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Are Medical Director Agreements Required in MSO Arrangements?

Posted By Administration, 4 hours ago

mso agreement

By Kita McCray, JD, ByrdAdatto

The purpose of a medical director agreement is to memorialize the responsibilities of a physician, which typically entail supervision and delegation, and address physician compensation. In a management services organization (MSO), the physician who owns the medical entity usually is the physician who is in charge of supervision and delegation. Where a single physician owns, delegates and supervises, he or she would not need a medical director contract with themselves. Moreover, financial terms, including medical director compensation, typically are captured in the management services agreement (MSA) between the MSO and the physician-owned medical entity. Thus, medical director agreements are only necessary when a company is operating in a state that allows non-physician-owned companies to contract with or directly employ physicians, and in MSO arrangements where the supervising physician is different than the physician owner.

To determine whether your company needs a medical director agreement, you should begin by looking to two places:

  1. Your state’s corporate practice of medicine (CPOM) doctrine, if any; and
  2. Any applicable supervision and delegation laws or regulations applicable to physicians.

The CPOM is a doctrine that prohibits an unlicensed individual or non-professional entity from:

  1. Practicing medicine;
  2. Employing or contracting with a physician to practice medicine on its behalf; or 
  3. Interfering with or influencing a physician’s professional judgment or practice of medicine.

This includes both the physician’s health care or medical decisions, and business or management decisions that necessarily implicate the practice of medicine.

In CPOM states—such as California, Texas and New York—the medical entity must be properly owned by a licensed physician. A company owned by a non-physician who employs a physician to render medical services and receives compensation in exchange for providing those services is structured in violation of CPOM. Where the MSO model is used to comply with CPOM prohibitions, a medical director agreement would be unnecessary, unless the physician-owner hires a different physician to supervise the medical entity’s operations.

In non-CPOM states, such as Florida, non-physician-owned companies are allowed to contract with or directly employ physicians, so long as the physician’s professional judgment and practice of medicine are not interfered with. Therefore, a medical director agreement would be necessary to specify the responsibilities and compensation of a physician acting as a medical director. Such responsibilities typically are for treatment plans, supervision and delegation, and they are in accordance with state supervision and delegation laws or regulations that are applicable to physicians.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

Kita McCray’s decision to become a lawyer was solidified in fourth grade after job shadowing a local lawyer in her hometown of Ferriday, Louisiana. In college, Kita dedicated all her enthusiasm and energy to becoming well-read in classic English literature before attending law school. But while working as a public health graduate researcher, she developed an interest in health law and policy, and decided to focus her legal studies toward health care law.  Today, Kita brings the full scope of her multidisciplinary background to assist clients with their business and health care needs.

Tags:  Business and Financials  ByrdAdatto  Med Spa Law  Med Spa Trends 

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Updates on the Texas Botox Arrests

Posted By Administration, Friday, February 14, 2020

handcuffed doctor

By Robert J. Fisher, JD, ByrdAdatto

At the end of 2018, much was written about the Texas Botox arrests that resulted in four different medical spa providers being led away in handcuffs or turning themselves into police. These arrests sent shockwaves through the medical spa community, as it marked an aggressive change in enforcement.

However, as of now, three of the four people arrested are no longer being criminally pursued by the state. Michelle Bogle, the LVN injector, and Paula Springer-Bryant, MD, the medical director supervising Savvy Chic MedSpa, were both “no billed” in March 2019. A “no bill” means that the grand jury did not find sufficient grounds to indict the accused. Additionally, Ricky Delatorre-Aguirre, a medical assistant performing injections for RD Aesthetica MedSpa without any proper physician oversight, had his case dismissed July 2019. The Houston district attorney indicated on the dismissal motion that while there was probable cause, the case could not be proven beyond a reasonable doubt at that time. Melissa Diaz Galvan, a medical assistant who was charged with the unlicensed practice of medicine and is being accused of writing prescriptions to patients on a prescription pad belonging to a physician, was the final person indicted. Her case is still ongoing with the next scheduled court date in February.

Perhaps the dismissals and no-bills described above were due to the extremely technical and nuanced nature of the laws that were being violated, which resulted in the district attorney’s office not being able to clearly translate to the grand jury the violations that occurred. On the other side of the coin, the case against Galvan appears to be more straightforward, as the district attorney can show the exact prescription page(s) she was signing on a physician’s pad.

Regardless, we would caution medical spa operators against letting their guard down and thinking that this is a sign of decreased criminal enforcement. Those who can remember the opening voiceover in the TV show Law & Order know that the justice system is made up of the police who investigate the crime and attorneys who prosecute the offenders. While these specific circumstances resulted in dismissals, it does not mean that the police will stop arresting medical spa personnel. It is critical to maintain compliance to prevent arrest in the first place. Even with a dismissal, the image of being led away in handcuffs from your facility is one that is best avoided. We will continue to monitor and provide updates on the enforcement actions being taken by the Houston police and other law enforcement units across the country.

As a final word of caution, the Texas Botox arrests made headlines because of the criminal allegations. Each of these providers and medical spas likely will have to continue to defend their licenses and ability to practice before the medical board. Although they may not face jail time, their livelihoods may hang in the balance.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

Robert J. Fisher’s passion for health care traces back to his high school days of shadowing doctors. His passion evolved in college to study as a pre-med major. The last major evolution of Robert’s interest in health care was the transition to an interest in health care law. With this education, a business attorney for a father, and a renowned orthopedic surgeon for a father-in-law, Robert has the pedigree for success as a business and health care attorney at ByrdAdatto.

Tags:  ByrdAdatto  Med Spa Law 

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How Your Employment Policies Shape Your Practice

Posted By Administration, Wednesday, February 12, 2020

employee handbook

By Renee E. Coover, JD, ByrdAdatto

Policies are to employees of a business what rules are to the players of a game. Employment policies act as a framework for how a business is managed and employees are expected to conduct themselves at work; at the same time, these policies protect the business and reduce the risk of liability. For anyone who has watched a few kids playing a game together, it is pretty obvious why rules are important, and why it’s a good idea to write them down.

Many employers, especially small businesses, neglect to put basic employment policies in writing. When the business starts growing, the limits of this approach become obvious. No one wants to focus on the negative, but employment disputes can and will arise in many businesses. Having policies established in clear and simple terms helps to reduce employer liability and limit the damage when disputes arise. In the event that an employment dispute leads to litigation, written policies also can be essential in ensuring a swift and fair outcome for the business.

Here are three key employment policies to consider implementing in your business today.

  1. Employee handbook. An employee handbook is a key asset with which any business can communicate written policies and promote fairness and consistency in the workplace. An employee handbook also can be incredibly useful in building a positive workplace culture and employee loyalty, if written properly. Every business should take the opportunity in its employee handbook to introduce company culture, as well as the mission and values of the business; set expectations in an employee code of conduct; and ensure regulatory compliance with state and federal laws governing the business and workplace.
  2. Internal processes and procedures. While often overlooked, creating a framework for business operations through consistent internal processes is crucial for running a successful business. In the health care field, this could mean outlining safety policies, developing a HIPAA compliance policy or creating standard operating procedures for every medical procedure performed by providers of the business. In the retail sector, this could mean developing customer service policies, credit and payment policies, and even safety and security policies. In every business, developing written policies to guide management through day-to-day operations is a key driver of success.
  3. Anti-harassment policies and training. Since harassment cuts across all professional industries, employers, both big and small, should develop and implement updated anti-harassment policies. If a business currently does not have a written policy against workplace harassment, it is absolutely time to get one. It is helpful to add specific examples of unacceptable conduct and consequences for violating the policy. Most importantly, employers should be sure that every employee has received the anti-harassment policy and acknowledged its receipt in writing. The policy is only as good as its implementers, so training all levels of management and each employee on harassment policies is crucial to follow-through. Conducting yearly anti-harassment training for all levels of employment is both preventative and proactive.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

Renee E. Coover, JD, is an associate with ByrdAdatto, a law firm focusing on business, healthcare, and aesthetics. She has a unique background, blending litigation with healthcare law. A former litigator in high-stakes employment cases, Renee has extensive experience with counseling and representing businesses in employment matters, policies, and contract disputes, and defending business owners in state and federal trials. She has also served as General Counsel for the American Med Spa Association, advising health care professionals on regulatory and legal issues governing the medical spa industry.

Tags:  Business and Financials  ByrdAdatto 

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What Does Your Practice Need to Know About CBD?

Posted By Administration, Monday, February 10, 2020

cbd vial

By Jeff Segal, MD, JD, ByrdAdatto and Medical Justice

The regulatory status of CBD seems to change yearly, if not monthly. It’s enough to give the public whiplash. CBD, the non-psychoactive ingredient of marijuana or industrial hemp, supposedly treats everything under the sun now. Putting aside any claims of efficacy, what is its regulatory status?

The 2018 Farm Bill removed cannabis with extremely low concentrations of THC from the definition of “marijuana” in the Controlled Substances Act. Marijuana and industrial hemp are cultivated from the same species. Hemp and recreational cannabis are essentially the same plant. Industrial hemp has low concentrations (less than 0.3%) of the psychoactive component THC. The Farm Bill expanded the definition of hemp from stalky cannabis plants with small leaves to any cannabis plant with less than 0.3% THC. Sale of CBD from cannabis that has less than 0.3% THC no longer violates the Controlled Substances Act.

So far, so good. Removing CBD from the Controlled Substances Act explains why we see countless shops selling CBD in every state. But while the Department of Justice and the Drug Enforcement Administration now take the position that CBD is a non-issue, not every government agency agrees.

Amy Abernethy, MD, PhD, principal deputy commissioner of the U.S. Food and Drug Administration (FDA), said, “At present, any CBD food or purported dietary supplement products in interstate commerce is in violation of the FD&C [Food, Drug & Cosmetic] Act.”

The reason: Epidiolex.

You would correct in retorting, “Huh?”

Epidiolex is a CBD product manufactured by GW Pharmaceuticals. It is FDA approved to treat specific types of medication-resistant seizures. Under the FD&C Act, it is illegal to sell a product that contains an active ingredient in an approved drug across state lines. The FDA considers products that contain CBD to be unapproved new drugs that violate the FD&C Act, even if such products claim to be dietary supplements. To the FDA, the same compound cannot be both a drug and a dietary supplement.

In other words, once CBD was approved by the FDA to treat seizures, entities other than GW Pharmaceuticals had no permission to sell it. The FDA treats it as a “counterfeit product,” even if street CBD is indistinguishable chemically from the product distributed by GW Pharmaceuticals.

On one level, it makes sense. If Pfizer spent a decade and $1 billion doing clinical trials on a compound prior to approval, and a mom-and-pop store decided to sell knockoffs that were indistinguishable chemically, the FDA would take action.

So, once Epidiolex was approved by the FDA as a CBD compound to treat seizures, over-the-counter CBD became illegal as a supplement.

This seems confusing. In other words, the compound went from okay to illegal.

There is an FDA-approved fish oil, Vascepa. However, I can still walk down the aisle at Costco and see plenty of over-the-counter fish oil. Plus, there are pharmaceutical-grade vitamins and dietary supplements, such as Carnitine and Niacin. Likewise, if you walk into GNC, you’ll see scores of such supplements.

Trying to think this through from a regulatory standpoint is enough to make your head explode.

Will the FDA take action against stores selling CBD? It’s doubtful, unless individuals are harmed by the product or wild and outrageous claims are made by the seller. On the radio and in magazine ads, the fine print for supplements generally states that such compounds are not intended to diagnose or treat any condition. That would seem to be the bare minimum needed to sell CBD without triggering the FDA’s wrath.

The FDA does not have unlimited resources to make good on its assertion that distributing CBD across state lines as anything other than Epidiolex is illegal. Time will tell.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

Jeffrey J. Segal, MD, JD, is a neurosurgeon turned serial entrepreneur turned attorney at ByrdAdatto who has literally been in both business and medicine. Segal was a neurosurgeon in private practice before beginning the second phase of his career as a serial entrepreneur in the health care field. He then founded or co-founded four separate health care startups. Segal lives and breathes health care and understands it viscerally.

Tags:  ByrdAdatto  Med Spa Law 

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How to Hire and Recruit the Best Team for Your Aesthetic Practice

Posted By Administration, Wednesday, February 5, 2020

new hire

By Terri Ross, Terri Ross Consulting

I see many aesthetic practices make the mistake of jumping too quickly into the hiring process without considering a few key pieces of information.

What You Should Know Before You Begin

Before you rush to advertise a job opening or hire additional staff, it is important to consider your long-term plan. Taking a bit of time up front to reflect on the following questions will be time well spent; this time just might end up saving you money, time on training and headache later on:

  • What is your mission and vision for the business, and what type of personality traits and skill set do you expect them to have to fit into your culture?
  • What is your vision for growing your practice in the next year?
  • How will this person contribute to the growth?
  • What level of training will you provide this new hire to ensure they meet the demands of the position and are an asset rather than an expense?
  • What specific qualities or qualifications and personality traits are needed for the role you are filling?

If you are replacing an existing staff member who only gives short notice prior to their departure, you might feel pressured and tempted to simply post an ad online and find a warm body to fill the position. However, finding quality people often takes time. I encourage you to take some time to think about and/or to speak with the rest of your team to determine some of the strengths and weaknesses of the previous employee and what skill set that position actually needs. Then, discuss what you are looking for in a replacement. Oftentimes, it is better to hold out than rush into hiring someone who is not a good long-term fit.

Some factors to consider include:

  • What responsibilities would you like the person in this role to take on?
  • Are clear expectations set forth and defined?
  • What personality traits match the position?
  • Was there too much responsibility or too large a workload placed on the previous employee, or were they simply not a good fit?
  • Is there someone internally who might be a better fit for this position or would like to move into this role?

After you are clear on exactly what you are looking for, the next step is making sure that you have a clear, concise, accurate job description. Now more than ever, it is imperative that you have thorough job descriptions to make sure you are compliant with your state labor and employment laws. Job descriptions should:

  • Outline specific salary and bonuses;
  • Detail the exact skills and experience necessary to perform the position’s duties;
  • Serve as a basis for recruiting and interviewing;
  • Give a clear scope of responsibilities and expectations;
  • Provide a baseline for employee reviews, salary increases and meeting expectations; and
  • Serve as legal documentation in the event an employee files a termination or discrimination suit against the company.

If you don’t have a job description created for each position in your office, I’ve got you covered. There’s no need to reinvent the wheel. I offer a full bundle or individual job description downloadable templates for purchase on my website.

Streamlining the Process

There are several recruiting sites where you can post job ads, including AmSpa’s job board, Indeed, ZipRecruiter, LinkedIn, Glassdoor, Simply Hired and Monster. Some sites have free listings and others have fees for posting, so the ones you use might depend on your budget.

Terri’s tactics for streamlining the hiring process:

  • Be proactive. Always be searching for qualified candidates, even if it means hiring before a start date you had in mind.
  • Act quickly but carefully. If you find a qualified candidate you are excited about, don’t wait to extend the offer, but make sure you are not rushing.
  • Involve your team in the process and solicit feedback from them, as mentioned earlier. Buy-in and teamwork is essential.
  • Interview based on quality, not quantity. Pick out the top 10 resumes and conduct prescreening calls. Then, choose the top five to schedule in-person interviews. Narrow down your choices and schedule a second interview, and invite several members of your team to be involved. Including other team members can help to ensure the candidate fits your practice culture.
  • Consider administering a skills assessment test. Just because someone says they have skills doesn’t always mean they do. If it is a front desk position, run them through role-play caller scenarios to see how their customer service skills measure up. Some personality tests I recommend are Myers-Briggs, DISC and The Predictive Index.
  • Make sure to conduct a background check and employment verification check. According to CareerBuilder, up to 56% of candidates have false information on their resumes.

Terri’s top six interviewing tips:

  1. Always ask open-ended questions. Let the candidate tell you about their background so that you can hear how they communicate. (Example: “Tell me a bit about your background.”)
  2. Clarify information that you find interesting by asking them to elaborate. (Examples: “That’s really interesting, tell me more.” “How so? What made you come to that decision?”)
  3. Be curious. Try to learn more about what makes them tick and the “why” behind their interest in the position. (Examples: “What made you decide to apply for this position?” “What about the aesthetic industry excites you?”)
  4. Determine their research or motivation level. Ask questions to gauge whether or not they did their homework about your practice. Remember, you are looking for long-term candidates, not just anyone needing a job. (Examples: “What interests you about our practice?” “How much do you know about the services we offer or the clientele we serve?”)
  5. Ask them about their past experiences and how they were able to overcome challenges. This technique can give you a lot of information about the candidate and assess their problem-solving skills. (Example: “Tell me about a time you had a challenge at work or with a customer or client and how you handled the situation.”)
  6. Always end by asking the candidate if they have any questions for you. Putting the ball in the candidate’s court can often give you good information about their true motivations and level of interest.

The Next Step After Hiring Staff

Most practices do not have formal training in place, so even if you hire and find the best possible candidates, they may not be able to help move you towards your goals of expansion or generating more revenue.

Establishing a formal sales training program is a key, critical component to growing your aesthetic practice. 

While there is no substitute for comprehensive sales training, there are a few key components to provide every new employee:

  • An employee checklist with necessary paperwork and forms;
  • A job description; 
  • A comprehensive employee manual with policies and procedures;
  • Work hours and a holiday schedule, plus details on paid time off, personal time, etc.;
  • A workstation and the necessary equipment to perform their job functions; and
  • Training in whatever areas that are necessary.

Remember, I’m here to help. Please feel free to contact me with any questions at terri@terriross.com. You can purchase your full set of job descriptions here.

Terri Ross brings more than 20 years of sales and management experience to the field, having worked with leading-edge medical device companies such as Zeltiq, Medicis, EMD Serono, Merck Schering Plough and Indigo Medical, a surgical division of Johnson.

Ross’ vast knowledge and experience as a sales director managing upwards of $20M in revenue and successful teams has allowed her to become a renowned plastic surgery management consultant helping aesthetic practices thrive.

To optimize revenues and business performance, Ross’ practice management consulting services help physicians evaluate practice processes including, but not limited to, overall-operating efficiencies, staff skill assessment, customer service and operating efficiency strategies. The goal is to develop a comprehensive plan of action to improve productivity, quality, efficiency and return on investment.

Tags:  Business and Financials  Terri Ross Consulting 

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What California Medical Spas Need to Know About AB 5

Posted By Administration, Monday, January 27, 2020

practitioner

By Bala Mohan, JD, ByrdAdatto

California Governor Gavin Newsom’s recent signing of Assembly Bill No. 5 (AB 5) could potentially reclassify millions of independent contractors as employees and dramatically reshape the future of workforces in California. This legislation could have far-reaching effects on the medical practice industry.

What is AB 5?

AB 5 codifies, clarifies and grants exemptions to a 2018 California Supreme Court decision referred to as “Dynamex.” Basically, AB 5 and Dynamex make it more difficult for companies to label workers as independent contractors. AB 5 offers the “ABC” test to determine independent contractor status. Under this test, a worker is presumed to be an employee unless all three of the following criteria are met:

  • The worker is free from control and direction in the performance of services;
  • The worker is performing work outside the usual course of the business of the hiring company; and
  • The worker is customarily engaged in an independently established trade, occupation or business.

The AB 5 definition of an independent contractor is much narrower than the previously used standard, called the Borello test, and the ABC test puts the burden on the hiring entity to prove independent contractor status. More information on the AB 5 law and how it may apply to you can be found on the California Labor and Workforce Development Agency website.

Who is Exempt from AB 5?

Dozens of professions won exemptions under this new law, and those that are exempt will use the more lenient Borello test for employee classification questions. Exemptions affecting the medical industry include physicians, dentists, podiatrists and psychologists; other exempt licensed professionals include veterinarians, aestheticians, electrologists, manicurists, barbers and cosmetologists. In addition, in order for the above-mentioned licensees to be subject to the Borello test, the company also must show that the worker:

  • Sets their own rates and hours and processes their own payments;
  • Receives payment directly from the client; and
  • Maintains their own license and book of business.

What Does This Mean for Medical Practices in California?

Medical practices—including surgical practices, medical spas, weight loss centers, IV hydration bars, functional medicine practices, and practices offering other anti-aging or wellness medical services—must look at their staffing model to prevent this misclassification on both a state and federal level. Potential liabilities and fines for misclassification can be costly. Companies employing or contracting with personnel should make sure they understand who will qualify as an independent contractor under AB 5.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

Bala Mohan, JD, knew from a very young age that her choice of career would be related to science because she excelled in her biology and chemistry coursework. With a strong passion for genetics and the desire to find a cure for her mother—who was diagnosed with diabetes at an early age—Mohan obtained a Bachelor of Technology in Pharmaceutical Biotechnology. Having worked as a scientific researcher during her undergraduate studies, Mohan greatly values attention to detail and is a meticulous person. She then pursued a master’s in Entrepreneurial Biotechnology to gain knowledge about business and startups. This landed her a position with Cleveland Clinic Innovations, where she evaluated over 100 innovations and negotiated deals with potential investors. In this role, Mohan had the opportunity to interact with business and health care lawyers from multiple health care organizations, and she quickly realized that her real calling in life was to be a health care attorney. Subsequently Mohan obtained her JD and was able to pursue a career that combined all her interests—science, business and law.

Tags:  Business and Financials  ByrdAdatto  Med Spa Law 

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One Week Until The Medical Spa Show in Las Vegas

Posted By Administration, Friday, January 24, 2020

medical spa show

The Medical Spa Show is only a week away, and there’s still time to make your plans to join the more than 1,000 people who have already registered. It takes place from January 31 – February 2, 2020—with Thursday Pre-show Education on January 30—at the Aria Hotel & Casino in Las Vegas. Regular registration ends on Tuesday, January 28, so if you’re considering attending, make sure to complete your registration by then—the cost for onsite registration is higher than if you register in advance.

The Medical Spa Show features six concurrent tracks of education—including two tracks of sponsored education—and an Expo Hall featuring more than 120 exhibitors demonstrating the medical aesthetic industry’s newest and most exciting products and services. Of course, it also features the industry’s best parties, and it’s a great place to network with fellow medical aesthetic professionals and industry leaders. There's something at the show that will help each member of your team, so bring them all to maximize the show's benefits!

What’s more, AmSpa Members can attend Thursday night’s Members Meeting, sponsored by Allergan—featuring influential, inspirational podcast superstar Cathy Heller—and everyone can come to the Opening Night Party on Friday night. Finally, after the regular show program ends on Sunday, AmSpa will present Live Cadaver Training: Facial Anatomy Course, taught by Jonathan M. Sykes, MD, for an additional fee for Medical Spa Show attendees who wish to learn more about what their injectables are actually doing. (Click here to learn more.)

Be sure to register today to reserve your space in the sessions you want to attend—several sessions are already at capacity, and others are nearing it, so don’t wait! Click here to begin the registration process right now!

We at AmSpa hope to see you in Las Vegas next weekend! It promises to be the biggest, best Medical Spa Show yet!

Tags:  Business and Financials  Med Spa Law  Med Spa Trends  The Medical Spa Show 2020 

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Credentialing and Creating Your Unique Value Proposition

Posted By Administration, Wednesday, January 22, 2020

medical spa team

By Terri Ross, Terri Ross Consulting

Prospective patients are buyers who want to know the answer to several questions. What’s in it for me? How do your products or services solve or improve my situation? What specific benefits do you deliver or offer? Why should I choose your practice or provider over another? What differentiates you from the competition?

They want emotional reassurance that they are making the right decision to choose you. They typically have some apprehension that something could go wrong, or questions about how good you are or how much experience you have performing the procedure they want.

Creating a clear, consistent message around your unique value proposition and explaining your credentials can take the guesswork out of promoting your practice and get your entire team on the same page and delivering the same message, further enhancing your brand.

The Importance of Credentialing

In a competitive and commoditized marketplace, credentialing is your time to shine. It is your opportunity to display your knowledge, education and expertise, and why patients should trust you and choose you.

Ideally, this should be apparent on your website. The message should be consistent for your staff answering the phones. They should be able to:

  • Explain the various services and products you offer;
  • Communicate how many years you have been in business, introduce the various providers on your team and describe their level of experience in aesthetics;
  • Confidently explain what makes your practice stand out and unique; and
  • Tell prospective clients what they can expect when they come to your practice—patients buy experiences, not products or services.

Why Credentialing is Often Overlooked

Sometimes my clients feel awkward credentialing because, in some respects, they feel like they are bragging or they don’t want to talk about themselves. Or, they feel like they are too busy to make time for that conversation.

One of the challenges I hear the most consistently when I am conducting sales trainings is, “Terri, we want to do this, but we don’t know what to say. We need a script to follow so we can have a consistent message.”

That’s why I created a step-by-step formula for you to create your own unique value proposition and an exact credentialing script you can tailor to your practice.

Credentialing and Creating your Unique Value Proposition is a tool designed to help market your practice, and you can download it here instantly for only $47.

The Two P’s of Credentialing

There are two aspects of credentialing—credentialing your provider and your practice.

Your team should be able to answer the following questions when communicating information to prospective patients about your provider:

  • Who will be performing the consultations and treatments? Will it be an MD, NP, PA or RN?
  • How many years of experience do they have?
  • How many years in aesthetics?
  • Have they received any special training—PDO, threads, lasers, butt lift, etc.?
  • What range of procedures does the provider perform or specialize in?
  • Are they known as a trainer or educator?
  • Are they recognized by any manufacturer for their volume?
  • Have they been published, or are they a speaker on this procedure?

Your team should be able to answer the following questions when communicating information to prospective patients about your practice:

  • How many years has the practice been in business?
  • How many providers do you have?
  • What is the practice’s specialty or specialties?
  • Is there anything different or special about the practice’s location or environment?
  • Is the practice recognized by any manufacturer for its volume (Diamond, Platinum Plus, etc.)?

By knowing the credentials behind your providers and practice, you are forming the basis for your unique value proposition.

As always, I’m here to help you identify opportunities for growth and put the pieces in place that result in increased revenue, long-term patient retention and a more confident team.

Take the first step today by downloading Credentialing and Creating your Unique Value Proposition here. If you have any questions, please feel free to email me at terri@terriross.com or call me at (310) 272-5715.

Terri Ross brings more than 20 years of sales and management experience to the field, having worked with leading-edge medical device companies such as Zeltiq, Medicis, EMD Serono, Merck Schering Plough and Indigo Medical, a surgical division of Johnson.

Ross’ vast knowledge and experience as a sales director managing upwards of $20M in revenue and successful teams has allowed her to become a renowned plastic surgery management consultant helping aesthetic practices thrive.

To optimize revenues and business performance, Ross’ practice management consulting services help physicians evaluate practice processes including, but not limited to, overall-operating efficiencies, staff skill assessment, customer service and operating efficiency strategies. The goal is to develop a comprehensive plan of action to improve productivity, quality, efficiency and return on investment.

Tags:  Business and Financials  Terri Ross Consulting 

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How to Choose a Business Entity for Your Medical Spa

Posted By Administration, Monday, January 20, 2020

business entities

By Michael S. Byrd, JD, Partner, ByrdAdatto

Choosing an entity for your business can be overwhelming. Clients often seek ByrdAdatto’s advice, confused by the choices and the process. From partnerships, sole proprietorships and corporations to limited liability companies (LLCs), each entity offers advantages and disadvantages, depending on your unique business model.

Choosing an entity should be informed by your current business strategy, in conjunction with your vision for the company for the future. Among other things, the choice of entity can affect tax structure, capital raising, initial public offerings, mergers and acquisitions, and distribution structure.

While forming an entity without strategic thought and input stems could potentially cause you to choose the wrong structure, tactical mistakes often are made in the formation process. Many clients don’t realize that there actually are two separate filings to consider: first with the state, and second with the U.S. Internal Revenue Service (IRS).

Filing With the State

State filings are nuanced and often dependent on options available in a specific state. Entities owned by a professional requiring licensing—by the state or other jurisdiction—may have more limited options. For example, in California, a medical practice must file as a corporation, and may be required to file additional documents with the state’s medical board. Otherwise, professional entity choices can include:

  • Professional corporation (PC);
  • Professional medical corporation (PMC);
  • Service corporation (SC);
  • Professional association (PA);
  • Professional limited liability company (PLLC);
  • Limited liability partnership (LLP); and
  • Unincorporated sole proprietorship.

Overall, LLCs—and their professional counterparts, PLLCs—are the most commonly formed entities. An LLC is flexible and can be customized to different business models, while also leaving open a menu of tax options. In circling back to the strategy and vision considerations, the LLC’s flexibility tends to be a great starting point when the vision for the business is uncertain.

The corporation as an entity choice has its place in more complicated businesses that raise outside funding from private equity or have a plan to become a publicly traded company.

Filing With the IRS

We stress to clients that an entity choice at the state level dictates your choices with the IRS, and thus how you will be taxed. For example, filing as a corporation limits your choices with the IRS to either a C-corp or an S-corp. If you form a partnership (limited, general or limited liability), your choices with the IRS will be limited to a partnership. The popularity of the LLC for tax election with the IRS again rests with its flexibility. An LLC can choose to be taxed as a corporation (C-corp or S-corp), a partnership (as long as there is more than one owner) or a disregarded entity (if there is one owner).

There are many pitfalls to avoid and variables to consider in choosing the right corporate entity for your business. At ByrdAdatto, we advocate simplification. Much like reducing a fraction to its lowest common denominator, we aim to provide simple solutions on complicated topics.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

With his background as both a litigator and transactional attorney, Michael Byrd brings a comprehensive perspective to business and health care issues. He has been named to Texas Rising Stars and Texas Super Lawyers, published by Thompson Reuters, for multiple years (2009-2018) and recognized as a Best Lawyer in Dallas by D Magazine (2013, 2016, 2017, 2018). He routinely lectures at continuing medical education seminars on the various business and legal issues that medical professionals face.

Tags:  Business and Financials  ByrdAdatto  Med Spa Law 

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How the Liability Insurance Market Can Affect Your Medical Spa in 2020

Posted By Administration, Friday, January 17, 2020

insurance

By Edward Kuhn, Liability Specialist, Wellness Medical Protection Group

Insurance buying for the medical spa professional requires a certain level of technical sophistication and understanding of the marketplace and product. The coverage and rated-up annual premium are always tied to the procedures and the size and scope of the practice. Insurance is driven by the market, and the current state of the market is changing for a number of reasons.

We all know the medical spa market is expanding at a rapid pace, and insurance underwriters are challenged to maintain coverage relative to the growth in new treatments and procedures. The expansion and maturing of the marketplace is causing claims development from quality control issues; patient expectations; suppliers having FDA problems; and cutting-edge procedures such as stem cell therapy, platelet-rich plasma (PRP), and skin procedures involving heat and pain. The personal injury attorneys are following the money, specifically with regards to medical weight loss, stem cells, laser hair removal and skin rejuvenation, and hormone replacement.

Patients expectations are different for elective, cosmetic and anti-aging procedures than they are for disease-focused medicine where there is third-party reimbursement. As a result, underwriters are scrutinizing the applications and operations of medical spas more closely—asking more questions, mandating the use of signed patient informed consent forms and requiring evidence of certified training. Your claim will be denied if you don’t produce a signed patient informed consent form for the procedure in question, as well as evidence that the provider in question has certified training in the procedure that is the subject of the alleged medical negligence.

Insurance is a function of the money coming in as fast as it goes out, or the result is an underwriting loss, after which rates increase and applications come under more underwriting scrutiny. Your premium is determined more by what you do (class), not so much by how you perform. Medical spa liability insurance policies predominantly are claims-made, surplus lines specialty underwritten policies from “A” rated and financially strong insurance companies. The rates and forms can change from year to year to adjust to the market changes. Rates usually are tied to some quantifiable measure, such as the size of revenues, number of procedures and patient visits. You could see your rates increase 30% for class alone, which means the companies are collectively losing money this year in that class and need to raise rates to compensate.

insurance information

What is Happening in the Medical Spa Liability Insurance Market?

Annual premium rates are on the rise, as is the scrutiny of medical spa practices. Be prepared to address this effectively with your insurance agent or broker. If you have a long period of clear operation—perhaps you have been covered for more than 10 years—you have the benefit being a known quantity. However, this can’t be used as leverage to get a lower premium from another company, like before—shopping your coverage is not that effective anymore.

Here are a few other trends you should know about in the industry:

  • An increase in overall claims for medical malpractice class in general;
  • An increase in minimum premiums and base rates as companies make adjustments, especially for certain procedures;
  • Claims development in certain procedures, including stem cell therapy, lasers, PRP, hormone replacement therapy and more;
  • A 20 – 50% increase in renewal pricing;
  • More rigid underwriting and a decrease in the limits of liability for procedures such as stem cell therapy and PRP; and
  • Claims exclusions for lack of evidence of certified procedure training or signed patient consent forms.

How Can You Manage Your Liability?

Repeating the need for some technical sophistication, it’s important to concentrate on the quality and the utilization of acceptable standards and best practices to minimize your liability as a med spa business owner. Here is a brief list of some of the main elements you can address:

  • Certified training in procedures and qualified personnel;
  • Understanding insurance is market driven and rates can change—work closely with your agent to navigate through the ups and downs;
  • Effective informed patient consent, documentation and quality control;
  • Seeking help from industry partners and associations, such as AmSpa;
  • Have a policy for properly handling disgruntled patients or bad outcomes;
  • Ensure the reputation and credibility of compound pharmacy, vendors and suppliers;
  • Manage expectations and presentation on results; if you don’t, you may receive board complaints; and
  • Refrain from making outrageous claims of results or guarantees.

These should already be integrated into your medical spa practice, with special emphasis on certified training for all procedures and effective patient informed consent. Remember, you buy insurance for protection, because even with all these measures in place, risk is inherent in what you do in any business.

Edward Kuhn began his insurance career in 1991 with the Evanston Insurance Company; he was involved in insurance accounting, broking and underwriting. In 2001, he started Liability Insurance Solutions as a specialty niche insurance broker. In 2014, he merged with the RXNB Companies to start Wellness Medical Protection Group.

Tags:  Business and Financials  Guest Post  Insurance 

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