Justin Marti, attorney and principal at Marti Law Group, provides legal insight on the commonly asked question, "Can I own a medical spa?"
Hands down, the most frequently asked question we receive from medical spa clients – or those hoping to break into the industry – is, “can I own?” Unfortunately, the answer is one all-too-commonly used by lawyers…“it depends.” As the medical spa industry experiences exponential growth, state regulators have been slow to add parameters around ownership requirements, leaving aspiring spa owners left trying to interpret grey areas of the law.
Below are three key considerations to help you navigate the wild world of medical spa ownership:
1. State Law
Most of the confusion around ownership stems from the fact that states have drastically different regulations on who can own a medical spa. While some states have clearly stated that a medical spa is, in fact, the practice of medicine and must be regulated as such, others have taken a more passive approach, failing to even define medical spas in their statutes. Compounding the confusion is the issue of whether the state subscribes to the Corporate Practice of Medicine (CPOM) theory. CPOM is a legal doctrine that allows only properly licensed healthcare providers to own a medical practice. Though states vary in both their subscription to and enforcement of this theory, the underlying idea is that healthcare providers should free from corporate or investor influence when making medical decisions for their patients. The emergence of Management Service Organizations (MSOs) as a workaround to CPOM is the bridge some groups use to legally function. While an unlicensed (or under-licensed) individual may not be able to own an actual clinical entity (think: the medical facility that is injecting or shooting lasers), they can own a management company that supports the operation and receives a hefty fee in exchange.
2. Licensure Type
The next consideration when determining who can own a medical spa turns on the individual’s level of licensure, if any. While an esthetician may be able to shoot lasers or a registered nurse (RN) can inject under physician supervision, this does not mean that these professionals can automatically own a medical spa. A growing number of states having been joining the independent practice movement, wherein licensed nurse practitioners (NPs) can practice medicine independent of physician oversight after meeting certain criteria. Currently, 28 states have approved some level of independent practice for NPs and a handful of others have proposed legislation working its way through the approval process. For those states that have passed such laws, an NP is generally able to own a medical spa. In other states, such as California, other licensed professionals, such as RNs, optometrists, and chiropractors, may be able to take a minority ownership stake in the medical spa, as long as a physician maintains at least 51 percent control.
3. Physician Arrangements and Medical Directors
Regardless of your level of licensure or lack thereof, it is of the utmost important that you have a medical director in place to properly supervise the clinical team. The credentials of the medical director again vary by state, but generally the individual will have to be a physician, NP (in an independent practice state), or in some instances, a physician’s assistant (PA). The medical director should have a written agreement with the clinical practice that articulates the duties owed to the practice, how good faith exams are conducted, frequency of in-person compliance checks, and compensation. For individuals with the proper license level to act as their own medical director, they may certainly do so, but it is still important for the team to know who is on call should the director be away or otherwise unavailable.
About Justin Marti
Justin Marti is a seasoned entrepreneur and attorney. He co-founded a dental group in Boston that grew to 40 locations before being sold in 2018. Along the way, he became a licensed attorney, practicing in the areas of healthcare and business, with a focus on the medical spa and dental industries. In addition to practicing, Justin is a business and healthcare professor at American International College. Justin’s experience in building and scaling his own healthcare group gives him the rare ability to think like a true entrepreneur and business operator, as opposed to merely just another lawyer. Justin has a deep passion for the medical spa industry and likes to say that he is an “advisor first, attorney second.”