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How Environ Skin Care is Dominating the Medical Spa and Aesthetics IndustryOpen in a New Window

By: Aly Boeckh, Marketing and Sales Coordinator for the American Med Spa Association

The Medical Spa Industry is growing so rapidly, nearly $4 billion in sales in the 4,200 locations in the U.S., and it's becoming an extremely competitive market for skin care products to stand out, dominate, and sell within a medical spa space.

With so many consumers uneducated on key ingredients and medical spa professionals lacking the sales talk techniques to engage consumers, most medical spas don't see the profit value in selling retail.

But because we know the top med spas in the nation are making a killing off their retail sales, we're letting you in on the secrets to retail success - and that's exactly what led us to Dr. Des Fernandes, Environ Skin Care Founder and Scientific Director. 

Fernandes is the pioneer and globally recognized expert in vitamin A skin care, Cosmetic and Medical Needling, Cool Peel Technology and state-of-the-art skin care ingredients and formulations.

As expected, Fernandes is as intelligent as they come - and built Environ Skin Care out of the very desire that every physician who's ever struggled with the question of what skincare line you should be using can relate to. 

Why Environ Skin Care was Born out of Necessity:

“Medical Spas are moving away from the simple visit once a year to actually trying to put people on the road to good skincare. I think we now open the opportunity for them to make substantial differences to skin, to make skin healthy, instead of just being pampered.” 

“In a medical spa, this is their natural type of function. The most interesting thing is the return business. We’ve got the big spas like Canyon Ranch, which is not a medical spa but it’s becoming a medical type of spa as well, that is opening up a tremendous future for medical spas to start doing work with patients that get hooked on the beautiful skin.”

Discovering the Secret to Vitamin A in High Doses:

“As we’re sitting here and as the sun is coming through the windows, UVA comes through, so I’m getting a bit of UVA that’s destroying my vitamin A on my skin and it will destroy the Vitamin A quite significantly."

"You know the photograph that they typically show of the truck driver that’s terribly damaged on the left side? That is photo-damage. But nobody takes you to that next step…What went wrong from the photo damage? What happened when the sunlight came into the skin? It damaged his vitamin A. When you see wrinkled skin or pigmented damage thick skin, you’re seeing vitamin A deficiency.” 

“Progressively, when we’re young we have excellent levels of vitamin A in our skin, because we have excellent receptors on the skin surface, but with time as we expose ourselves to sunlight just through the window, we get those damaging rays.”   

"As we get older we lose our vitamin A receptors core cells. Now you don’t notice it, and you don’t know that you have vitamin A deficiency. But as you get older, you start to see that your smoother skin is now on the bottom, which is generally not receiving the sunlight. That’s the crime of vitamin A deficiency that we suffer from." 

How Vitamin A Reverses Signs of Aging:

"First, we have to make the cells able to use the normal amount of vitamin A, but the cells can’t use the normal amount of vitamin A."

"Say a blonde person like you, give them vitamin A and they’ll say 'This is dry, it makes my skin pink, acne spots, this stuff is terrible' and it’s just because you don’t have the receptors from subtle damage to the skin that we are totally unaware of. It takes a bit of time for us to adapt to the skin to take in normal doses of vitamin A."

"That’s why I created the step up system. For some people, even the step up system is too drastic for them and they start with vitamin A once a week. Then I advise these people to eat vitamin A, because when you take it by mouth you will build up more vitamin A in the skin cells as well."

Complimenting Cosmetic Treatments

“That is why I created it. When I started a private practice I was very lucky. Rapidly, I became very busy doing lots of facelifts, and what I realized is that if you’ve got bad skin and very wrinkled skin, I can do a facelift at my upmost best, but you don’t look young enough. You don’t look really young." 

“One of the things that you sometimes see is somebody looking very old, very tired, but they look odd. They look odd because they have old skin and a tight young face but it doesn’t look young. We’ve all seen that as we walk down the street and so on, and when I was in Canyon Ranch I saw a few examples of that." 

“What I realized in the early 80s, is if I wanted to get good results, I had to do this. That’s why I made the initial product. Only for my patients. Then I suggested to a number of my colleagues that they too should buy these products for their patients, and they just thought I was crazy!” 

“But the main reason was for medical reasons. Then as a plastic surgeon in South Africa, we treat a lot of skin cancer cases. When patients come in with skin cancer again and again, 2 to 3 times a year, we feel that we have to do something here. As I got more people to use vitamin A on their skin, I  started noticing that they were coming in for check ups. People that were operated on 3 times a year, were now coming in for a check up annually and they didn’t have the skin cancer. Then I realized that actually this cosmetic level of vitamin A was managing to reduce the risk of skin cancer."

The Medical Spa Landscape in South Africa:

"In my own practice we don’t sell any cosmetic products. You have to have very separate esthetician offices, and that is pretty true for United Kingdom and most of Europe. There are very few medical spas. You must not forget that lucky for South Africa, an esthetician goes to study 2-3 years at a college before they come in."

"For example, if you go to Ireland they have to go to a university to get a degree before they can become a skin care therapist. So there is a vast difference. In America, true esthetic work is a relatively new concept. Estheticians here are being trained with 300 hours to do things and the equivalent person in Europe and Australia, are going for more or less university courses." 

"I think the American model of the medical spa will come. But it’s not there now. Not significantly. It’s beginning, it’s in its early phases.“

To learn more about Dr. Des Fernandes, please visit his page here

 

Who Can Legally Fire a Laser In Georgia?Open in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

The issue of who can and cannot legally operate cosmetic lasers troubles many medical spa and medical aesthetic facility owners and operators. After all, there is no universally accepted licensing procedure for cosmetic laser technicians, and most state medical boards have not taken the time to rule on the subject. However, the Georgia Composite Medical Board has been proactive in addressing the idea that cosmetic lasers are something of a hybrid of medical and non-medical treatment, and it offers cosmetic laser practitioner licenses that permit estheticians, registered nurses, and cosmetologists to legally fire lasers under certain circumstances.

Peachy keen

It is difficult for some medical spa owners and operators to come to terms with the fact that some non-invasive laser treatments are considered medical treatments, and therefore require a physician, nurse practitioner (APRN), or physician assistant (PA) to not only perform an initial consultation, but also fire or supervise the firing of the laser. To many, this seems like an unnecessary use of these medical professionals’ time and resources.

The Georgia Composite Medical Board decided to address this issue by creating a state licensure procedure to clarify who can legally fire certain types of cosmetic lasers, and what procedures need to occur in advance of these treatments. 

First of all, it is important to clarify that this licensure covers only a few types of cosmetic laser treatments: laser hair removal, intense pulsed-light devices, and non-ablative light-based devices. All other cosmetic laser treatments are beyond the scope of this licensure and must be treated as medical procedures, with accompanying initial exams and proper supervision. However, the simple, relatively inexpensive cosmetic treatments this licensure does cover account for a large percentage of the laser treatments administered in the U.S., so the impact of this licensure can be significant.

Georgia’s law creates two levels of cosmetic laser practitioner licenses:
Assistant laser practitioner: This license allows people who hold licenses as PAs, licensed practical nurses (LPNs), APRNs, registered nurses (RNs), estheticians, and master cosmetologists to conduct the cosmetic laser treatments mentioned above without a doctor seeing the patient first or a even being on site. In order to earn this license, a candidate must complete certain courses from accredited laser training schools and meet certain requirements from the state.

A licensed assistant laser practitioner does not require any supervision when performing the treatments covered in this license, which helps improve a medical spa’s flexibility. Having a physician onsite to supervise basic treatments such as these is a major hurdle that these businesses have to clear in order to improve their profitability, and Georgia has provided the mechanism to make that possible. 

Senior laser practitioner: This license permits PAs, RNs, and APRNs to supervise unlicensed individuals who are firing lasers. If an LPN or esthetician, say, does not have an assistant laser practitioner license and a physician is not onsite to supervise, an RN with a senior laser practitioner license does provide sufficient supervision from a legal standpoint, thanks to this aspect of Georgia law. Again, this gives the practice the ability to treat a patient without needing a doctor to see him or her, which could potentially save it a great deal of money. 

As with the assistant laser practitioner license, someone seeking a senior laser practitioner license must complete training courses from state-approved laser training schools. In addition, he or she must have at least three years of experience, as well as three years of clinical or medical technological experience.

The laser’s edge

From AmSpa’s perspective, the availability of these licenses is a major positive, because it provides some clarity in an area of medical aesthetics where, often, there is none. It’s something we in the legal profession always seek—a definitive statement that illustrates exactly what one must do to be compliant. We’re always supportive of efforts by a legislature or medical board to clarify things that need it.

Also, this law creates the potential for medical spas and laser centers in Georgia to see more patients, as well as potentially open more locations with a higher patient flow, because they don’t need to circulate the patients in to see a doctor or NP. However, this still only addresses a small number of laser services, so if you operate in Georgia and have questions about remaining compliant while administering other laser treatments, consult your local health care attorney or work with AmSpa’s national law firm, ByrdAdatto. AmSpa members can view the Georgia legal summary to get an overview on the state’s medical aesthetic laws.

To learn more about this law and others that affect medical spas in the Peach State, sign up to attend AmSpa’s Boot Camp in Atlanta on November 6 and 7. Click here for more information and to register for the Boot Camp. We hope to see you there!
 

 

Who Are the Most Commonly Employed Team Members in a Med Spa?Open in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

According to AmSpa's 2017 State of the Industry Survey, physicians, nurses and aestheticians are among the most commonly employed staff at
medical spas. 

Nearly 77% of all medical spas are in some way affiliated with a physician. However, only 48.4% of physicians have complete ownership.     

The full report is available for purchase for $995 here. AmSpa members can request a complimentary copy of the executive summary by emailing Morgan at morgan@americanmedspa.org.

 

FTC Reiterates Social Media Influencer GuidelinesOpen in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Social media influencer marketing isn’t heavily used in medical spas yet. According to AmSpa’s 2017 Medical Spa State of the Industry Report medical aesthetic practices rely most heavily on their website, email marketing, and their own free social media channels to reach new patients. In many other industries, however, online influencers are gaining a lot of attention from marketers looking for effective ways to reach certain demographics.

If you ask a Millennial who his or her favorite entertainers are, you very likely will be introduced to a world beyond movie stars, rock stars, and comedians—the world of social media stars. These enterprising individuals create their own content and broadcast it over social media for the world to see. Although this form of celebrity might seem unusual to some, the potential reach of social media networks is undeniable. YouTube, the ubiquitous video site, claims to have more than 1.5 billion active visitors each month, and Twitter has 328 million active users per month. Some social media celebrities have garnered enormous followings—for example, more than 57 million YouTube accounts subscribe to the channel of controversial video game vlogger PewDiePie (aka Felix Kjellberg).

In marketing terms, these social media celebrities are known as influencers. And because these influencers’ audiences are huge and extremely dedicated, marketing professionals have begun to dedicate a great deal of time and effort to reaching them. This has led to the rise of this new type of marketing known as “influencer marketing,” whereby the influencers are paid to tacitly endorse a product rather than overtly promote it. This is seen by marketers as a way to establish credibility with the influencer’s followers without engaging in the bald consumerism of conventional advertising. What’s more, it has proven to be extremely effective, with advertisers reporting immediate upticks in activity on their social media sites and websites, which translates directly into sales. This is considered to be among the best ways to reach Millennials, a demographic that is known to be notoriously difficult to market to.

Medical spas have not yet engaged in a great deal of influencer marketing, but given the growth of this type of advertising, it likely is only a matter of time before it becomes a part of medical spas’ marketing strategies.

However, the Federal Trade Commission (FTC), which regulates advertising on the airwaves, has issued a statement that warns influencers to be very careful when they engage in this type of marketing, because truth-in-advertising requirements mandate that they very clearly disclose when they are being paid to promote a particular product or service. When you see an advertisement on television or in a magazine, it is very obvious that it is a paid marketing unit; this is because the FTC wants to ensure that the public is fully informed when it is being sold to, because otherwise the ad can be viewed as misrepresentation.

The problem with influencers mentioning products is that often, they do not disclose that they are being compensated. The FTC considers this a problem. Influencers have a great deal of selling power, even though they might not necessarily realize it.

In April 2017, the FTC revealed that it issued warning letters to more than 90 social media influencers. These letters explain very explicitly that the influencers need to be careful, and that they need to disclose very specifically if they are being paid to talk about a product. In a blog post explaining the letters, the FTC offered the following advice:

Keep your disclosures unambiguous. Vague terms like “Thank you,” “#partner,” and “#sp” aren’t likely to explain to people the nature of the relationship between an influencer and the brand. There’s no one-size-fits-all way to make that disclosure, but an unfamiliar abbreviation or cryptic word subject to multiple interpretations probably won’t do the trick. Approach the issue by asking yourself “In the context of this post, how can I make the connection clear?”


Make your disclosures hard to miss. In addition to what you say, consider where you say it and how it will look to consumers on the devices they’re using. People should be able to spot the disclosure easily. But if they check their Instagram stream on a mobile device, they typically see only the first three lines of a longer post unless they click “more.” And let’s face it: Many people don’t click “more.” Therefore, disclose any material connection above the “more” button.


Avoid #HardtoRead #BuriedDisclosures #inStringofHashtags #SkippedByReaders. When posts end with a jumble of hashtags, how likely is it that people really read them? That’s why a “disclosure” placed in a string of other hashtags isn’t likely to be effective.

If your medical spa is using an influencer marketing program or is interested in exploring this type of campaign, make sure the influencers with whom you’re working know the rules governing this type of advertising. If not, they could be subject to severe penalties from the FTC. 

 

Can Dentists and Chiropractors Own Medical Spas?Open in a New Window


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.

Dentists

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.

Chiropractors

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.

Conclusion

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. 

Become an AmSpa member to see your state’s legal summary of regulations governing medical spas and medical aesthetics practices.
 

 

Update on Illinois Bill to Grant Advanced Practice Registered Nurses Full Practice AuthorityOpen in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Nurse practitioners in Illinois medical spas and aesthetic practices may soon have more autonomy in the industry. Every 10 years the Illinois Nurse Practice Act expires, so the state’s General Assembly must draft and pass a new version of the act before that happens. The current version of the act is set to expire on January 1, 2018, and on schedule, the General Assembly recently passed a bill that will (likely) replace it. This revised Nurse Practice Act features a few notable elements that could affect the way the med spa business is conducted in the Land of Lincoln.


Initial reactions when the bill was first passed.

A Bump Up

The most significant change in the new version of the Illinois Nurse Practice Act is that, once it is enacted, advanced practice registered nurses (APRNs) can achieve full practice authority adding Illinois to the list of 23 states plus the District of Columbia that grant this level of independence to these providers. This means that nurse practitioners can essentially operate independently, without direct oversight from a physician, provided they meet certain qualifications. Currently, nurse practitioners in Illinois are governed by collaborative agreements with a physician, and those agreements dictate generally what they can and cannot do. If a nurse practitioner wants to perform Botox injections, for example, or see new patients at a med spa, he or she would have to have that written into the collaborative agreement. In addition, they are required to meet with their supervising physician once a month and they must have protocols developed in accordance with the physician. Essentially, an Illinois nurse practitioner’s scope of practice is restricted by what his or her supervising physician feels comfortable putting into the collaborative agreement.

However, once the new Nurse Practice Act takes effect, APRNs—including nurse practitioners, nurse midwives, and clinical nurse specialists—can apply for and be granted full practice authority provided they meet certain requirements, including training, clinical experience, continuing education, and physician collaboration in certain practice areas. If a nurse practitioner achieves full practice authority, he or she is no longer required to have a written collaborative agreement with a physician. This allows nurse practitioners to be fully accountable to their patients and to have their own practices. They can accept referrals, make referrals, write orders, prescribe medications, and essentially operate as an independent entity without being restricted by a collaborative agreement.

What this means for med spas is that instead of employing both a doctor (medical director) and a nurse practitioner, they can potentially enter into an agreement with a nurse practitioner, and that nurse practitioner could independently operate a medical spa. Potentially, this could be very significant.

However, the changes to the Illinois Nurse Practice Act also include provisions regarding fee-splitting, preventing an APRN from splitting any fees they collect for their services. This means that a medical spa wishing to partner with either an APRN or a physician must do so through a management services agreement and may not pay the APRN or physician a percentage of medical revenue.

The revised Nurse Practice Act was passed by both the Illinois Senate and the Illinois House of Representatives on June 25, and was sent to Governor Bruce Rauner on July 24. As of this writing, Governor Rauner has yet to sign the bill into law, so this post is somewhat speculative in nature. However, it is expected that he eventually will sign the bill—nothing in it is particularly controversial from a political standpoint, and both chambers of the General Assembly passed it without a single “no” vote. Stay tuned to AmericanMedSpa.org—we’ll let you if the governor signs the bill, and if not, what the potential ramifications are.

In the meantime, if you are a nurse practitioner or a med spa owner in Illinois, it is worth familiarizing yourself with the bill in order to learn what the future may hold for this segment of the industry. 

Learn more about the medical aesthetic laws you need to know at AmSpa’s Medical Spa & Aesthetic Boot Camp in Chicago, IL October 14-15.
 

 

Who Can Perform Microblading in a Medical Spa?Open in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Questions about who can perform microblading in a medical spa are popping up more and more as the treatment continues to gain popularity. Answers can be hard to find as medical boards and other regulatory agencies have often not made an official decision as to which scope of practice this fall under.

Watch AmSpa Founder/Director Alex Thiersch weigh in on the subject, and see AmSpa’s Treatment Directory for more information on microblading.


For more information on regulations governing medical aesthetics become an AmSpa member and access the legal summary for your state.

 

 

LLC Laws Change in IllinoisOpen in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

When opening a medical spa in Illinois, deciding on the appropriate corporate structure for the practice is an important choice that is not always at the front of peoples’ minds. There are many options, however recent updates to the LLC law in Illinois may make it the preferable structure for medical spas and aesthetic practices in the state.

Limited liability companies (LLCs) are businesses structured to allow their owners and operators more flexibility when compared to traditional corporations. They essentially allow the owners of a company to organize the company however they like and choose how they wish to be taxed. This gives owners a good idea of the company’s financial position at all times and allows them to plan accordingly for upcoming events. The LLC is a relatively new legal construct, but in the medical aesthetic industry, it has quickly become a preferred organizational method. As an attorney, I recommend that clients use LLCs all the time. 

In Illinois, LLCs are governed by the Limited Liability Act, which was enacted on January 1, 1994. However, as of July 1, 2017, the act has been dramatically revised in an effort to bring it in line with recommendations from the National Conference of Commissioners on Uniform State Laws and similar legislation that has been passed in other states. These revisions help to make the act a bit more predictable and make the enforcement of certain provisions easier, because standardizing the law as much as possible helps to give both regulators and LLCs a good idea of how courts will interpret it in certain situations.

My colleague, Renee E. Coover, goes into detail regarding the changes to the Illinois law in this blog post for the national medical aesthetic law firm of ByrdAdatto. Although the revisions apply to LLCs in all different industries, they make some basic administrative and structural changes that medical spa owners and operators should be aware of.

First of all, the LLC Act now allows oral operating agreements. Typically, an LLC drafts an operating agreement—the “constitution” of the company, if you will. This agreement determines how the company acts and how changes can be made by specifying who gets what votes, who has control, how decisions are made, what happens when somebody leaves, what happens if somebody wants to sell, and so forth. The revision to the LLC Act allows oral operating agreements, so now elements of an operating agreement that have been agreed to orally do not need to be codified to be binding, which is a distinct change from the way that the statute has previously been enforced.

Another key aspect of these revisions that medical spa owners and operators should note is that the LLC Act now allows forthe waiver of fiduciary duties by a manager. A fiduciary duty is an inherent, implied duty of loyalty in which an individual acts in furtherance of the company’s interest at all times. The revisions to the LLC Act allow managers and members of the company to waive fiduciary duty, which gives more power and flexibility to the owners, who can essentially run the company as they see fit.

Finally, the revisions to the LLC Act establish specific authority for members and managers. This means that the LLC can file a statement with the Illinois Secretary of State’s office that either grants or limits the authority of a member or manager in the organization to make certain decisions outlined in the statement.

If you own a medical aesthetic practice or medical spa in Illinois that is operating under an LLC, you should consult a business attorney to make sure that your operating agreements are up to date. If you are considering starting a new company under an LLC, you should be aware of the revisions to the Illinois LLC Act and factor them into your decision-making process. 

Find out more about how to set up your medical spa’s legal structure – from corporate structure, to ownership, to employee payment plans, to HIPAA compliance, and more – at AmSpa’s Medical Spa and Aesthetic Boot Camp October 15-16 in Chicago, Illinois.

 

 

How to Legally Open a Med Spa in MassachusettsOpen in a New Window

By: Renee E. Coover, JD, ByrdAdatto Attorney   

Opening a medical spa in Massachusetts comes with a number of regulatory and licensing requirements. ByrdAdatto Attorney, Renee Coover, explains how to navigate the process. Become an AmSpa member to find the laws governing medical spas and aesthetic practices in your state.

 

Can Non-Doctors Own Medical Spas?Open in a New Window

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.

 

The Basics

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. 

 

Of course, all this is predicated on the assumption that the arrangement is executed properly. If so, everyone stands to benefit; if not, both sides could suffer significant consequences. Be sure to consult an attorney familiar with medical aesthetic laws in your state before deciding on the ownership structure of your medical spa.

 

Word to the Wise

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!

 

Is Telemedicine Legal in Medical Spas?Open in a New Window



By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

Whether telemedicine is legal in medical spas and medical aesthetic practices is a hot-button issue. Little more than a decade ago, you likely would have been laughed at if you told someone that in 2016, most people would be walking around with high-definition (HD) video cameras in their pockets, but here we are. That’s why medical aesthetic practices should pay attention to telemedicine rules and regulations, even if it is not currently legal in their states.

Telemedicine is the use of electronic telecommunication technology to provide healthcare services to patients, and it is becoming central to the medical landscape. Theoretically, medical aesthetic practices could stand to benefit a great deal from using telemedicine, since conducting initial exams for minor medical services such as the ones provided by medical spas can be a drain on resources if they must be conducted in person. However, the laws that govern telemedicine are evolving, so medical spa owners and operators should familiarize themselves with the legal issues surrounding the practice and decide if they want to to give it a try. When looking for legal advice be sure to consult an attorney who is familiar with medical aesthetic laws in your state. (AmSpa members receive a complimentary compliance assessment with the business/healthcare/aesthetic law firm of ByrdAdatto.)

The Technology
Conceivably, telemedicine could change the way medical aesthetics practices conduct initial examinations. Most states require a licensed healthcare professional – a physician, physician assistant, or nurse practitioner – to conduct an initial examination, generally face-to-face, with each patient prior to the administration of medical services. As a result, compliant medical aesthetics practices tend to need to have at least one licensed professional onsite at all times.

But what if you could simply reach a healthcare professional as needed instead of paying one to be in the office all the time? That’s the prospective advantage of telemedicine. Ideally, a healthcare professional could conduct examinations over a telecommunication protocol such as Skype or FaceTime, and the practice would not need to pay a premium to have a licensed professional onsite all day, every day.

A Legal Matter
This practice inspires a few questions. Can a healthcare professional conducting a remote examination detect all skin conditions or abnormalities that could complicate medical aesthetics procedures? Moreover, can such an exam sufficiently establish the doctor/patient relationship? Lawmakers across the country are currently evaluating these issues and more, as legislation governing telemedicine is still evolving and open to interpretation. No consensus of opinion exists from state to state or even lawyer to lawyer regarding the practice. Telemedicine is the topic of entire week-long conferences, which should give you some idea about the amount of controversy surrounding it.

Many states have telemedicine laws on the books, and they do generally tend to allow it, but typically for continuing care and consultations with specialists in other cities, states and even countries, rather than initial examinations. If a patient is already under the care of a doctor, telemedicine is more widely accepted than if a healthcare professional conducting an initial exam has never met the patient in person.

In Illinois, for example, the state medical board does not look favorably on the practice, despite the fact that there is no actual law prohibiting it on the books. In Texas, on the other hand, state legislators have passed a law that sets very specific standards for how an offsite consultation must work. It is permitted, provided the healthcare professional performing the offsite consultation is in a specific location and working under particular conditions. California’s medical board also allows telemedicine, provided certain conditions are met.

Some issues that still need to be sorted out include the question of whether a doctor can conduct initial exams on patients in states other than the one(s) in which he or she is licensed to practice. Historically, it has been difficult for physicians to obtain medical licenses in multiple states. However, an initiative known as the Interstate Medical Licensure Compact (IMLC) aims to help provide healthcare to underserved areas via telemedicine by making it easier for doctors to acquire medical licenses in multiple states. As of now, medical boards in 22 states are in various stages of adoption of this accord. Check the IMLC website to learn if your state is among them.

A side effect of IMLC adoption is that it will soon be realistic for medical spa chains to conduct initial exams from a central location, which certainly could help expand their profit potential. This aspect of the story is developing, but it could have industry-altering ramifications.

Learn About It
With imaging technology such as Visia improving rapidly and HD video becoming even sharper and more lifelike, conducting initial exams via telemedicine may very well be the industry’s future.

Learn more about telemedicine and many other legal topics of interest to medical spas at AmSpa’s Medical Spa and Aesthetic 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!

 

Top 5 Most Popular Med Spa TreatmentsOpen in a New Window

Just how well do you know the medical spa industry and the clients that you serve? Would you be surprised to learn that Chemical Peels are the number one service provided in a medical spa? AmSpa's 2017 Medical Spa State of the Industry Report is here to help you decide on which treatments to offer, and how you can receive the biggest return on your investment. 

Let's take a look at the Top 5 Most Popular Medical Spa Treatments:

1. Chemical Peels

A chemical peel is a technique used to improve the appearance of the skin on the face, neck or hands. A chemical solution is applied to the skin that causes it to exfoliate and eventually peel off. The new, regenerated skin is usually smoother and less wrinkled than the old skin.

2. Aesthetician Services  

Aesthetician services involve skin care and beauty treatments such as facials, makeup applications, and hair removal through electrolysis, waxing or other techniques.

3. Botox and Filler Injections

The injection of botulinum toxin--commonly known as Botox, Dysport or Xeomin-- has become very popular for reducing wrinkles and rejuvenating the aging face. First granted U.S. Food and Drug Administration (FDA) approval to treat frown lines in 2002, Botox remains one of the most popular cosmetic procedures on the market, and its popularity continues to rise.

4. Microdermabrasion

Microdermabrasion skin rejuvenation is used as a method of exfoliation, as well as to treat light scarring, discoloration and sun damage, and stretch marks. Treatments include using a minimally abrasive instrument to gently sand your skin, removing the thicker, uneven outer layer.

5. Photo-facial pulsed light (IPL)

Intense-pulsed light (IPL) is a technology used in various skin treatments, including hair removal and photofacials. A handheld flashgun is passed across the skin, delivering a spectral range of light that targets the hair or skin issue. These types of treatments may also be called laser skin rejuvenation, photorejuvenation, or laser resurfacing.

Here's an infographic from the report that shows how all Medical Spa treatments measure up. 

AmSpa members receive a complimentary copy of the report's executive summary. Join today and receive your copy!

 

California Has Strict Laws Regarding Laser Treatments and InjectablesOpen in a New Window

By Alex R. Thiersch, JD, Founder/Director of the American Med Spa Association (AmSpa)

The state of California can be viewed as the epicenter of aesthetic medicine. The industry is already huge there, and many more doctors—core and non-core alike—are moving into the market and opening medical aesthetic practices in the state. Due to the size of the medical aesthetic market in the state, California’s Board of Barbering and Cosmetology tends to set a standard for other regulatory agencies around the country, so even if your medical spa isn’t located in the Golden State, it’s worth paying attention to what happens there to learn what might be forthcoming in your neck of the woods.

 

In California, there are very specific regulations that govern who can perform which treatments at a medical esthetic practice. These rules are very strict—much stricter than many medical spa owners and operators understand, and much stricter than in most other states.

Lasers

For example, the Medical Board of California and the California Board of Registered Nursing have ruled quite clearly that anybody with less certification than a registered nurse should not be firing lasers. So essentially, the operation of aesthetic lasers in the state of California must be limited to registered nurses, nurse practitioners, physician assistants, and doctors.

 

We have seen that in California, many laser centers allow lasers to be fired by people who do not fit into these categories—typically laser technicians. Unfortunately for these facilities, the Medical Board of California, the California Board of Barbering and Cosmetology, and the California Board of Registered Nursing are making a conscious effort to crack down on practices such as these. The doctors who own and operate practices where estheticians and laser technicians are permitted to fire lasers can be punished severely.

 

It is important to understand that even if a person is a so-called certified laser technician, he or she is not necessarily permitted to fire lasers in California. Additionally, doctors in the state are not permitted to delegate laser services to employees who are no higher than registered nurses in terms of certification. We recently have seen several estheticians cited by the Board of Barbering and Cosmetology, as well as several doctors cited by the Medical Board of California for not following these rules, simply because the doctors and estheticians are not familiar with the specifics of the state laws. As is the case with most legal issues, ignorance is not an excuse, so if you believe your California medical spa might not be compliant, consult a healthcare attorney and make the changes that he or she recommends. (Note: The American Med Spa Association (AmSpa) works with a national law firm that focuses on medical aesthetic legalities and, as a member.)

 

Injectables, microneedling and dermaplaning

The situation in California concerning injectables is somewhat similar. In the Golden State, nurses and other licensed medical professionals can inject Botox and fillers and conduct microneedling and dermaplaning treatments, but under no circumstances should anyone else be doing it. This is another area that is being focused on by the Medical Board of California, the California Board of Barbering and Cosmetology, and the California Board of Registered Nursing.

 

“This isn’t new—estheticians cannot penetrate the skin,” said Kristy Underwood, executive director of the California Board of Barbering and Cosmetology, at the AmSpa Medical Spa Boot Camp in San Jose, Calif., in September 2016. “They also can’t use any metal needles, period … [California] estheticians are prohibited from using metal needles, as well as anything that might be used in a manner that is disapproved by the FDA.”

 

Underwood also spoke about the issue of needle depth.

 

 “[California] doesn’t define the depth,” she said. “We do say that [estheticians] can’t go below the epidermis.”

It is worth noting that thus far, microblading—a treatment in which fine incisions and ink are used to create a semi-permanent makeup-like definition, typically for eyebrows—has thus far escaped scrutiny from these regulatory agencies. This is because the state considers that this particular treatment is governed by tattoo licenses. Therefore, if your medical aesthetic practice is offering this service, you should make sure that the people who are performing it have tattoo licenses, which in California typically are issued by counties. Otherwise, your practice is open to regulatory intervention.

 

We will be discussing these and many other legal topics of interest to California medical spas at our San Jose Medical Spa and Medical Aesthetics Boot Camp, which will take place on Sept. 18 and 19. We have reached out to both the California Board of Barbering and Cosmetology and the Medical Board of California, and we hope members of both will pop in to answer any legal and regulatory issues attendees may have. Click here for more information and to register for the Boot Camp. We hope to see you there! 

 

Top Medical Spa Legal IssuesOpen in a New Window

The medical spa industry exists at the unfortunate confluence of state statutes, regulations, and often, the rules of multiple professional boards. Although it is easy for a savvy veteran of the medical spa industry to unintentionally run afoul of this web of regulation, it is also shockingly common for some medical spas to be noncompliant with even the most basic of rules. Equally shocking is that the reason behind this noncompliance can be traced back to simple maxim: Many, if not most, of the services offered in medical spas constitute the practice of medicine.

All things considered, perhaps it’s not that surprising that this basic tenet gets overlooked, because medical spas go out of their way to create welcoming, relaxed environments in which patients can receive aesthetic or cosmetic treatments and services. This cultivated “retail” feel is intentional and is antithetical to the feel one often experiences when visiting a doctor, which is perhaps why the fact that medical spa services are the practice of medicine can also easily be overlooked or ignored. However, it is important for both the medical spa and the spa’s clients to bear in mind that most medical spa services do constitute the practice of medicine and should be treated accordingly.

KEY PROBLEM AREA NO. 1:

THE INITIAL EXAM

One key area in which medical spas are often noncompliant is the initial examination of a patient seeking treatment at a medical spa. In the American Med Spa Association’s (AmSpa’s) recent 2017 State of the Medical Spa Industry Report, 37% of respondents admitted that they either do not perform a good faith examination prior to a patient’s first treatment at the medical spa or that the examination is not performed by a physician, physician assistant (PA), or nurse practitioner (NP). Good faith examination is a term used in California to mean the performance of an appropriate prior examination and medical indication before pre- scribing, dispensing, or furnishing a dangerous drug, which would include botulinum toxin type A or fillers prescribed for a patient. Although the good faith examination serves a specific purpose, the responses to the AmSpa survey inform a broader area of noncompliance, because physicians, or the mid-level practitioners to whom they can properly delegate the task, often do not perform an initial patient examination or prescribe treatment plans for medical spa patients. And while the semantics might differ, all states have some requirement that a physician must prescribe a course of treatment before medical spa services may be rendered.

In most states, this initial assessment may be delegated to a PA or NP when proper delegation and supervision protocols are followed, but it would be beyond the scope of practice for a registered nurse (RN) or licensed practical nurse (LPN) to engage in this diagnosis phase of the treatment. This becomes a problem for medical spas, because it is common for a RN to see and treat patients in the facility without the patient ever coming into contact with a physician or a mid-level practitioner, such as a PA or NP. This means that even if the RN performs an initial assessment, that nurse would have acted outside the scope of his or her authority and that medical spa just joined the ranks of the 37% of spas that fail to perform a proper initial assessment of the spa’s patients. This makes this medical spa noncompliant with state law or regulation.

This issue is further complicated by the emergence of telemedicine as a viable alternative through which health care can be delivered, as it begs the question of whether an initial assessment that complies with state requirements
can be completed via telemedicine. To make matters worse, telemedicine is a still developing and evolving legal concept, and laws vary widely from state to state. When it comes to performing the initial assessment via telemedicine, states generally fall into three schools of thought: (1) the initial assessment cannot be performed via telemedicine at all; (2) the initial assessment may be performed via telemedicine where the physician, PA, or NP is present through streaming audio and video, and a nurse is physically present with the patient to guide them; or (3) the initial assessment may be performed via telemedicine where the physician, PA, or NP is present through streaming audio and video. Because many states lack a comprehensive statutory or regulatory structure addressing telemedicine, a medical spa wishing to implement 
initial assessments via telemedicine would be safest by seeking legal counsel on compliance requirements of the state.

HOW DOES YOUR MED SPA STACK UP?

 

KEY PROBLEM AREA NO. 2:

 COMMISSIONS

Another area where medical spas commonly fail to comply with regulation is in the payment of commissions to people working in spas for the performance of specific services. In fact, according to AmSpa’s 2017 State of the Medical Spa Industry Report, 31% of respondents pay commissions for the performance of certain medical treatments. Commissions do not, in and of themselves, violate state law. Rather, commissions fall within a veritable minefield of regulations that intersect to make what otherwise would be a benign form of compensation when properly structured into a payment that is at best unprofessional conduct and at worst illegal. Improper commissions are commonly referred to as fee-splitting, which can be true, but such commissions actually run the risk of violating multiple areas of the law, including fee-splitting, kickbacks, the corporate practice of medicine doctrine, or physician self-referral laws.

Fee-splitting is defined as the practice of sharing fees generated from the performance of professional services with other persons as compensation for referring a patient. Kickbacks are somewhat different from fee-splitting as the focus is not on the source of the income (professional services), but rather whether the compensation, regardless of source, was used to generate referrals.

Kickbacks are generally defined as any sort of compensation, money or otherwise, that is directly or indirectly given or received to induce or reward patient referrals. Physician self-referral prohibitions go hand-in-hand with kickbacks, because they prohibit a physician from paying for referrals to or from another medical practice in which a physician has an ownership interest. Self-referral prohibitions often can be avoided by simply disclosing to a patient the physician’s interest in the practices, and the fact that a fee is being paid for the referral in the form prescribed by a particular state.

Finally, the corporate practice of medicine doctrine prohibits certain business entities or unlicensed individuals from practicing medicine or employing a physician to provide medical services. This means that a commission that (1) is a portion of a professional fee or (2) is paid as compensation for giving or receiving referrals or (3) is paid between entities in which the same physician has an ownership interest or (4) is paid to persons ineligible to have ownership in a medical spa all potentially violate state law or regulation, depending on the particular prohibitions that a state has codified.

Naturally, this raises the question of when can commissions be paid for the performance of medical services. The simplest answer is to avoid commissions to navigate the regulatory mine- field. The best practices of medical spas are to pay a bonus for specified performance metrics or pay a discretionary bonus.

NAVIGATE CAREFULLY

The payment of commissions and the performance of proper initial assessments of medical spa patients are just two examples of noncompliance. Because medical spas exist at the intersection of state law, regulations, and professional board rules, it is easy for a well-intentioned medical spa to be noncompliant. With that in mind, always remember that most treatments at medical spas are considered to be the practice of medicine and everything from the assessment of the patient to the delivery of treatments should be navigated carefully. Also, if a medical spa is going to use incentives as part of a compensation package for its employees, do not pay commissions. Finally, if you ever have any questions or concerns regarding your spa’s compliance with laws, regulations, and professional board rules, please seek legal counsel. (Author’s note: The American Med Spa Association (AmSpa) works with ByrdAdatto, a national law firm that focuses on medical aesthetic legalities and, as a member, along with a number of other great benefits, you receive a free initial consultation. To learn more, click here.) 

This article was originally published in Modern Aesthetics May/June 2017 Supplement issue.

MICHAEL S. BYRD

As the son of a doctor and entrepreneur, Michael S. Byrd , Partner at ByrdAdatto Law Firm, has a personal connection to both business and medicine. He routinely lectures at continuing medical education seminars on the various business and legal issues that medical professionals face. Outside of healthcare, he has handled sensitive and complicated business matters for entrepreneurs, business owners, attorneys, CPAs, high net worth individuals, and public figures. He is also active on the Board of Directors of the LEAP Foundation, an organization that provides pro bono medical services to those in need.

BRADFORD E. ADATTO

Bradford E. Adatto, Partner at ByrdAdatto Law Firm, decided to become a lawyer during sixth-grade Career Day, when he promised to represent his best
friend, a future doctor. Adatto’s background is in regulatory, transactional, and securities law. Having worked in healthcare law his entire career, he has an in-depth knowledge of the “do’s and don’ts” of this heavily regulated industry. Adatto is actively involved in various community and philanthropic associations, and serves as a Board Member of Carry the Load, a charitable organization founded to help veterans and their beneficiaries.

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