The medical spa business in the United States has experienced exponential growth in the past few years, and Texas is no exception. Technological innovations in the treatments provided at med spas have increased patient satisfaction by reducing recovery times and limiting adverse outcomes. As a result, Texas entrepreneurs have jumped into action to satisfy the rising demand for various non-invasive procedures.
From Botox® to IV Hydration and laser treatments, medical spas provide many lucrative cash-pay offerings to patients nationwide. Both licensed providers and everyday business people alike have seen the value of providing in-demand services without the headache of haggling and fighting for reimbursement from insurers.
However, where technological innovation has been rapid, Texas laws and regulations have been slow to adapt to the modern healthcare landscape. As a result, hopeful entrepreneurs may be surprised by the complexity of compliantly opening a med spa and the severity of punishments for running afoul of the law and the licensing boards. If you want to open a medical spa in Texas, this might sound overwhelming or even worrisome. Have no fear! This post is the first in a five-part series of things our attorneys think you should know before opening a medical spa in the Lone Star State. This series is meant as a primer on the big legal issues facing entrepreneurs in medical aesthetics. This primer is not a substitute for the advice and counsel of our experienced attorneys. Still, it is a great way to increase your understanding of the legal pitfalls and complexities of opening a med spa anywhere between Galveston and El Paso.
You don’t have to be a doctor to own a med spa, but you better do it correctly. The prohibition on the corporate practice of medicine (“CPOM”) is alive and well in Texas. CPOM laws were created to ensure that only licensed physicians could practice medicine, and they were structured to prevent an unlicensed person or corporation from interfering with physicians’ medical decision-making. Texas CPOM laws accomplish this by prohibiting non-physicians (with limited exceptions for co-ownership by other licensed healthcare professionals) from owning a physician practice or directly employing physicians.
You may be thinking, “Why are you telling me this? I just want to open a med spa, not a physician practice.” That is a fair response. However, the Texas Medical Board has classified many cosmetic treatments medical spas provide as medical procedures. Thus, Texas medical spas are considered medical practices and must comply with the CPOM laws.
However, don’t give up hope if you are a non-physician hoping to open a med spa. When properly structured, the management services organization (“MSO”) model allows for non-physician investment and ownership in a med spa business. This is accomplished by separating the med spa into two distinct legal entities: the MSO takes care of the administrative, management, and support services required to operate any business, and the medical entity maintains uncompromised control over medical decision-making. These two distinct entities are then hitched together using a management services agreement. The agreement identifies the administrative services the MSO will perform to support the medical practice and the fee the MSO will receive as compensation.
This structure allows RNs, NPs, PAs, and unlicensed entrepreneurs to participate in the lucrative world of medical spa ownership while limiting risk, protecting their businesses, and creating more predictable outcomes when interacting with regulators and licensing boards. At Lengea, we have a wealth of experience with this model. We would be happy to walk you through the particulars of how to competently and compliantly start your aesthetics business. To get started, schedule your free consultation with one of our attorneys by clicking here.