MSO & MSA: How to Legally Set Up
a Med Spa or Wellness Clinic
Are you planning to open a med spa, IV hydration business, or hormone therapy clinic—but you’re not a physician? Or maybe you are a provider and want to grow your brand without breaking any healthcare laws?
If so, you’ve probably come across something called the Corporate Practice of Medicine (CPOM) and heard terms like MSO and MSA thrown around. Let’s break down what these mean and why they matter to your business.
What Is a “Medical Practice” Anyway?
You might think that a medical practice only includes traditional doctor’s offices. But in many states, services like:
- IV hydration
- Botox and fillers
- Hormone replacement therapy (HRT)
- Weight loss injections
- Laser treatments
…are all legally considered part of the practice of medicine.
That’s right—even if your services are marketed as “wellness” or “cosmetic,” if they involve injections, prescriptions, or medical devices, then you’re running a medical practice in the eyes of the law.
And that means you’re subject to specific rules, especially in states that follow the Corporate Practice of Medicine doctrine.
What Is the Corporate Practice of Medicine (CPOM)?
In 33 states, non-physicians (including RNs, NPs, and businesspeople) cannot legally own or control a medical practice. This is called the Corporate Practice of Medicine prohibition.
Why? Because the law wants to make sure that medical decisions are made by licensed providers—not influenced by business owners, investors, or corporations.
So what if you’re not a doctor but want to open a med spa or offer medical services?
That’s where the MSO model comes in.
What Is an MSO (Management Services Organization)?
An MSO is a company that handles the business side of a medical practice—things like:
- Marketing
- Staff management
- Billing and collections
- Leasing office space
- Ordering supplies
- Managing software, insurance, payroll, and more
The MSO does not practice medicine. That part is left to the licensed providers. But it can be owned by anyone—including non-physicians, RNs, or business partners.
So, if you’re a nurse, entrepreneur, or wellness founder, you can legally own and operate an MSO to support a medical practice, without violating CPOM rules.
How the MSO and Medical Practice Work Together
The medical practice, which must be owned by a licensed provider, delivers patient care.
The MSO, owned by you (or your partners), provides management and support services.
This separation protects your business legally and ethically—and it’s enforced through a written contract called a Management Services Agreement (MSA).
What Is an MSA (Management Services Agreement)?
The MSA is the contract between the MSO and the medical practice. It outlines:
- What services the MSO will provide
- How the MSO will be paid (e.g., flat fee or fair market value)
- Who is responsible for what
- How long the agreement lasts
- Rules around compliance, termination, and exclusivity
It’s critical that the MSA is drafted properly to avoid fee-splitting violations, unauthorized practice of medicine, or triggering medical board or DEA scrutiny.
At Lengea Law, we draft MSAs every day—and tailor them to your specific state, business model, and goals.
What’s the Role of the Medical Director?
In most MSO/MSA setups, there’s also a Medical Director involved—especially if you’re offering services like IV therapy, injectables, or HRT.
The Medical Director usually:
- Oversees clinical staff
- Conducts good-faith exams or signs off on treatment protocols
- Ensures compliance with medical board rules
- Holds liability insurance
- Helps develop training and clinical standards
They’ll typically have a separate agreement with the professional entity (not with the MSO). But the MSA may reference how the MSO supports the Medical Director (e.g., pays their malpractice insurance or provides office space).
Can a Nurse or Non-Physician Own a Med Spa?
In many states, no—but you can own the MSO. That lets you legally participate in the business side of a healthcare venture without crossing regulatory lines.
Bottom Line: MSO + MSA = Legal Growth for Your Med Spa or Wellness Business
If you want to build, grow, or invest in a medical aesthetics or wellness business, an MSO model is the go-to legal structure in CPOM states—and a smart one even in states that allow more flexibility.
At Lengea Law, we’ve helped launch and support over 1,500 healthcare and wellness businesses across the U.S., including:
- Med spas
- IV clinics
- Testosterone and estrogen clinics
- Concierge practices
- Virtual health startups
We draft everything you need—from MSAs and Medical Director agreements to entity formations and provider contracts—so you can build a compliant, profitable business from the start.
Frequently Asked Questions
Can I own a med spa if I’m not a doctor?
In most states, no—but you can own an MSO and work with a licensed physician through a properly structured MSA.
Is an MSA the same in every state?
No! State laws vary widely. What works in California won’t necessarily work in Texas or New York. That’s why we customize every agreement based on your location.
How much control can the MSO have?
The MSO can manage business operations but cannot control medical decision-making. That’s reserved for the licensed provider to stay CPOM-compliant.
How do I find a Medical Director?
We can help you with that too. We have many in our database. We can also draft the agreement that defines their responsibilities and protects both sides.
Ready to Get Started?
Whether you’re launching your first location or expanding across multiple states, we’re here to help.