As one might expect from the name, medical services are provided at a medspa. As a consequence of this, the majority of states regulate medical spas in the same manner in which they regulate other types of medical practices. Additionally, in contrast to traditional day spas and salons, medical spas do not typically require clients to present a “facility license.”
That in no way negates the fact that a medical spa must comply with the requirements of various other business registrations and certificates to be operational. Instead, the medical spa is authorized to provide its services because the health care providers who work there hold licenses that permit them to do so.
Suppose a person wants to own a medical spa. In that case, the primary qualification they need is the appropriate qualification that enables them to hold a medical practice and employ health care personnel, also known as an MD. The specific requirements of this qualification vary from state to state. In many states, it is illegal for non-physicians to own medical practices or to have employment relationships with physicians. A medical practice or spa owner must be a licensed medical practitioner in these states.
This concept is known as the “corporate practice of medicine” doctrine in the legal community. In many cases, states with laws like these will make it possible for a physician to share ownership of a medical practice with another physician if certain conditions are satisfied. These requirements, in most cases, make it possible for certain health care professionals to co-own a business or permit others to hold minority interests in businesses where physicians hold majority ownership.
Physician assistants (PAs) and nurse practitioners (NPs) are ideal for working in medical spas due to their expanding practice areas, prescriptive authority, and flexible supervision requirements. However, are they able to possess medspa on their own?
Once more, this depends on the state where the practice is situated. There is no question that physician assistants and nurse practitioners are eligible to own a medical spa in states that do not restrict who can own medical practices. However, it is essential to remember that specific licensing boards pay closer attention to practices in which an employed physician supervises the owner physician assistant or nurse practitioner.
Even in states with more stringent ownership laws, PAs and NPs are frequently included on the lists of other specialists who can hold or co-own minority interests alongside physicians. PAs are fitted as being able to co-own more frequently than NPs are, most likely because physicians and PAs frequently share a licensing board. NPs, on the other hand, are not included as often.
On the other hand, NPs have gained more independence in their practice in recent years. They are no longer required to have physician supervision in states where they have full practice authority or the ability to practice independently. In these states, nurse practitioners are typically permitted to own their nursing practices and render services that fall within the parameters of their respective scopes of practice. This may make it possible for nurse practitioners (NPs) to own a medical procedure similar to a spa, even in states that restrict ownership of medical practices to physicians only.
Again, this depends on the scope of the practice. PAs have only recently been granted autonomy, and even then, it is only in a select number of states. This is in contrast to NPs, who have some form of independence in many states.
The most common licensees in medical spas are registered nurses (RNs) and aestheticians. Regrettably, this widespread availability does not transition into the ability to open one’s medical spa. Of course, both can own in states where professional medical ownership is not required. Furthermore, some states allow non-licensed individuals to own minority interests in professional medical businesses. When neither of these options is available, RNs will be added to the list of people who can co-own a company with doctors as minority shareholders.
On the other hand, aestheticians are not permitted to co-own medical businesses. A few states have established master or advanced practice aesthetician licenses, allowing licensees to provide a much broader range of aesthetic services, including many available in medical spas. A master or licensed practical aesthetician in these states could open their salon and perform these procedures independently of their medical practice.
Suppose you are not a part of any of the categories mentioned earlier for who can own a medical spa; this is the case for most people. But, if you want to open a medical spa nevertheless, are you out of luck in acquiring ownership?
Both yes and no. You can’t directly own an aesthetic medical practice unless you move to a state that allows it, change the law, or qualify for the proper license. You can, however, participate in the company or organization and day-to-day monitoring of an aesthetic practice regardless of where you are located. This entails utilizing a management services organization as a business structure (MSO).
Entrepreneurs can form management services organizations (MSOs) to provide “management services” to medical practices in collaboration with physicians or physician-owned corporations. An MSO essentially acts as a landlord for a medical practice, charging the physician or physician-owned corporation a rent and maintaining the facilities to their specifications.
A management services agreement (MSA) between the MSO and the physician or physician-owned corporation is required. The functions that each entity will perform, as well as the compensation that the physician or physician-owned company will pay the MSO for the use of its facilities and the management fee that the MSO will charge the physician, should be detailed in this agreement.
A flat-fee structure is ideal because the management fee cannot be based on a percentage of the medical practice’s billables. However, determining the value of management services can be difficult when the practice’s success is uncertain. Remember that if your management fee varies depending on the practice’s volume of business, the fluctuation of your management fees may attract unwanted attention from regulators.
If you would like to learn more about establishing a medspa and educational resources that you can use for your upcoming business, consider contacting us at Derm Aesthetic Consulting. We offer business services that can help propel your medspa start-up to success.
