Category: HealthLaw Blog

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section
martin@martinmerritt.com

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

As you can tell, I love talking about health law & litigation issues, if you have any health law questions or better yet, need to refer a case, just call or drop me an email and I will happily talk.

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Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like. –Will Rogers

Money is power. The people who say, “money is power,” have no idea how right they are. Cash flows like an electric current, which we call “power” (as in “the power’s off.”) We even use the same slang “juice,” to refer to both electric energy and the power to influence people in “charge” (we call them that, because they have power.) I could play with words all day, but I have bigger concerns. I have kids in college and I am trying to teach them well.

Having represented wealthy people and poor people, the first thing I would tell my kids, is it sucks to be poor. If you don’t believe me, just let the world find out you don’t have enough money to make ends meet. If you don’t starve, you at least get hit with all kinds of penalties, like late fees and higher interest. If you get arrested, you stay in jail, rather than getting bailed out. In short, without “juice,” you end up constantly getting your ass kicked by life.

Everyone can’t be wealthy, but it is possible at least, “not to be poor.” My first thought is that “not being poor” is the same as having “security,” and so not spending all you make, should be “job one” which any kid should learn.

Have you ever thought about how electricity works? No one does. Like money, it is all around us, but not one in a thousand can tell you what it is and how it works. Cash “flows” like electricity and it has similar “utility.” That’s why we call the electric bill a “utility bill.” But cash you earn will flow straight through your fingers, if you don’t take charge and make it behave. Which is exactly how electricity works.

I may have this a little wrong, but if you want to make electricity, all you have to do is spin a magnet close to a coil of copper wire. If you want to make a lot of it, get a really big magnet and a lot of wire. The electrons in the copper are being pushed one direction by the “north” pole of the spinning magnet, then pulled back by the “south” pole. This creates an A/C alternating current of electrons flowing through the wire, which is why it is called “electricity.”

But this “back and forth” alternating current of power flow doesn’t just end up sitting in your electrical socket waiting to be used. You either must use electricity when it is created, or it must return to its source to be depleted, which completes the electrical circuit. If there isn’t a circuit, it won’t flow.

There is one exception to the “use it or lose it” rule. You can store energy, at least for a while, in a battery. (You can even be a “battery,” if you’ve ever rubbed your shoes across a carpet in winter, then touched a door knob, then you know.) Which illustrates, energy stored in a battery is not a permanent, natural state, and so stored energy is always trying to get out, to dissipate, to leave you, and find some way to return to the universe.

What the hell does electrons have to do with teaching kids about money? Money is always trying to leave. Being “destitute” is more or less the natural state. You have to go out and spin the wheel to make cash flow. Then you have a different problem, how to make it behave?

“Wealth” is different than “income.” Wealth is cash flow that you don’t use immediately. Like a battery, it is a store of power you didn’t use, which also makes wealth largely invisible. There is a difference between acting rich and being rich. If kids use their money as fast as they make it, they might light up incandescently, but only for a short time. If they buy expensive meals, people can see how well they are doing, but they deplete wealth. You literally “can’t have your cake and eat it too.”

At least not all of it. But you could still eat some of it and have some of it left over. That is generally how you avoid being poor.

This is also the irony we can see in the song in Fiddler on the Roof “If I were a rich man.” (Tevye gleefully would blow it all ostentatiously. And then he wouldn’t be a rich man very long.) Which is the lesson here. When we spend our cash flow, we might feel “elated” like Tevye, but it doesn’t last. When you don’t spend all of your cash flow, you feel more “secure.” (I think that is why they call investments “securities.”) Which brings me to my final point on “how” to teach kids not to be poor.

There are two kinds of people, “spenders” and “savers.” Savers just place a higher value on security, often at the expense of having any fun at all. This is what Oscar Wilde had in mind when he said, “Show me a man who lives within his means, and I will show you a man that lacks imagination.”

I would tell my kids, then, there are two ways to live a “poor” life. I have represented people who saved every penny, amassed a fortune, and I don’t think they ever had a day of fun in their whole lives. Most of the financial advice I read, suggests that you should strive to save a certain percentage of your income, and enjoy your life with the rest. If you can’t do that, cut your expenses. Save “something.” And don’t touch it.

If you do not have a natural “saver’s” mindset, this is a perfect time to be a phony and “fake it until you make it.” Act like a saver until you are one. If you don’t have three to six months of expenses in savings, you are “poor.” Stop acting rich, until you are not poor. And that’s a good enough definition of what “wealth” is: having some “security and peace of mind.” It certainly won’t hurt, if you give “catastrophe” fewer chances to find you.

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section
martin@martinmerritt.com

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

 

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“Never interrupt an opponent while he is in the middle of making a mistake.”

—Napoleon Bonaparte (1769-1821)

 

Two of the most important things a lawyer can convey to a client — (1) if you want to win a lawsuit, it doesn’t matter what happened in the “real world,” unless you can get it into evidence (2) if you want to avoid a lawsuit, don’t go around blasting emails, Facebook entries, or leaving an “evidence trail,” that will get you sued.

But, assuming the client didn’t get the second part (at least not in time to avoid getting sued), you still have to get “what happened” into evidence. I have two tips for lawyers that can be a total “game changer.” First let’s describe the problem.

Professor Irving Younger taught me 40 years ago when I was in law school, it doesn’t matter what happened in the real world. You have the get it into the court’s record. The court’s record is like a complete vacuum in outer space. Nothing is in the court’s record, until the lawyers put it there, using the rules of evidence. Which can be a kind of game.

Playing Hardball. All “causes of action” have “elements,” which usually break down into four groups: (1) duty (2) breach of duty (3) causation and (4) damages. Think of these four as if they are bases on a baseball diamond. The objective is to get “home.” And in this illustration “home” means getting your case “to the jury.”

To get “home,” you must get to “first base,” you have got to get some evidence in the court’s record of “duty.” This usually means the person being sued “did something” that gives rise to a duty to do it properly. To get to “second base,” there must be some evidence of “breach,” and so on with the third element of “causation” and the fourth element of “damages.”

This is also called having a “legally sufficient” case to get to the jury. This evidence doesn’t have to be very believable, there just must be “some evidence” to get to the jury. There are three problems make this harder for plaintiffs (or defendants who countersue.) And two easy fixes.

First problem. Your opponent is playing hardball. They are trying to “strike you out,” “throw you out” or “pick you off” base. Why? Because the defending party only has to eliminate any one element to keep the plaintiff from getting “home,” and thus, keep the case from getting the jury. That’s what summary judgments and directed verdicts are for.

Second problem. Depending upon the jurisdiction, courts may have determined that evidence of “A, B &C” are still “no evidence” of an element. Meaning, you have to know whether you can get “home” to a jury with the evidence you have. So, for example:

Facts: Suppose a home health agency fails to do a criminal background check on a home health worker, who then is placed in a plaintiff’s home who steals items from the home.

Here the plaintiff can practically “walk” to first and second base. “Duty” is supplied by law, the defendant “did something” by offering services. “Breach of duty” is supplied by evidence of a failure to exercise any care in doing a background check. “Damages” are also fairly clear.

But what about “third base.” Did the breach of duty “cause” the damages. Suppose a later background check turns up, that there were no prior convictions or complaints that a background check would have uncovered. Did the breach cause the damage? Was the crime a superseding cause? You have to know what the law is in a given jurisdiction. These nuances in the law might not be “intuitive.” That’s why we look them up.

Worse, frequently, the opponent will wait until the last minute to file a brief with their version of the law and why they should win. The tactic is designed so that you don’t have time to check their citations. That’s a problem.

Third problem. Just “any old witness” cannot get on the witness stand and attempt to offer evidence of “what they think,” or maybe “what they heard” someone else say about an element. This is called a “lack of foundation” or “improper predicate.” So, in the example, you might want to introduce evidence of a “lack of any record” of a crime. Is that hearsay? Is there a workaround? How do you do that?

“Predicates” are rules of evidence, some might call them, “magic incantations,” like the Medieval trial by ordeal, where the accused was required to recite a complicated sentence from the Bible. If they got it wrong, they lost. Same thing with “predicates.”

If you say the right words, the evidence comes in. Fail, and you lose.

Easy Fix No. 1: AI can help. In the November 2024 issue of the Dallas Bar Association Headnotes monthly newsletter, Alexandra Wahl, of Wick Phillips writes about the practical uses of emerging AI technology.

Nowadays, you can check the law in your jurisdiction using West Law QuickCheck or Bloomberg Law’s “Brief Analyzer,” to drop your brief (or opposing counsel’s) into the AI program, and it will analyze the law and tell you if you or you opponent got the law correctly, or if they left out important cases. This takes seconds. So if you get that last minute brief from you opponent, this is your workaround.

Note: This also means that clients can do the same thing. At any rate, lawyers still have to read the cases and double check the results; and you can see where this might eventually become the standard of care in keeping with ethics rules that require lawyers to keep up with technology.

Easy Fix No. 2: Never fail with a “predicate.” There is a 571- page State Bar of Texas Manual in ebook form Entitled “Predicates,” updated through 2024, that costs $199.00. Anyone with an internet connection can own a copy in 6 minutes. You don’t have to be a member of anything. Just Google it, and click “add to cart.” And “poof,” you never have to worry about getting “picked off base” for “improper predicates” again.

Want to get “airplane records” into evidence? The predicate is on page 20. A “chart”? That’s on page 101. “Facebook” entries? That’s on page 213. An “oral contract?” That’s page 345. “Social media page printout?” That’s page 455. “Voice identification.?” That’s page 529.

Although it is produced by The Family Law Section of the State Bar of Texas, predicates work the same for any case. Just Google “Predicates Manual 6.0” and “Texas” and you will find it.

Now, go “play ball!”

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section
martin@martinmerritt.com

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

 

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Only a fool would talk about politics in a legal blog a week before an election. Confidentially, one of the best things about being a solo practitioner—I can’t be fired for saying what I honestly think. I don’t have any particular leaning, one way or the other. I like some things about Republicans and some things about Democrats. One week from an election, my main thought is, “Please, make it stop, I wanna get off.”

But, apparently, according to the ads, I am to “hate vote” for one or the other. (Even after I did, the Text messages didn’t stop.)

I don’t’ think Republicans are the heartless capitalists of the Gilded Era whom Democrats claim them to be. They no longer send children to work 18-hour days, in locked factories (at least not here.) Democrats aren’t the Marxists of the old Soviet Union who murdered any Kulak peasant rich enough to own a cow, and then murdered anyone who told the truth, “this isn’t really doing any good.”

Speaking Truth to Power. Perhaps the most famous painting of a “fool,” is “Stanczyk,” a jester in the court of King Sigismund I, the Old of Poland (1506-1548). Stanczyk was known for being able to tell the king the truth without being punished. The painting, was completed in 1862 by Matejko, and depicts Stanczyk in a red outfit, sitting dejectedly in a darkened room outside a ballroom. The jester has a “1000-yard stare” on his face, because beside him on a table is a newspaper he has just read (most likely the King’s newspaper that Stanczyk just happened to find, during a break in performances).

The paper contains the news that Stanczyk’s home, Smolensk, has fallen to Russia. It is a tragic scene, made more so, because just to his right and through a doorway, we can see the court of the King and Queen, having a ball (literally), unaffected by the news that has stricken poor Stanczyk so sorrowfully.

I think most of affecting thing about “Stanczyk,” at least for Americans, is that is so hard to tell in a country as fortunate as we are, “when is it okay to be happy, even though there is no end to news that somebody, somewhere is suffering?”

“John Frum and the Cargo Cult.” That won’t stop people from making a religion out of politics. One thing is for sure, you can make a religion out of anything. We watched this unfold in real time, beginning in the 1930s, in an island known then as “New Hebrides,” in the South Pacific.

Americans made a base of as many as 50,000 service men and women in advance of WWII. The islanders watched as cargo parachuted from the sky, with food, clothes and other goodies, in crates marked “United States of America.” So, the islanders formed a religious belief, that leaders quickly turned into a church, which preached that there was a deity named “John Frum” (as in “John from America”) who was magically causing goodies to fall from the sky.

The Americans tried to tell the islanders that, “we are from America, there is no ‘John Frum.’” But the islanders were suspicious, “that is exactly what Americans want you to believe.” Which is sort of a “Pascal’s Wager.” (If you believe and you are wrong, you are not any worse off, but if you are right, you get goodies.)

After Americans departed in WWI, the “Cargo Cult of John Frum” continued to exist in the Hebrides, at least until the decade of the 2000’s. Still believing what their leaders had told them, that “Santa Jesus” John Frum would return from America, they built landing strips on the island, and sat and waited.

Politicizing the bell curve. I have a theory that American politics exist on a bell curve. Most of the people are like me, in the middle, while towards the left end and the right end, there are ever-increasing “cargo cults,” who exist in ever decreasing numbers the farther away they are from the middle. They are sure noisy at the ends, but there aren’t really statistically, that many of them. Until election time, and then, the statistical ends ends are all that seem to get attention, on matters I wasn’t really worried about before.

I get that same feeling at Southwest Airlines during the boarding process. All the “rich people,” and people suffering some “hardship,” get to board first and everyone else that isn’t special in any way, can just “suck it.”

Even though I know there aren’t that many of them (and we all are get to fly at half the speed of sound, to a destination that pioneers literally had to walk to reach), the ones that get to board first still give me “compassion fatigue”— to the point that I am looking at them side-eyed, “you don’t really need that wheelchair.” (Which makes me feel like a bad person.)

Please make it stop!

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section
martin@martinmerritt.com

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

 

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Where do I get my ideas? The number one question asked by the nearly 200,000 people who have been reading my blogs, is “where do you come up with ideas?” That’s easy, I can’t stop them. I find stories, mysteries and puzzles absolutely everywhere I go.

And once they appear, they won’t go away until I work the problem out in my head and write about it. And then it’s not longer in my head. I’ll show you what I mean.

The trouble with dating Apps. I was having lunch a few weeks ago with a fellow trial lawyer, who had just settled a case for tens of millions of dollars. She’s young, she’s single, she’s successful and she’s gorgeous. She said, wearily, when it comes to dating, she’s “ready for the Asteroid.” “Dating apps,” she said, “are just the worst thing ever invented.”

I looked at her quizzically, through a lens that has walked this earth with me since the early 1960’s and said, “the question isn’t what you do about the asteroid coming . . . it’s what do you do every day that it doesn’t.” The sun is still gonna rise tomorrow and every Gosh darned day thereafter (I cleaned up the language a bit.)

This thought that has haunted me for weeks. Honestly, if she is having trouble, humanity is totally screwed. So, I went and did some digging on YouTube. And sure enough, 30 percent of young people 18-30 report that they have had no “relations” in the last year. And they have no plan to start. People are just not getting together. Which means “no babies.” And they all say “dating Apps” are to blame.

The Good Old Days. When I was young, women usually did the choosing, while men usually had to go through some ritual to win her. So, we waited for Friday night, when the dance halls opened, and after drinking just enough liquid courage from a can of Pabst Blue Ribbon, we got up the nerve to go ask a girl we liked to dance. Then, we prayed she (and the rum and coke she was drinking) would say “yes.” We figured, that’s the way God intended. Eventually, if everything checked out, we got around to “what is your name.”

Let me slow this scene down, like I am replaying the “back and to the left” Zapruder tape in Oliver Stone’s 1991 film JFK. There is a point I want to make.

It is supposed to be hard. The old way of meeting our wives and husbands had self-regulating aspects that aren’t immediately obvious: (1) The window of opportunity was limited, we had to wait for the weekend, and then only a few hours were active each of two days, there was “scarcity” here (2) It was scary as hell for both men and women. Alcohol has the nearly the same pharmacological effect on anxiety as Xanax. And we needed it. Getting “shot down,” or “passed over,” was particularly swift and immediate, public punishment. Which meant that we had an incentive to choose more deliberately (3) There were consequences to the ordeal. The word “Pub” is short for “Public House,” (which is what bars were called in England until we shortened the word.) This meant for men and women, “mistakes” were very public. Whether you got shot down, or left with somebody, everybody knew it.

A Man-Made Catastrophe. But it seems to me, with dating Apps, all of these self-regulating aspects disappear. It isn’t that dating Apps don’t work, they work too well: (1) The window never closes, you are walking around with a “Meat Market” in your pocket 24/7. (2) There is no “barrier to entry” nor public “punishment” for failure. Men will “swipe right” on hundreds of women, no matter how far out his league she might be. According to YouTube videos I watched, there might be 700 men for every woman. But women find only about 4 percent of the men who message them on apps to be “acceptable,” (3) Because the “window” is always open, “mistakes,” are harder to avoid, but easier to replace.

The Perry Mason problem. Women only approve of 4 percent of men, from what I can tell, is because all they usually have to work with is a picture. It is like being a casting agent. All you have is hundreds of headshots. There are no other important social cues. This is not necessarily contrary to human nature.

If you have ever watched Perry Mason, the 1960’s television legal drama, you can always tell who the “innocent” client will be, just by looking at the faces of the actors. The “good” person, will have “neotenous” features, which means they have the “cuteness” of young creatures (like puppies, or kittens. Smaller noses and faces and larger eyes.) That’s why puppies are adorable. But always, the Perry Mason actors who are up to “no good,” have something that doesn’t “look right,” slightly sharper features, shifty eyes, and a hundred other defects IYKYN.

Strangely, however, we extrapolate or project “good” from limited information, like cute neotenous features. (Until the cute little puppy enters your life and tears up your house.) Which brings me to my next thought.

You should never meet your idols. An “idol,” is an “ideal” in tangible form, which you should also never meet. In dating apps, Mr. or Ms. McDreamy in the photo, usually will not live up to the ideal. Underneath the “cute,” there is something terribly wrong. Even American Idol’s 2005 winner Carrie Underwood’s agreed in the song, “The More Boys I Meet, the More I Love My Dog.”

Relationships are hard, while dating apps are easy. You won’t get three pages into the Bible, in Genesis 3:16, to find that we knew 3500 years ago that men and women don’t really get along so well. One of the things that made it all work for all these millennia, that apps have eliminated, was that it was and ordeal to find your person, and difficult to discard one, knowing how hard it would be to replace the one you chose.

If humanity has one thing going for it, it is that each succeeding generation, considers anything done by the preceding generation “lame.” And if there is a just and loving God, this will include dating apps.

Meanwhile, rather than wait for an asteroid that isn’t coming, get the hell out of the house and “touch grass.” Dating apps show you can’t pick people like you are picking a puppy. You gotta get back to the real world, and get to know people, where you have more than just a picture to evaluate.

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse”

As you can tell, I love talking about health law issues, if you have any health law questions or better yet, need to refer a case, just call or drop me an email and I will happily talk.

If you run into an a**hole in the morning, it means you just ran into an a**hole. If you run into an a**hole all day, you’re the a**hole.” – Rayland Givens, Justified

You know, I sometimes wonder if people have needed therapy because they met me once. Lawyers get paid to be a**holes. But in reality, I don’t think many of us want to do it in our spare time. It ruins everybody’s day. And honestly, the things an intelligent lawyer can come up with, might be the stuff of nightmares that can live in a person’s head for weeks.

I am guilty, but I am doing my best, as a public service, to stop being such an a**hole. But, in the off chance there are those of you out there who want to improve you’re a**hole skills, I can certainly teach you how I did it.

Tip 1: Surround yourself with a**holes. Nietzsche said, “Whoever fights monsters should see to it that in the process he does not become a monster.” This also works with A**holes. These a**holes can be found at work, or in “pity parties” you attend in your spare time. In fact, there is a funny Sigmund Freud meme, “You could be clinically depressed, or you could, in fact, just be surrounded by a**holes.”

I posted the meme on Facebook and got a strike, telling me that “Freud never said that.”

“Of course he didn’t say it!,” I yelled at the screen. “It’s absurd! That’s why it’s funny!” Which leads me to my next tip.

Tip 2: Always expect everything to go as planned. Psychiatrists will tell you that a great deal of what comes out as “angry outbursts,” is actually caused by being surprised. It is related to the primal part of the brain that wires us to yell at others, when there is real danger. . . as in, “tiger,” or “fire.”

So, if you want to be a real jerk, always remain wickedly optimistic that that keys will never get lost, no waiter could ever make a mistake on your order, every legal or medical assistant always gets right what you want them to do every time, and that no other driver on the road will operate in a manner that displeases you. That way you can be surprised, when they turn out to be human, which is the root to being a righteous a**hole.

Tip 3: Always act like people are trying to screw with you. There is a very cool heuristic maxim, called “Hanlon’s Razor.” Which is essentially, “Never attribute to malice that which can be adequately explained by incompetence.”

But, if you want to be an A**hole, always assume people are disappointing you on purpose. I have two wonderful college kids who are “ride or die,” the people who love me best. And they p*ss me off all the time. It doesn’t mean they are doing it on purpose. It’s just what they do. If you want to be a real jerk, don’t take this into account.

Tip 4: Never let anything “go.” There are a number of passages in the Bible about “turning the other cheek,” or “going the extra mile.” The later comes from Roman times when soldiers would make farmers carry their packs at least until the next farm.

The idea here, is that if you get mad at an insult, the other person gets to live in your head rent free. If there is an insult, and you don’t want to feel better, never “let it go.” There is no telling how many peoples’ days you can ruin with this one tip alone. But you must be careful of the final tip.

Tip 5: Never get addicted to “being nice.” Maya Angelou famously said, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

Being nice to people is addictive. It releases dopamine. The sneaky “feel good” hormone. In fact, you could get addicted to the dopamine “hit” of just going out for the sole purpose of making everyone you meet feel good. Christ, if you did that, it might cure your depression, your loneliness, your introversion, or self-pity, all sorts of things a**holes love. And then where would you be?

Always remember what Raylon Givens said in the TV show Justified, “if you aren’t running into A**holes all the time, you’re doing it wrong.” (Or correctly, depending on your goal.)

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse”

As you can tell, I love talking about health law issues, if you have any health law questions or better yet, need to refer a case, just call or drop me an email and I will happily talk.

My DEA Visit. Yesterday morning, as usual, I was lost in thought, watching the sun rise out the 49th floor window of Chase Tower. The planes were taking off and landing at Love Field. And I wondered where all those people were going.

But then, a rustling and “ahem” to my right, brought my attention back to the two United States Department of Justice DEA agents, who were sitting with me. (They were not happy.)

I should own up to it, on Saturday, three days earlier, I did go to “Disco Night” at the Stoneleigh Hotel, (because it was the 21st of September), as in the Earth Wind and Fire Song, “Do you remember, the 21st of September. . .”

While I admit my disco dancing was appalling, and possibly “offensive,” as far as I know, it was not a federal offense.

So, I asked the DEA agents, “how can I help you?”

And while I cannot talk about an active case, I can generally talk about the law, “the problem” and how physicians need to be more careful with prescriptive authority agreements and collaborative agreements when it comes to telehealth, med spas, and other forms of cash-only cosmetic clinics.

What’s a “Collaborative” and “Prescriptive Authority Agreement?” Time was, only doctors could establish a physician-patient relationship and, after a good faith exam, then physicians could write orders for drugs, devices or other care. Everyone else who worked at the facility, more or less, followed doctors’ orders.

Then, it was decided that persons with advanced education and training, could be licensed as what are called “Mid-Level Practitioners.” Most of the time, but not always, these are PAs and NPs.

In some states, these Mid-Level Practitioners (MLPs) can practice completely independently of physician supervision. In other states like Texas, MLPs can practice “semi-autonomously.”

What this usually means, is that because it is cheaper to hire a Mid-Level to do the work, we want more of them doing work, but the government wants a physician to blame, if anything goes wrong.

This also means, if you haven’t figured it out, that the physician doesn’t need to work in the same place as the Mid-Level. The supervision is often a “retrospective” review of a certain number of charts at a regular meeting, once a month. The physician otherwise, just stands by the mailbox, waiting for a check to arrive for handling the supervision.

In Texas, the term is a “collaborative agreement,” which is a legal contract between the physician and the Mid-Level Practitioner, filed with the Texas Medical Board. (Emphasis on “legally binding contract”.) The physician is contracting to do a job. This isn’t just “mailbox” money.

The physician and Mid-Level Practitioner can also enter into a “Prescriptive Authority Agreement” which can contractually allow the Mid-Level Practitioner to prescribe some medications.

But there are limits. In Texas, physicians can only have a total of 7 prescriptive authority agreements with a Mid-Level Practitioner. What drugs can be prescribed is determined by state law which is informed by the FDA and DEA list of controlled substances.

Drugs are classified as either “over the counter,” “dangerous” (meaning “prescription required,”) and “controlled,” the latter of which are covered by the DEA Schedules at Level I, II, III, IV or V. Level I has no medical use, like street heroin. Level II is prescription pain killer narcotics, like Oxycontin. Level III and higher are for things which have a lower likelihood of abuse, like valium or codeine in cough syrup.

What drugs a Mid-Level can prescribe varies by state (just Google, “Mid-Level Practitioners Authorization by State”) and a wonderful DOJ DEA Diversion Control chart will pop up, that tells you everything you ever wanted to know about MLPs and “who can prescribe what” in each state under 21 CFR 1300.01 et seq.

So, what’s the problem? People who run med spas, telehealth programs, and other cosmetic clinics are sometimes “knuckleheads.”

The collaborative agreement with prescriptive authority spells out the duties of the physician, in supervising people who are sometimes legally classifiable as “idiots.” And if anything goes wrong, the physician can be in very big trouble.

So the message is, “Physicians, read your contracts and do what the contracts call for.”

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section
martin@martinmerritt.com

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

As you can tell, I love talking about health law issues, if you have any health law questions or better yet, need to refer a case, just call or drop me an email and I will happily talk.

“It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so. –Mark Twain

At least once a week, I have a client who isn’t a doctor, who has begun setting up an aesthetic medical clinic (weight loss, Botox & Fillers, or an IV Drip Bar). Often, they have attended a seminar where they were told, “all you need is to pay $1,500” and using special “smoke and mirrors,” they will be delivered their own bouncing baby “MedSpa, LLC.”

What could possibly go wrong? It takes a special kind of idiot to try to answer in a 600-word blog, what’s wrong with this? (including tax advice) Or, “which federal agency with three letters on a blue blazer is going to get to them first,” but here we go: (1) why does an LLC need to be a PLLC? (2) why do we elect a Subchapter S-Corp when forming a company like a MedSpa? (3) what happens if we screw this up?

Sole Proprietors, C-Corp’s, Partnerships and LLC’s. If you open a lemonade stand, you are the sole proprietor, or if you get a friend to go in with you, you are a partnership. If anyone chokes on a pip, you and your partner are both personally liable for the claim. There is no limit to your liability. This is how 23 million companies in America operate.

However, if you don’t want to be “stupid for a living,” you can limit your liability as do the 21.6 million people who have formed LLC’s and 1.7 million who operate as C-Corporations.

The formation of a “limited” liability company creates a separate legal entity from the owners. The “limited” part in a name like “Fred & Sons, Ltd.,” doesn’t mean “fancy.” It is a warning: If you do business with them, the owners of Fred & Sons, aren’t liable to pay the debts of the LLC. The reason for this is to encourage people to take risks. You get to follow your dreams, but if the business fails, the dream dies, not the dreamer. Otherwise, no one would try. This creates jobs, at a risk to creditors. Hence, the warning: “Ltd.”

Why do we elect a Subchapter S? When you form an LLC, which limits liability for debts, you still have taxes to deal with. If you don’t elect to be taxed as a Subchapter S, the LLC owner pays income tax plus FICA 15.3% payroll taxes on all of an LLC’s net income up to a maximum limit. You make $100,000, all of it is taxed with FICA.

A Subchapter S election allows the owner to split income into (1) a reasonable wage for active work by the owner, which is subject to income tax and the FICA 15.3% tax, and (2) distributions, which are subject to income tax but not subject to the 15.3% FICA tax. The idea here is that not all of an LLC’s income is due to the active labor of the owner. It is only right that you pay the FICA on your reasonable salary for active involvement but not on the part that is passive income from your investment.

Why do we put the “P” in front of “PLLC”. There is a difference between operating a lemonade stand and practicing a profession. If the company performs a professional service, in states like Texas owners are required to form a “PLLC.” If you click the wrong box and put it on your website, at a minimum, you announce to the world, “you don’t know what you are doing.” Regulators might want to take a look.

How big a screw up this is, depends. It is a “tiny no, no” if the correct type of professionals clicked the wrong “LLC” box when they should have clicked “PLLC.” At worst, they need to correct it.

A middle-sized screw up arises where the “wrong type of person” has gotten it into their heads that they can own a medical practice. In Texas (and some other states), the corporate practice of medicine doctrine (CPoM) forbids anyone who is not a doctor (or mid-level N.P.s or P.A.s) from owning a medical clinic.

If ownership is wrong, everything you do from that point forward is illegal. But, if you do everything else right, hire the correct medical personnel and haven’t killed anyone yet, the medical board doesn’t really have jurisdiction over a license a layperson owner doesn’t posses. Instead, you will likely get a “cease and desist” letter followed up by an injunctive lawsuit by the AG. Any doctor (who got paid to be a Medical director) that talked you into owning your own business named “I Can’t Believe It’s a Med Spa,” does have a license that the TMB can have fun with. And they will!

The “Unauthorized Practice of Medicine” is a big, big screw up because it is a felony. This is where nobody with a proper license evaluated the patient and ordered treatment. First, understand, “what precisely is the practice of medicine” is determined by “what goes on” inside a business, not by “what you call it.” This sometimes gets tricky, as can be seen in the United States” Supreme Court case over “teeth whitening,” in North Carolina Board of Dental Examiners v. FTC. 574 U.S. 494 (2015).

Almost all MedSpa’s (including weight loss clinics, Botox centers and injectable filler spas) would qualify as “practicing medicine.” Even though you can train a monkey to use a syringe, that’s not where the problem is. It is in the “medical judgment” that must happen before the needle goes in—in determining whether the patient is healthy enough to receive an injection of a prescription drug–that requires a medical evaluation by a doctor or at least a mid-level N.P or P.A. In this case, it is a felony both for the injector to treat a patient without a medical exam and the person “aiding and abetting” the unauthorized practice of medicine.

A set of laws somewhat “observed in the breach.” It isn’t until something goes wrong, or a complaint is filed by a competitor, disgruntled employee, (or patient who was trying to get freebie extra treatment she felt she was owed), that the Medical Board gets involved. The first sign you are doing it wrong, which is a beacon to a competitor trolling for complaints, is the “LLC” structure when it should be a PLLC. You are just asking for it. But understand, it doesn’t matter that the motive of the complaining party might be, if you get any of this wrong, you will still be just as screwed.

By: Martin Merritt, esq.
Past President, Texas Health Lawyers Association
Past Chair, DBA Health Law Section
martin@martinmerritt.com

“Please Tell Me you Didn’t. . . How to Keep Clients Out of the Jailhouse, Poorhouse and Lawyers Out of the Nuthouse” -Blog

On September 11, 2001, eighty percent of police and firefighters who died in the attack did not have a will or estate planning documents, such as a “living will” or “directive to physicians.” Bradley and Bank of America recruited volunteer Dallas Bar Association attorneys who provided these much needed basic estate planning documents to Dallas Police Officers in a pro bono event held yesterday, on the anniversary of 9/11.

As you can tell, I love talking about health law issues, if you have any health law questions or better yet, need to refer a case, just call or drop me an email and I will happily talk.

FedEx charged me $250 last month, in a scheme to defraud passport applicants (in my opinion) into thinking that FedEx can deliver applications to the US Passport Office (they can’t). So, I decided to do the only thing I know how to do, put pen to paper and tell you about it and see if I am wrong.

Highway Robbery. In the pioneer days of this country, farmers in the mid-west harvested their crops and then built rafts to float their produce down the Mississippi River to market in New Orleans. Then, they walked back, up the Natchez Trace, sometimes all the way to Illinois.

The term “Highway” originated with the Romans, who would pile dirt from ditches to make roads high enough to remain dry and easily passible. The term eventually came to mean any pathway that was the best way to get from one place to another. Which is what the Natchez Trace was, in my home state of Mississippi.

It didn’t take long for thieves along the Natchez Trace, called “highwaymen,” to figure out that people with money would be walking right past them on a predictable path. All these thieves had to do was hide and wait. And this is where we get the term, “highway robbery.”

FedEx Passport “Smart Service.” Highway robbery also refers to any excess profit earned at the expense of unwitting customers. Here is what happened when it came time to renew my passport. I asked my office manager to help me. She said FedEx can do it for about $250 plus the official fee charged by the US State Department.

I asked, “why do we need to pay FedEx $250?” And she responded, “they give you shipping labels to send your old passport and the application to the Passport Office.” So we paid the fee and we got our shipping labels, but used the wrong form.

When I got to the FedEx office, the lady at the counter informed me we had the wrong form, and would need to go back to the “smart service” website and do it all over again. I told her, “I also have the correct application I got from the US Passport website (just to be safe, I always try to anticipate problems). “So, you can just ship it from here?”

She replied, “No, the U.S. passport office address is a P.O. Box and FedEx can’t ship to a P.O. Box.” “Okay,” I asked (in a tone I am not proud of), “why am I paying FedEx $250 to ship someplace you cannot deliver?”

So I then looked closely at the address of the U.S. Passport Office on my application and the address on the FedEx Labels. And I looked back at the lady. The Passport Office is in Irving, Texas—15 miles from my front door. The FedEx shipping labels were for some company in Florida that FedEx calls a “partner.”

Near as I can tell, the $250 FedEx “smart service” pays to ship my old passport 1,312.4 miles in the wrong direction to a company in Florida, who would then (I presume to cover up the fact that FedEx can’t deliver passport applications), goes to the post office in Florida to mail my passport application 1,312.4 back to a Texas address, which is 15 miles from me.

I took my application to the post office in Dallas, where it cost me $9 to send a Priority Mail envelope to Irving. Which I share with you now, as a public service warning. That “Smart Service” seems to be anything but “smart.”

I worry about this country. Sure, we don’t have to float our produce down the Mississippi on rafts, but there certainly seem be highwaymen waiting on the path wherever we need to go, who have so little fear from consumer protection laws, that they don’t even need to “hide.”

Martin Merritt, J.D., Ole Miss Law ’86. Martin tried over 500 healthcare law cases to jury verdict, judgment or ALJ administrative law decision. He has been selected to the 2024 D Magazine “Best Lawyers in Dallas” List, Texas Monthly’s “Texas Super Lawyers” and U.S. News and World Reports “Best Lawyers in America,” is Past President of the Texas Health Lawyers Association, Past Chair of the Dallas Bar Health Law Section and State Bar of Texas award-winning author, has published books from the ABA, and published hundreds of articles on matters related to health law and legal ethics in the Federal Lawyer, the Texas Bar Journal and many trade publications. If you have a question or need to make a referral, Martin can be contacted at his office in Dallas, Texas. Email at Martin@MartinMerritt.com

As you can tell, I love talking about health law issues, if you have any health law questions or better yet, need to refer a case, just call or drop me an email and I will happily talk.

U.S. District Judge Ada Brown of the Northern District of Texas set aside the FTC’s ban on non-competes and held that it shall not be enforced or otherwise take effect nationwide as to all employers, not simply the parties.

Global tax services giant, Ryan LLC, filed suit within hours of the FTC announcing a Rule banning non-competes which was to take effect September 4, 2024 in Ryan LLC, et al., v. Federal Trade Commission.

It is Ryan’s story, so I will let them tell it:

• “Today we prevail in protecting the very foundation of innovation that drives our economy from the overreach of the FTC in its misguided mission to invalidate millions of employment contracts,” said Ryan Chairman and CEO G. Brint Ryan. “Non-competes serve as a cornerstone of mutual trust between employer and employee. As a champion for our clients and business owners nationwide, Ryan stands proud in the role we’ve played to protect businesses’ intellectual property and ongoing investment in employee training and skill development.”
• Ryan’s lawsuit, filed within the hour after the FTC promulgated its ban on non-competes, challenged the FTC’s authority to issue such a rule, which imposes an extraordinary burden on business owners seeking to protect their IP and to retain talent within the professional services industry. The U.S. Chamber of Commerce, Business Round Table, Texas Association of Business, and Longview Chamber of Commerce joined the case shortly after it was filed, along with a vast array of organizations that filed briefs supporting Ryan’s position.
• In her ruling, Judge Brown concluded that “the text and the structure of the FTC Act reveal the FTC lacks substantive rulemaking authority with respect to unfair methods of competition” and that “the Rule is arbitrary and capricious because it is unreasonably overbroad without a reasonable explanation.” She emphasized “the role of an administrative agency is to do as told by Congress, not to do what the agency think[s] it should do.”
• “Judge Brown’s ruling preserves the economic freedom of businesses and their employees to enter into non-compete agreements,” said John Smith, Ryan Chief Legal Officer and General Counsel. “They play a vital role in safeguarding intellectual property and innovation, building trust within businesses, and investing in training their people.”

Judge Brown rejected the FTC’s argument that the court ruling should only apply to the parties, holding that the ban applies nationwide to all employers. Meaning, employers can ignore the FTC rule (for now).

(You can cut and paste their press release address at https://ryan.com/about-ryan/press-room/2024/ryan-lawsuit-succeeds-in-striking-down-ftc-ban-on-non-compete-agreements/).

Martin Merritt, J.D., Ole Miss Law ’86. Martin tried over 500 healthcare law cases to jury verdict, judgment or ALJ administrative law decision. He has been selected to the 2024 D Magazine “Best Lawyers in Dallas” List, Texas Monthly’s “Texas Super Lawyers” and U.S. News and World Reports “Best Lawyers in America,” is Past President of the Texas Health Lawyers Association, Past Chair of the Dallas Bar Health Law Section and State Bar of Texas award-winning author, has published books from the ABA, and published hundreds of articles on matters related to health law and legal ethics in the Federal Lawyer, the Texas Bar Journal and many trade publications. If you have a question or need to make a referral, Martin can be contacted at his office in Dallas, Texas. Email at Martin@MartinMerritt.com