Aesthetic medicine is not just for

cosmetic surgeons, dermatologists, or

laser surgeons these days. Just attend

a local laser seminar and you will meet

any number of physicians from

specialties wholly unrelated to

cosmetics, dermatology, or laser

surgery – gastroenterologists,

radiologists, family physicians. Spa

into the medical spa business.

Whether you’re a physician,

entrepreneur or both, if you plan to

offer aesthetic medical pr

ocedures

such as laser hair removal, Botox

®

injections, or mesotherapy, you must

abide by the same r

egulator

corporate practice of medicine, fee-

splitting prohibitions, and self-referral

conflicts.

CORPORATE PRACTICE OF

MEDICINE PROHIBITIONS

medicine” is simple: it is illegal for a

corporation or business to employ

physicians in such a

way that they may

corporate profit,

which, in turn, can dictate the way in

which a physician practices medicine.

practice of medicine prohibitions

which regulate lay ownership of

healthcar

If you don’t know about these

prohibitions, you can easily find

yourself in violation. In many states,

m

edical grade laser hair removal

d

evices can be sold to spa or salon

owners even though laser hair removal

is considered the practice of medicine.

Once the spa or salon owners buy the

operate without regulatory oversight

and without any problems until

something happens. Perhaps a patient

complains to the medical board, a

disgruntled employee files a

complaint, or a competitor complains

to the state agency. Failure to take the

necessary precautions to protect your

business and comply with corporate

practice of medicine laws is most

ractice of medicine issues is contract

enforceability. Kase says, “If the

contract is illegal because of the

unauthorized practice of medicine by a

lay entity, this illegality could void the

contract. When an issue arises in

which one of the parties wants to

enforce the contract, the contract may

not be enforceable.”

REFERRAL PROHIBITIONS

referring Medicare and Medicaid

patients to other medical services (e.g.

physical therapy, imaging, diagnostic,

lab, etc.) in which the physician

has ownership interest. The

purpose of this law is to

prevent physicians from

making unnecessary referrals

to ancillary services where they

would directly profit from the

not have to worry about fee-splitting

prohibitions and illegal remuneration.

However, if you are a medical spa

owned by lay entity, and the lay entity

wants a 50% cut of the profits from the

California’s Business and

Professions Code extends to cover all

types of medical services

and different types of

remuneration including

but not limited to rebates,

refunds, commissions, and

other types of inducements.

partnership whereby profits are

compensation or

other kickbacks

for medical

service

r

efer

rals,

even if

To protect yourself from self-

To protect yourself from fee-

splitting prohibitions, be careful about

monetary distributions, and try not to

f

d

isburse profits on a per-case or

percentage basis. Make sure that

payments to the lay entity related to

medical services are clearly worded

the issues raised in this article, consult

with your healthcare attorney as soon

as possible. Addressing potential

problems before they arise will be

much less costly than waiting until

something happens.

■ A nurse or spa owner wants to open a laser clinic and

approaches a physician to ask that physician to be his/her

medical director. In exchange for being medical director,

the physician will receive a percentage of all aesthetic

medical fees collected.

medical spa, and the physician’s spouse receives a 40%

profit distribution from revenues collected at the spa.

■ A spa r

hair r

emoval. The doctor charges the patient $200 per

treatment and gives the spa a $25 referral fee.