What You Need to Know About Therapeutic Ketamine Laws

Posted By Madilyn Moeller, Friday, March 4, 2022

Woman receives IV medication

By Samuel E. Pondrom, JD, ByrdAdatto

Ketamine has been used as an anesthetic since the 1970s, but, about 20 years ago, doctors noticed that, in doses that did not produce anesthesia, it has remarkable anti-depressant effects, including for depression that had not responded to other treatments.

Over the past few years, the use of ketamine therapy as a treatment for depression has exploded.

The most significant aspect of ketamine therapy is its speed. According to research on the impact of ketamine therapy, while other treatments can take weeks to months to work, in the 50 – 70% of patients who respond to ketamine, depression and suicidality reverse so quickly that just one to three treatments will have a noticeable effect.

Depression is a major cause of disability, and this has worsened over the course of the pandemic. The promise of a drug that can relieve crippling symptoms and reduce the risk of suicide quickly has, therefore, made ketamine a matter of not only great clinical interest, but of curiosity for investors as well.

So, what do you need to know if you are considering expanding into this area?

First, you need to understand the current status of ketamine. Although intravenous infusion is the most common method of administration, that actually is an "off-label" use, because the U.S. Food and Drug Administration (FDA) has only approved ketamine at a higher dose for anesthesia. The FDA has also approved the nasal inhalation form, but that is specifically for the treatment of resistant depression.

Ketamine is also a Schedule III controlled substance. A dispensing facility must follow all requirements for registration, storage, inventory management, security, record keeping and prescription protocols that apply to Schedule III drugs, and any staff member who is involved in storing or administering the drug must be registered with the U.S. Drug Enforcement Administration (DEA). Criminal penalties will attach for failure in these areas.

Second, it is important to keep in mind that ketamine therapy is the practice of medicine. With the surge in demand, ketamine therapy is being marketed to the public, and sites have opened that present it as psychiatric fast-food. There are even mail-order ketamine providers that supply oral doses and offer "psychedelic guides" to remotely instruct on the process. However, under all the marketing spin and happy-talk ads, the legal basis to dispense ketamine for the treatment of depression remains a clinician's prescription, and so the same state regulations that pertain in any medical care will apply to prescribing ketamine therapy. Physicians may prescribe ketamine, but they will still be subject to their state's laws on licensure, scope of practice, authority to prescribe and any requirements for supervision if they delegate its administration.

Because ketamine is the practice of medicine, a physician-patient relationship must be established through the performance of an appropriate initial examination. In many states, this initial diagnosis must come from a psychiatrist who must qualify the patient as a good candidate for ketamine therapy. Moreover, in addition to obtaining the appropriate education and training to engage in low-dose ketamine therapy, a physician should refer to the American Psychiatric Association's Consensus Statement, which addresses issues such as patient selection and dealing with adverse reactions. While these are not binding guidelines, they provide good insight into the treatment if you are considering integrating it into your practice, and if you are practicing within the standard of care.

Due to the increasing popularity of low-dose ketamine, there has been an uptick in non-physicians seeking to be involved in providing the treatment. However, because the treatment is the practice of medicine, the ownership of a practice administering low-dose ketamine must adhere to the laws governing medical practice ownership in the state in which the practice operates. In traditional corporate practice of medicine (CPOM) states, this means physician ownership or limited joint ownership between physicians and other health care licensees. A minority of states allows for direct ownership by non-physicians, including laypersons, and the engagement of physicians and other health care personnel to render medical services. Accordingly, non-physicians looking to become involved in low-dose ketamine administration will need to know the ownership laws of their state.

For non-physicians in CPOM states, utilization of the management services organization (MSO) model can provide an alternative to traditional physician ownership. As with any MSO structure, the management and medical parties involved must take care to craft a management services agreement (MSA) that complies with applicable state law and does not result in the influence or control over a medical practice's professional services.

The third and final key issue to consider regarding therapeutic ketamine is who can administer the treatment itself. Initially, a practice must understand the delegation and supervision laws of their state. Typically, this means the potential delegate must have the appropriate education, training and experience to execute the medical service; the medical service must not be excluded from the delegate's scope of practice; and there must not be any board opinions that restrict the delegate from performing the service. However, because ketamine involves the use of an anesthetic, some states apply special rules to its use and delegation, despite the fact the ketamine is not being used to achieve a sedative effect. This tends to further limit the level of delegation possible for low-dose ketamine. Thus, it is crucial that any practice looking to add ketamine therapy to its array of services understand how its state treats the use and delegation of ketamine, even at low doses.

In summary, low-dose ketamine is a relatively new use for an existing drug, so the regulatory landscape surrounding it is evolving. It is an exciting field, both clinically and as a business, but anyone considering entering it must be prepared to deal with the medical requirements and with multiple layers of regulation, as well as to respond flexibly if the regulatory environment tightens in the future. If a practice or non-physician is considering entering the ketamine therapy space, they must carefully address all the issues discussed above to ensure compliance.

AmSpa Members receive a complimentary 20-minute introductory compliance assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

As the youngest of three brothers, Sam Pondrom learned early on how to work effectively as part of a team. After graduating from Oklahoma State University, an intrinsic sense of curiosity and a keen eye for details led him to work as an accountant for two Engineering-News Record top-40 construction firms. It was there where he honed his ability to analyze complex issues and craft clear, concise answers. Pondrom utilizes these skills to work in partnership with ByrdAdatto clients to resolve their complex business and regulatory concerns in a simple, straightforward way.

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