Canadian Medical Tourism: Expanding Opportunities and Reducing Legal Risks for American Healthcare Providers

Abstract

After identifying the economic benefits that increased medical tourism from Canada to the United States may confer on the U.S. healthcare market and local economies, this essay analyzes applicable U.S. legal impediments that certain medical tourism arrangements — to wit, those involving a third-party medical tourist "broker" — may implicate. While the authors demonstrate that such arrangements will not run afoul of the U.S. federal Stark Law and federal Anti-kickback Statute, certain state-level anti-kickback and fee-splitting prohibitions impose the most substantial of the potential legal impediments on such arrangements. Given these state restrictions, the article suggests ways to structure these transactions in a manner designed to minimize this risk, and ultimately show that making a Canadian medical practice the medical tourism broker — serving as both the clearinghouse for identifying patients and as the broker for negotiating the arrangements — is critical for legal compliance purposes. Replacing the for-profit lay-owned entity with a medical practice that does not seek to profit from the arrangement serves critically to minimize inappropriate referrals and lowers the risk to the American providers under applicable legal barriers. Finally, the authors propose changes to the applicable laws to further eliminate risk from Inbound Medical Tourism ventures, without compromising the patient protection goals of existing laws.

Keywords: Medicine, Medical Tourism, Canada, Stark Law, Antikickback Statute, Medical Tourism Broker

JEL Classification: H75, I00, I1, I10, I14, I18, I19