Medical spas are fascinating establishments that serve as a hybrid between a medical practice, a retail space, and a spa-like experience for many patients.
Medical spas must comply with various federal, state, and local laws covering their operations. For instance, some states restrict the corporate practice of medicine (CPOM), necessitating an attorney’s creation of a management services organization/management services agreement (MSO/MSA) structure. In contrast, other states allow non-physicians to own a medical spa directly. Additionally, certain conditions may permit anyone to own a medical spa but limit who can serve as a medical director.
It’s important to note that non-compliance with these laws can have serious consequences, including investigative actions by regulatory bodies like medical, nursing, cosmetology, and pharmacy boards, among others. The outcome of these investigations can result in severe legal and financial implications, such as hefty fines, suspension of operations, and even revocation of the provider’s license and criminal charges.
Good Faith Exams/Wellness Checks
As a medical professional, it is essential to recognize that performing good faith exams (GFEs) and wellness checks are critical components of any healthcare practice, including medical spas. These exams provide a means for medical spas to evaluate a patient’s health history and gather essential information about their overall health and wellness.
GFEs also provide a safe and comfortable environment for patients to discuss their health history and related concerns, which can aid in diagnosing and treating health and beauty issues. Additionally, GFEs serve to protect both the patient and the medical spa by ensuring that proper medications and treatments are provided.
In some states, only licensed healthcare providers, such as nurse practitioners (NPs), physician medical directors, or physician associates (PAs), are authorized to conduct GFEs before any medical procedure can be performed.
While it is true that innovative companies now offer outsourced telehealth GFEs for a modest monthly fee, it is essential to note that these services do not serve as a remedy for poorly constructed medical spas. For instance, if a state mandates a particular MSO/medical spa entity structure, outsourcing GFEs will not solve any underlying compliance issues.
Medical Directors
It’s important to note that some companies offer outsourced medical directors to medical spas, which can be an affordable and convenient option for supervising medical procedures. While outsourced medical directors may seem like a useful addition, it’s crucial to understand that they cannot fix or solve issues with an improperly established medical spa.
For instance, in states where medical spa entity structure requires MSO/MSA, hiring an outsourced medical director will not address any underlying compliance problems. Despite this limitation, outsourced medical directors can help medical spas by supervising and providing medical guidance to ensure proper patient care.
Selected State-Specific CPOM Requirements
California:
California has a restriction on CPOM, which means that if a non-physician healthcare provider (including but not limited to nurse practitioners, physician assistants, registered nurses, psychologists, acupuncturists, naturopaths, chiropractors, among other specified professionals) would like to enter the medical spa space, they should either open an MSO or co-own a professional corporation with the physician medical director owning 51% of the entity.
California nurse practitioners may have full practice authority after specific criteria are met. Still, no regulations are yet to allow Nurse Practitioners in California to own a medical spa directly.
Texas:
Texas has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity. Podiatrists and chiropractors may co-own a medical practice with a physician, as may physician assistants. In the case of physician assistant/physician co-ownership, the physician should own at least 51% of the medical practice.
New York:
New York has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity. Nurse practitioners in New York may have full practice authority after 3,600 practice hours, so those Nurse Practitioners who have full practice authority may own the medical spa directly as well.
Florida:
Florida does not restrict CPOM, meaning a non-physician who wants to enter the medical spa space may do so without an MSO. However, Florida has requirements for who could be a medical director of a medical spa (in certain cases requiring that medical directors be board-certified dermatologists or plastic surgeons), even if an autonomous nurse practitioner owns it.
Nevada:
Nevada has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity. Nevada nurse practitioners in Nevada may have full practice authority, so they may own the medical spa directly in certain situations.
Washington:
Washington has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity. Nurse practitioners in Washington may have full practice authority and own the medical spa directly in certain situations.
Illinois:
Illinois has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity. Nurse practitioners in Illinois may have full practice authority, so long as certain conditions and requirements are satisfied.
Arizona:
Arizona has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity. Arizona nurse practitioners may have full practice authority, so they may also own the medical spa directly, as long as certain conditions and requirements are satisfied.
North Carolina:
North Carolina has a restriction on CPOM, which means that if a non-physician would like to enter the medical spa space, they should open an MSO that contracts with a physician medical director’s professional entity.
Summary
In the above sampling of states, the MSO structure may be required if a non-physician (and, in some cases, a non-full practice authority nurse practitioner) would like to enter the medical spa space. Using an outsourced GFE telehealth provider or outsourced medical director will not remedy an improperly formed medical spa. As such, operating a medical spa requires compliance with various regulations to ensure the safety and satisfaction of patients while mitigating legal and financial risks. By adhering to all applicable laws and regulations, medical spas can provide exemplary services and remain a valuable asset to the aesthetics industry and to their clients.
How Can We Help?
Lengea is a law firm that provides world-class legal solutions to medical spas, intravenous (IV) hydration businesses, dental practices, and other healthcare and healthcare tech companies. Our attorneys help our clients form, operate and grow their healthcare businesses in legally compliant ways. We offer services tailored to your state and business needs to ensure proper setup and compliance during operation. We also provide compliance audits for new and existing companies within our practice area to assist you and your business with appropriate legal compliance. You can contact us on our website to schedule an appointment with our team of experienced attorneys to get started today!
*This blog post is for informational purposes only and does not constitute legal, financial, or medical advice or the forging of an attorney-client relationship. Please retain the services of an attorney to receive legal advice on how the law applies to your business.