Who Can Own a Medical Spa?

Posted By Madilyn Moeller, Monday, November 22, 2021

medical team

By Patrick O'Brien, JD, Legal Coordinator, American Med Spa Association

There are several posts on AmSpa Now about who can do what in a medical spa and technical issues one can face. However, it is also important to consider who can own one. To begin with, it is important to note that every state has slightly different rules, so the details may vary from what is discussed here. AmSpa Members have access to a legal summary for their state, which will provide more details on who can own a medical spa.

Qualifications Needed to Open a Medical Spa

As the name implies, medical spas primarily offer medical treatments. Accordingly, most states regulate medical spas in the same way they do other medical practices. Also, unlike traditional day spas and salons, there is typically no medical spa "facility license." That is not to say that there aren't other business registrations and certificates that a medical spa will need to operate. Instead, it is the licenses of the health care providers who work in the medical spa that allow it to offer its services.

The main qualification a person needs to own a medical spa is having the proper qualification that allows them to own a medical practice and employ health care personnel. What exactly this qualification is depends on the state. Many states prohibit non-physicians from owning medical practices or from employing physicians. In these states, only a physician may own a medical practice or medical spa. Among lawyers, this is referred to as the "corporate practice of medicine" doctrine, and it has been discussed here more fully in the past (here and here). Often, states with these types of laws will allow a medical practice to be co-owned with a physician if other requirements are met. Typically, these requirements make it possible for certain other health care professionals to co-own or allow others to hold minority interests with physician majority ownership.

In states that allow non-physicians to own medical practices and hire physicians, anyone who wants to can form a business entity and start a medical spa. In these states, no particular professional license may be needed for the owner, but that is not to say that there are no requirements at all. Frequently, businesses owned by unlicensed persons will need to apply for a health care clinic license or register the business with the medical board. This is, of course, in addition to any sort of business license that any business would need to obtain.

Can NPs or PAs Own Medical Spas?

With broad scopes of practice, prescriptive authority and flexible supervision requirements, nurse practitioners (NPs) and physician assistants (PAs) are perfectly positioned to work in medical spas. But are they able to own one themselves? Again, it depends on the state in which the practice is located. In states that allow anyone to own medical practices, PAs and NPs are clearly able to own a medical spa. Note, though, that some licensing boards look more closely at practices where an employed physician provides supervision to the owner PA or NP.

Even in more restrictive states that limit ownership to physicians, PAs and NPs are often included in the lists of other professionals who can co-own or hold a minority interest together with physicians. PAs are included as being able to co-own more frequently than NPs, likely due to physicians and PAs often sharing a licensing board. NPs, on the other hand, have been gaining more and more practice independence in recent years. In states where NPs have full practice authority or independent practice, they no longer need physician supervision. NPs in these states can normally own their own nursing practices and provide services within their scope of practice. Depending on their scope, this may allow NPs to own a medical spa-like practice, even in states that limit medical practice ownership to physicians only. While NPs have some form of independence in many states, PAs have only been recently granted autonomy, and only in a few states.

Can RNs or Aestheticians Own Medical Spas?

Registered nurses (RNs) and aestheticians are by far the most abundant licensees within medical spas. Unfortunately, this ubiquity does not translate into the ability to own medical spas themselves. Of course, both can own in states that do not require professional medical ownership. In addition, a few states allow people, including those without licenses, to hold minority interests in professional medical businesses. Where neither of these options are available, RNs will occasionally be included in the list of those who may co-own with physicians as minority shareholders. Aestheticians, however, are not included among those who may co-own medical businesses. A few states have created master or advanced practice aesthetician licenses; these licensees are able to provide a much broader scope of aesthetic services, including many found in medical spas. In these states, a master or advanced practice aesthetician could open their own salon and provide these sorts of procedures separate from a medical practice.

How Can Non-Physicians Own Medical Spas?

Let's assume that you do not fall into one of the categories discussed above regarding who can own a medical spa; this is the case for the vast majority of people. But you want to open a medical spa—are you completely out of luck in terms of owning? Yes and no. Unless you move to a state that would allow you to own, change the law or qualify for the right license, you cannot directly own an aesthetic medical practice. But, no matter where you are located, you can still participate in the business and day-to-day management of an aesthetic practice. This involves using a business structure referred to as a management services organization (MSO). AmSpa offers numerous articles and webinars on MSOs, what they do, and how they work. But to briefly explain, while you cannot own a medical business, you can own a business that provides key business management services and offer them to the licensed owners of a medical spa; this frees them up to focus on providing services.

If you would like to learn more about the MSO model, in addition to the free resources offered on this site, consider attending Medical Spa Show 2022 in Las Vegas or one of the Medical Spa and Aesthetic Boot Camps taking place in 2022.

Related Tags