Amid the growing interest in psychedelic-assisted psychotherapy, especially with substances like MDMA, psilocybin, and ketamine, it becomes imperative to navigate the intricate landscape of legal considerations associated with this burgeoning field. While the therapeutic benefits are promising, each substance brings along its own set of risks, responsibilities, and legal complexities for providers. In this context, the establishment of ketamine clinics demands a comprehensive understanding of the legal framework. Five major legal areas should be examined when considering opening a ketamine clinic, ensuring compliance, and fostering a secure and ethically sound environment. These considerations span corporate formation, physician-psychotherapist agreements, the development of employee handbooks, insurance coverage, and the crucial distinction between independent contractors and employees. Let’s delve into these key legal facets that make for responsible and legally compliant practices within the realm of psychedelic medicine.

1. Corporate Formation. Understanding the business’s legal structure is essential. The operation of ketamine clinics may raise issues related to the legal and regulatory framework that governs the way corporations can be involved in the practice of medicine. Some jurisdictions restrict corporate entities from practicing medicine to guard against non-medical professionals exercising control over medical decisions; therefore, it is critically important to pay close attention to the laws and rules that apply in the specific state where the clinic will operate. Regulations may differ significantly from one state to another. It is crucial to consult a legal professional when setting up your corporation to avoid violating your state’s corporate practice of medicine regulations.
2. Physician-Psychotherapist Agreements. When it comes to fee-splitting between physicians and therapists, state laws differ. California and Wisconsin, for example, restrict certain types of fee-splitting. There are also federal laws that may be implicated in this type of arrangement.
3. Employee Handbooks. Ketamine clinics should have employee handbooks that detail operations, expectations, disciplinary actions, complaints, and the laws and regulations that affect operations. These handbooks can highlight operational compliance and demonstrate areas of non-compliance that need addressing. A comprehensive handbook will help to ensure consistent administration of care and assist all employees in complying with laws and regulations that affect the clinic.
4. Insurance Coverage. Ketamine infusion therapies require specialized insurance policies to address risks specific to this type of treatment. Essential coverage spans from Professional Liability/Errors & Omissions (E&O) Insurance to Cyber Defense and Data Breach Insurance. Consult with an independent insurance broker familiar with psychedelic medicine to review your coverages before offering ketamine-assisted psychotherapy.
5. Independent Contractor vs. Employee. Determining the correct classification of therapists and healthcare professionals in ketamine clinics as either independent contractors or employees is crucial and complex due to varying state and federal laws. For instance, in California, workers are assumed to be employees unless they meet specific criteria. Further, on January 10, 2024, the U.S. Department of Labor issued a final rule that redefined “independent contractor” under the Fair Labor Standards Act, introducing a ”totality-of-circumstances” test to determine employment status.[1] Due to these intricacies and variations in labor law, one should consult a regulatory professional to ensure compliance.

As the field of psychedelic-assisted psychotherapy continues to unfold, we find ourselves at the nexus of innovation and responsibility. The therapeutic promise of substances like MDMA, psilocybin, and ketamine is compelling. Yet, it comes with a profound need for a nuanced understanding of the associated risks, responsibilities, and legal intricacies. From corporate formation and physician-psychotherapist agreements to the development of comprehensive employee handbooks, specialized insurance coverage, and the nuanced classification of personnel as independent contractors or employees, each of these facets contributes to the ethical and legal foundation of psychedelic medicine practices. By navigating these complexities with diligence and seeking expert guidance, we can ensure regulatory compliance as well as foster an environment where the transformative potential of psychedelic therapies can be realized responsibly and ethically. Let’s embark on this journey with a commitment to the highest standards, shaping the future of psychedelic medicine through responsible legal practices.

[1] For further information, please see U.S. Department of Labor Issues Final Rule on Independent Contractors.