Owning Or Working With A Medical Spa – Yea or Nay?

Have you thought about owning or working with a medical spa? If so, here are a few important aspects you should consider before making your decision.

Before you open a medical spa or begin working for one, you must ensure that the ownership structure does not violate any law. Otherwise, your license to practice medicine may be at risk for discipline. You could lose your license or be charged with fines and penalties even if you had no idea that you or the owner were breaking the law.

The Illinois Department of Financial and Professional Regulations (IDFPR) regulates physician licensing. A physician or a physician-owned entity must be the sole owner of a medical practice in Illinois because the “corporate practice of medicine” doctrine prohibits a lay entity (i.e., one that is owned by non-physicians) from practicing medicine, either through the entity itself or by employing or contracting licensed physicians, under the theory that medicine may be practiced only by professionals who are duly licensed by IDFPR. A medical spa provides medical services, is considered a medical practice, and it must be one-hundred percent physician-owned. If a physician is asked to be a medical director at a medical spa, the physician must be sure the medical spa is owned by another physician licensed in Illinois. In Illinois it is unlawful for a physician to be employed as a physician or a medical director by a medical spa that is not owned by a duly licensed physician.

Sharing revenue is another factor in medical spa ownership. Physicians may not share, or split, any professional fee or compensation for the professional services provided, with limited exceptions (billing, collections, etc.). Physicians may not share these professional fees with non-physicians. If a physician shares revenue with non-physicians, or pays employees commissions on procedures, the physician may be violating state fee-splitting statutes.

Medical care at a medical spa must be provided under a licensed physician’s supervision and oversight. Under the Illinois Medical Practice Act, physicians may delegate medical treatments to an appropriately trained and experienced health care professional provided the physician is available for consultation or collaboration.

Medical spas typically operate under a physician’s license and their malpractice insurance. As a physician, you are responsible for each patient that comes to the medical spa and your license is on the line if you fail to comply with the laws and regulations governing medical spas. It is crucial that you educate yourself about the risks associated with medical spas before you make the careful decision of owning or working with a medical spa. Also, you must educate your staff, especially your licensed cosmetologists and estheticians, so they understand the differences between their scope of practice and the practice of medicine.

How a medical spa is advertised should be carefully considered, particularly if the spa works in conjunction with a non-medical business, such as a hair salon. As an example, a hair salon may not hold out the physician who owns or works in the medical spa as an employee or agent of the hair salon. With the current trend toward cross marketing, this is an often overlooked area and physicians are prudent to seek legal advice regarding this issue.

The medical spa industry has been booming for the past several years and medical professionals are taking advantage of the rising market especially since most procedures are provided on a cash basis. The decision to own or work for a medical spa should not be taken lightly, especially with the complicated legal issues associated with this industry.

​For further information about the medical spa industry contact Melinda Malecki.