Thinking About Opening a Med Spa? Not as Simple as it Looks

We frequently receive inquiries about how a person can own or start a medical spa (“med spa”). A “med spa” can take many forms, from practices providing IV infusions for energy and hangover relief, to Botox injections, to laser treatments, and more. Medical spas may look like a day spa and may only offer low-risk procedures that don’t even seem like they would be considered medical procedures, such as IV infusions, but don’t let the “aesthetics” fool you. Any entity that renders medical services, regardless of whether it is dubbed a “med spa,” is a medical facility, and, therefore, subject to the same rules and regulations as your typical doctor’s office. If you are considering owning or working for a med spa, here are a few important legal aspects you should consider before making your decision.

If you are a licensed medical professional, before you open a med spa or begin working for one, you must ensure that the ownership structure does not violate any law. Otherwise, your license to practice may be at risk for discipline, and you could lose your license or be charged with fines and penalties; this is the case even if you had no idea that you or the owner were breaking the law.

In many states, including Illinois, med spas must be 100% physician-owned; otherwise, the entity and owner are violating the law by engaging in the unauthorized practice of medicine. Unfortunately, this means if you are not a licensed physician, you should probably rethink owning a med spa business. As an example, in Illinois, the Illinois Department of Financial and Professional Regulation (IDFPR) regulates physician and nursing licensing. In Illinois, only a physician (medical doctor, osteopathic doctor, or doctor of chiropractic) or a physician-owned entity may be an owner or co-owner of a medical practice 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. Therefore, in Illinois and in states with similar laws, it is important for physicians and other licensed medical professionals to verify that a med spa is 100% physician-owned before considering working with or at a med spa.

Individuals who are not legally allowed to own a medical business but want to be operationally involved with a med spa may choose to create management relationships with the spa. This concept should be discussed and vetted with legal counsel. In particular, care must be taken to avoid violating the fee-splitting prohibition in the Illinois Medical Practice Act.

Another thing to consider is that medical care at a med spa, no matter how simple or low risk, 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. There are special rules for invasive procedures, such as the use of lasers. The physician must also have experience and training in aesthetic medicine. Just as you wouldn’t want a physician specializing in urology doing brain surgery, physicians not trained in aesthetic medicine should not be overseeing the operations of a med spa, and the law tends to agree.

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 a physician or practitioner who owns or works in the medical spa as an employee or agent of the hair salon because, as a lay entity, a hair salon is not permitted to employ a physician. The physician is considered to be engaging independently in his/her own practice, even though it is conducted at the salon location. With the current trend toward cross marketing, this is an often overlooked area and legal advice should be sought regarding this issue.

Very tricky questions can arise when a non-physician licensed professional, such as a chiropractor or advanced practice nurse, wants to provide aesthetic services similar to a med spa. First, the business should not call itself a “med spa.” Regulators could regard that as representing that the business engages in the practice of medicine. Second, the procedures performed at the facility must be within the scope of practice of the licensed professional and not the practice of medicine. Illinois now permits an advanced practice registered nurse (APRN) to obtain a license for full practice authority. The APRN must be certified as a nurse midwife, clinical nurse specialist or nurse practitioner and have completed at least 250 hours of education and 4,000 hours of clinical experience after obtaining national certification. An APRN with full practice authority may practice without having a collaborative agreement with a physician and may order and perform tests and procedures, not including procedures defined as the practice of medicine (such as operative surgery).

The medical spa industry has been booming for the past several years, and medical professionals are taking advantage of the rising market. Most procedures are provided on a cash basis (as they are rarely covered by insurance) and can be very lucrative. The decision to own or work for a medical spa should not be taken lightly, but, with proper legal guidance, practitioners can minimize the risk of regulatory pitfalls in this type of practice.

For further information contact us.