Ketamine Management Services Organizations (MSOs): The California Puzzle

Our law firm has seen an uptick in ketamine clients lately. And it’s no surprise as the drug picks up considerable speed with its off-label infusion applications for a slew of serious ailments, including depression and mood disorders. We’ve also been handling several M&A deals around ketamine clinics and the management companies that serve them. While the medical research and business interest in ketamine continues, any physician or investor looking to participate in or capitalize on such ketamine infusion clinics needs to get familiar (and fast) with: 1) what it takes to prescribe, store, and administer ketamine, and 2) the myriad laws and regulations around the corporate practice of medicine and the business set-ups that may run afoul of the same.

In California, the corporate practice of medicine is very serious business (see Business & Professions Code Sections 2052 and 2400). California actually requires stricter compliance than the Feds when it comes to the corporate practice of medicine doctrine and anti-kickback, fee-splitting, and self-referral laws and regs. This means that not just anyone can administer or manage ketamine infusion treatments here. In fact, in California, such treatments must be conducted by licensed physicians (although other licensed health care providers,

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