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Hospitals and AI: Legal Questions, Liability and Consent

Summary of article from Chief Healthcare Executive, by Ron Southwick:

The use of artificial intelligence (AI) in healthcare is raising complex legal issues, including the standard of care, liability, and patient consent. As AI becomes more prevalent in patient care, the standard of care could evolve, potentially leading to a “reasonable machine standard of care”. Hospitals must also consider the legal complexities surrounding liability if complications arise from AI use, with factors including the diligence of the physician and the performance of the AI tool. Additionally, the growing use of AI in healthcare necessitates careful consideration of patient consent, particularly as AI becomes more integrated into workflows. Finally, hospitals need to understand the new legal landscape, develop policies to comply with laws and regulations, and regularly review the impact of AI.

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Stark Law-Based FCA Lawsuits Multiply: Relators Targeting Physician Compensation

Summary of article from Davis Wright Tremaine, by Robert G. Homchick, Adam D. Romney, Gavin Keene:

Several health systems, including Community Health Network Inc., University of Pittsburgh Medical Center, Erlanger Health System, and Steward Health Care System, have recently faced Stark Law-based False Claims Act (FCA) lawsuits. These lawsuits primarily focus on allegations of above fair market value compensation to physicians for referrals. The cases underscore the increased scrutiny of physician compensation practices and potential severe consequences of Stark Law violations. The trend suggests that health systems should reassess their risk levels arising from physician compensation practices. To mitigate risks, healthcare organizations should ensure fair and transparent compensation arrangements, implement effective compliance programs, take whistleblower claims seriously, and seek legal guidance to navigate Stark Law complexities.

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Weighing the Pros and Cons of Synthetic Healthcare Data Use

Summary of article from Health IT Analytics, by Shania Kennedy:

Healthcare data, while valuable for improved outcomes, faces challenges including data quality, patient privacy, and HIPAA compliance. Synthetic data, artificially generated information that mimics real-world data (RWD), offers a promising solution by maintaining statistical properties of RWD without containing personally identifiable information. Synthetic data provides privacy preservation, prevents data re-identification, and supports algorithm training. However, it also presents challenges, including potential data quality issues, bias, and AI model collapse. While synthetic data generators need improvement and standardized quality assessment, they are being increasingly utilized for various healthcare projects.

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Chief AI Officers in Healthcare: Strategy, Tactics and Evangelism

Summary of article from HealthTech Magazine, by Nathan Eddy:

The rise of artificial intelligence (AI) in healthcare has led to organizations considering hiring a Chief AI Officer (CAIO) to spearhead their AI strategies. The role of a CAIO involves accelerating AI adoption while ensuring safety and innovation, managing investments, and addressing ethical and governance issues. They also need to understand the integration of AI with existing technologies like electronic health records. The role has evolved to include more attention to governance and risk management, especially in medical tech companies. CAIOs provide strategic advantage by guiding AI initiatives, ensuring alignment with strategic objectives, and fostering a culture of exploration and experimentation.

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Epic Releases Open-Source AI Validation Tool for Health Systems

Summary of article from Fierce Healthcare, by Heather Landi:

Epic has launched an open-source tool to help healthcare organizations test and monitor artificial intelligence (AI) models. Available for free on GitHub, the AI validation software suite can be integrated with electronic health record (EHR) systems and used to validate AI models from various sources. The tool automates data collection and mapping, providing near real-time metrics and analysis. However, it currently does not validate generative AI models, although Epic plans to expand its capabilities in the future. The Health AI Partnership (HAIP), which includes Duke Health, Mayo Clinic, and Kaiser Permanente, intends to use the tool for local AI model validation.

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The Colorado AI Act: What You Need to Know

Summary of article from IAPP, by Cobun Zweifel-Keegan:

The Colorado AI Act, the first U.S. cross-sector AI governance law, was signed into law on May 17, 2024, with key provisions effective from Feb. 2026. The law focuses on high-risk AI systems, defined as those making consequential decisions, and introduces stringent requirements to prevent algorithmic discrimination. The Act imposes responsibilities on both developers and deployers of AI systems, requiring them to use reasonable care to avoid algorithmic discrimination and mandating comprehensive documentation and impact assessments. The law also requires incident reporting, public disclosure of risk management, and direct consumer notifications. The law exempts entities covered by HIPAA if they provide AI-generated recommendations that require a health care provider to take action to implement that recommendation. Enforcement of the law, which treats violations as breaches of Colorado’s general consumer protection statute, will be carried out by the Colorado attorney general starting 1 Feb. 2026.

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Physician Group Integration: Trends & Challenges

Summary of article from VMG Health, by Cordell J. Mack:

Hospitals and health systems have been integrating with physician groups in an effort to improve healthcare quality, service, and efficiency, with mixed results. Despite this, health system employment of physicians continues to rise, currently accounting for over 50% of all practicing physicians. However, the multispecialty group structure commonly used in these systems presents challenges, including financial misalignment across subspecialties and inconsistent financial reporting. VMG Health suggests an alternative approach involving reorganization of physician enterprise offerings within integrated delivery systems, focusing on improved governance, financial reporting, and physician loyalty. This evolving landscape of physician organizational structures within health systems aims to enhance operational efficiency, growth, and care delivery.

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How Often Should Med Spas Perform Good Faith Exams?

At a minimum, a Good Faith Exam (GFE) should be performed annually, but may be required more often depending on the circumstances.

The good faith exam should be performed on any patient receiving treatment for the first time. From this GFE, the provider develops a treatment plan which will often include multiple treatments over several sessions. A GFE does not need to be performed for each session included in that treatment plan.

With that said, a new GFE should be performed:

  • If a patient seeks additional services not anticipated during the initial GFE, or not included in the initial treatment plan;
  • The patient discontinues the treatment plan, but then desires to resume treatment after a substantial delay; or
  • A patient’s health changes materially, either during the course of a treatment plan or thereafter.

There is no hard and fast rule. It is a question of the applicable medical standard of care. When in doubt, a physician or midlevel should decide if a GFE is required.

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Does a Doctor of Pastoral Medicine Degree Expand a Practitioner’s Scope of Practice?

There is a mistaken belief that a D.PSc., PSC.D or Doctor of Pastoral Medicine degree from the Texas-based, Pastoral Medical Association, will expand the scope of practice of non-physician, medical providers. Will such a degree allow a nurse practitioner, for example, to provide services or perform medical assessments that they provide could not otherwise perform? Or, can the provider now hold themselves out as a “doctor” without disclosing the type of degree?

Whether disclosed or not, pastoral medical degrees can create confusion about the scope of practice and competency of the provider. Does this “medical” degree confer any authority to offer medical advice to their clients?

There are several internet articles about this degree and potential confusion, but little in the way of public guidance from state agencies.

I searched for disciplinary actions taken by the Texas Medical Board and the Texas Board of Chiropractic Examiners. Reviewing these disciplinary matters, I conclude that advertising or trying to use a pastoral medicine degree in the provision of health care has significant risks.

The Pastoral Medical Association purportedly “qualifies and licenses spiritually-minded health professionals with diverse practice specialties who are committed to partnering with their clients in using scripturally-sound means to achieve and maintain robust mental, physical and spiritual health.” While that description is innocuous enough, the word “Medical” in its name implies a focus beyond its stated purpose.

A problem arises when the activities of the pastoral medicine provider fall within the scope of practice regulated by a Texas licensing board. Because the Pastoral Medical Association is not a governmental agency, it does not have any legal authority to regulate a scope of practice.

Want to see what happens when apastoral medicine provider crosses the line into a scope of practice regulated by the Texas Medical Board or the Texas Board of Chiropractic Examiners?

These are their stories. [Bum. Bum.]

This information was reported publicly by the referenced licensing board. Nevertheless, I have redacted the practitioners’ names.

Texas Medical Board Disciplinary Actions

XXXX XXXXXX, D.C., No TMB License, Austin

On October 25, 2019, the Board directed the Executive Director to enter a Cease and Desist Order regarding XXXX XXXXXX, D.C., prohibiting him from practicing medicine in the state of Texas without a license issued by the Texas Medical Board. Mr. XXXXXX shall not refer to himself as a medical doctor or physician in any manner, by designating himself by using “doctor,” or “Dr.” unless he also designates that he is a doctor of chiropractic as required by the Texas Occupations Code. The Board found Mr. XXXXXX advertised his Doctor of Pastoral Medicine as Dr. XXXX XXXXXX, PSc.D., which is not recognized in Texas and no disclaimer was provided. Mr. XXXXXX does not identify himself as “D.C.” or “Doctor of Chiropractic” after calling himself “Dr.” on his website.

XXXX XXXXXX, No TMB License, Conroe

On August 25, 2017, the Board and XXXX XXXXXX, entered into an Agreed Cease and Desist Order prohibiting Mr. XXXXXX from practicing medicine in the state of Texas without a license issued by the Texas Medical Board; shall cease and desist any unlicensed practice of medicine; and shall cease and desist from identifying himself as a doctor. The Board found Mr. XXXXXX operates a business under the name Simple Wellness and a website and Facebook page where he claims to offer various health services, including “Frequency Specific Microcurrent (FSM) which can be used to treat the following: scar reduction, pain, injuries, fat loss, performance and recovery, energy mood, brain injury, nerve issues, stress trauma, emotions, anxiety, sleep, addiction, ADHD/Focus, autism, depression and PTSD” Mr. XXXXXX also advertises these services in publications such as Psychology Today where he refers to himself as Dr. XXXX XXXXXX,, and states on his website and other promotional materials that he is licensed by the Pastoral Medical Association, an entity that does not confer any authority upon Mr. XXXXXX to practice medicine in the state of Texas under the Medical Practice Act.

XXXX XXXXXX, D.C., No TMB License, Plano

On June 16, 2017, the Board and XXXX XXXXXX, D.C., entered into an Agreed Cease and Desist Order prohibiting Ms. XXXXXX from practicing medicine in the state of Texas, shall cease and desist using the titles Doctor, Medical Doctor, or Physician unless licensed by the Texas Medical Board. Because Ms. XXXXXX is a licensed Chiropractor, she may use the title of “Doctor of Chiropractic” or “D.C.” Ms. XXXXXX shall cease and desist from using the post-nominal titles of Doctor of Functional Medicine, Doctor of Pastoral Medicine, or any other title that is not recognized by Texas as an authority authorizing her use of the prenominal title of Doctor. Ms. XXXXXX shall denote in all promotional materials and biographies that she is not licensed to practice medicine in Texas. The Board found Ms. XXXXXX has identified herself in online promotional materials and biographies using the prenominal title Doctor and used the post-nominal title of Doctor of Pastoral Sciences and Functional Medicine Doctor as the authority authorizing her use of the prenominal title of Doctor neither of which is recognized in the state of Texas.

XXXX XXXXXX, D.C., No TMB License, Austin

On June 10, 2016, the Board and XXXX XXXXXX, D.C., entered into an Agreed Cease and Desist Order prohibiting Mr. XXXXXX from acting as, or holding himself out to be, a licensed physician in the state of Texas. The Board found Mr. XXXXXX’s website and other promotional materials did not make it clear that he does not treat thyroid disease, diabetes, Hashimoto’s disease, fatigue, digestive issues, and autoimmune disorders. Mr. XXXXXX’s website and other promotional materials state he is licensed by the Pastoral Medical Association. This entity does not confer any authority upon Mr. XXXXXX to practice medicine in the state of Texas under the Medical Practice Act.

XXXX XXXXXX, No TMB License, Galveston

On March 4, 2016, the Board and XXXX XXXXXX entered into an Agreed Cease and Desist Order, prohibiting Mr. XXXXXX from acting as, or holding himself out to be, a licensed physician in the state of Texas. Mr. XXXXXX shall cease and desist any practice of medicine and desist from identifying himself as a doctor, unless he does so in compliance with Healing Arts Identification Act. The Board found Mr. XXXXXX refers to himself as Dr. XXXXXX or “doctor” in publications and online without specifying an authority for the use of the title of “Dr.” or “doctor.” Mr. XXXXXX’s website and other promotional materials state he is licensed by the Pastoral Medical Association. This entity does not confer any authority upon Mr. XXXXXX to practice medicine in the state of Texas under the Medical Practice Act.

XXXX XXXXXX, No TMB License, The Woodlands

On March 4, 2016, the Board and XXXX XXXXXX entered into an Agreed Cease and Desist Order, prohibiting Mr. XXXXXX from acting as, or holding himself out to be, a licensed physician in the state of Texas. Mr. XXXXXX shall cease and desist from identifying himself as a doctor, unless he does so in compliance with Healing Arts Identification Act. The Board found Mr. XXXXXX refers to himself as Dr. XXXXXX or “doctor” in publications without specifying an authority for the use of the title of “Dr.” or “doctor.” Mr. XXXXXX’s website and other promotional materials state he is licensed by the Pastoral Medical Association. This entity does not confer any authority upon Mr. XXXXXX to practice medicine in the state of Texas under the Medical Practice Act.

XXXX XXXXXX, D.C., No TMB License, San Antonio

On March 4, 2016, the Board and XXXX XXXXXX, D.C., entered into an Agreed Cease and Desist Order, prohibiting Mr. XXXXXX from engaging in the unlicensed practice of medicine. Mr. XXXXXX shall indicate on each page of his website and other advertising, where the term “doctor or “Dr.” appears, that he is a doctor of chiropractic. In addition, where reference to the Pastoral Medical Association (PMA) appears on his website and other advertising, Mr. XXXXXX shall indicate PMA is not a state licensing agency, and he will comply with Tex. Occ. Code 104.004 with respect to the use of the title “doctor” in relation to his “D.PSc” credential. The Board found Mr. XXXXXX has published information, including Internet website pages, other postings, and mailings that did not at all times make it clear that his is not a medical doctor. Some of the material that Mr. XXXXXX posted and mailed could be read to imply that he treats medical and physical conditions, including chronic conditions of persons.

XXXX XXXXXX, No TMB License, Cedar Park

On March 4, 2016, the Board and XXXX XXXXXX entered into an Agreed Cease and Desist Order, prohibiting Mr. XXXXXX from acting as, or holding himself out to be, a licensed physician in the state of Texas. Mr. XXXXXX shall cease and desist from identifying himself as a doctor, unless he does so in compliance with Healing Arts Identification Act. The Board found Mr. XXXXXX refers to himself as Dr. XXXXXX or “doctor” in publications without specifying an authority for the use of the title of “Dr.” or “doctor.” Mr. XXXXXX’s website and other promotional materials state he is licensed by the Pastoral Medical Association. This entity does not confer any authority upon Mr. XXXXXX to practice medicine in the state of Texas under the Medical Practice Act.

Texas Board of Chiropractic Examiners Disciplinary Actions

XXXX XXXXXX, DC, TBCE Lic. No. XXXX, Houston

[Dr. XXXXXX was required to …] Differentiate his chiropractic practice from any other businesses that are outside the scope of chiropractic practice, remove any references of other businesses from his chiropractic website and provide statement in any advertisements referencing “Pastoral Medicine Association” (PMA), that PMA is not a state-regulated entity.

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Can a Professional Limited Liability Company Own Another Professional Limited Liability Company?

Question: Can a professional limited liability company own another professional limited liability company?

Answer: Yes, a PLLC can own another PLLC provided it has the correct ownership and is formed for the same purpose as the PLLC it owns.

For example, a physician can form John Doe, MD, PLLC, and that entity can be an owner of Medical Practice, PLLC. Interestingly, this would not be true for professional associations. PAs can only be owned by individuals, cannot be owned by any other type of professional entity, and cannot own another PA.

The key is in the chain of legal definitions that only an attorney could love.

Professional associations, professional corporations, or professional limited liability companies are all considered “professional entities” under Texas law. Texas Business Organizations Code § 301.003(4). Each of these entities must be formed to provide a professional service and meet all the requirements of a professional entity. Id. §301.003(2), (3), and (6).

All professional entities have one thing in common: they can only be owned by an “authorized person.” Id. § 301.004. But who qualifies as an “authorized person” is different depending on the type of professional entity involved.

For professional associations, an authorized person can only be a “professional individual,” which is an individual who is licensed to provide in Texas or another jurisdiction the same professional service that will be rendered by that professional entity. Id. § 301.006(a), .003(5).

For professional corporations and professional limited liability companies, an authorized person also includes “professional organizations.” Id. § 301.004(2).

The definition for professional organizations is needlessly confusing. Companies are considered “persons” in the sense they are separate legal entities. With that in mind, a professional organization means “a person other than an individual, … that renders the same professional service as the professional corporation or professional limited liability company…”

That answers the question. Professional entities are “persons other than an individual,” and if they render the same professional service as the professional corporation or professional limited liability company they own, they meet the definition of a professional organization.