According the Center for Disease Control (CDC), it is estimated that nearly 750,000 people from the United States travel to another country each year for medical care. An entire industry has grown around this “medical tourism” for many reasons, including the increasing cost of healthcare in the United States, the approval or allowance of procedures in other countries that are not permissible in the stateside, and the quality of care provided by facilities in other countries. In addition to patients traveling abroad to receive healthcare services, more physicians and facilities are moving out of the United States to establish businesses offering healthcare services to U.S. residents seeking treatment abroad.
Those physicians and companies seeking to get involved in this rapidly growing, innovative industry are often faced with a host of questions regarding the legal, regulatory, and business aspects of setting up a medical tourism facility or practice in a foreign country. The attorneys at Fuerst, Ittleman, David, and Joseph are well-versed in the unique challenges faced by these medical practitioners and facilities, particularly those in the regenerative medicine industry. These challenges include where and how to market and advertise in the United States; how the FDA and FTC may regulate any activities conducted in the U.S. or abroad; and creating a corporate structure, business plan and tax plan advantageous to the overall strategy of the company and in compliance with both U.S. laws and the laws of the country in which the business is formed. Our attorneys are exceptionally experienced in assisting clients entering this industry.
Advertising and Marketing
The Federal Trade Commission (FTC) regulates advertising and marketing done in the United States. Any advertising of services or treatments offered outside of the United States will be regulated by the FTC. The FTC is concerned with the veracity of advertisements to residents in the United States and has taken enforcement action, sometimes in conjunction with foreign governments, against companies offering medical treatments in foreign countries.
When crafting advertising and marketing campaigns for healthcare services offered abroad, medical tourism companies must take care to substantiate their claims, properly contextualize the claims made about their services, and ensure that procedures or treatments offered are in compliance with the countries in which they are offered. Our attorneys have worked with clients providing overseas healthcare services to develop and craft marketing strategies that advance our clients’ business goals while complying with the requisite regulatory schemes applicable to these unique business models.
FDA Regulatory Compliance
While FDA’s extraterritorial jurisdiction is somewhat limited, the agency’s regulatory reach does extend to any portions of healthcare services offered within the United States and, at times, can reach beyond its borders. It is important for clients offering services both in the United States and abroad to understand when and how they must comply with FDA regulations and policies. Fuerst, Ittleman, David, and Joseph has assisted clients in developing policies and procedures that govern the conduct of the international business domestically and abroad, and fully comply with all applicable FDA regulations.
Corporate Structure and Tax Compliance
When physicians and companies make the decision to establish a medical tourism facility or practice in a foreign country, many complex corporate and tax considerations come into play. It is critical for individuals and businesses to understand these factors and to properly plan for both domestic and foreign laws, regulations, and policies. The corporate and tax attorneys at Fuerst, Ittleman, David, and Joseph have advised clients establishing healthcare services and practices in foreign countries and are experienced in helping clients understand their options and obligations given the corporate and tax laws applicable to these types of business models.
From a corporate perspective, our clients need to be focused on both meeting foreign regulatory requirements on establishing medical practices and laboratories, and on limiting their own corporate and medical liabilities here in the United States. To do so, many clients establish either new companies in these foreign jurisdictions or enter into joint venture agreements – often with a local entity in the foreign country – to form the medical tourism business.
Creating a presence outside of the United States triggers several tax implications, many of which touch upon the most complex provisions of the Internal Revenue Code and Treasury Regulations. From a tax standpoint, clients should be mindful of sourcing of income rules, controlled foreign corporations, and possible subpart F income.
Fuerst, Ittleman, David, and Joseph’s corporate and tax attorneys have helped clients establish companies and joint ventures throughout the Caribbean, Latin America, and Europe. We have also worked with local counsel to ensure that these new businesses meet the foreign legal requirements for medical and laboratory practices in addition to being tax compliant.
Our attorneys are well-versed at negotiating, drafting, and executing contracts that can protect your intellectual property and your medical licenses here in the U.S., and limit the liability of the individual physicians as well as U.S. companies for these foreign operations. We also have extensive experience helping international businesses navigate the complexities of the Internal Revenue Code and the regulations promulgated thereunder.