A recent $60 million settlement involving Pfizer is a wake-up call for healthcare businesses—including MedSpas—about the risks of improper payments to physicians. The U.S. Department of Justice (DOJ) found that Pfizer paid doctors in ways that violated federal laws, leading to serious legal and financial consequences.
What Happened?
Pfizer was accused of paying doctors through speaker fees and consulting agreements to encourage them to prescribe its drugs. These payments violated the Anti-Kickback Statute (AKS) and the False Claims Act (FCA) because they led to false claims being submitted to government healthcare programs like Medicare and Medicaid.
In simpler terms, the government saw these payments as bribes disguised as business deals, which is illegal in the healthcare industry.
Why This Matters for MedSpa Owners
While your MedSpa may not be as big as Pfizer, you still must follow similar rules when working with doctors. Here are some key takeaways:
1. Be Careful When Paying Physicians
If your MedSpa hires a doctor as a medical director or consultant, any payments must be:
✔️ Fair market value (not overpaying just to get referrals)
✔️ For actual work performed (not just for “being available”)
✔️ Not based on how many patients they refer
Even small, well-intentioned payments can lead to legal trouble if they seem like a reward for referrals.
2. Avoid Illegal Kickbacks and Fee-Splitting
The Anti-Kickback Statute (AKS) makes it illegal to offer or receive money in exchange for patient referrals in federally funded programs like Medicare. Even if your MedSpa is cash-based, many states have their own anti-kickback and fee-splitting laws that could apply.
For example, some states don’t allow MedSpas to share profits with non-doctors. That means if your business is paying a doctor based on the number of patients they bring in, you could be breaking the law.
3. Be Smart About Marketing Payments
If you pay doctors, influencers, or other professionals to promote your MedSpa, make sure:
✔️ Payments are for real marketing services (not just to send you patients)
✔️ You have written agreements detailing what they are being paid for
✔️ You don’t tie payments to the number of referrals they bring in
Many businesses get into trouble because they don’t properly document these payments.
4. Protect Your MedSpa with a Compliance Plan
To stay on the right side of the law:
✅ Have clear contracts for any payments to physicians
✅ Keep detailed records of work done for any payments made
✅ Regularly review your business structure with a healthcare attorney
Final Thoughts
Pfizer’s $60 million settlement underscores the importance of compliance in healthcare-related businesses. MedSpa owners must be particularly cautious about financial relationships with medical professionals to avoid violating federal and state laws. If you have questions about structuring physician partnerships or avoiding anti-kickback risks, consulting with a healthcare attorney is essential.
If you need guidance on ensuring your MedSpa operates within legal boundaries, Lengea Law can help. Contact us today for a compliance review.