How to Open a Legally Compliant Medical Spa

1. Who can own a med spa?

Due to their medical nature, ownership of these practices often requires a medical license in many states. Licensed physicians or physician-owned corporations who are interested in venturing into this field, are allowed to own medical spas all across the United States. This allows experienced medical professionals to bring their expertise to the world of wellness and provide a holistic approach to beauty and healthcare.

It's important to highlight that while physicians have the opportunity to own medical spas nationwide, ownership requirements for non-physicians can vary significantly from state to state. Each state has its own regulations and guidelines that need to be met in order to establish and operate a medical spa compliantly.

Whether it's providing advanced skincare treatments, performing non-invasive cosmetic procedures, or offering therapeutic massages, medical spas offer a unique fusion of medical expertise and relaxation. With the right ownership qualifications and adherence to state regulations, medical spa practices can embark on this exciting venture and contribute to the growing field of medical aesthetics.

The corporate practice of medicine

The crux of the wide range of medical spa ownership laws is a doctrine called the corporate practice of medicine. Many states have laws on the books designed to make sure that physicians are the ones in charge of making medical decisions for a patient - not a corporation or other non-medical professional. These laws tend to either prohibit non-physicians from owning a medical practice or employing physicians, or require non-physicians to partner with physicians to own the practice.

Not all states adhere to this doctrine, however, and in states that do not regulate the corporate practice of medicine, generally non-physicians may own part or all of a med spa practice.

Listen to AmSpa founder Alex Thiersch, JD discuss medical spa ownership with Michael Byrd, JD and Brad Adatto, JD on the Medical Spa Insider podcast.

Read more on who can own a med spa here.

Can nurse practitioners or physician assistants own a med spa?

In states that allow anyone to own a medical practice the answer to whether nurse practitioners or physician assistants can own a medical spa is obviously yes.

So, in states that do regulate the corporate practice of medicine, can nurse practitioners or physician assistants own a medical spa? Once again, the answer can be quite different depending on the state. Some states require partial physician ownership (such as California which requires physicians to own at least 51%, while an enumerated list of other medical licenses may own up to 49%) while other states restrict medical practice ownership strictly to physician

In some states, nurse practitioners with full practice authority may own a med spa, however, if you plan to go this route just understand that some regulatory and licensing boards look more closely at practices that are not owned by a physician.

It's imperative to understand the specific laws in your state to understand if NPs and PAs are permitted to own a medical aesthetics practice.

Can RNs own a med spa?

Similar to NPs, in states that do not regulate the corporate practice of medicine, RNs may own med spas. As well, there are select states that allow RNs to be minority owners with physicians. These are the only cases, however, where RNs may participate in direct ownership of a medical practice.

Can non-doctors own a med spa?

If you live in a state that regulates the corporate practice of medicine and do not have a medical license can you own a medical practice?

Technically, no.

Unfortunately, if you live in a state that regulates the corporate practice of medicine and do not have a medical license, you cannot own a medical practice. However, there is a ray of hope! In every state, including those that regulate the corporate practice of medicine, non-physician entrepreneurs can legally work with medical spas through a legal structure called the MSO.

Management Services Organization (MSO)

To understand how an MSO allows non-physicians (including PAs, NPs, RNs, and unlicensed individuals) to work with and earn money from a medical spa practice it's important to remember the underlying purpose of the corporate practice of medicine doctrine: only physicians can practice medicine, only physicians can collect money related to the practice of medicine and only physicians may employ other physicians.

However, in any medical practice, especially including medical spas, there are a lot of non-medical functions that are necessary for the business to function. Essentially, non-physicians may supervise most of the business aspects (or management services) of medical aesthetics, including, but not limited to: 

• Branding;
• Marketing;
• Owning the real estate;
• Payroll;
• Human resources;
• Accounting;
• Billing;
• And many other functions outside of the administration of medical services. 

The MSO then enters into a contract with the medical spa to provide business functions, which allows for the non-physician MSO owner to generate profit from these services.

2. The good faith exam in medical spas

Consider this scenario: A person walks into a med spa inquiring about neuromodulator injections. They are introduced to an aesthetician, a non-medical "Patient Care Coordinator" or an RN who then gives an initial consultation to the patient. The patient is then booked for a service, the staff member who did the consultation logs everything into the practice's record keeping system, and an RN goes on to deliver the treatment.

This is a scenario that goes on in medical spas across the United States and seems innocuous enough, but is, in fact, a clear demonstration of one of the more riskier lapses in legal compliance in medical aesthetics.

The practice in this example skipped the good faith exam, which is so vital to legal compliance that the law firm ByrdAdatto calls it the Medical Spa Widow-maker.

The good faith exam goes by many names depending on the state (sometimes called the "initial exam", "physical exam" or "initial consult", for example), and is the first step in establishing the physician-patient relationship required to diagnose and provide medical treatment. While the name of the good faith exam may vary by state, every state requires some form of it in a medical practice. 

The good faith exam must happen before a patient receives a treatment to assess their current condition (including a physical examination), note their medical history and ensure they are fit for the procedure. The exam must be given by a licensed medical professional whose scope of practice includes prescribing treatment.

Can NPs and PAs perform the good faith exam?

Yes, physician assistants (PAs) and advanced practice registered nurses (APRNs) play a pivotal role in performing the good faith exam. This crucial examination can be carried out when PAs and APRNs are working with a physician under a collaborative agreement. Additionally, in states that grant independent practice rights to PAs and NPs, they are empowered to conduct the good faith exam autonomously.

The ability of these highly skilled healthcare professionals to perform the good faith exam is a testament to their expertise and dedication to patient care. Their ability to deliver quality care, combined with their collaborative approach and increasing autonomy, makes them indispensable assets to the medical aesthetics industry.

Can RNs perform the good faith exam?

It's universally agreed in every state, by every medical board and nursing board, that the examination of patients and diagnosis of treatment constitutes the practice of medicine, and so is outside of the scope of practice of registered nurses. While an RN is able to aid a physician, PA or APRN in the process, they may not independently administer the exam or decide a course of treatment. Medical spas that rely on RNs (or any unlicensed individuals) to perform the good faith exam run the risk of board investigation, and even arrest for the unauthorized practice of medicine.

How often must a good faith exam be performed

The good faith exam must be performed before the first time a patient undergoes a particular procedure. If a patient comes in for a series of treatments, the medical spa does not need to perform a new good faith exam for each visit. Additionally, many medical spas create treatment plans comprising several different services. In this case, a physician, PA or APRN may perform a single consultation encompassing all of the services in the plan.

However, if the patient adds a new treatment or service line, or experiences a significant change in health status, then the practice must perform the exam again. Even in cases where there is no change to the treatment plan or patient health, it's recommended that the practice administer the exam every twelve months.

Can telemedicine be used for the Good Faith Exam?

The use of telemedicine expanded dramatically in the wake of Covid lockdown, though laws vary from state to state as far as distance, licensing and other factors. Many states do allow the good faith exam to be administered virtually, but be sure to understand how your state approaches telemedicine before adding this to your patient consultation process.

If your state does allow telemedicine, understand that all the other rules of the good faith exam still apply. The practitioner should hold a license that allows them to diagnose and practice medicine (physician, PA, APRN) and they must be able to conduct an appropriate physical examination.

For more information on good faith exams view this webinar, which is free for AmSpa Plus members.

3. Physician supervision in medical spas

The supervising physician is a central figure of a legally compliant medical spa. With their extensive expertise and guidance, the medical spa is able to offer a wide range of safe and effective medical aesthetic treatments and the team at the medical spa can confidently provide these treatments knowing that they are operating within the legal boundaries of a licensed medical practice.

Without the supervising physician, the medical spa and its staff would be left vulnerable to potential legal consequences. Their supervision ensures that the medical spa operates in compliance with all necessary regulations and standards. As well, the supervising physician is responsible for every patient seen by the medical spa, and it is that physician's license on the line in any issues of legality or negative patient outcomes.

The supervising physician needs to play crucial role in developing treatment plans tailored to each individual patient. They assess the patient's needs, preferences, and medical history to create personalized treatment options that yield the best possible outcomes. In essence, the supervising physician cannot just be a figurehead, but must be a vital component of the medical spa.

Does the supervising physician need to be on-site in a medical spa?

The exact details and requirements of physician supervision can be very different between states, and often differ depending on treatment and the license of the individual performing the treatment. Different states have different rules on what treatments physicians may delegate to what person, if they need to be on-site, how close they need to be and how many practices physicians may supervise.

Experience and training for a supervising physician

One aspect of supervision that's often overlooked in the medical spa world is that supervising physicians cannot just rent their license out to medical practices where they aren't familiar with the treatments. Supervising physicians should have some level of training and expertise in each medical treatment that's being offered in the medical spa practice, whether or not they are the ones who will be providing the service.

Independent PAs and NPs

The regulations governing independent practice for physician assistants and advanced practice registered nurses are very specific to each state. Even among states that allow for independent practice, the specific training requirements and level of independence can be very different. Be sure to understand how your state handles independent practice before making a final decision on whether you need to work with a supervising physician.

4. Who can do medical spa treatments

The question of who can do what treatment in a medical spa is perhaps the one compliance piece that varies more than all of the others. This makes it difficult to provide a broad overview since the rules on who can inject, who can operate energy devices or who can administer other medical spa treatments are so different state to state.

Although these procedures are generally considered medical in most states, it's important to be aware that exemptions may exist in other states. This variation in regulations regarding who can perform specific treatments adds an extra layer of complexity to the compliance aspect of medical spas. Therefore, it is essential to stay informed about the guidelines specific to each location in order to ensure safe and legal practices.

By maintaining high standards and adhering to the appropriate regulations, medical spas can continue to provide exceptional care and achieve optimal results for their patients.

The authority to administer medical aesthetic treatments follows a basic hierarchy:

1. Physician;
2. Nurse practitioner (NP) and physician assistant (PA);
3. Registered nurse (RN);
4. Licensed practical nurse (LPN)/licensed vocational nurse (LVN); and
5. Aesthetician, cosmetologist and unlicensed personnel.

Physicians in a medical spa

Physicians have the broadest authority and generally fill the role of owner or medical director of a medical spa practice. They may generally do all of the treatments on offer, but as mentioned above they should be trained in each of the procedures offered in the practice. Physicians working in a medical spa or serving as a medical director should understand their responsibility to each patient that comes in the door, and the standard of care for the treatments the practice is providing.

Physician assistants and nurse practitioners in a medical spa

When working under a collaborative agreement with a physician, the supervising physician can delegate a wide range of treatments to PAs and NPs - and they can operate autonomously in some states that allow independent practice. Practitioners with these licenses can provide most if not all medical spa treatments in many states as long as the treatment is within the scope of practice in their state and they have sought out appropriate training.

RNs in a medical spa

Registered nurses are often among the most skilled injectors in medical aesthetics, however their ability to perform treatments legally is very dependent on their state. Some states allow nurses to inject neuromodulators or fillers under the supervision of a physician, PA or NP. Other states classify these treatments as the practice of medicine, and as such are outside of the scope of RNs. Still other states, like Florida, have issued contradictory statements over the years with no solid guidance to point to. Be sure to understand what the rules are regarding nursing scope of practice in order to maintain compliance.

LVNs, LPNs, aestheticians and medical assistants in a medical spa

Though some states allow physicians to delegate treatments to properly trained individuals as "medical assistants", it is AmSpa's position that neuromodulator and filler injections should only be performed by individuals with an RN license or above, as long as the treatment is within their scope of practice in their state. The standards for proving "proper training" are murky if they exist at all in the case of an investigation or negative patient outcome. Additionally, while these individuals may be skilled in the administration of medical spa treatments, they may not have the experience handle a complication.

Energy devices and other medical spa treatments are often similarly classified as medical procedures. Some states, however, have specific laws on the books relating to laser hair removal, laser technicians, master/advanced esthetician licenses and other unique qualifiers.

Legal compliance is not optional in medical spas

Medical aesthetics is one of the fastest growing industries in the United States. It's still a lucrative space to enter and while competition is high, the number of providers still hasn't met the demand for services. It's imperative to remember, however, that this profession is the practice of medicine first.

The industry's focus on beautiful, engaging imagery and its reliance on consumer-oriented business practices can make it easy to forget, but in the eyes of the law medical spa treatments are medical procedures, and medical aesthetic practices are medical facilities.

As these treatments become more mainstream, and as the industry continues to grow, more attention is being focused on practitioners in this space, both from potential patients and from regulators. It's more important than ever to operate within the bounds of the law to secure your practice, protect the licenses of your medical providers and ensure the safety of your patients.