Because the parameters of the medical spa industry have yet to be clearly defined, the legalities and liabilities are extremely gray issues. "We have to regulate ourselves or the government will regulate us," said attorney Dr. David Goldberg, a member of the Medical Spa Society Medical Advisory Board. "Medical spas are high volume, high end, high income enterprises. But the industry is not without risks." (Case in point, a laser hair removal procedure resulted in third-degree burns for a 34-year-old woman who then brought a $100 million lawsuit against a Greenhouse Day Spa.)

The American Society for Dermatologic Surgery reports that 45% of their physicians had seen non-physician induced complications from medical spa procedurees such as laser hair removal. The increase in exposure has caused some insurance carriers to question providing coverage for aestheticians performing medical spa treatments. "Spa malpractice" is a term the spa industry will be hearing more of. Medical spa treatments such as laser hair removal, non-ablative treatments like microdermabrasion, and spider vein treatments are becoming more risky as the number of procedures performed grows exponentially and are released into the hands of non-physicians using inappropriate parameters.

Currently, 15 states allow only physicians to perform cosmetic laser procedures, while many other are more lenient and still others have no regulation at all. And the state regulations are not keeping up with the exponential growth of non-invasive treatments such as hair removal treatments, which is expected to at least double in the next 5 years, according to Dr. Goldberg. 6.5 million laser or light procedures were performed in 2002, generating $1.7 billion dollars in revenue. This growth will only exacerbate the existing issues, which are already significant:

1. Legislation - It is up to each individual state board to determine who can perform cosmetological procedure such as microdermabrasion and laser hair procedures.

2. Licensing - There is no such thing as a licensed medical aesthetician or paramedical aesthetician. There are no accepted standards for medical spa treatments at the state boards level.

3. Scope of practice - Many so-called "medical aestheticians" act beyond their scope and training

4. Off-label - Non FDA approved use of drugs like Botox® are commonplace

5. Liability - The physician is responsible for acts of the employees under the scope of the terms of employment

Medical spa operators and potential operators must be educated in state and federal regulatory issues including State Cosmetology Board and State Medical Board laws, FDA and OSHA regulations, and the Material Safety Data Sheet (MSDS)-for "hazardous" substances such as Glycolic Acid. They must also comply with the newly enacted HIPPA (Health Insurance Portability and Accountability Act) regulations, which requires the adoption of written privacy procedures and the appointment of a "designated privacy officer" to ensure the security and safety of patient information. There are also special zoning laws for medical facilities, and a stringent certification procedure with the AAAHC (American Association for Ambulatory Health Care) to become a certified medical facility.

When undergoing a medical spa venture, consulting a knowledgeable healthcare attorney is a smart investment. "People always think it won't happen to them, but it will" says Judith Kutler, CEO of Kaner Medical Group, a primary care internal medicine physical medicine and rehabilitation fitness center in New Jersey). "What we need to be concerned with is not the OIG (office of the Inspector General) coming to our door, but a disgruntled patient or competitor reporting us. We all need to be concerned."