Currently, the Food and Drug Administration (FDA) has endorsed ketamine only as an anesthetic. Aside from Spravato, the FDA has not yet approved other forms of ketamine as a treatment for depression; it recommends patients only use ketamine products if their medical needs cannot be met by an FDA-approved drug. There are three main ways patients can receive ketamine in a clinic. First, patients can get ketamine administered intravenously or intramuscularly. Second, an oral form can be prescribed. Third, patients can get esketamine (a different version of ketamine) administered intranasally, marketed as Spravato and administered under a Risk Evaluation and Mitigation Strategy (REMS). The FDA has approved esketamine as a treatment for depression when used together with an oral antidepressant. FDA approval of a drug is a rigorous (albeit long) evaluation process. FDA approval is an assurance that the drug works safely and effectively prior to marketing.
Legal Considerations of Clinic Operations
Compounded Ketamine, Off-label Use, DEA Waiver of the Ryan Haight Act
Some practitioners have been turning to compounded nasal sprays to treat patients experiencing depression. Compounding drugs is the process of combining, mixing, or altering components of a medication to tailor it to the needs of an individual patient, such as someone who is allergic to a component in the FDA-approved drug. Compounded drugs are not approved by the FDA. Generally, there is a lack of standardized safety measures for the use of compounded ketamine nasal sprays. This lack of guidance may expose patients to an adverse event or lead to potential patient misuse and abuse of compounded ketamine. By contrast, the FDA has issued guidelines on the administration of esketamine, marketed as Spravato, including administering the drug only in healthcare environments that comply with the REMS safety program and mandating that providers monitor a patient for a minimum of two hours after receiving the treatment.
One company, Mindbloom, is operating in this market with prescribed sublingual tablets of ketamine, to be placed under the tongue or between the cheek and gums for the treatment of depression. This constitutes off-label use of oral ketamine. Healthcare providers may prescribe drugs for off-label use if judged medically appropriate for the patient. Each psychiatric medical practice that is affiliated with Mindbloom is independently owned and operated. Mindbloom clients meet with their licensed clinicians via video and receive ketamine tablets via mail. This business model appears to rely on several legal developments involving the Ryan Haight Online Pharmacy Consumer Protection Act (Haight Act), which was originally passed in 2008. This Act outlined the circumstances in which controlled substances can be prescribed via telemedicine, such as requiring registration with the Drug Enforcement Agency (DEA). During the COVID-19 pandemic, the DEA loosened restrictions on remote prescriptions absent an in-person examination such that a prescription can be provided remotely if the healthcare practitioner conducted a two-way, real-time interactive telemedical appointment; the prescription is for a legitimate medical purpose; and the practitioner is acting within applicable federal and state laws. It remains to be seen how long the DEA’s waiver of the requirements of the Haight Act will last. In April 2022, two U.S. Senators requested that the DEA and the Department of Health and Human Services continue telehealth access to controlled substances after the pandemic. Whether the waiver will be made permanent remains to be seen.
Operational Risks of Ketamine Clinics: The Corporate Practice of Medicine Doctrine
Ketamine clinics face a variety of potential legal concerns that should be addressed in order to manage operational risk. First, because the clinics are prescribing and administering ketamine, they could be participating in the corporate practice of medicine, depending on ownership structure and the clinic’s location. The corporate practice of medicine is a legal doctrine stating that corporations and other non-professional entities may be prohibited from practicing medicine or employing physicians to furnish professional medical services. State law varies (and is changing) on what is permissible under the corporate practice of medicine. For example, in Minnesota, not-for-profit corporations can practice medicine, but for-profit corporations cannot. Alternatively, in Florida, there is no prohibition against the corporate practice of medicine. In Florida, corporations and investors can freely invest in and own medical practices that employ physicians. Ketamine clinics must also comply with other state laws on professional entities and fee-splitting that are similar to the corporate practice of medicine and which vary from state to state.
Operational Risks of Ketamine Clinics: Regulatory Licensure Requirements
Second, regulatory licensure for the ketamine clinic may be necessary. In some states, ketamine clinics may not need a specific regulatory facility license; in other states, the licenses may be preferred or mandatory. A ketamine clinic may also need a facility-level DEA license and pharmacy permit, depending upon the model of the clinic. Ownership structure of the clinic may affect licensing requirements. Third, ketamine clinics face potential liability in fraud and abuse laws. If Medicare or another governmental healthcare program covers a patient’s treatment, then the clinic must comply with federal laws, including (a) physician self-referral (Stark Law) if a physician referred a patient to the clinic in which the physician or immediate family member of the physician has a financial relationship and (b) Anti-Kickback Statute (AKS), if the clinic is not careful about rewards for patient referrals or the general of business for a service payable by a federal healthcare program, such as Medicare. Currently, many ketamine clinic services are considered out-of-pocket, however, this may change in the near future as the Federal Register published some proposed rules for Medicare payments for esketamine (Spravato) on July 26, 2022.
Operational Risks of Ketamine Clinics: Standards of Care and Negligence
Fourth, ketamine clinics can be held liable for negligently administering treatments. Currently, the risk of medical malpractice is murky; ketamine is a developing field so there is no consensus among experts on standard of care. The American Psychiatric Association (APA) has offered some suggestions on how clinics should operate before, during, and after administering ketamine to a patient. Before administration, the patient should be carefully selected. Providers should weigh the risks and benefits of treatment, the urgency of the patient’s condition, and the patient’s medical history.
Operational Risks of Ketamine Clinics: DEA Compliance and Auditing
Further, the clinician ought to be licensed in administering a DEA Schedule III medication with Advanced Cardiac Life Support certification (in most states an MD or DO with certain licensure). The APA also recommends site-specific standard operating procedures for delivery of ketamine treatments. Further, documentation should be maintained in the event of an enforcement action, such as a DEA audit, which can occur without announcement. Education and training of the clinic’s employees are of paramount importance. Procedures to ensure that quantities of the drug are tracked and secured properly along with training and safety materials will become important in the event of an audit. Operating procedures should cover topics ranging from: informed consent, to monitoring patient vitals, to post-treatment evaluation, to patient transportation back home.
A detailed policies and procedures manual that is specific for the location, ownership structure, practitioners, and clinicians and that lists standard operating procedures and procedures on how to handle certain emergencies should be developed and maintained. Operating the clinic under such written guidelines will mitigate the clinic’s risk for legal claims in the future. Lawsuits against such clinics brought in the United States to date involve allegations of medical malpractice, wrongful death, medical negligence, psychosis after ketamine administration, suicide, and sexual assault. The settlement demands in these cases have ranged from $1.5 million to $8.2 million—none of these figures include defense costs. However, addressing these legal issues and instituting policies and procedures could significantly mitigate risks of a lawsuit.
Proponents of ketamine treatments frequently cite it as the only form of medicine that can relieve their pain or depression. Ketamine clinics seek to help these patients. Such clinics operate in the United States under a network of regulations, yet could be exposed to legal liabilities if certain precautions are not taken to mitigate such risks. Ketamine clinics have been operating for only a few years, helping people relieve their symptoms. This growing industry has the potential to impact countless lives, especially in light of the mental health crisis brought on by the pandemic. The right guidance and operational practice, specifically geared towards clinics and their legal counsel situation, could go a long way to ensuring a clinic’s compliance with legal standards which in turn would make this new modality of treatment available to more patients who need it.
The authors wish to thank Husch Blackwell summer associate Colleen Pert for her contributions to this article.