In North Carolina’s fast-growing medical spa industry, ensuring compliance with regulations is crucial to the continued success and safety of operations. Many medical spas rely on supervisory relationships with physicians who oversee Advanced Practice Providers (APPs) performing medical spa services and ensure patients receive high-quality care. The medical director fulfills this supervisory role in any medical spa, although additional supervising physicians may be involved in the medical spa’s day-to-day operations.
A recent case handled by the North Carolina Medical Board (NCMB) highlights the importance of establishing clear, compliant, and transparent agreements between medical spas and medical directors who provide supervisory services; particularly when it comes to the division of the medical spa’s management duties and the medical director’s clinical duties.
In this case, a physician was approached by a medical spa with what appeared to be a straightforward offer: he would act as the medical director for the medical spa but would not be required to be onsite or actively involved unless clinical issues arose. The medical spa assured him that his involvement would be minimal and offered a monthly fee of $2,000 in exchange for his medical director services. After he accepted this position, the medical spa officially designated him as the supervising physician over four APPs without conferring with him or obtaining his consent. The medical spa was likely trying to comply with regulations and take the administrative lift off of the medical director; nevertheless, the medical spa overstepped its bounds by assigning the physician to supervise the APPs without his knowledge–and the medical spa should have known better.
Months passed without incident until a patient filed a complaint with the NCMB after experiencing blistering burns from a laser treatment provided at the medical spa. The complaint prompted an investigation into the medical spa, and the focus quickly shifted to the medical director, who had not been actively overseeing the care provided by the APPs as required by state regulations.
When questioned by the NCMB, the physician stated that he had no idea that he had been assigned as a supervising physician over the medical spa’s APPs; the NCMB, understandably, did not find this to be an acceptable excuse, especially because the role of medical director is inherently supervisory. Additionally, when the NCMB asked the physician what his duties as a medical director were under the arrangement with the medical spa (i.e., what was he being paid for?), the physician responded that he didn’t really know. Of course, his lack of information did nothing to absolve him from responsibility for the violations he had been committing, even if unwittingly. Furthermore, the physician’s accountability for these mistakes mirrors the medical spa’s accountability for stepping into the medical director’s clinical decision-making.
The NCMB investigation is still underway, and it remains to be seen what the board will ultimately do to discipline the physician and/or the medical spa, but the possible consequences range from high monetary penalties to revocation of licensure to significant reputational harm–for the physician and, potentially, the medical spa. Regardless of whether the medical spa faces any formal discipline for past actions, it now must face the problem of immediately replacing the medical director (whose license is under investigation) or… closing the business until another medical director is brought on. Closing a medical spa for even a week will, in most cases, result in a major loss of revenue. In essence, these are the kind of mistakes that, depending on the severity of the violation, could tank a medical spa’s business.
The NCMB’s investigation underscores the importance of having proper supervision structures in place, particularly when dealing with MSO (Management Services Organization) arrangements. These business models can sometimes create confusion about roles and responsibilities, especially if physicians assume their involvement is minimal. The NCMB has emphasized the need for clear, active supervision by a qualified medical director to protect both the physician’s license and the medical spa’s business.
Medical spas can take several steps to avoid these types of situations:
- Clear Contracts and Communication: Medical spas should set up transparent contracts with medical directors that clearly define expectations, responsibilities, and supervisory duties. Regular check-ins, communication between APPs and their supervising physicians, and medical director evaluations of how clinical services are being performed are crucial for maintaining compliance and patient safety.
- Education and Compliance: Medical spa owners should be well-versed in North Carolina’s regulations for physician supervision of APPs and the other duties associated with being a medical director. Educating your staff and supervising physicians (including, of course, the medical director) about the level of involvement required can help prevent misunderstandings and ensure everyone is operating within legal guidelines.
- Proper Oversight: Establishing clear channels for physician oversight, such as regular reviews of patient care, consultation for complex procedures, and direct involvement when necessary, is essential. While supervisory arrangements may differ, there must always be some level of engagement that aligns with regulatory standards. In the case of a medical director–the level of engagement should be high enough to meet the physician’s ethical and contractual obligations.
Business structures involving minimal or nonexistent physician involvement are risky in North Carolina. Medical spas should prioritize creating compliant, mutually beneficial agreements with their medical directors and/or supervising physicians that foster open communication, ensure the safety of their clients, and comply with the law.
Keep in mind that, as mentioned above, the role of a medical director is inherently supervisory, whether such an individual is assigned as a supervising physician on paper or not. The medical director is responsible for the overall clinical operations, including supervising what every provider does (not just APPs). The medical spa should take actions that support the medical director without ever stepping into decisions related to clinical care, including assignment of supervisory relationships.
Compliant and well-structured medical director arrangements not only protect your business and the physician’s license but also reinforce your commitment to providing safe, effective care to your patients. When done correctly, these relationships are win-win for everyone involved.