.
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