Posted By Aly Boeckh,
Thursday, September 28, 2017
Updated: Tuesday, October 31, 2017
By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)
Can a dentist or chiropractor own or serve as a medical director for a medical aesthetic practice? Recently I have been asked this on several occasions since, after all, you could make the argument that the certified skills of a dentist or chiropractor might be a good match for a medical spa. However, in most states, the answer to the question is “no,” and it is important to understand why that is the case.
Dentistry, of course, is the branch of medicine that deals with treatment of teeth and the oral cavity. To be a dentist, one must complete a rigorous education with medical components. Although a medical spa owner wouldn’t necessarily immediately think of a dentist for the role of a medical director, it is not an outlandish proposition.
When I am asked about medical directorships by dentists, they often point out that, in course of their practice, they use injectables, such as Botox and fillers, as one would at a medical spa. They feel that this particular expertise might qualify them, under the law, to become a medical director of a medical spa, a position that is typically held by a physician. But an important distinction between dentists and physicians is that the dentists are restricted to performing only the treatments specified in the dental practice act of the state in which they practice.
Within those restrictions, dentists are often permitted to use injectables in and around the oral cavity, so they could conceivably administer these treatments to lips, mouths, and the immediately surrounding areas. However, that is where we recommend it stops, because that is a reasonable interpretation of the area that is connected to the oral cavity.
I have had dentists on many occasions tell me that, in dental school, they learned about full facial anatomy—they make the argument that the cheeks are connected to the mouth, and the neck is part of the mouth, and so forth. In many instances, they have used that justification to expand the treatments they offer beyond the oral cavity and its immediate surroundings. Some have been known to administer forehead Botox, fillers around the nose and cheeks, and other treatments that one would not typically associate with dental practice.
Despite this, all the information AmSpa has received from various dental boards suggests that these regulatory bodies absolutely would not support the idea of a dentist administering Botox to a patient’s forehead, for example, being reasonably related to their practice act. Additionally, being a medical director at a medical spa involves being responsible for all the medical treatments being administered by the practice—not just the ones that involve the mouth and (if we’re being extremely generous) the face. This can include treatments such as laser hair removal and laser skin tightening and rejuvenation to other parts of the body. It is very clear that within his or her scope of practice, a dentist cannot oversee medical treatments such as these.
The bottom line is that we strongly encourage medical spas to look elsewhere for a medical director, although we are sympathetic to dentists’ cause. They simply are not qualified in the eyes of state regulatory bodies.
The story is very similar for chiropractors. Chiropractic generally is regarded as a form of alternative medicine, and it is concerned with the health of the musculoskeletal system. Chiropractors treat their patients without the aid of surgery or medicine. This is a somewhat controversial field, as chiropractic’s tangible benefits are difficult to pin down.
Nevertheless, chiropractors’ scopes of practice typically are controlled by their state’s medical practice act. They are often referred to as “doctors,” but they are restricted to administering the treatments that are specified within these practice acts—generally for chiropractors, this means treatments relating to the back, spine, and neck. Chiropractors can, in some cases, use light-emitting devices to treat ailments relating to bones, joints, and musculature, but we at AmSpa feel strongly that such a dispensation does not extend to treatments dealing with aesthetics and the skin.
It is a stretch, at best, to think that a state regulatory agency would rule that many of the treatments offered by a typical medical aesthetic practice fall within a chiropractor’s scope of practice.
Because of the restrictions set forth in the practice acts governing dentists and chiropractors we strongly advise medical aesthetic practices to look elsewhere for medical directors. Most states will not even permit these dentists and chiropractors to have an ownership stake in a medical spa.
Posted By Administration,
Tuesday, September 5, 2017
By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)
Owning a medical spa or aesthetic practice for non-doctors is a goal that’s often difficult to realize. In most states, only a physician or a physician-owned corporation can legally own a medical practice. However, non-doctors can essentially own a medical spa via a management services organization (MSO) and, while such an arrangement still hinges on the participation of a physician, it allows others a very significant role in the day-to-day operations of a medical aesthetic practice.
Most states observe a doctrine known as the corporate practice of medicine, which dictates that only a physician or physician-owned corporation can receive payment for medical services. Since many of the treatments offered at medical spas are medical in nature, the ownership of such facilities is typically governed by this doctrine. (AmSpa members: check your state legal summary to see if your state observes the corporate practice of medicine.)
But entrepreneurs who want to become a part of the medical aesthetic industry on an ownership level and live in states that observe the corporate practice of medicine can look into setting up an MSO, which provides management services (as its name suggests). It partners with a physician’s company, which only provides medical services. This arrangement, known as a management service agreement (MSA), allows a non-physician to supervise most aspects of a medical aesthetic business, including branding, marketing, owning the real estate, payroll, human resources, accounting, and billing—everything except medical services.
Paying the Cost to Be the Boss
It is helpful to think of this as a lessor/lessee situation in which the MSO is the landlord and the physician is the tenant. The physician pays the MSO “rent” to occupy the space, and the MSO maintains the facility and keeps the physician as comfortable as possible. However, unlike an apartment rental governed by a lease that dictates the occupant pay an agreed-upon amount of money for a certain term, the amount paid to the MSO each period changes according to the amount of business conducted by the physician. If more patients are treated in a month or quarter (depending on the terms of the agreement) than in the previous period, the MSO also makes more money. This helps to create a strong bond between the two sides of the business—if one succeeds, they both succeed.
The contractual separation of the two entities also helps mitigate risk for both parties. A physician risks very little when entering into an MSA. If the practice fails, he or she is probably going to be fine. The physician is not liable for the facility, its contents, and the land on which it is located; that risk belongs to the MSO. The MSO also typically covers the physician’s liability insurance. On the surface, this arrangement might seem heavily weighted in the physician’s favor, but that’s why the physician pays the MSO. Also, the MSO is not responsible for any sort of liability claim leveled against the physician.
When entering into these types of arrangements, a few pitfalls must be avoided. First and most importantly, the doctor must always be responsible for medical decisions. Second, payment for medical services must be always made directly to the physician’s company. The MSO is paid by the physician—at the end of each pay period, it submits an invoice for management services to the physician’s company. If this is properly executed, the MSO receives most of the revenue generated by the med spa.
In order for the practice to work properly and compliantly, the doctor must make all medical and clinical decisions. If the physician does not actually do this, he or she is subject to severe consequences, including license forfeiture and large fines. Furthermore, the MSO may be found to be practicing medicine without a license. As such, it is vital that when setting up an MSA, all parties must understand the roles and obligations to which they are agreeing.
A Formula for Success
MSOs have been used for many years by entrepreneurs to form management companies for medical organizations as large as hospitals and managed care facilities, so it makes a certain amount of sense that creating an MSO for a medical spa would be relatively simple. However, an MSA cannot be properly executed using forms downloaded off the internet, so it is important that you consult an attorney who has experience setting up MSOs if you want to enter into this sort of arrangement.
You can learn more about MSOs and many other legal topics of interest to medical aesthetic practices at AmSpa’s Boot Camps. We will be hitting San Jose, Calif., on Sept. 18 and 19, the Chicago suburbs on Oct. 14 and 15, and Atlanta on Nov. 6 and 7. We hope to see you there!