Episode 23: The Emerging Investigatory Focus on Telehealth: What You Need to Know

In this episode of Health Care Law Today, Nate Lacktman and Maureen Stewart are joined by Mark Josephs, Deputy General Counsel of LifeMD to discuss the current regulatory and legal environment for telemedicine companies regarding online subscription services, and the recent investigations by the federal government of these services.

We encourage you to listen to the podcast in its entirety.

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Nathaniel (Nate) Lacktman is a partner and chair of the firm’s national Telemedicine & Digital Health Industry Team, and member of the Board of Directors of the American Telemedicine Association. He advises entrepreneurial health care providers and technology companies on business arrangements, compliance, and corporate matters in telemedicine, digital health, remote patient monitoring, and click-and-mortar services. Working with hospitals, health systems, providers, and start-ups to build telemedicine arrangements across the United States, his practice emphasizes strategic counseling, creative business modeling, and fresh approaches to realize clients’ ambitious and innovative goals.

Maureen Stewart is a senior counsel and litigation lawyer with Foley & Lardner LLP. Maureen’s practice primarily focuses on malicious insider cases. She handles and advises on high-profile and highly confidential cases in this area for clients across a variety of industries, including consumer products, pharmaceuticals, entertainment and technology, economic consulting and immigration. Maureen has extensive experience handling malicious insider matters ranging from employee fraud, embezzlement, and misappropriation to breaches of non-solicitation, non-compete and confidentiality agreements. Maureen has successfully recovered significant assets, including monetary, intellectual property and other non-monetary assets for clients in these cases. She also has managed sensitive, high-profile, and large-scale workplace investigations arising out of the #MeToo movement.

Mark Josephs is an accomplished attorney with more than 20 years of experience in white collar criminal defense and government investigations; health care law, particularly pharmaceutical and medical device enforcement defense, litigation and compliance; commercial litigation; and advertising and marketing statutes and regulations affecting retailers.

Previously, Mr. Josephs spent sixteen years at the United States Department of Justice, where he was first a civil litigator and then a criminal prosecutor of consumer-related fraud. At the Justice Department, Mr. Josephs brought high-profile criminal prosecutions of, and civil enforcement cases against, entities and individuals engaged in health care and financial fraud, including pharmaceutical companies, dietary supplement sellers, and telemarketers. Mr. Josephs’ work at the Justice Department led to record-breaking judgments and awards, and his civil litigation work included a series of complex civil commercial cases that reached the United States Supreme Court.

Mr. Josephs received a number of awards during his government service, including the Attorney General’s Award, the highest award offered by the Justice Department. He also served as an instructor in civil and criminal litigation topics at the renowned Justice Department training center. Please click here to view his full bio.

Please note that the interview copy below is not verbatim. We do our best to provide you with a summary of what is covered during the show. Thank you for your consideration, and enjoy the show!

Nate Lacktman

Thank you, Judy. Welcome to our podcast from Healthcare Law Today. My name is Nate Lacktman. I am a partner with the law firm of Foley & Lardner and Chair of our national Telemedicine & Digital Health Industry Team. I’m joined today with two distinguished attorneys, Mark Josephs and Maureen Stewart. They’re going to join us today to talk about some of the current regulatory and legal environment for telemedicine and, in particular, online subscription services and some of the OIG, DOJ, and FTC investigations and review that have begun to commence. Let’s hear whom our guests are with a little bit of introduction, starting with Mark.

Mark Josephs

Hi, I’m Mark Josephs. I’m currently Deputy General Counsel of LifeMD, a growing telemedicine company. Among other things, prior to joining LifeMD, I spent 10 years at the Justice Department, where I prosecuted healthcare fraud and consumer fraud on behalf of the Federal Trade Commission, the Food and Drug Administration, and while I was there received the Attorney General’s Exceptional Performance Award, which is the DOJ’s highest honor.

Nate Lacktman

It’s nice to have you, Mark. And, Maureen, why don’t you introduce yourself to the audience? Maureen Stewart

Thanks, Nate. I’m Maureen Stewart. I’m a senior counsel in Foley and Lardner’s Tampa office. I spent about six years, before moving to Tampa, in D.C. as a litigator, and I spend my time litigating complex cases as well as handling internal and regulatory investigations for companies with a government focus.

Nate Lacktman

So when things start to fall apart, people give you a call, right?

Maureen Stewart

Exactly. That’s exactly right.
Nate Lacktman

And that is what we’re going to talk about a little bit today, is what happens when the threads start to unravel. I don’t want to say it’s easy, but it’s one thing to give proactive compliance-oriented advice — ”Do this…Don’t do that.” But the reality is there are business decisions to remain competitive in the marketplace, there are patient consumer expectations, and there’s the push and pull of risk assessment versus all the legal compliance aspects. And so, I think it is not inevitable, but it is likely that a company operating in this space, which is very cutting-edge DTC, online-only telemedicine services, will at some point land under the microscope of a regulator, whether it’s through a subpoena or just an inquiry or a complaint. And so, I think you would be well-suited and advised to anticipate how to respond to that and, attendant to that would be, how to reduce the risk of non-compliance.

With that in mind, let’s start with you, Mark. Mark, how would you describe the current regulatory and legal environment for telemedicine companies?

Mark Josephs

Well, first, telemedicine really advanced during the COVID pandemic, where a lot of people found it very useful in a way to stay well by using telemedicine. But more recently, both the Department of Justice and the Office of Inspector General at HHS have engaged in

enforcement activities in this area, and DOJ has had a number of take-downs involving many, many, many telemedicine operators. And the OIG recently issued a fraud alert about telemedicine—really addressing the same sort of schemes that the Department of Justice was prosecuting, involving kickbacks to practitioners who never saw patients or only over the phone. And then durable medical equipment or genetic testing was ordered for these people when they didn’t need it, and it eventually got back to reimbursing fraudsters from government healthcare programs and violating, among other things, the Anti-Kickback Statute.

But in other ways, it’s tough to tell exactly what the regulatory environment is because, what makes this an interesting area to practice in is it’s very new and there’s going to be some sort of risk in everything we do because the standards aren’t set out in this area in stone yet. And so, unless we’re talking about off-the-reservation fraud like the OIG address or like the Department of Justice prosecuted, those companies that are trying to do the right thing don’t always have signposts in the regulatory area about how they can comply. So there’s always going to be a little bit of risk involved, and it’ll be interesting in the future how aggressive the government gets to, becomes regulating these companies.

Maureen Stewart

Yes, I definitely echo what Mark says, and to not, kind of repeat everything, I would describe it, really, as evolving and heightened, right? Evolving because while telemedicine has been around for about a decade now, since COVID is really when there was the absolute rapid rise to both the number of companies and also the access to telemedicine, and obviously with a rapid

change comes an evolving regulatory and legal landscape. And so what we saw—I think there was a recent review, I can’t remember who put it out—but 22 states changed their laws or policies in response to the pandemic to increase coverage for telemedicine. So with that type of rapid change, as you said, Mark, it’s hard for companies to completely understand what the guideposts are, what the signs are, and what they need to anticipate in terms of the regulatory environment.

We’re sitting three years out of COVID—not that we’re out of COVID, but from the initial impact of COVID—now is really when that regulatory tail is going to kick in, it’s when the scrutiny is going to kick in. Now we have these new regulations, they’ve been in practice for some time, and that’s when the intense focus is going to start. I think you see that, as Mark pointed out, with the fraud alert. So, companies really should, I think, anticipate in this space a lot more

regulatory focus over the next couple of years.

Mark Josephs

Yeah, I agree with that, Maureen, and that’s going to be both on a federal and state level. I mean, this industry is regulated both by the federal government and individual states. And as you said, a lot of state laws have been changing over the last couple of years. One thing I’m looking out for is how many states draw back on telemedicine now that the COVID crisis is mostly over.

Nate Lacktman

Yeah, it’s interesting how you both mentioned the pace of change. We had all these rule waivers across the board. In that period of volatility and change, opportunities arise, but as well as complexities and challenges.

Why don’t we unpack one of them. This is something that we’ve seen everywhere and permeate e-commerce as the new business model, a subscription service If you’re a venture-backed company, you know that it’s MRR, monthly recurring revenue. And if you’re a consumer, you’re like, “Oh, it’s a subscription fee.” Sounded fun first, but now with everybody offering them, let’s unpack how it relates to telemedicine. So, we have a lot of these direct-to-consumer, DTC, telemedicine companies with these subscription-based services. I’ll start with you for this, Mark. Tell me, you used to work there, so what’s the FTC’s perspective on subscription services, and why is it important to healthcare and telemedicine companies in particular to be aware of those rules and concerns?

Mark Josephs

Well, the FTC, I can say that their perspective on subscription services is very negative, unless that’s changed since I was in the government. The FTC brought actions and referred actions to the Justice Department. I even had a large criminal trial involving a subscription program that made it impossible for consumers to cancel and their credit cards kept getting charged even if they didn’t want them to be. So the FTC is very concerned about this area and sees a lot of potential for injury to consumers in the subscription area.

Now, as far as how it’s useful in telemedicine is companies prescribe products or sell them, and these are prescription products, and they would like the patient to keep taking them. So that’s set up as a subscription service and the patient can always cancel that, but the subscription service is set up for this prescription drug to keep coming to the patient, assuming that the patient still needs it. And so, in that sense, it’s very useful in the telemedicine area. And frankly, it becomes a driver of revenue. When you get subscription patients, they’re getting charged monthly, and that’s a good driver of revenue, but it really is the nature of healthcare that if we are selling these healthcare products, the patients need them and they will continue to need them, so it sets up well for subscription services.

Maureen Stewart

Nate, I think that this is another area where you see innovation coming out of COVID-19, So not just in prescription, as Mark was talking about, but also subscriptions to, there’s now all these new mental health apps and other types of direct-to-consumer subscription services that are coming in, applications, other types of subscriptions. And I think, I echo what Mark has said on the FTC—it does not like subscription-based services, especially when consumers feel trapped. So you’re adding one thing that has always had heightened scrutiny to another area, which is healthcare, that most people feel and understand. They don’t want any sort of bad practices or fraud to be involved. So when you combine those things, I think it’s going to very much put those type of healthcare apps under a microscope with the FTC.

They put out a statement late last year, I think it was in October, outlining what they want to see, what the FTC expects from subscription services. They were very clear, they want upfront, non-deceptive practices. They want companies to disclose the relevant information. They want to make sure that the consumer has given their express and informed consent, and then, of course, making cancellations easy.

I think that those components, even healthcare apps, are going to be held to an even stricter, more scrutinized standard than, let’s say, you had a monthly subscription to a magazine, or I have one to a wonderful coffee bean delivery service, I absolutely love it. But if I can’t cancel that, it’s a lot less effective or has a lot less of an impact on me than a healthcare app or a prescription-based service through a telemedicine company.

So, I think this is an area that while it’s great for innovation and great to offer these new services to consumers and patients, it’s an area that companies need to be very careful about how they set up their subscriptions and whether they feel fair and easy to access and also easy to cancel and that no one feels trapped. If you feel trapped or feel like you can’t get out of these subscriptions, then the FTC has made it very clear that they’re ramping up enforcement around that area.

Nate Lacktman

Mark, do you have any little takeaways on the functionality of how easy it is to cancel that listeners may want to think about?

Mark Josephs

Yeah, I think that it is trite, but I like to think of it as, “Is this a fair way to do things, and is it easy enough to cancel?”—where a consumer is not getting in this endless loop of transfers and upsells and never seems to get the cancellation done within a reasonable period of time.” And whether it should be—I mean, some states require cancellation to be done, that it can be done by email, others do not have that requirement. States are moving that way. A couple states like Virginia and Illinois recently changed their laws to require that companies allow cancellation online, through the same method that they originally ordered the products, so that makes things easier as long as those cancellation requests are honored. But I really look at things in the cancellation area as, “Is this fair? Is this easy enough for a consumer to do, that doesn’t have an hour to spend getting transferred around and getting hit with upsells?”

Nate Lacktman

Could you explain your cancellation process with the same confidence and straight face you explain your subscription onboarding process, right?

Mark Josephs

Yeah I like to think we have that in my company now, but it’s interesting because we do look at our competitors, and some competitors do not have an easy way to cancel and do not have good disclosures about the subscription program. I’m interested to see whether the FTC gets wind of that and eventually moves against some of these companies, or at least launches investigations of them.

Nate Lacktman

Let me ask a follow-up too for both Maureen and Mark. Do you think that for the majority of these companies, which are typically early stage, high growth, do you think this is deliberate and intentional in their design? Or is it maybe an oversight—they just got a lot on their plate and they’re trying to figure it out?

Maureen Stewart

I think, on the whole, it’s an oversight It’s a new product offering. It’s the lack of making sure you’re collaborating with different partners in understanding all the different regulatory aspects that touch on you. And so, they may just be following what someone has done prior in that specific aspect of the subscription of how you cancel, “Well, this is how I’ve seen it done before,” without really understanding the environment right now and understanding all the different components that they should in terms of making it easy, doing a check, then checking it after they offer it. You put out a new product, you put out a new offering, where you often see companies fail is the follow-up. Is it working as we anticipated? And oftentimes, we don’t see that follow up and that’s where we see companies have that failure. And so, of course, there are some bad apples out there, but I think on the whole companies are trying to do the right thing and these are often oversights, and with the new product, that happens.

Nate Lacktman

I’ll shift gears a little bit more into the criminal space with DOJ and OIG on this Special Fraud Alert. The OIG recently issued a Special Fraud Alert on arrangements with telemedicine companies. It came out July 20th of 2022. They articulated seven different elements that are not conclusive but are suspect risk factors to be aware of. I’ll start with you Maureen and then we’ll

go to Mark. What message do you think OIG and DOJ are sending to the marketplace? What should telemedicine companies or other any tech-enabled healthcare service companies be thinking about in this alert?

Maureen Stewart

Well, I think with this alert, you’re seeing—and we talked about this a little bit earlier so I don’t want to belabor it too much—but you’re seeing that trail. You have this explosion from COVID of new offerings, new coverage, and companies trying to meet the needs of their consumers and their patients during COVID-19 and after. And now what we’re seeing is the application of sort of the old legal regime, right? If you look at the fraud alert, it talks about anti-kickback. These are things that have existed in our laws that have been a regulatory focus of states and the OIG for years of normal healthcare. Now we’re seeing the application to telehealth, and with that, you have, I think, the companies’ failure to completely anticipate the application of those regulatory requirements to the new technology, the new offering. And of course, you have the bad apples who are setting a standard where they are taking advantage, are engaging in fraud, which then puts immense and intense focus on this market.

So, I think that this shouldn’t be unexpected given what happened with COVID, the rapid rise, the evolving legal landscape, and the ability to have people take advantage of that, with the bad apples. I don’t think that this should have been unexpected. And it is obviously an area that is not a left or right issue, right? It’s very much, if there’s fraud in healthcare, everyone gets on board with holding those people accountable.

Mark Josephs

Yeah, I agree with Maureen, what Maureen said. I think that the regulatory scrutiny from OIG and DOJ and the FTC are only going to increase in telemedicine as telemedicine gets bigger and bigger. Usually when industries get bigger and bigger, there’s more and more fraud in them. And from my perspective, from my time in the government, when we saw a lot of money going into something or a lot of money being developed in a new industry, we thought, “Okay, this is going to be an area we’re really going to have to look at eventually, look at for fraud.”

I think the OIG alert addressed these companies that are engaged in true fraud. I mean, they’re engaging in clear violations of Anti-Kickback Statute and I know that’s something that in our company we’re always thinking about, whether we’re doing anything that could even come close to an anti-kickback violation. But one thing that Maureen said and I agree with is attention to our vendors. We heavily scrutinize our vendors because we know we can be held responsible for something that they do wrong. So, when we’re reviewing the contracts with them or inquiring about their reputation or monitoring their activities, we really keep a close eye on that to make sure that they’re not putting the company into difficult position.

Nate Lacktman

Let’s talk about that a little bit further. But how would each of you, counsel companies, to appropriately balance the regulatory compliance and legal complexities and demands while remaining competitive in the marketplace? What are the levers to pull or the things to discuss

with the C-suite execs in order to best understand that risk-reward decision-making process? Why don’t we start with Maureen, and then we’ll go to Mark.

Maureen Stewart

I think one of the things that you can do is do a gut check. You can always have a gut check about who needs to be involved in the decisions, but as well making sure that companies as they go forward, they have a plan in place to track compliance. I talked about this a little bit earlier, that when you have a new offering, you think it will work out a certain way, but when you finally go to market or you offer it, you don’t have an audit in place to ensure that it’s actually working the way that you expected. So you make sure that you have that audit in place. There are other things that you can do in terms of having outsiders come in and test the product or test what the offering is afterwards to make sure it seems fair. In terms of the subscription, for example, does it seem easy to someone who hasn’t been involved in the process to cancel, for example?

I think that you want to make sure that the right people are in the room and that people feel heard. You don’t want to tell a client that they shouldn’t innovate. That would be a big mistake. But you want to make sure that they feel comfortable understanding what their risks are and ways that they can minimize them and one of the really big ways is to have that audit check afterwards because that’s when you can go back and make sure that you’re following what you thought would happen and how it would work.

Mark Josephs

Yeah, I agree with the audit check. That’s something I personally do, is go through our offerings and make sure that they’re working the way they should and they’re remaining relatively fair for the consumers. I think that executives tend to inevitably look at what the competitors are doing in order to decide how much risk to take on and feel like, “Well, as long as we’re in the middle of that group and not at the bottom end, we’re fine.” But that’s always difficult to make that assessment. And given what we talked about at the beginning where there aren’t clear guidelines here in a lot of areas, sometimes it’s even difficult to figure out how much risk you’re actually taking on because you’re not sure what the standards are. And that is always a decision-making process that requires a collaboration from everybody and not just the

marketing folks or the executives. It needs to include the lawyers and the compliance people because we need to come to consensus decisions on how much risk, if we can determine what risk it is, how much risk we’re willing to take on while still remaining 90% compliant as much as we can tell we’re compliant.

Sometimes in this area we just don’t know. I mean, we’ve looked at things and thought of one way and then we go to a third-party and figure out it should be done slightly differently. But this is just such a new and growing area that sometimes it’s just difficult to tell exactly how compliant you need to be and how much risk you’re taking on.

Maureen Stewart

I just wanted to jump on something that Mark said. I think he made a really good point in that it’s unlike something else that’s been done so you don’t really know what compliance aspects there are, what you need to be looking out for. And so, one thing that you can do is determine what is this most like that we’ve previously done and then identify the differences. And that can help the compliance and the legal folks say, “Okay, it’s most like this. We analyze that in this way, but here are the differences and here is how we can pull the levers and decide where the risk-reward evens out in terms of this new product offering or this new innovation. If you can identify something that it was most similar to, you really then can help start to identify the differences, and that’s really where the rubber meets the road is, “Okay, how do those differences then play in the regulatory, the legal regime, those types of things, and that’s what presents the potential risk.

Nate Lacktman

20 years ago when Donald Rumsfeld was discussing known knowns and known unknowns. He said, “There’s things we know we don’t know, but there are also things that we don’t even know that we don’t know them, the unknown unknowns, and those tend to be the most difficult problems.” I think definitely with early-stage, high-growth, tech-enabled healthcare services companies, many of the founders are not from a healthcare background. They know e-commerce, they know product design, they know tech very well, but their core competency is not healthcare services. So there are a lot of issues in complexities that they don’t even know they don’t know. I think that’s absolutely worth thinking about.

What I do see a lot of, though, are potential clients talking about, “Hey, we want to do a pilot program.” or “We want to do a proof of concept.” And then the mechanics of that proof or pilot clearly do not comply with the law.

And so, what I always say is, “It’s not a proof of concept if you could not deploy it legally or in reality.” We know that if you create a model that’s rife with kickbacks and fee splitting it will scale up very fast because you’re breaking the rules.

What I think is a better approach is just do it right the first way and see how it works. It might work just fine. Don’t take the shortcut in advance under the expectation that if you follow the rules it’s just not going to grow fast enough or do it the right way. I think that is a morally hazardous route to go. What it can result in is a series of three, four, five risk steps that when you zoom out, you realize, “Oh my gosh, cumulatively I have taken several steps now outside my comfort zone without fully realizing it.” I think that may be the dilemma that many of early stage entrepreneurs face in the health tech space.

Maureen Stewart

I think that’s exactly right.
Mark Josephs

Yeah, I agree with that. And I also agree that the ones that are doing that are tending not to go to outside counsel and just trying to ramp up as fast as possible, not worrying too much about the rules, and then finding themselves in a place where they don’t want to be.

Nate Lacktman

All right we’re going to shift a little bit from philosophical approaches to running a telemedicine company. What are some of the red flags that if you’re operating a DTC telemedicine company, what are some of the red flags to keep an eye out for, and what would you recommend along that sort of life cycle of enforcement? Let’s start with Mark.

Mark Josephs

Well, the first thing I’d be looking out for is attention from the government, particularly the federal government. And that’s a huge red flag, and that’s something that immediately has to be dealt with in terms of trying to narrow the scope of what the federal government’s looking at and whether they’re starting an investigation or not. But one of the things that I look a lot is the level of consumer complaints we’re getting through Better Business Bureaus. Some of them come through state AGs. If they’re coming in one area, as a company, we really try to look at what we’re doing in that area. And if there’s something that is not fair, that’s generating lots of legitimate complaints, we’re going to have to change that to make it more fair.

But if you’re not at the degree where you’re getting government investigation inquiries, I think the consumer complaint volume and the type of complaints really are red flags to where you can nip something in the bud without the government having to get involved and address something that consumers are legitimately complaining about and that really isn’t fair. That’s happened a couple times in my experience, and that’s a good signal from the marketplace that you’re doing something wrong.

Maureen Stewart

I think that’s, again, exactly right. Usually, if the government is knocking, it’s because there’s been a red flag prior, right? And so, how can a company prepare—not prepare, but anticipate or prevent the government coming to knock? And it’s to identify those red flags as early as possible. And so, what a company can do is really have not just a compliance program that’s on paper, but a dynamic compliance program, one that provides a feedback loop. So, what Mark was talking about is exactly what you would want to do, look at consumer complaints to customer service. Are you seeing the same type of repetitive complaints, repeat complaints where consumers have the same problem? You also want to make sure that you’re monitoring those things. Oftentimes they exist, but is there an actual monitor where you’re getting meaningful reports, and meaningful reports that are easy to digest?

Compliance officers, the level of executives who would need to be involved to identify these red flags and then make the changes are very busy. So they need to be able to have meaningful feedback from the compliance program that’s in place. So meaningful feedback on if there’s an internal whistleblower channel or a complaint hotline. You can have a complaint hotline, but if it’s not monitored, and again, not going up to the right people in a way that’s summarized to be able to meaningfully act, you might just end up with a bunch of internal complaints that when the government comes knocking, they say, “Well, why didn’t you do anything with these?”

And then the other thing that companies have gotten a lot better about that I’ve seen is actually monitoring social media. Just from news reports, where direct-to-consumer type complaints go

when it’s a direct-to-consumer product, consumers sometimes will just go on social media and tag the company or write posts. If you track that and you’re getting, again, a repetitive type of feedback, it shouldn’t go unnoticed. It should be tracked and acted upon.

Mark Josephs

I agree about social media, and some of that feedback exists exclusively on social media. That’s something that’s worth monitoring pretty much at all times to make sure that it’s just functioning like consumer complaints coming into the company and looking at what people are raising on social media, as Maureen said, and know if it’s a similar thing that is appearing repeatedly, it’s something that the company has to address.

Nate Lacktman

Another rule of the internet is don’t read the comments section, but I guess here it is an exception to it. You want to read those comments. You want to read Reddit, look for subreddits on it and see how people are reacting, expressing their frustration, if any, or praise in a social media space. But, you talked about the consumer or patient complaints, you talked about some of the internal complaints and social media, what’s next? When do the stakes get higher?

Mark Josephs

The stakes get higher when the government comes in. And ’that’s when you really need to devise, start to conduct a good internal investigation and deal with the government in the most effective way possible. A lot of times that’s trying to narrow what they’re looking at and define the scope and then deal with it that way. But that’s really when the rubber meets the road in terms of, you’ve got a problem here and the government is noticing it, and that’s when things get pretty dicey.

Maureen Stewart

Yeah, Mark definitely said the magic words there of narrow and define the scope. Once the government comes knocking, it’s important of determining which regulatory agency is knocking and then that can help you first identify the scope, but also then doing as much as you can to figure out what that scope is, define it, and then try to narrow it. Because, as you’ll see, and you’ll see in some of the bad apple type press releases, they went in with one thing, they found that one thing, but then they also found other things too, and the scope broadened. Even for companies that aren’t the bad apples, but they had an issue that received a lot of complaints, they have an agency come in, a CID, you want to narrow the scope. In part because of costs alone, but also you want to narrow the scope because you don’t want it to broaden, and there can be referrals to other agencies. And so, your goal at all times should be keenly focused on what the government has claimed or the regulatory body has claimed their scope is and to keep it narrow and as focused on that scope as possible and to reduce, reduce, reduce.

That being said, it’s important, as Mark outlined the internal investigation, not to completely put blinders on. Because the scope may be one thing, but you don’t want to put blinders on as you’re doing the internal investigation because you want to be aware of what the potential risks are out there if it were to get broader and advise on strategy related to that as well.

Mark Josephs

Well, I think that from my perspective in the government, I know that when a company receives notice of investigation, there’s been a whole lot of activity in the government before that notice goes out. And especially at an agency like the Federal Trade Commission that has lots of layers, this has bubbled up through the agency at different layers. And then the Federal Trade Commission itself lots of times is required to sign off on sending out the notice to a company that they’re being investigated. So there’s been already a lot of scrutiny done by the agency. It’s important to understand that when you’re doing your internal investigation and you’re

responding to the government. You have to know that they already know a lot when that letter comes out to you.

Nate Lacktman

let’s say you’re ’working at a telemedicine company and they want to develop a new offering for their customers. From your perspective, the two of you where you’ve seen things fall apart, what considerations would you recommend that the operators keep in mind before launching a new line?

Mark Josephs

I’d ’first take a look at what, if there are any other major risks in developing the new product line. Say, major ones, say, interfering with a medical provider’s independent decision-making, if trying to do something that might interfere with that or you know make sure that nothing looks like any of the well-established rules, that there’s any risk there. And then just look into it from a compliance perspective and from what we know about how to stay compliant to make sure that it can be done in a way where compliance can be maintained. But I’d look first at whether there are any major risks with clear sign posts that have been around for a while, such as anti-kickback or the independent medical-decision making to make sure that the new product line or new service is not going to interfere with that.

Maureen Stewart

Yeah, to jump on to what Mark said about identifying the rules, the regulations, landscape involving compliance, make sure that you collaborate with compliance and legal, but also those who have experience with the most similar offering in the company and the most recent new product offering of what obstacles they faced, what hurdles they had to manage. And then also make sure that you don’t just rush or go to market without having that plan in place, as Mark and I talked about earlier, to track compliance and ensure that what the offering ended up going and the new product ended up working as anticipated and having that feedback. That should be done before launch. So, at post-launch you have that feedback already starting so you can react quickly to improve the new product, and that will let you maneuver faster. And hopefully a lot of what regulatory agencies look at is, “What were your intentions? Did you react when a problem arose and try to correct it?”

There’s a lot to say that acting in good faith, and not always, I mean, the government can be very harsh, but acting in good faith and with good intentions and with good compliance gets you a long way in these types of cases, where you can go in good faith and say, “No, no, no, we look at the steps we took in advance and the steps we took to correct. Those things are critical.”

Nate Lacktman

I’d really like to thank you both for joining us today, Mark Josephs and Maureen Stewart. I learned a lot, and I hope some of the listeners did as well. We’ll have the transcript available online for those who prefer to read it in that format. Thank you for joining us today, and we look forward to seeing you at our next installment.

Mark Josephs

Glad to do it, Nate.

Maureen Stewart

Happy to. Thank you so much.

Nate Lacktman

Now, back to you, Judy.