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Tennessee Law Aims to Make Medical Spas Transparent

Posted By Administration, Tuesday, September 18, 2018

By Alex Thiersch, Founder and Director of the American Med Spa Association (AmSpa)

Tennessee medical spas are, for the most part, governed by laws that are very similar to the laws that regulate such practices in other states. (AmSpa members can check their medical aesthetic legal summary to find the laws governing their practice.) However, as part of a bill that was passed in 2015, Tennessee has taken the extremely unusual added step of defining “medical spa”. 

The Definition

According to the law, which can be read here, a medical spa is “any entity, however named or organized, which offers or performs ‘cosmetic medical services.’” The law also requires all medical spas, and medical spa medical directors, to register with the state’s health professional boards. Lawmakers hope that this regulation will help practitioners in the Volunteer State become more transparent.

Registration

For example, if you are the medical director or supervising physician of a medical spa in Tennessee, you are required to fill out a form to register with the state. Likewise, if you are running a medical facility that offers cosmetic medical services primarily, you must register with the state of Tennessee.

Other requirements in the law lay out what must be disclosed in this registration, and in the practice’s advertising. For example, if the medical director is not board-certified as a plastic surgeon or a dermatologist, that fact must be divulged. This is a laudable step, as it ensures the public has a significant amount of information available to it. It tells consumers right up front that a practice is a medical spa, and it allows them to know, in no uncertain terms, which doctors are affiliated with the practice. Click here to read about general best practices to make sure your medical spa advertising is legally compliant.

Treatments

Aside from the registry, Tennessee’s regulations are fairly similar to those of other states, in that some are very specific and can be defined narrowly, while others are more vague and present some grey areas. Generally speaking, though, all treatments that are offered at a typical medical spa—light-emitting devices, laser treatments, Botox, etc.—are considered to be medical treatments. Click here to read more about medical vs non-medical treatments in med spas.

Delegation

Tennessee has a fairly broad, yet restrictive delegation statute, which appears to say that a physician is authorized to delegate treatments only to LPNs, RNs, NPs, PAs, and, oddly enough, pharmacists. However, this statute does not provide any direction when it comes to delegation to unlicensed individuals. Therefore, it must be assumed that in Tennessee, you must be a licensed practitioner to fire a laser, for example. This is unlike similar delegation statutes in other states, such as Texas and Illinois, which allow physicians to essentially delegate to whoever they want, provided that person is operating within his or her scope of practice. Click here to see AmSpa’s webinar on the basics of medical spa delegation, free to AmSpa Plus members.

Ownership

Tennessee does not allow anyone other than a physician to own a medical spa, although in some instances, PAs and NPs can own practices and can enter into contracts with physicians. If you are a PA or NP who wishes to look into medical spa ownership, you should reach out to ByrdAdatto to discuss how to structure it. A consultation is free to AmSpa members. Of course, an MSO is a possible solution that permits a certain amount of ownership to a non-physician, but as we don’t want anyone to be a test case, the prudent and conservative approach in Tennessee is to make sure a physician owns the facility.

See the Tennessee medical aesthetic legal summary for more information about laws governing medical spa practices in the Volunteer State.

We’ll be discussing these regulations and many others at our Medical Spa & Aesthetic Boot Camp at the Doubletree Nashville Downtown in Nashville on Oct. 15 and 16. Join us there to learn all about how to run a compliant, successful medical spa in Tennessee and throughout the country. Click here to learn more and register, and click here to see the full schedule of Boot Camp dates.

 

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

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CareCredit Establishes New Partnership with American Med Spa Association to Help Drive Growth Among Spa Providers

Posted By Administration, Monday, September 17, 2018

Sponsored Content: CareCredit

CareCredit has partnered with the American Med Spa Association to help spa and med spa industry professionals bring the benefits of CareCredit to their practices. Providers can now offer clients access to more treatments and services while also expanding their potential client base to CareCredit’s 11 million cardholders. Participating spas and med spas will also become a part of the CareCredit network of qualified providers, which receives more than 850,000 searches per month.

The partnership was developed in conjunction with CareCredit’s recent expansion into the day and medical spa markets—helping spa providers drive growth by providing an additional payment option for consumers. Day and medical spas are an attractive growth segment for CareCredit. According to the Global Wellness Institute Global Economy Monitor, wellness is a growing trend showing no sign of slowing down, having become a $3.4 trillion-dollar global industry as of January 2017. Over the next five years, the medical spa market opportunity is expected to grow at a rate of 8% year over year through 2022.  

Working with more than 200,000 providers across a broad range of specialties including medical care, beauty, dental and veterinary services, CareCredit helps people care for themselves and focus on their overall wellbeing, while also helping small business owners offer more payment options.  In turn, small business owners can enjoy peace of mind while using CareCredit to grow their business and clientele.

All AmSpa Members receive 20% off merchant fees on purchases over $200. Click here to learn more about CareCredit.

 

Tags:  Business and Financials  Sponsored Content 

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Connecticut Allows Private Cause of Action for HIPAA Violations

Posted By Administration, Friday, September 14, 2018

Jay Reyero, JD, Partner, ByrdAdatto

As a medical facility, any med spa must be HIPAA compliant. While HIPAA does not contain a rule or regulation providing an individual a remedy for a breach nor are violations of HIPAA a specific cause of action, HIPAA is increasingly being accepted as the standard of care with respect to handling confidential patient information. 

In a recent Supreme Court decision, Connecticut joined the list of other states recognizing a private cause of action against health care providers for HIPAA violations.

In the case, a healthcare provider received a subpoena requesting production of all the medical records of one of its patient involved in a paternity suit. In response to the subpoena the healthcare provider mailed a copy of the medical records to the court. As a result, the other party of the paternity suit obtained access to the medical records and began harassing the patient. The patient sued on multiple negligence counts and breach of contract.

In its opinion, the Connecticut Supreme Court concluded that “a duty of confidentiality arises from the physician-patient relationship and that unauthorized disclosure of confidential information obtained in the course of that relationship gives rise to a cause of action sounding in tort against the health care provider, unless the disclosure is otherwise allowed by law.” To determine whether disclosure was allowed by law, the Supreme Court pointed to the requirements under HIPAA for responding to a subpoena because:

“to the extent it has become the common practice for Connecticut health care providers to follow the procedures required under HIPAA in rendering services to their patients, HIPAA and its implementing regulations may be utilized to inform the standard of care applicable to such claims arising from allegations of negligence in the disclosure of patients’ medical records pursuant to a subpoena.”

While most healthcare providers think of HIPAA as only an enforcement tool utilized by the Federal Government, this case further demonstrates the increasing use of HIPAA as the standard of care when it comes to common-law causes of action. Regardless of whether HIPAA is applicable to a particular healthcare provider, all healthcare providers need to be cognizant of its rules and regulations, as they may be held to such standards and rules. 

HIPAA isn’t the only standard that could come into play as typically there are other standards such as state law, licensing board rules, and ethical rules. Healthcare providers would be wise to reevaluate their policies and procedures and ensure they are in line with the applicable rules and standards to ensure the proper handling of confidential patient information within their organization. AmSpa members can check their state’s medical aesthetic legal summary to find the laws governing their practice.

For more information on patient privacy requirements in medical spas sign up for AmSpa’s live webinar on the topic, free to AmSpa members.

Jay Reyero, JD, is a partner at the business, healthcare, and aesthetic law firm of ByrdAdatto. He has a background as both a litigator and transactional attorney, bringing a unique and balanced perspective to the firm’s clients. His health care and regulatory expertise involves the counseling and advising of physicians, physician groups, other medical service providers and non-professionals. Specific areas of expertise include Federal and State health care regulations and how they impact investments, transactions and various contractual arrangements, particularly in the areas of Federal and State anti-referral, anti-kickback and HIPAA compliance.

 

Tags:  ByrdAdatto  Med Spa Law 

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Physician Supervision: Keeping the “Medical” in Medical Spas

Posted By Administration, Thursday, September 13, 2018

By Renee E. Coover, JD, ByrdAdatto

Medical spa laws regarding physician supervision can be critical to a practice’s compliance plan, particularly if the practice utilizes nurse practitioners, physician assistants, nurse injectors, laser techs, or other non-physician providers to administer treatments.

Given the current economic landscape for medical practices, an increasing number of physicians are seeking alternative sources of revenue outside the traditional practice of medicine. Many physicians are turning to medical spas as an additional or alternative source of income, not wrought with the same Medicare/Medicaid and insurance issues currently plaguing the healthcare industry. But as physicians flock to medical spas in the hopes of making an easy income, many overlook the fact that a certain level of supervision is still required for all medical treatment. At the end of the day, the physician is responsible for every patient and if something goes awry, the physician’s license is on the line. 

Recently, our law firm has exploded with calls from physicians and med spa employees asking questions about physician supervision like: 

  • Does the doctor need to be present at all times? 
  • Does the doctor need to see every patient? 
  • What if the doctor consults with the patient over Skype- is that allowable? 

Of course, the answers to these questions, and many others, depend upon your particular state’s laws and regulations. AmSpa members can check their state’s medical aesthetic legal summary to find the answers to their med spa compliance questions.

The Practice of Medicine

First and foremost, it is crucial to know what med spa services require physician supervision in your particular state and what constitutes an adequate amount of supervision. In California, for example, all medical treatments – including Botox and laser hair removal – require physician supervision. Although a physician may delegate medical treatments and initial patient consults to nurse practitioners (NPs) and physician assistants (PAs), the physician must be involved and available to patients in the event of an emergency. 

Ultimately, the physician is responsible for each patient that walks through the door of a med spa. Some states have additional oversight requirements as well. In Illinois, a medical professional must be onsite at the med spa at all times when medical procedures are performed. This means that if a physician owner only has one other employee and that individual is a non-medical professional, the physician must be onsite at all times to supervise the medical procedures. 

Many physicians don’t realize, at least not right away, that treating patients in a med spa is just like any other practice. Most medical spa treatments by and large are still considered the practice of medicine, and the physician must assume ultimate responsibility for all of the patients that are seen and treated at the med spa. The physician must ensure that proper protocols are in place, oversee treatment plans, and safeguard patient confidentiality. While many of these tasks can be delegated, it is the physician, not the med spa owner or the employees, who is going to be held responsible if something goes wrong.

Experience and Training

One pitfall is the physicians’ notion that they can supervise medical tasks outside of their specialty practice, but in most states a physician in a med spa must specialize in, or at least have experience and training in, aesthetic medicine. In other words, the physician overseeing the medical spa and whose license is ultimately on the line, must actually practice aesthetic medicine.

Frequently, general practitioners, OB/GYN’s and emergency room physicians are quick to sign on as “medical directors” of med spas even though they have no experience or training in injectables, laser treatments, or any other aesthetic procedures, but this can get them in trouble fast. Even dermatologists and plastic surgeons should seek out training in these types of medical treatments in order to properly supervise the aesthetic treatments being offered at the med spa.

For more information on medical spa supervision and delegation requirements watch AmSpa’s medical spa webinar on the topic, presented by Michael Byrd, JD, partner at ByrdAdatto.

Telemedicine

With the advent of telemedicine, physicians frequently want to know if they can use real-time interactive communication on programs like Skype or Facetime to consult with and examine patients instead of meeting each new patient in-person, but this remains a gray area in the law. There is a fine line between giving generic health information over a smartphone and actually diagnosing or treating a patient.  Telemedicine is viewed as a cost-effective alternative to the more traditional face-to-face method of providing medical care and in some states it is being cautiously embraced. In Oklahoma, for instance, the state medical board recently passed telemedicine rules exempting physicians from face-to-face meetings with patients if certain criteria are met. Not every state is on board with this and only time will tell if telemedicine will be the future of medicine. Read more on telemedicine in medical spas here.

The bottom line is that physician supervision in the medical setting is a key component to running a successful and legally compliant med spa business. If you are unclear about the level of physician supervision required in your state, you should seek legal guidance from an experienced attorney immediately. AmSpa members can take advantage of their 20-30 minute annual compliance consultation with an attorney from ByrdAdatto.

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

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:  AmSpa's Med Spa & Aesthetic Boot Camps  Med Spa Employee Types  Med Spa Law 

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Getting a Loan for Your Medical Spa Practice: Q&A With Wells Fargo

Posted By Administration, Wednesday, September 12, 2018

Sponsored Content: Wells Fargo

Being approved for a business loan for a medical spa practice isn’t a process that many are familiar with, and the thought of it can seem daunting. AmSpa recently recorded an episode of the Medical Spa Insider podcast with Jeremiah Johnson and Chris Maiwald of Wells Fargo. Check out the quick Q&A below and listen to the episode to get answers to your medical spa lending questions.

 
1. People tend to either be unfamiliar with commercial lending or intimidated by it. Can you describe how you, as a lender, approach the lending process with a new entrepreneur? Is it a difficult process or relatively painless?

Each lending scenario is different. However, I find the lending process to be relatively painless when the borrower/entrepreneur is responsive. My approach to lending is to offer financial expertise to my clients based on their business’ unique needs. My team and I work with our customers to offer them a range of financial services, including credit and cash management. 

 
2. Getting a commercial loan has been difficult, at least historically, in this industry. Are startup loans for med spas available? How hard are they to get?

Yes, start up loans for med spas are available. While each scenario and loan application is different, it is important to work with your banker to determine your best loan options. 

 
3. How does the overall process work? How long does it take? What information does the borrower need?

Although we have a standard process that all loans will follow, each customers’ business scenario and needs are different. Therefore, the timing will vary from customer to customer.

Most loan applications can take between 45 – 60 days depending on the complexity of the project. Projects that include real estate can take up to 60 days, due to the time it takes to obtain appraisals and environmental assessments. A start-up loan without real estate generally takes less time.

Equipment-only loans generally can take anywhere from 3-21 days depending on the documents needed and how fast the entrepreneur submits them.

Typically, we need a copy of an application, personal financial statement, 3 years of business and/or personal tax returns, and a resume.

 
4. How detailed a business plan should the entrepreneur have? Should they have pro formas for 1 year, 3 years, 5 years? How specific/detailed should it be?

Your business plan should serve as a road map to the success of your business. A detailed plan is great, but from a bank’s perspective, we look at a range of different numbers, what type of project you are taking on and the associated risk. 

 
5. Typically how much of a down payment does the entrepreneur have to come up with? Any rule of thumb?

Every loan transaction and customer is different and evaluated on their own merits. Generally, down payment requirements are up to 30% of the total project cost.

I always encourage our customers to call their banker to discuss the project they have in mind. This allows our team to get a better understanding of the customer’s needs and develop a plan for their specific business scenario. 

 
6. Are these loans typically personally guaranteed?

Not all business loans require a guarantee, but all SBA loans do require a personal guarantee. Talk with your banker to learn more about guarantees required by the lender. 

 
7. Why is it important to use a lender familiar with health care? Medical aesthetics specifically?

Lenders who fully understand the healthcare and medical aesthetics industry can speak the language that can help get borrowers through the application process and, if eligible and approved, get the project funded. Our team knows the industry thoroughly, so we are able to help our customers choose the right loan program that fits their needs and ultimately help to achieve their long-term plan. We understand all aspects of a business plan from the complete start-up cost to marketing. We also understand what it takes to be a fee for service business and how to approach cash flow needs from that perspective.

 
8. What about lending for capital equipment purchases, like a laser – do you handle that and how difficult is it to obtain this type of loan?

We have a healthcare equipment lending group that we will engage to help you evaluate potential options to finance this type of request. Our equipment lending group only lends on equipment and offers highly specialized expertise in this area.

Ultimately I would recommend reaching out to your banker who can make suggestions based on your unique situation.

 

For more information reach out to:

 Jeremiah Johnson
Vice-President–Healthcare Specialist
817-505-3641
jeremiah.a.johnson@wellsfargo.com

Chris Maiwald
Vice President¬–Business Banking
682-213-0711
chris.maiwald@wellsfargo.com

Tags:  Business and Financials  Medical Spa Insider Podcast  Sponsored Content 

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The Importance of Reading Contracts for Medical Spa Owners and Physicians

Posted By Administration, Tuesday, September 11, 2018

By Alex Thiersch, JD, Founder and Director of the American Med Spa Association

An employment contract between a medical practice and a physician must benefit both the employer and employee; otherwise, it likely will be unsatisfactory for one or both sides. If one or both sides don’t take the time to read the contract, they could find themselves disappointed with the outcome. Here are a few things that physicians and practices should find within a mutually beneficial contract.

For more information on medical spa employment contracts, view AmSpa’s webinar on the topic (free to AmSpa Plus members.) 

A Clearly Articulated Goal

Before a contract with a physician is finalized, the practice should consider what it wants to accomplish. Does it want to fill a need? Does it want to service more patients? Does it want to transition ownership to this individual? The answer to this can affect the way an employment agreement is designed and the type of person the practice wants to recruit (i.e., a younger doctor versus a more experienced one). If a practice hires a physician who has entrepreneurial aspirations to simply tend to patients, for example, neither side is likely to be particularly happy, and the relationship likely will not last very long.

The practice must clearly communicate its intentions during the recruitment process and make sure that the contract is built around that philosophy.

From the other perspective, a physician must honestly evaluate his or her goals when negotiating a contract. Physician contracts typically last for one to two years, but both sides typically expect that the relationship between the practice and the physician will continue thereafter, so a physician must consider his or her long-term plan. Is this where he or she wants to build a career? This can influence how the contract is negotiated.

The physician also needs to consider his or her “plan B”—if this arrangement does not work out, what’s next? The answer to this question heavily influences how he or she evaluates the contract. For example, if the physician wants to live in the city where the practice is located but the contract has a restrictive non-compete clause, that clause will need to be negotiated, as it severely restricts his or her options if it the relationship with the medical spa does not work out. Click here to read more on non-compete and non-solicitation clauses

A Fair Wage

A medical spa should balance the economics of the practice, the risk tolerance of the owners, and the realities of the market in terms of salary when negotiating a contract. A competitive guaranteed base salary with some form of incentive-based bonus system can make a difference when it comes to obtaining top talent who might be considering other options. There are multiple ways this can be arranged depending on what suits the physician.

The prospective employee, on the other hand, must come to terms with his or her risk tolerance. While a high base/low bonus structure might appeal to some, others might want to bet on themselves with a low base/high bonus structure. It is up to the physician to determine his or her comfort level with the contract’s salary structure and negotiate if it is not optimal.

The physician also must be sensible when determining his or her actual earning power. If there is not enough potential business in the market to justify taking a low base/high bonus salary, the physician should negotiate a different deal.

Ownership Considerations

The practice must determine what it wants to accomplish in terms of ownership with the hire, since it will affect everything from scheduling and coordination to top-level decision-making. The owner(s) of the practice also must consider if this transaction constitutes part of their exit strategy; if so, the contract must be structured with that in mind.

The physician, meanwhile, must determine his or her goals in building the practice and figure out how the ancillary revenue streams offered by the practice compare to those offered by others. Ownership has different appearances for different entities, so the physician must think about what he or wants and what the practice can provide. What is the cost of the investment? What is the potential return? What is the risk? All these questions should be answered in the contract.

A contract is a complicated matter. Both sides must assess the value of the risks and rewards, and they must be willing to compromise on matters that may not be as important. A careful reading of a contract is absolutely imperative, however—if a physician or practice doesn’t thoroughly read the contract, they have nobody to blame for their unhappiness but themselves.

For more information on structuring your medical spa profitably and compliantly, 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 Ownership 

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SkinPen® Remains the Only FDA-Cleared Device for Microneedling

Posted By Administration, Monday, September 10, 2018
Sponsored Content: Bellus Medical

Aesthetic medical providers beware: The FDA codified its classification order for microneedling, likely putting practices using non-cleared devices at greater risk.

“In many medical device liability cases, a doctor is shielded from liability when properly using a cleared and compliant device, since the FDA review and clearance would ensure all likely hazards are controlled,” said Marc C. Sanchez, an FDA attorney who worked on Bellus Medical’s microneedling De Novo submission. “That defense is totally washed away when using an unapproved medical device.”

As of March 1, there is only one FDA-cleared microneedling device: SkinPen® by Bellus Medical. According to Sanchez, the classification order makes all non-cleared microneedling devices of any kind subject to enforcement actions, such as refusing entry for imported derma rollers and pens as well as issuing warning letters to non-compliant manufacturers.

Read Sanchez’s post on FDA Atty to learn more about the classification order and the new risks for doctors and aestheticians.

Click here for more information on Bellus Medical, and click here to read more about the SkinPen® in AmSpa’s medical spa treatment directory.
 

Tags:  Med Spa Trends  Sponsored Content 

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Social Media Advertising: Are You Legally Compliant?

Posted By Administration, Friday, September 7, 2018

By: Sam Pondrom, JD, Associate at ByrdAdatto

When it comes to advertising, social media is the hot new trend. It’s cheap, has a far reach and the potential to lure in many new customers. But it can also cost you if you aren’t advertising yourself and your business accurately. (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 medical spa law.)

Social media marketing is being embraced across industries because of its cost-effective, direct-access marketing to potential consumers.  An additional bonus to social media marketing is its self-selecting nature, which allows social media users to seek out the advertising themselves, making them more receptive to the messages.  But when it comes to using social media marketing to select a plastic surgeon for treatment, it is important that social media users still perform their due diligence to ensure the advertisements are posted by board-certified, credentialed plastic surgeons.

A report recently published by the Aesthetic Surgery Journal examined all of the plastic surgery related advertisements posted to Instagram on a single day—January 9, 2017—to assess who was publishing the social media content.  The Journal found that there were about 1.79 million Instagram posts on that day that included at least one plastic surgery-related hashtag, like #plasticsurgery, #plasticsurgeon, #breastlift, #liposuction, or #brazilianbuttlift (hashtags categorize content and clicking on a hashtag retrieves similar content; they are functionally a search for similar content).  The Journal then evaluated the content of the top nine posts (top posts are those with the most engagement) in 21 plastic surgery related hashtags

The Journal also found that only 17.8% of the top posts for these hashtags came from board-certified plastic surgeons.  Another 26.4% came from physicians that did not have specialized plastic surgery training, and another 5.5% of the top posts came from persons who were not physicians at all, including dentists, medical spas with no physician/medical director, and even one hair salon.  The Journal also found that the majority of the posts were self-promotional (67.1%), rather than educational (32.9%), and that board-certified plastic surgeons were much more likely to post educational content than non-plastic surgeons (62.1% versus 38.1%, respectively).

This is particularly troubling because of social media’s reach and influence on young people, who now make up a large sector of the plastic surgery population in our country. The American Society of Plastic Surgeons reported that in 2014, nearly 64,000 cosmetic surgery patients were aged 13 – 19 and industry experts believe this number increases every year.  Moreover, in 2016, the American Academy of Facial Plastic and Reconstructive Surgery polled its members and more than half of the respondents reported an increase in cosmetic procedures in patients under age 30 in 2016. 42% of respondents also reported that their clients were at least partially motivated to seek plastic surgery because of a desire to look better in selfies posted to Instagram, Snapchat, and other social media platforms.

This means that social media users should research potential surgeons beyond their social media presence, and users wanting plastic surgery should seek out a board-certified plastic surgeon.  Board-certified plastic surgeons are doctors with more than six years of surgical training and experience, at least three of which are specifically in plastic surgery.  Moreover, social media users should move beyond Instagram and meet with the surgeon in person to obtain information like how many surgeries the surgeon has performed, what recover times are, and whether the patient is a good candidate for the surgery.

There are many resources to verify whether a physician is a board-certified plastic surgeon, including the American Board of Plastic Surgery’s website that lists physicians’ credentials, the American Society for Aesthetic Plastic Surgery that maintains a searchable database of board-certified physicians, and the America Society of Plastic Surgeons that allows a person to search for board-certified plastic surgeons by location.

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.

For more medical spa legal and business tips sign up for our email newsletter to receive business strategies, news and med spa law directly in your inbox.

As the youngest of three brothers, Sam Pondrom learned early on how to work effectively as part of a team.  After graduating from Oklahoma State, an intrinsic sense of curiosity and a keen eye for details led Sam to work as an accountant for two Engineering-News Record top 40 construction firms.  It was here where he honed his ability to analyze complex issues and craft clear, concise answers.  Sam utilizes these skills to work in partnership with our clients to resolve their complex business and regulatory concerns in the most simple, straightforward way.

 

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

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Non-competes, Non-solicitations, and Medical Spa Employment Contracts

Posted By Administration, Thursday, September 6, 2018

By Alex R. Thiersch, JD, Founder and Director of the American Med Spa Association

Excellent medical spas require a commitment to building an excellent team, and once that team is in place many medical spa owners look to non-compete and non-solicitation clauses to protect their investment in time and training. Conscientious medical spa owners invest a great deal of time, effort and money toward making their employees the best they can be, and these contractual clauses, known as restrictive covenants, can prevent former employees from working for a competing medical spa and taking its clients and/or employees for a certain period of time. Implementing these clauses and enforcing them, however, are two very different things, so medical spa owners and operators must understand what they’re all about before attempting to utilize them.

Non-competition Agreements

A non-competition agreement is a part of a contract that is designed to bar an individual from working for a competing medical spa for a set period of time in a designated geographic area. If employees with non-competition clauses in their contracts choose to leave your medical spa, they would theoretically be subject to legal action if they went to work for another medical spa within the agreed-upon time span and geographic area.

This seems fairly straightforward; however, in reality, non-competition agreements are somewhat difficult to enforce to their fullest extent because American courts tend to be very reluctant to prevent people from working where they want. 

As with many things in this industry, the laws governing these arrangements vary from state to state. California, for example, has essentially established a ban on non-competition agreements. In Illinois, according to Renee Coover, JD, attorney with the law firm ByrdAdatto, “In a 2015 decision, the Third District of the Illinois Appellate Court readily followed and applied a rule established by a ground-breaking 2013 First District Appellate Court ruling. In Prairie Rheumatology Associates, S.C. v. Francis, the court reiterated that continued employment is sufficient consideration for a non-compete only where the employment is for a substantial period of time.  Citing the 2013 Fifield v. Premier Dealer Services, Inc. opinion, the court held that two or more years of continued employment amounts to adequate consideration. This means that the employee must be employed, under the terms of the non-compete agreement, for two years before the non-compete is enforceable against the employee.”

Non-solicitation Agreements

A non-solicitation agreement is a part of a contract that is designed to prevent a former employee from soliciting clients and/or other employees from your practice for a specified amount of time. In the medical spa setting, it’s not unusual for patients to become attached to the nurse practitioners, laser technicians and nurse injectors to whom physicians commonly delegate treatment. 

When one of these people decides to leave a practice, that practice needs to make sure that no effort is made to take said patients along—those are the practice’s patients, not the individual’s. If former employees make any effort to reach out to those patients and entice them to follow the employees to another practice, it is a clear violation of any non-solicitation agreement has been accepted.

Unlike non-competition agreements, non-solicitation agreements are commonly enforced, as courts are consistently willing to punish the misappropriation of a company’s assets—in this case, patients and employees. And with good cause—imagine the financial hit a medical spa could take if nurse injectors or laser techs were simply allowed to take the clients they’ve treated when they leave. However, like with non-compete agreements, you must be sure that any non-solicitation agreement you employ is carefully crafted to best protect your interests. 

Keys to Enforceable Contracts

Simply writing a non-competition or non-solicitation agreement into your employment contracts does not guarantee that they will be enforced when push comes to shove. But if these clauses adhere to the following guidelines, a medical spa’s chances of collecting damages if they are violated improve dramatically.

Adequate Consideration: In order to get something—in this case, protection for your medical spa should an employee leave—you must give something. This is known as adequate consideration, and every contract must include it in order for it to be enforceable. If you include a non-competition or non-solicitation clause in employees’ initial contract when they are hired, it is understood that employment is the consideration they are receiving in return for signing the contract.

“In the employment context, when an employee is at will, meaning he or she can be terminated at any time without cause, the employment itself constitutes adequate consideration,” says Coover. “Similarly, if a new employee signs a non-compete agreement as a condition of employment, the employment itself is also adequate consideration.”

However, if you wish to incorporate one of these restrictive covenants into an existing contract, some states require that you provide your employee with something extra in return for it—typically a pay raise or a promotion These states do not consider continued employment to be adequate consideration. If an employee does not receive something in return for this newly incorporated restriction, it is unlikely that a court will view the contract as enforceable. 

Coover adds, “For continued employment to be adequate to enforce a non-compete agreement on the existing employee, the employment must last a sufficient amount of time. For example, if a new employee signs a non-compete and the employer fires the individual the next day, it would not be fair to restrict the employee from competing for years in the future.”

Legitimate business interests: Courts typically permit the enforcement of restrictive covenants when they are utilized in the protection of confidential information, investment in specialized training and patient/client relationships. Make sure that any restrictive clause you wish to employ addresses these issues in some fashion—reach for anything more and you risk its enforceability.

Reasonableness: A restrictive covenant should not be excessively long in duration or cover a geographic area any larger than need be. Of course, both of these factors are case-specific—if a medical spa is in an urban area with a great deal of nearby competition, for example, it makes sense that the geographic restriction should cover a smaller area than if it were in a small rural community with one other medical spa in a 20-mile radius.

AmSpa members can utilize their annual complimentary compliance consultation with ByrdAdatto for any further questions regarding restrictive covenants in employment contracts.

A Crucial Decision

When delving into the world of restrictive covenants, it’s crucial to make sure that any non-competition or non-solicitation contract provided to employees be legal and binding. After all, a medical spa’s employees and clients are its lifeblood, and need to be protected. If you have existing contracts, make it a point to have a local health care attorney review them for viability. If you don’t have them in place and want to include them in your employment packet, make sure to work with a health care attorney to craft them correctly the first time.

To learn more legal and business best-practices attend a Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

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

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5 Principles For Recruiting and Hiring Medical Spa Employees

Posted By Administration, Wednesday, September 5, 2018

By Dori Soukup, Founder and CEO of InSPAration Management

Recruiting, and hiring medical spa employees (including physician assistants, nurse practitioners, nurses, and aestheticians) and building them into a high performing team can be difficult. Finding talented team members, training them, and keeping them is essential to success! In this article, you will discover five effective principles to help build your team and elevate your performance.  

PRINCIPLE 1: Always Be Recruiting 

You should always be on the lookout for talent. Avoid waiting until you need people to start interviewing. You want to hire people who have a position already. In sports, teams have recruiters who are always scouting and looking for talent. Your business should follow the same practice. You need to always be searching for “A Players”. If you wait until you need someone, you end up hiring out of desperation and you will most likely hire the wrong person. 

PRINCIPLE 2: In-Depth Interview Process

It all starts with the interview. Do you have a system for the interview process? If not, you must in order to avoid faux pas. The most common mistake spa and medi spa professionals make when hiring individuals is the lack of clarity in regard to expectations. 

Often, a detailed position description and a commitment agreement are missing. Both are essentials components of the CLARITI Hiring System where you write down all the expectations you want the employee to do. 

For example, if recommending retail products is mandatory, it needs to be clarified in the interview process. Or if attending training and team meetings is something you do on weekly and monthly basis. Or if doing laundry and maintaining inventory, etc. All expectations should be disclosed, clarified, agreed upon in the interview process, put in writing and signed off by both you and the new employee. This will help you avoid making costly mistakes and assist you in hiring A and B players instead of C and D players. 

The cost of team turnover and hiring mistakes is enormous. Always hire slow. Take your time and make sure everything is crystal clear prior to offering the position.  

Find the keys to implementing CLARITI in your practice in the AmSpa Store.

PRINCIPLE 3: Orientation 

Once you’ve hired the new employee, your goal is to position them for success. Begin with a professional Orientation. Your orientation manual should contain your operating guidelines, your organizational structure, your culture, your policies, procedures, your systems along with your employee manual. This can be a mini seminar they attend or it can be a video they sit and watch. Post-orientation, they should be tested to ensure they understand everything. This will provide clarity on what it means to be part of your team.  

PRINCIPLE 4: Spa & Medi Spa Training Manuals

No one is going to come to you completely trained. It’s essential to have training manuals to help you train your team. One thing I learned long ago is that for a business to succeed, you need to have effective systems in place, then keep training those systems until they are perfected. 

As a business consultant, I have the opportunity to speak to many medi spa owners and directors. The one thing I notice over and over is the lack of training structure within spas. Spa leaders must put on the trainer and coach hat more often if they want to build a dream team and reach new levels of success. 

I like to use sports analogies because they have a lot in common with business. Sports teams spend a lot of time training and sharpening their skills. Coaches are always on the floor watching and coaching  their teams. They take time-outs, watch videos, create plays and map-out game strategies. You have a TEAM and if you want to win, you need to spend time coaching and training. 

A. Business Training

Business training is almost non-existent within the industry. BIG MISTAKE! 

As leaders, it’s essential to train the team. Having training manuals by department will make your life a lot easier. Your manuals should include systems, strategies, processes, tools, forms, scripts, an approach on how to perform and deliver a great guest experience. 

Business training should include:

  • Revenue generation – Training the team on how to increase service and retail revenue (Click for more information on recommending treatment upgrades, series sales, or retail products)
  • Marketing – self and cross promoting to increase awareness  (Click for more information on building a medi spa marketing plan)
  • Guest experience – increasing retention rate
  • Promoting spa and medi spa memberships (Click for more information on developing your membership program)
  • Overall revenue generation – Increasing revenue per guest (Click for more information on compensation based on Volume Per Guest)

B. Technical Training 

Delivering a great experience is essential to your success. Your team must wow your guests with their skills, techniques and knowledge.

Technical training should include:

  • Treatment protocols
  • Product knowledge – services and retail
  • Contraindications
  • Ingredients and their benefits 
  • The spa and medi spa menu
  • Treatment room up keep
  • Inventory management
  • Monitoring product cost per treatment

C. Guest Relations Training – Reception Team 

Your client relations department can make you or break you.

Training manual should include:

  • Call management
  • Check-In
  • Check-Out
  • Retail sales
  • Future appointments
  • Membership sales
  • Scripts and strategies
  • Targets and goals

Click here to learn how to transform your guest relations department.

To be successful, a big emphasis must be placed on initial training and continual training.

PRINCIPLE 5: Develop Healthy Training Habits 

Training Schedule

Develop a training calendar and publish it. A training session can be as short as 30 minutes. Getting the team into a training habit is essential to your success. Schedule training sessions for the same day and time on a regular basis.

Training Agenda

Be prepared with an agenda and a purpose. Portray a professional image to your team and keep them engaged.

Evaluating Your Training

It is wise to evaluate your training to ensure productive sessions and obtain valuable feedback.

Assistant Coach

As in sports, the head coach has assistant coaches to assist them. Who are your assistant coaches? If you don’t have them, it’s time for you to develop some key players to assist you.

Setting Goals

Establish targets and goals for each department. Break them down into daily goals.

Measuring Results

Not measuring results is like getting on the playing field with a bunch of people running around and not keeping score of the game. Setting goals and measuring results is the only way to run a successful business.

Success requires planning, self-discipline, motivation, dedication and consistency. When you invest in your team’s technical/business training and development, your spa business will thrive and produce great results. 

Dori Soukup is the Founder and CEO of InSPAration Management, a firm specializing in medical spa and salon business development, advanced education, and business tools. Throughout the past 15 years, Soukup has contributed to the success of spa companies worldwide. Her passion is developing innovative, effective educational programs and business strategies leading to exponential growth and profits. She is the recipient of the American Spa Preferred Educator award and is a sought-after global speaker within the spa and medical spa industries.

 

Tags:  Business and Financials  Med Spa Ownership 

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