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How the New California Privacy Act Affects Med Spa Practices

Posted By Administration, Wednesday, August 1, 2018
Updated: Wednesday, August 1, 2018

By Brad Adatto, JD, Partner, ByrdAdatto

Med spas and other aesthetic practices should be aware of the new California Consumer Privacy Act of 2018 recently passed and signed into law. With seemingly daily reports of data breaches or improper sharing of user data, consumer privacy is a growing concern. California is the latest State to take action to protect consumers’ personal information and has passed a law that provides strong and broad protections to do so. Signed into law on June the 28, 2018, the California Consumer Privacy Act of 2018 (“Privacy Act”) creates some of the strongest consumer privacy protections in the nation.

New Privacy Act Details

The Privacy Act creates a right for consumers to

  1. Request that businesses disclose what information they have collected, sold, or shared on them,
  2. If they so choose, to have that collected information deleted, and
  3. To proactively opt-out of future data collection, selling, and sharing.

These protections in turn create numerous compliance, notice, and penalty issues for businesses who collect information from California residents.

Businesses subject to the Privacy Act will need to provide proper notice of the types of information collected and the rights of the consumer under the act before any information is collected. Businesses also will need to ensure that their data collection and use practices involve only the types of information and uses that have been properly disclosed to the affected consumer.

Additionally, businesses will need to have trained personal to accept, verify, and respond to consumer requests within the statutory deadlines. And finally, businesses subject to the Privacy Act will need to have data systems capable of securely storing the information while providing for rapid and accurate access for requests, and to delete the information if requested.

Additional Details Regarding Patient Privacy

Medical businesses who are covered under the Health Insurance Portability and Accountability Act (“HIPAA”) or California’s Confidentiality of Medical Information Act (“CMIA”) have additional hurdles to overcome. The Privacy Act exempts “protected” or “health information” that is already covered under the prior laws. However, medical businesses will need to determine what information they have and comply with the Privacy Act for other types of information not covered by HIPAA or CMIA.

The safe and accurate handling of information and consumer requests will be critical to medical practices in particular as the Privacy Act creates substantial penalties for failure to maintain compliance, mishandling of information, and failure to respond appropriately to consumer requests. Luckily medical practices in California have some time to learn more about what is covered before being subjected to penalties, as the Privacy Act is slated to take effect on January 1, 2020.

Read the full text of the law here. If you have concerns on how the California Consumer Privacy Act of 2018 may impact your business consult a healthcare attorney familiar with California law.

AmSpa members may take advantage of their annual compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto. Become a member today to gain access to business and legal compliance tools to keep your practice profitable and on the right side of regulations.

Brad Adatto, JD, is a partner at ByrdAdatto, a business, healthcare, and aesthetic law firm that practices across the country. He has worked with physicians, physician groups, and other medical service providers in developing ambulatory surgical centers, in-office and freestanding ancillary service facilities, and other medical joint ventures. He regularly counsels clients with respect to federal and state health care regulations that impact investments, transactions, and contract terms, including Medicare fraud and abuse, anti-trust, anti-kickback, anti-referral, and private securities laws.

Tags:  Med Spa Law 

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The Dangers of Med Spas Purchasing Overseas Botox

Posted By Administration, Tuesday, July 31, 2018

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

Med spas purchasing Botox or other drugs from legitimate overseas sources in order to save money open themselves to significant legal risks. For instance, in June 2018, Oregon-based physician Brenda Roberts had her medical license revoked for obtaining and using prescription medication from foreign countries. Roberts was a family practice doctor who began administering Botox treatments at her home on the side. She wasn’t necessarily doing anything improper in terms of patient care, and she was keeping appropriately detailed records on her patients, but after Allergan noticed that she was having Botox sent to her home and cut off her account, she began buying Botox from United Pharmacies, a “rogue pharmacy” that operates outside of U.S. Food and Drug Administration (FDA) governance. FDA agents went through her trash and found that she had used Botox that was intended for sale in Europe.

Parallel Importation

Roberts was participating in a practice called parallel importation. In countries such as the United Kingdom, Germany, France, Sweden, and Canada, government regulates the cost of pharmaceuticals. Broadly, these measures are designed to prevent drug manufacturers from charging too much for what those governments consider essential medicine, but they also apply to pharmaceuticals used for elective procedures such as those offered by medical spas, including Botox.

In the U.S., however, drug manufacturers essentially can charge whatever they feel the market will bear for their products, and that price is invariably much higher than what is charged in other countries. In response, licensed dealers in countries where cost controls are enforced sell their products to customers in the U.S. at prices that are up to 50% less than what the buyers would have to pay if they were purchasing the drugs directly from the manufacturer.

This transaction benefits both parties. The buyers get legitimate pharmaceuticals for much less than they would have to pay if they were buying directly from the manufacturers, and the dealers can make a decent profit simply by marking the product up slightly. These are not cheap, counterfeit pharmaceuticals like the ones that are typically manufactured in China that have flooded the medical aesthetics market in recent years; these are the same drugs that are approved by the FDA and sold in the U.S.

Legal Concerns

However, while parallel importation is broadly legal in the U.S.—the Supreme Court ruled that to be the case in a 2013 case involving textbooks—this case demonstrates that the distribution of drugs that are not explicitly intended for use in the U.S. is still absolutely illegal, and that the FDA and the U.S. Drug Enforcement Agency (which also participated in the investigation) are taking cases such as this one extremely seriously. There hasn’t been a great deal of enforcement yet, but this case demonstrates that the issue is absolutely on the agencies’ radars.

Despite the relatively minor risk of being caught, ByrdAdatto and AmSpa steadfastly believe that medical aesthetics practices should not participate in parallel importation. The potential consequences clearly outweigh the cost savings. If a practice’s profitability depends on getting 30% off Botox, it needs to re-evaluate the way it does business. Practices should remain compliant with the FDA and other regulatory agencies, regardless of whether a drug is overpriced. It is absolutely possible to run a medical spa practice that is both financially sound and compliant with all laws and regulations. Learn the keys to running a medical spa practice profitably and legally at an AmSpa Medical Spa & Aesthetic Boot Camp. Consult with your healthcare attorney if you need more information. AmSpa members can take advantage of their annual compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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Med Spa Law Update: Illinois Nurse Practitioners and Full Practice Authority

Posted By Kate Harper, Monday, July 30, 2018
Updated: Thursday, August 9, 2018

By: Renee E. Coover, JD, Associate, ByrdAdatto

Last year Illinois passed a bill granting full practice authority to nurse practitioners, joining 23 other states and the District of Columbia. We’ve been getting a lot of questions regarding the status of this law and when people will be able to apply. Unfortunately, although the bill has been passed by the legislature and signed by the governor, Illinois NPs must still wait for the final rules to be established.

Renee Coover, JD, associate with the law firm of ByrdAdatto spoke with the executive director of the Illinois Society for Advanced Practice Nursing (ISAPN) to try and gain some insight into how the process is moving along. She learned that, at this time, the Illinois Department of Financial and Professional Regulation (IDFPR) is still developing these rules, and is getting close to a first comment period.

This means that, as of this writing, no NPs in Illinois can apply for full practice authority so until the rules process is complete all APRNs in the state are still required to have a written collaborative agreement with a physician. According to ISAPN the goal is to have rules available for release on or before January 1, 2019.

Click here to see the ISAPN update from January outlining the rule-making process and noting some of the pertinent information that is available, including:

  • The attestation form necessary for attesting to the 4000 hrs of practice and the 250 hrs of CE and training will be developed and distributed by IDFPR.
  • An APRN who applies for Full Practice Authority will have a license # that begins with 309.
  • An APRN with FPA who prescribes controlled substances will need to apply for a controlled substance license, not a mid-level CLS (that license number will begin with 310.

See AmSpa Founder/Director Alex Thiersch’s thoughts on the bill shortly after it was signed by the governor.

 

For more information on what full practice authority might mean for Illinois APRNs ones the rules are finalized watch AmSpa’s webinar on what full practice authority means for Illinois nurse practitioners.

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:  Med Spa Law 

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Nurse Practitioners and Physician Assistants in Medical Spas: An Overview

Posted By Administration, Friday, July 27, 2018
Updated: Thursday, July 26, 2018

By: Sam Pondrom, Attorney at ByrdAdatto

Medical spas utilizing mid-level practitioners like nurse practitioners (“NPs”) and physician assistants (“PAs”) is on the rise in the U.S. Merritt Hawkins, a national healthcare search and consulting firm specializing in recruitment, recently released the results of their annual review of physician and advanced practitioner recruiting.  In it, Merritt Hawkins found that NPs were the third most requested recruitment search, trailing only family physicians (#1) and psychiatrists (#2).  PAs also cracked the top 20 for requested recruitment searches, coming in at #20.

This recent expansion largely can be traced back to two key reasons.  First, NPs and PAs have broad scopes of practice and cost less to employ than physicians.  Second, NPs and PAs have less onerous education requirements, so a person can become a mid-level practitioner faster than they could a licensed doctor.  Accordingly, mid-level practitioners can perform many of the functions of unlimited licensees while reducing the cost of providing a healthcare service.  Moreover, because experts anticipate shortages in the supply of physicians, the use of mid-level practitioners likely will continue to expand because they can bring their services to market faster than physicians.

NPs specifically have been granted full practice authority in several states, and the Medical Group Management Association recently reported that practices employing APRNs/NPs were more efficient and profitable.

One important downside to the increased demand for NPs and PAs is the patchwork of statutes and regulations governing their practice.  NP and PA scopes of practice are set by state law, as are the requirements for supervising and delegating to mid-levels.  This means it is crucially important to understand the type of relationship (e.g., collaborative, supervisory, or independent) that a state requires an unlimited licensee to have with a NP or PA.  It is likewise important to know the limitations a state places on the medical tasks that mid-levels can perform and what tasks, if any, an unlimited licensee must perform to ensure the mid-level is maintaining the community’s standard of care (i.e. countersignature, chart review, meetings with the mid-level, etc.).

AmSpa members can check their state legal summary, or utilize their annual compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto for more information on the legal requirements for mid-level practitioners in medical spas.

If you have any questions about the use of NPs or PAs in your medical practice, please contact Jay Reyero at jreyero@byrdadatto.com or Sam Pondrom at spondrom@byrdadatto.com.

Tags:  Med Spa Employee Types  Med Spa Law 

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Wow New Patients and Have Better Patient Retention in Your Med Spa by Selling an Experience

Posted By Administration, Thursday, July 26, 2018

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

A med spa is a medical facility, but by presenting your med spa as a luxe experience, you can gain new patients and gain better retention on your existing clientele.

The non-invasive medical aesthetic procedures that make up the menu of services often require licensed medical professionals to perform them, and these facilities always require a doctor to be involved with the business. Additionally, because medical professionals are involved, and these treatments are often classified as the medical procedures, medical spas are regulated like medical practices. (AmSpa members: see the laws governing aesthetics in your state in your medical aesthetic legal summary.)

These facilities, however, are a far cry from doctor offices. They often resemble retail storefronts or day spas, and are subject to business realities like marketing, product sales, and especially customer service. Everything in a medical spa—from retail sales, to reviews, to patient retention, to the ability to bring in new business—improves if the spa goes out of its way to create a stellar patient experience. This doesn’t just mean performing excellent treatments, although that is part of it. It means creating a singular, spectacular client experience from website, to phone call, to every interaction after they step through your doors.

“Our entire purpose working in this industry is to ‘wow’ our clients,” says Dori Soukup, founder of InSPAration Management. She continues, “We’re not just a medical spa—we deliver experiences.”

Once a patient steps into your facility, your aesthetician can be one of the most solid touch points in creating that consistent experience, along with your front desk staff. Terri Wojak of True U Education outlines ways that aestheticians can offer complete “concierge services” to customers in a medical spa. These services include:

  • Prepping the skin prior to treatments;
  • Assisting medical professionals during procedures;
  • Review post-treatment care with patients; and
  • Performing follow-up calls.

Your patients’ experience isn’t just about the treatment they’re coming in for, or the products that they buy. As Bryan Durocher of Durocher Enterprises says, “People buy solutions to problems, and they buy feelings.”

Matt Taranto, owner of AesthetiCare and Mint Aesthetics in Leawood, KS, says that he doesn’t just want to be the person his clients come to for Botox or fillers. “I want to be your lifetime anti-aging consultant.”

Investing in providing your patients with a world-class experience can be transformative for your business. Not only can it increase your current patients’ average spend per visit, and increase your retention rates, but it can build your reputation as the go-to medical spa in your area, which will increase your ability to attract new clients.

For more information on medical spa legal best-practices attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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Med Spa Business Planning: A Step-by-Step Guide

Posted By Administration, Wednesday, July 25, 2018
Updated: Wednesday, July 25, 2018

By: Bryan Durocher, Founder and President of Durocher Enterprises 

A detailed business plan is a must-have for a successful, profitable, and sustainable medical spa practice. “Business is a numbers game”. We have all heard that saying before and it is very true. Having a positive bottom line in this industry means really keeping an eye on operating expenses and understanding what the numbers mean and what to do to keep them in proper alignment.

Having a handle on your numbers means understanding what the overall financial picture needs to look like and breaking it down into manageable bite size action steps that need to happen every day. It starts with you and your vision and then educating your team members as to their role in the financial process.

Many med spas or cosmetic practices are not profitable. This is mainly due to the lack of understanding and education on the part of the ownership. With most payroll expenses take a significant amount of the gross service sales revenues. Our profit margins in this industry are very tight and there is little room for error. Keeping an eye on your numbers allows you control over knowing where you are, and planning for where you want to go. An owner who knows their numbers is not waiting for the financial advisor to tell them if they are successful or not. Keeping your finger on your business’ financial pulse allows you to dance, shift and change with your business’ needs quickly and intelligently.

For additional help building your medical spa business plan, see the Business Plan Template in the AmSpa store.

Financial Projections

Every business plan must include pro forma financial statements. These are financial statements that are used for you to predict the future profitability of your business. Your projections will be based on realistic research and reasonable assumptions, trying not to overstate your revenues or understate your expenses. If you are going to seek a lender or investor, they will use these financial statements to highly scrutinize your med spa. The bottom line, the lender or investor wants to know when and if your spa will be profitable.

The pro forma statements that are required are listed as follows:

  • Pro Forma Income Statement
  • Pro Forma Cash Flow Statement
  • Pro Forma Balance Sheet
  • Yearly Projections (Income Statement, Cash Flow Statement, & Balance Sheet)
Income Statements

These are a tool to review your gross sales vs. the expenses you incur while operating your business. The model we will use allows for totaling gross service and retail sales, then deducting the costs of doing business and allotting them to the appropriate categories to show our net profit before taxes. These statements should be done at the end of each month to identify what is working and where our opportunities for improvement are. The most important result is the timely completion of the statement. You need to understand the process and do not physically have to do it. If you are not a “numbers” person, a bookkeeper, accountant, and tools such as med spa/spa software, Quick-books® or you may use a computer spreadsheet program such as Excel® can support you in getting the job done.

Format and Sources of Information

Information for a three-year projection can be developed from your pro forma cash flow statement and your business and marketing analysis. You can also pull together a first year forecast by combining information on sales from business owners and trade associations. The first year’s figures can be transferred from the totals of income and expense items. The second and third year figures are derived by combining these totals with projected trends in the industry.

Cash Flow Statement

Definition and Use

The cash flow statement (or budget) projects what your business needs in terms of dollars for a specific period of time. A cash flow projection tells (1) whether or not you can pay bills, and (2) when you’ll need cash infusions to keep going. This statement deals only with actual cash transactions and not with depreciation or other non-cash expense items.

For information on financing options for your medical spa practice, listen to the Medical Spa Insider Podcast Episode 10 with Wells Fargo’s healthcare specialists.

Balance Sheet

Definition and Use

A balance sheet shows what items of value are held by the company (Assets), and what its debts are (Liabilities). Professional lenders look at your balance sheet to analyze the state of your finances at a given point in time. They are looking at things like liquidity (how easily your assets can be converted into cash) and capital structure (what sources of financing have been used, how much was borrowed, and so on). Professional lenders use such factors to evaluate your ability to manage your business.

The following is explanation and instructions of how the ‘Strategic Assumptions’ data will apply to a business plan.

Revenue Assumptions

  • # of treatment rooms
  • How many hours a day and days per week the med/spa will be open
  • Estimate of the price points for services offered
  • How long each of the spa services will take

The above assumptions will then be used to answer the following questions

  • Hours open per day divided by length of treatment = # of treatments per day per room
  • # of treatments per day multiplied by price of service = Revenue per room per day
  • Revenue per room per day multiplied by # of treatment rooms = Total Service Revenue per day
  • Total Service Revenue per day multiplied by days per month = Total Service Revenue per month
  • Total Service Revenue multiplied by retail percentage% = Approximation of Retail Sales
  • Retail Sales plus Total Service Revenue = Total Spa Revenue operating at 100% capacity
  • Total Spa Revenue operating at 100% capacity multiplied by % selected by identifying which of the below works for your model = the Actual Capacity Assumption.

Actual Capacity of your spa when it first opens will depend on many factors. For example, if you are an existing practice expanding into an ancillary spa, your Actual Capacity ratio would be higher than that of a spa being built with no existing clientele.

  • If you are building a spa with no existing medical practice attached to it, begin with an Assumed Actual Capacity Rate of 10% in the first month.
  • If you are expanding your medical practice to include a spa and you have an existing clientele base that will support, begin with an Assumed Actual Capacity Rate of 20-35%.
  • An average you could calculate is 4% growth per month
  • Goal to be met by the end of year one is 45% capacity
  • Ultimate goal will be to operate at 75% capacity

Keep careful notes on your research and assumptions, so you can explain them later if necessary, and also so you can go back to your sources when it’s time to revise your plan at some later date.

Service Expense Analysis

When it comes to your expenses shopping around will do you well. Remember it is not what you “make” it is what you “keep”. I have highlighted the major expenses that are usually out of line and cause a lack of profit.

Fixed vs. Variable Expenses

Fixed expenses are those costs that remain the same month in and month out. It is easy to incorporate them into your budget as you know the number you are dealing with already. Items such as lease payments, loan payments, accounting fees when on retainer, insurances, cleaning services, and depreciation can all be examples of fixed expenses.

Variable expenses change with volume of business your company does. Meaning the “more” or “less” business you do, these numbers can rise and fall exponentially. Example variable expenses include credit card fees, education & travel, repairs & maintenance, salaries & commissions, telephone, and utilities.

Expenses and Professional Services Used to Run Your Business
  • Get at least three references for each individual or company you are going to use in helping you operate and grow your business.
  • Look at your natural skill sets – Do you love doing the task? Can you pay someone else to do the task and make more money doing what you do best? Could you have more quality time and a better life by delegating out the task?

“I’d rather have 1% of a 100 people’s efforts than use a 100% of my own”. –John Paul Getty

Advertising & Promotion

This category covers all of the tools you use in marketing and promoting your business. It is a category you have to pay particular attention to as advertising costs can add up very quickly. Items covered under this expense include; magazine, social media, television, and radio advertising, marketing materials such as business cards, menus, brochures, and referral cards, all direct mail pieces, and client entertainment.

With any investment into advertising/marketing/promotion, think about tangible return. Can you track the return on investment? For example, are you advertising with a display ad in the yellow pages? If you are investing heavily in any particular area you must have a tracking system put into place to monitor results. Otherwise, how do you know if it is a wise investment? The strongest form of marketing is “word of mouth” and it can be the least expensive. A referral card program is the best way for techs to build a clientele and it is traceable. Special events are another strong revenue tactic.

When creating your advertising plan, also keep in mind the specific legal requirements that apply to medical practices.

Payroll Expenses

Your costs for salaries, commissions on technician’s revenues, EDD, FICA, and workman’s comp insurance are totaled and listed here.

Hands down this is one of the most challenging areas with your business and has to be monitored closely. If this area is out of alignment refer to the commission structure in for a plan that allows for profitability.

Supplies – Back Bar

This would consist of anything used to perform a service. Professional supplies need to be separated from retail products that are purchased for resale. Request that your distributors or vendors itemize them separately for you if possible.

This is another challenging area. These expenses if not checked can mount up very quickly. The three main culprits are; the actual cost of the product to perform the service is too high, product waste and inventory control.

Product Cost

When choosing professional products to perform service you have to compare the cost of the products needed to perform the service and how much you are charging for the service and does the product cost amount to no more than an average of 18% of the service price charged in a med spa. You may find some services are slightly higher and other come under the seven percent and in the end balance out. A business that too focused on injectables or fillers will run into to challenges with cost of goods. You want a balance of service revenue from machines as well.

Example:

Inappropriate Cost – European Facial $100.00

Cleanser/Toner/Mask/Moisturizer/Eye Cream/Cotton Pads $20.00

Product Cost $20.00 divided by $100.00 Service Cost = 20%

Waste

The second culprit is technicians using or wasting too much product. When staff is not paying for the product sometimes there is little care in how much they use or how much is rinsed down the drain. Coach your team in the appropriate amounts of product needed for their particular services offerings. Another option is to use products that are formatted for individual services so there cannot be waste.

Inventory Control

Create a monitoring system for back bar products where technicians have to turn in completed packaging before they can get new supplies. Appoint an individual to be responsible for inventory control and ordering. This person would do a physical count of inventory each week, note shrinkage (missing product) and create a master order form to track purchases. By all means do not let your sales reps decide what to order for you.

Retail Expense Analysis
Product Cost

This category covers the expenses of buying the products you retail in the med spa or spa. You are looking for the highest profit margin possible. Typically a branded line’s cost will range between 48%-56% of the retail price. Private label or specialty items can have a much lower product cost and higher profit margins that you set based upon market acceptance.

An inventory system is essential for keeping track of ordering. Most software systems allow for inventory control and adjustments. Having a point person handling this is important to monitor cost, orders, and shrinkage. It is easy to overspend in this category especially when there are sales and promotions constantly offered from your vendors.

For more information on systems and best-practices to build your medical spa profitably and legally, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Bryan Durocher is the author of Wakeup Live the Life You Love in Beauty, and is the founder of Essentials Spa Consulting and Durocher Enterprises. Durocher was named one of the “Top 20 People to Know in the Beauty Industry” by Global Cosmetic Industrymagazine, and provides coaching, consulting, global industry trends, and marketing solutions for medical spa, spa and industry professionals internationally. He has published many articles and has provided business education internationally at a variety of national and international industry events including AmSpa’s Medical Spa & Aesthetic Boot Camps and The Medical Spa Show.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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Fee-Splitting: Pitfalls of Med Spa Compensation

Posted By Administration, Tuesday, July 24, 2018

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

One of the most common legal issues in medical spa practices involves “fee-splitting” and how that relates to med spa ownership and employee compensation. Despite a medical spa’s superficial resemblance to more traditional retail outlets, it has to play by a different set of rules and answer to a different set of authorities because it administers medical treatments. In most states, if a medical spa owner is paying employees commission, he or she is engaging in a practice known as fee-splitting, which is illegal. Therefore, it is important for medical spa owners and operators to understand this issue and its consequences in order to avoid running afoul of regulatory agencies.

Commission: A Common Mistake

In most states, a patient who receives a medical treatment—such as many of the services provided at medical spas—is required to provide full payment directly to a physician or a physician-owned corporation; this is in accordance with a doctrine known as the corporate practice of medicine. If these physicians or corporations give a percentage of that payment to a non-physician who was responsible for securing the patient’s business, for example, they have engaged in fee-splitting.

This practice is not uncommon at medical spas, and it typically doesn’t represent any sort of shady attempt to practice unlicensed medicine—the doctors who operate these establishments simply wish to reward employees who attract business to the practice. Regardless, in many states it is illegal to engage in this practice, and doing so places both parties to the transaction at risk.

The Consequences

If a physician is found to be engaging in fee-splitting in a state in which it is illegal, he or she could be subject to the suspension or revocation of his or her license, as well as a large fine. Additionally, the person or people who receive the commission payments also are subject to fines. Therefore, if you are an aesthetician, registered nurse, nurse practitioner, physician assistant, or laser technician who is being paid commission, mention it to your employer to make sure he or she knows about the problematic nature of this setup. If you are a physician who is giving commissions in a state in which fee-splitting is illegal, you should stop doing this immediately. Consult your local health care attorney or AmSpa to learn about the laws governing fee-splitting in the state where your practice is based.

This does not mean that medical spa employees cannot be awarded extra compensation, however—medical spa owners can establish bonus plans, pay-per-service systems, and perhaps even profit-sharing programs that are perfectly legal in the eyes of regulatory agencies. These types of programs – like the compensation plan available in the AmSpa Store – can be very lucrative for employees, and they will prevent all involved from incurring penalties that can alter lives and end careers.

AmSpa members can check their medical aesthetic legal summary, or utilize their annual complimentary compliance consultation with the business, healthcare, and aesthetic law firm of ByrdAdatto to ensure their compensation plan meets all regulatory requirements.

A (Possible) Exception

Viewed through an impartial lens, it would seem that using a deal site such as Groupon to drum up business would represent a form of fee-splitting, as medical spa vouchers sold through these services—from which the service receives a percentage of the sale—can be used by customers to purchase medical treatments. Check with your local healthcare attorney to learn about the specifics of the regulations regarding deal sites in your state, but for this reason and others outlined in our previous blog, we don’t recommend partnering with Groupon or a similar site.

For more information on how to run your medical spa practice legally and profitably, attend an AmSpa Medical Spa & Aesthetic Boot Camp, and be the next med spa success story.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership 

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How Aesthetician Services Can Benefit Your Medical Spa

Posted By Administration, Thursday, July 19, 2018

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

While medical spa services command higher prices than traditional spa treatments, medical spa owners and operators shouldn’t overlook aesthetician services. These can be lucrative opportunities for added services for your patients, increasing both retention and profitability of your med spa practice.

What Can Aestheticians Do For You?

According to the American Med Spa Association’s 2017 Medical Spa State of the Industry Report, aesthetician services were one of the leading revenue-generators in medical spas. These treatments can include facials, aesthetician-grade chemical peels, and waxing, to name a few. This category also includes Hydrafacials, which is one of the fastest-growing treatments in medical spas regardless of practitioner type.

Some Caveats

In many states, treatments such as microneedling and dermaplaning are considered to be the practice of medicine. Because of this, they should only be done by a licensed medical professional. However, there are some situations in which a person holding an aesthetician license may perform these procedures.


Microblading is also a treatment that individuals holding aesthetician licenses perform in many states. State laws can vary regarding this procedure, but it is often categorized as permanent makeup and, with some additional training, these practitioners can often offer this service in medical spas.

Contact an attorney familiar with medical aesthetic laws in your state for more information on microneedling, dermaplaning, or microblading. (AmSpa members can take advantage of their annual complimentary compliance consult with the law firm of ByrdAdatto, or check their medical aesthetic state legal summary.)

Legal Requirements
To add these aesthetician services to your medical spa, first be sure that the practitioners you hire are properly licensed to perform these treatments. This should be of paramount importance for all of your service providers, whether offering beauty services or medical treatments. In-depth training and proper licensure ensures that your patients are getting the best possible services and results, and also protects your staff and business against fines and other punishments from regulatory agencies.Your business will also need to obtain an establishment license for these procedures, and that license must be displayed in your facility during business hours. Additionally, be sure to double check with your insurance-provider to make sure you are covered to offer these additional treatments. Assuming that your other business housekeeping is in order (LLC, tax ID, etc.), you should now be set to offer another tier of services to your clients.

For more information on medical spa legal best-practices attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Trends 

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Med Spa Advertising: Legal Issues to Understand

Posted By Administration, Monday, July 16, 2018

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

Since medical spas are medical practices, they are bound by the laws governing medical advertising. The minute you are involved in any kind of medical treatment, you are subject to much more stringent requirements than traditional companies when it comes to advertising your practice.

Med Spas and Marketing

According to the 2017 Medical Spa State of the Industry Report, the three most common marketing techniques for medical spas are digital, including websites, email, and organic social media. Businesses cannot simply rely on word of mouth or good reviews bring in customers—they must create effective promotional campaigns to attract new clients because there is so much competition and because the industry is cash-based, rather than insurance-based. Given this, it is easy for medical spa owners and operators to slip into the mindset that they are going to do whatever they need to do to get people in the door. And while we encourage people to run their medical spas in such a manner, it is important for them to keep in mind that these practices are, above all, medical practices, so they are subject to the same rules and regulations that govern more traditional medical institutions.

Truth in Advertising

All state medical boards have certain provisions that deal with medical advertising. Most of them are relatively similar, but it’s important for practitioners to look at and understand their state laws regarding advertising. These rules and regulations are typically fairly easy to find, and most of them are generally similar in that they require absolute, verifiable honesty. 

Unlike, say, a car dealership or a furniture outlet, the claims a medical outlet makes must be true. For example, if you say, “Dr. Thiersch is the best injector in the state of Illinois,” or “Our nurses are the best injectors in the country,” that is likely to become an issue. A medical board or nursing board is going to see a claim like that and ask what you’re basing this on. It’ll want to know where the proof of this is, and unless you’re prepared to submit something to that effect—which, quite frankly, is impossible—your practice could be in some trouble.

In the past, if you perused the in-flight magazines from the major airlines, you may have seen their lists of “best doctors in America.” If you looked at these publications in recent years, however, these lists have been changed to say “among the best doctors in America,” because that is at least somewhat truthful, and the doctors mentioned in these pieces must be concerned about compliance, too.

Misleading Titles

Whether it’s in marketing collateral, on social media, or even using influencer marketing, you need to make sure that everything that’s said about your medical spa is objectively verifiable. You can do this by citing your credentials and your certifications. We previously wrote about misleading titles that are used by some medical spa employees, and those definitely merit mention here too—if you use titles such as “medical esthetician” and “certified laser technician” in your advertising materials, you’re asking for trouble, because you have to prove that you are what you say you are, and in cases such as these, it simply can’t be done.

Social Media Influencers

Speaking of influencers, there are also a number of issues to note regarding social media in general, and influencer marketing specifically. In particular, the FTC recently laid down a list of guidelines regarding proper disclosures that must be in place for compliant social media influencer marketing.

You can always ask your lawyer to review your advertisements before they’re posted in order to make sure you’re compliant¬. Some state boards will even allow you to submit ads to them to make sure they’re compliant, although the review process tends to take quite a while. Regardless, it’s very important that your practice does what it can to maintain compliant advertising, because the penalties for violations can be severe.

For more information on medical spa laws in your state, check your medical aesthetic legal summary. To learn about legal and business best-practices to keep your med spa compliant and profitable, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps and be the next med spa success story.

Tags:  Med Spa LawAmSpa's Med Spa & Aesthetic Boot Camps 

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Can Aestheticians Do Microneedling in a Med Spa?

Posted By Administration, Thursday, July 12, 2018

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

Microneedling is a trending procedure in med spas, but many owners and practitioners are not clear if aestheticians can legally perform the treatment. The answer to that question, like many regulatory issues in the medical spa industry, can vary depending on what state you practice in. For the much of the United States, however, the answer is likely no.

Also known as collagen induction therapy, microneedling is a minimally invasive treatment to rejuvenate the skin. A device with fine needles creates tiny punctures in the top layer of the skin, which triggers the body to create new collagen and elastin.  

Sign up for AmSpa’s webinar on the Trends, Science and Economics of Microneedling for more information on the procedure.

The Practice of Medicine

An aesthetician’s license does not permit them to perform medical treatments, but rather aestheticians may only perform procedures for the purpose of beautification. Many med spas look at this standard and assume that aestheticians can perform microneedling, however many state regulatory boards are specifically classifying microneedling as medical treatment, no matter whether the needles penetrate the outer layer of the skin. 

Illinois and California, for example, specifically listed microneedling as medical treatment in 2016 because they classify the device as medical equipment. At an American Med Spa Association Medical Spa Boot Camp in San Jose Kristy Underwood, executive director of the California Board of Barbering and Cosmetology, gave additional details as part of a 30-minute Q&A. 

“This isn’t new – aestheticians cannot penetrate the skin,” said Underwood. “They also can’t use any metal needles, period. [California] aestheticians are prohibited from using metal needles.” She added that they cannot use anything that might be disapproved by the FDA, cautioning people against the Dermatude device until more information came out from the federal government related to its use.

 

For more business and legal med spa best-practices attend an AmSpa Medical Spa & Aesthetic Boot Camp near you.

Physician Supervision and Delegation 

In some states, however, there are ways in which individuals holding aesthetician licenses can perform certain medical procedures. As noted in this video update, for example, the state differentiates between an aesthetician and a person who is performing medical procedures under the supervision and delegation of a physician.

This means that if the patient is examined by a physician or a mid-level practitioner (like a nurse practitioner or a physician assistant) then an individual working in a medical spa may perform microneedling. It is very important to note for aestheticians that if you are going to do this procedure under this caveat you cannot represent yourself as an aesthetician while doing so. This means flipping over your aesthetician name tag and taking down any certification you might have hanging on the wall.

The state may allow you as a person to perform this procedure under proper medical supervision, however your regulatory board does not cover this under your license.

Supervision Requirements

This sounds onerous, and it is certainly involves more of a pain point than a facial or another aesthetician service, but depending on your state this does not have to be a deal-breaker for offering microneedling services in your medical spa. The supervising physician doesn’t have to be in the room watching the aesthetician perform the procedure, and in many states does not have to see the patient before every treatment – just the first one. 

Know the Law

Regulations can vary greatly depending on where your business operates so it’s very important to know the laws specific to your business. When in doubt consult an attorney in your state familiar with aesthetics.

AmSpa members have access to legal summaries of the laws regulating medical spas in their state, as well as an annual complimentary compliance consultation with the law firm of ByrdAdatto.

See AmSpa’s Treatment Directory for more information on microneedling. 

Tags:  Business and Financials  Med Spa LawAmSpa's Med Spa & Aesthetic Boot Camps 

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