Top Compliance Pitfalls for Intensive Outpatient and Partial Hospitalization Youth Programs

Are you planning to offer outpatient or partial hospitalization youth programs? Discover the considerations vital to maintaining compliance.

Young attendees of a group therapy session sitting in a circle with a therapist.

Offering an Intensive Outpatient Program (IOP) or Partial Hospitalization Program (PHP) for children and adolescents can make a meaningful impact. These programs provide clients the necessary support and tools to overcome challenges and lead healthier, more fulfilling lives. 

Given the growing need for accessible and comprehensive treatment, you might be contemplating launching a practice based on these models. Naturally, you may also be curious about the compliance requirements involved.

Licensure and Certification 

As you set up your practice to offer licensed services, consider whether you and your employees have the proper licensure. For instance, if you hope to provide prescriptions, you might need a psychiatrist or physician on staff. Additionally, you might need various other licensed professionals such as mental health counselors or social workers.

If you plan to offer services to children and adolescents involving coordination with their schools, you may want to hire teachers. In addition to their state-mandated education and certification, consider whether they have additional licensure that qualifies them to work with youths in outpatient or partial hospitalization programs.  

Entity Formation

Creating the proper entity should be one of your first steps to ensure compliance. In most states, healthcare professionals starting a practice that provides licensed services will need to create a specific business structure, such as a professional limited liability company (PLLC). You can find more information on business entities in our article, “Should I Form an LLC? FAQs for Healthcare Practices.”

Confidentiality and Sharing Information with Families

Preserving patient privacy is crucial for practice compliance. When minors are involved, this becomes more complex due to general state laws on patient privacy,  HIPAA, and additional laws targeting minors. For example, your practice likely needs to comply with the 21st Century Cures Act Final Rule, which focuses on the electronic sharing of health information and addresses disclosing information with patients’ families. 

Practices that interact with patients’ schools will likely need to follow the requirements of the Family Educational Rights and Privacy Act (FERPA). Complying with FERPA can involve coordinating with the patient’s family, the patient themselves, and the patient’s school, especially if the practice needs access to information in the patient’s educational record. Compliance with state and federal laws often requires obtaining patient consent to share certain information. However, note that there might be exceptions where consent isn’t necessary, such as if the patient poses a danger to themselves or others.

See our related articles:
“Don’t Tell My Mom”: A Guide to HIPAA Compliance for Minor Patients.
Duty to Warn and Reporting Threats of Harm: What You Need to Know


Does your practice need to be accredited? Believe it or not, accreditation isn’t exclusive to hospitals. Although not a compliance requirement, accreditation can have benefits. It demonstrates to you, your staff, and your patients that your practice provides safe, high-quality care. Accreditation is available through several different organizations, such as the Joint Commission. 


Your practice may need to provide patients with referrals for services it doesn’t offer. Most states have specific provisions within their professional practice acts addressing fee-splitting and what constitutes improper referrals. Moreover, practices serving patients with Medicare or Medicaid must also comply with federal laws such as the Anti-Kickback Statute or the Physician Referral Law (“Stark”). 

Government Involvement

Your practice might elect to have more involvement from the government. For instance, you could consider becoming a federally qualified health center (FQHC) or partnering with one to provide services. To become an FQHC, your practice must satisfy specific requirements. These include obtaining a grant under Section 330 of the federal Public Health Services Act, meeting the conditions set out for such a grant, serving medically underserved populations, and fulfilling other obligations listed in Section 330 of the Public Health Services Act.

Get Legal Support

Successfully navigating compliance for intensive outpatient or partial hospitalization youth programs demands addressing business formation, licensing, confidentiality, referrals, and more. Staying well-informed, seeking legal advice, developing written policies, and fostering a compliance culture is crucial for providing exceptional care within legal and ethical boundaries. 

If your practice is located in a state where Jackson LLP has licensed healthcare attorneys, reach out to us to learn how we can support you. By booking a free consultation, you can establish if we’re a good fit for your needs.

This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

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