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OSHA: What You Don’t Know Can Hurt You

Posted By Administration, Thursday, October 11, 2018

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

Med spa ownership, delegation requirements, HIPAA, and fee-splitting are common issues to consider when coming up with your medical spa’s compliance plan, however it is vital that you do not overlook Occupational Safety and Health Administration (OSHA) standards in your medical aesthetic practice. You may not even know what OSHA is, what it does and why it does it. It’s time to change that. In fact, it’s mandatory that medical spas follow OSHA standards—your business depends on it.

When Lori Marshall, a physician's assistant at the West Side Medical Spa, reported to management that she had been stuck by a contaminated needle during a procedure, nobody knew what to do. When she tried to convey to management the need for procedures, she was told to wash the puncture site and get back to work. Lori felt betrayed and angry. At her husband’s suggestion, Lori called the Occupational Safety and Health Administration (OSHA) and reported the incident. Within hours, Lori was contacted by an OSHA compliance safety and health officer (CSHO), who took a detailed statement from Lori, and advised her that they would schedule an immediate site visit.

Two days later, an OSHA CSHO walked in to the West Side Medical Spa and identified herself to management, and advised that they were there in response to a complaint. Throughout the next three days, all employees were interviewed, and all documents and records were reviewed.  Within a matter of weeks, West Side Medical Spa received a letter containing the following citations and penalties.

No written bloodborne pathogens/exposure control plan                             $4,500 
Failure to train employees in BBP within 10 days of hire                               $2,500
Failure to provide medical follow-up after an exposure                                $2,500
Failure to maintain required needle stick logs                                                  $1,500
Failure to include employees in selection of safe medical devices             $2,500
Total penalties                                                                                                    $13,500

 
This scenario is based on an actual event, and all names have been change to avoid actual identification of the employee or the employer. 

What is OSHA?

The Occupational Safety and Health Administration (OSHA) is part of the United States Department of Labor. It was created by the Occupational Safety and Health Act of 1970, and its mission, according to the act itself, is “to assure safe and healthful working conditions for working men and women.” OSHA protects most private-sector workers in the United States, though its standards are typically associated in the public consciousness with industries such as construction and agriculture—fields in which physical labor is a major part of jobs, and workers may easily suffer injuries—or worse—if improperly trained.

However, medical spas and medical aesthetic facilities also must follow a number of OSHA standards, which may come as a surprise to their owners and operators. Often, unless these are followed, a business can be fined tremendously and ultimately, it can be shut down.

“Sadly, many medical spas may not even be aware that OSHA standards apply to them,” says Steve Wilder, president of Sorensen, Wilder & Associates, a safety and security risk management consulting group specializing in health care. “Medical spas are considered health care entities; therefore, they are subject to the health care requirements of OSHA.”

OSHA standards for medical spas

According to Wilder, medical spa owners and operators must comply with seven particular OSHA standards.
• Bloodborne pathogens—exposure control plan;
• Hazard communication;
• Recordkeeping;
• Slips, trips and falls;
• Tuberculosis;
• Workplace violence; and
• Laser safety.

The specific requirements for each standard can be found on OSHA’s website (www.osha.gov). In general, compliance for each standard requires commitment from management and employees; workplace analysis; detailed hazard prevention and control procedures; the completion of training programs; and detailed recordkeeping utilizing OSHA’s Form 300 log and Form 300A summary.

“If you’ve got the proper programs in place in those seven areas, including the written programs, the training programs and everything that’s required, you’re going to be in pretty good shape,” says Wilder. “It can be expensive, but there are a lot of alternate ways around it. You can find different ways to be creative—such as online training—and still meet the intent of the requirement.” 

What Happens If I Do Not Comply?

If OSHA conducts an audit on your medical spa and finds that it is in violation of workplace standards, you will be fined a considerable amount.

“OSHA has enforcement authority under the federal government,” says Wilder. “The standards that they develop can be enforced under penalty of law. What that means is that if they come in and audit a health-care provider—whether it’s a spa, hospital, nursing home, an ambulance or whatever—and they identify places in which the health-care provider is not compliant with the standards, they then have the authority to issue monetary fines.”

And those fines can be severe. OSHA can issue a fine of up to $7,500 for a first offense, though it is more likely that such a fine will be in the range of $1,500 to $5,000, depending on the severity of the deficiency. It is also important to keep in mind that each additional violation will result in an additional fine, and these fines can quickly add up. What’s more, you cannot be insured against such fines, so they will come directly off of your bottom line.

“I looked at [a case] for a nursing home client a couple of months ago and, when OSHA got done with them, their total penalties were more than $45,000,” explains Wilder. “And with no insurance to cover it, that’s a heck of a bite.”

And if a violation for which you have already been cited is found during a subsequent visit, or if said violation is found at a different location that is owned by the same person or company, OSHA has the authority to fine you up to $75,000 for that violation.

“You need to take it seriously,” cautions Wilder. “OSHA is not getting any gentler; they’re not getting any more workplace-friendly. Expect them to be really aggressive in infection control in all areas of medical care. Their focus is protecting employees, so anywhere that employees can get exposed to an injury risk or to an illness risk, they’re aggressive about it.”

Knowledge is Power

Bringing your medical practice up to OSHA code is not an option. It’s a necessity and OSHA does not accept ignorance as an excuse. Now that you know what is expected of your business, you must take the necessary steps and move forward in order to avoid major financial penalties that very easily could result in the closing of your business. Click here to read more articles about med spa law topics and how they could affect your business.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn ways to build and run your medical spa practice profitably, and within the bounds of the law.

 

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

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The Med Spa Industry Needs Minimum Standards, and It Needs Your Help to Make It Happen

Posted By Administration, Wednesday, October 10, 2018

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

AmSpa has been watching the medical aesthetics industry grow for five years, and I’ve personally been involved in compliance issues involving the industry for more than 10 years. In that time, I’ve continually observed a total inconsistency across states and practices regarding who is doing what procedure and the risk that is incurred with that, and it both amazes and disappoints me.

There needs to be some minimum standard that all medical spas follow. The reason I’ve become concerned about this is because, recently, I was interviewed for a story that will be published in the coming weeks, and the author asked a lot of pointed questions about the industry—she wanted to know about people getting injured, unsafe practices, lawsuits, regulations, and so forth; this is the third or fourth time in the past year that these issues have come up. However, I continue to see medical spas that are doing things that they just should not be doing, and it harms the entire industry.

Self-regulation is the only way for the industry to stop this, and AmSpa wants to help lead the way by creating some minimum standards that everyone can buy into. However, the only way this is going to work is if the entire industry buys into it.

One of the reasons I’m bringing this up relates to injectables. We have had an ongoing discussion with aestheticians, medical assistants, and practical nurses—basically everyone who is not an RN or above—about whether or not they should be performing injectable treatments. Most states basically allow doctors to delegate these treatments to whomever they want, but that doesn’t necessarily mean that aestheticians should be injecting. 

In fact, my law firm, ByrdAdatto, and AmSpa have been steadfast in the opinion that only nurses and above should be performing these procedures, and we think that needs to become a rule. If patients get injured because non-licensed professionals are performing erroneous procedures, the industry is going to be legislated out of existence.

It is my strong belief that if the industry regulates and sets minimum rules, the industry will become bigger, because it will create standards and safety, and end the particularly egregious accidents that are happening.

To that end, I am happy to announce that AmSpa is embarking on a project to create minimum standards, including, but not limited to items such as:

Who can perform certain treatments;
Training standards; 
Ownership standards; and 
Supervisory requirements. 

However, it is only going to go so far unless practices get on board with regulation. There can’t continue to be stories of people getting injured and medical spas being shut down because they are not following proper medical protocols. All this has got to stop. Until it does, this industry is only going to go so far, and possibly could even go in the opposite direction.

If you think this can’t happen, look at the National Football League, which is going through a major shift because people are finally beginning to realize how dangerous the game is due to emerging stories about the effects of chronic traumatic encephalopathy. More and more parents are not allowing their children to play football, and who knows what will happen to the game in 20 years.

We’re asking for everyone’s help with this initiative. It’s not only important—it’s crucial. I sense there is blood in the water when it comes to media coverage of the medical aesthetics industry, because we’re getting contacted more and more often by reporters and authors who are working on negative stories, and industry professionals have got to do whatever they can to protect themselves.

 

Stay tuned for information in the coming months regarding standards in the medical spa industry.

Tags:  Business and Financials  Med Spa Law 

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Can RNs Inject Botox in Florida? The Nursing Board Says… It’s Complicated

Posted By Administration, Tuesday, October 9, 2018

By Patrick O’Brien, Legal Coordinator for the American Med Spa Association

The question of who can inject Botox and fillers in a medical spa is one of the most common in the industry, and for Florida it seems that the answer may be more strict than in many other states. Botulinum toxins (i.e. Botox, Dysport, or Xeomin) and injectable fillers are year after year one of the top procedures performed in med spas and they are consistently among the top procedures sought by patients. This popularity is the case in Florida as well. But who can perform Botox and dermal filler procedures in Florida? 

Can Physicians? Yes, physicians are licensed to diagnose, treat and prescribe for any human disease or injury. Physician assistants can as well if their supervising physician delegates the practices in a written protocol. Nurse practitioners may also perform botulinum toxin injections if authorized by their supervisory protocols. What about registered nurses (RNs)? Well... let’s look at the law.

Florida Board of Medicine
According to the Florida Board of Medicine there are no laws or rules that directly address who may or may not inject. RNs must practice within the scope of practice of their license as described in the Nurse Practice Act. Registered Nurses are licensed to practice “professional nursing” which is defined as, among other things, 
“the administration of medications and treatments as prescribed or authorized by a duly licensed practitioner authorized by the laws of this state to prescribe such medications and treatments.”

Based on that it would seem that RNs should be able to perform these treatments. After all, physicians definitely can prescribe and inject toxins and filler and these are certainly either a medication or treatment (or both). But the answer is not so clear from the Florida Board of Nursing.

A Challenged Rule

According to a 2015 administrative hearing which you can read here, the Nursing Board had an answer to a frequently asked question on their website. It read 

“Can a practical or registered nurse inject Botox? The injection of Botox is not within the scope of practice for practical or registered nurses and does not constitute the administration of medication”.

The hearing in question was challenging the validity of the statement on the grounds that it constituted a “rule” that was adopted in violation of Florida’s rulemaking procedure statute. The final order found that rule had indeed been adopted in violation of the statute and prohibited the Board from relying on the statement (or similar statements) as a basis for disciplinary actions. That was in March of 2015, and the “Botox FAQ” no longer appears on the Board’s website, and it doesn’t appear that an administrative rule was passed since then. 

The Supervision Question

In February of 2017 we have a disciplinary action made against an RN for injecting Botox without a physician’s order, which you can read here. This makes sense as an RN is permitted to administer treatments and medications when authorized by the prescribing practitioner. 

Based on that ruling, hypothetically, if this RN had a valid physician’s order she would not have been subject to discipline, so we have a better idea of the Board’s stance as to what an RN needs to do to inject Botox versus the 2015 blanket statement. 

But not so fast! 

We have an order issued later that same year from a request for a declaratory statement in October of 2017. You can read it in full here.. In it, the RN stated they had training in injecting Botox and dermal fillers and provided two certificates from training courses. The RN intended to provide Botox and dermal filler treatments under the supervision of a physician. On the face of it this seems promising: we have an RN with training in a procedure getting physician’s orders to do the procedures. It should meet all of the tests to fit within the RN’s statutory scope of practice. 

However the Board decided that, no, the RN was not permitted to do this. In the order they draw a distinction that “aesthetic injections” are not part of the scope of practice for RNs. It should be noted that declaratory statements are the Board’s opinion regarding the requesting nurse’s specific situation and may not be applicable to other sets of facts.

So Where Does That Leave Us? 

It seems the Board of Nursing has an unwritten policy that RNs cannot inject Botox or dermal fillers even when under the supervision of a physician and with specific training and education. It is true that “injections for aesthetic purposes” are not specifically authorized in an RN’s scope of practice, but likewise there is nothing specifically forbidding the practice or declaring toxins, fillers, or “aesthetic injections” not a medicine or treatment. So Florida registered nurses are left in limbo as to what they are actually permitted to do with their license. 

Plainly reading the statutes points to a different answer than the Nursing Board has been giving. AmSpa and partner law firm ByrdAdatto are reaching out to the Board for clarification and will post the information as soon as it is available.

Tags:  Med Spa Law  Med Spa Ownership 

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Keys to Keeping Medical Records in a Medical Spa

Posted By Administration, Monday, October 8, 2018

By Patrick O’Brien, Legal Coordinator for the American Med Spa Association

Medical spa medical records are a piece of your compliance plan that cannot be overlooked. It’s easy to look past them when considering other parts of building your business, but they are vital to your practice. According to our 2017 State of the Industry Report med spas indicated that 70% of their clients are repeat customers. This is a wonderful statistic to read because loyal customers are happy/satisfied customers and they can and will generate great recommendations and buzz for new customers. But these loyal clients and customers are much more than that; they are also patients. Because most of the procedures offered in med spas are medical procedures the practice must retain appropriate records just as any other clinic or doctor’s office would. 

The content and retention requirements for medical records are set by each state and their respective medical boards. In general the records should include, among other things, medical histories, exam notes, details of procedures and treatments. Typically these should be kept for several years after seeing the patient with the two years that New Mexico requires being the shorter side and 10 years as in Tennessee and South Carolina being on the longer side. Physicians may be subject to Board discipline for failing to properly maintain and keep patient records, so you will want to review your own state statutes and advice of your medical board to determine what information should be kept in the medical records and how long you should keep them. 

Watch AmSpa’s webinar on patient charting for more information on the topic.

The 2017 industry survey also uncovered this interesting stat: half of med spas we heard from see more than 50 patients a week. This is great from a business perspective, but daunting from a record keeping perspective. Every one of those visits will need an entry made in that patient’s records, and the med spa’s records system, in addition to being able to keep up with the volume of updates, will also need to comply with Federal and State privacy laws. 

The big one is the federal Health Insurance Portability and Accountability Act (HIPAA). I’m sure you’ve heard more about HIPAA than you ever cared to so I won’t bore you with too much detail other than to say patient medical information needs to be securely stored and accessible only to authorized individuals. Most states also have a version of a patient information privacy law with similar concepts. 

While the general gist of the laws are “protect patient information” you’ll need to check your jurisdiction for specific implementation requirements. For instance California has the Confidentiality of Medical Information Act which has stricter requirements on when and who you can disclose confidential health information. AmSpa members can check their state’s medical aesthetic legal summary, or utilize their annual 15-20 minute complimentary compliance call with ByrdAdatto for more specific information.

It takes a lot to build a successful med spa and the more successful it becomes the more important it is to have a streamlined and secure medical record system and policy. Don’t let paperwork be a limitation on your Spa’s success. If you want to learn more about record retention policies and systems consider attending one of AmSpa’s Medical Spa & Aesthetic Boot Camps to learn medical spa legal and business best-practices.
 
If you liked reading through our 2017 State of the Industry Report we will be gathering data for 2019 survey soon. Did your spa see more customers this year? Did you add new service lines? Or bring on more staff? We hope to hear from you so together we can define data in the medical spa industry.

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

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Telemedicine Law: What the Delaware Update Means for Your Med Spa

Posted By Administration, Friday, October 5, 2018

By Brad Adatto, JD, Partner, ByrdAdatto
 
There’s a new rule concerning telemedicine in Delaware that could potentially affect you and your practice. On June 1, 2018, the Delaware Board of Medical Licensure and Discipline (“Board”) issued a rule to clear up some important issues in the Delaware telemedicine law surrounding patient exams and prescriptions. Telemedicine promises to leverage telecommunication technology to improve delivery and efficiency of medical care. However, it is not risk free. Without the traditional in-person patient exams, the possibility of abuse and less attentive care is increased. To combat this concern, Delaware enacted a telemedicine law in 2015 that lays out a framework for appropriate telemedicine implementation.
 
The law requires that before a physician can first diagnose and treat a patient via telemedicine, they must have formed a patient-physician relationship and perform an appropriate exam of that patient. This patient exam can take four possible forms. The first two methods are to either have an in-person exam with the attending physician, or have another Delaware licensed physician present with the patient. While these methods can be effective at overcoming the deficiencies of audio/video meetings, they also remove the “tele” aspect of telemedicine.
 
The third method is to base the diagnosis on audio and video electronic communication. Here the Board has clarified that the audio/video communication must be live and in real-time. This means that the physician cannot rely solely on saved images and data.  Therefore, this particular method, known as “store and forward,” must use some sort of real-time video conferencing.
 
The fourth approved method is for the examination to use telemedicine practice guidelines that have been developed by “major medical specialty societies”. Through this method, the Board is directing Delaware physicians to look to guidelines promulgated by societies that are members of the Council of Medical Specialty Societies to tailor their telemedicine exam policies. You can find a list of members here.
 
Finally, the Board has added a major restriction to prescribing opioids via telemedicine. Physicians practicing through telemedicine can prescribe medications under the same standards they use in their in-person practice. However, the rule prohibits telemedicine-practicing physicians from prescribing opioids unless the prescription is part of an addiction treatment program permitted by the Delaware’s Division of Substance Abuse and Mental Health and performed according to the Division’s guidelines. This restriction should close off a possible avenue for misuse in the face of the opioid epidemic. The Board’s rules follow many other states, such as Texas that passed a law in 2017 with similar rules and regulations.
 
To see how your state handle telemedicine check the AmSpa medical aesthetic legal summary.
 
Hopefully the reduced uncertainty that these rules bring will not only prompt more Delaware physicians to employ telemedicine in their practices but allow more Delawareans to benefit from this cutting edge technology as well. For more information on your state’s laws and regulations, attend an AmSpa Medical Spa & Aesthetic Boot Camp and be the next med spa success story.
 
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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How Core Doctors Are Missing Out With Med Spas, and How They Can Fix It

Posted By Administration, Thursday, October 4, 2018

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

The medical spa industry is worth over $4 billion and as it continues to boom core doctors—plastic surgeons, facial plastic surgeons, oculoplastic surgeons, and cosmetic dermatologists—are uniquely placed to do exceptionally well in this still-expanding space. As physicians, they are allowed to own medical spas, and ideally, they would not only profit from the medical spas themselves, but also use them to direct business to their surgical practices. After all, medical spas tend to do a lot of the same things these core doctors do, albeit non-invasively, and it does stand to reason that if patients go to a medical spa looking for a Botox injection, they might eventually want a nose job or a face-lift. In that case, the core doctor who owns the medical spa might be uniquely positioned to offer his or her services.

However, despite the apparent synergy between these two types of businesses, many of the core doctors who treat medical spas as extensions of their surgical practices end up very disappointed in the actual results. I chat with core doctors all the time, and those who have opened medical spas with the idea of using them primarily as feeders for their practices tend to view them as poor investments. Their medical spas tend to flounder, and the amount of business they drive to their surgical practices is disappointing.

In truth, medical spas that are designed primarily to act as feeders for surgical practices are set up to fail, and most core doctors tend to be very bad medical spa owners. They typically don’t understand the medical spa business, how much work it takes, the profit margins, the necessary volume, and numerous other factors vital to maintaining a successful medical spa. But that doesn’t mean that a medical spa can’t still be a successful business for a core doctor or help to generate surgical business—it simply means that a core doctor needs to understand the realities of the medical spa industry before he or she decides to dive headlong into it.

A Different Kind of Practice

The business model with which core doctors tend to be familiar is very different from the one under which medical spas operate. Surgical practices offer big-ticket procedures, such as breast augmentations and face-lifts; therefore, they do not need to deal with a large volume of patients and they do not need to do as much marketing as, say, a retail outlet —by the nature of their business, they tend to generate sufficient revenue to at least get by.

Medical spas are very different. Granted, they must follow the same rules and regulations to which more traditional medical facilities adhere, but the medical aesthetic field is unique in the medical world in that it is entirely elective and entirely cash-based. People who use medical spas do so because they want to, not because they need to, and treatments at medical spas are much less expensive than the ones available from core doctors’ surgical practices. Therefore, for a medical spa to succeed, it must have a high volume of patients, its employees must master the art of selling, and it must do what it can to get patients to return. In other words, it must be run like a retail center rather than a medical office.

For that reason, medical spa operators need to incorporate a totally different mind-set than the type that is typically utilized by core doctors. Medical spas run by core doctors who do not adapt to a more retail-oriented focus often end up failing. When I tell core doctors that I have medical spa clients who generate up to $6 million annually, they are usually blown away. Many of them cannot wrap their minds around how that can be possible.

Understand What You Know, And What You Don’t

In order for a medical spa to succeed in creating business for a core doctor’s surgical practice, it must first succeed on its own terms and, to facilitate that, core doctors typically need to let someone else run the show. Core doctors need to come to terms with the fact that the medical spa business is much, much different than the one they are used to, and they need to partner with people who are experienced with marketing and sales in a retail environment.

A core doctor’s time is better spent doing the things medical spas cannot do: highly profitable surgical procedures. If a core doctor can get a true businessperson to operate the med spa, they will do much better in the end. Giving up this control can be difficult for core doctors to do, since a lifetime of academic and financial success tends to make them think they can achieve anything. However, most doctors don’t go to business school—they usually don’t know retail and they don’t typically understand sales. These qualities—not medical knowledge or surgical skill—are what tend to make medical spas successful.

In addition, medical spa team members need to have the tools and the processes to be able to sell. A medical spa receptionist, for example, should not be someone fresh out of high school and being paid $12 an hour; a receptionist should be one of the highest-paid people on an administrative staff, because he or she needs to be able to sell. 

A medical spa should have talk tracks for nurses and estheticians, so they understand that their jobs are about selling themselves and selling the doctor. Employees at medical spas also need to understand that selling retail products is very important to maintaining a healthy business. These are things that successful medical spas do that may seem distasteful to doctors, who are used to a professional environment that is less aggressive. But this is the reality of the medical spa industry, and every day more and more physicians are finding this to be true.

The businesspeople who are entering the medical spa industry are willing to do whatever it takes to be successful. A core doctor might think he or she doesn’t need help, but chances are the opposite is true.

There are many resources in the AmSpa store to help you build your business and to train your team to put your medical spa practice in the best position to succeed.

Still the Practice of Medicine

Although a medical aesthetic practice must be focused on sales, it is also required to follow the medical rules and regulations of the state in which it is located. These laws can vary widely depending on your state, so consult an attorney familiar with aesthetics when setting up your practice and your procedures. AmSpa members can check their state’s medical aesthetic legal summary to see the rules and regulations governing their practice.

Most states observe a doctrine known as the corporate practice of medicine, which dictates that a medical practice must be owned by a physician or a physician-owned corporation. As previously established, medical spas are retail outlets, but they are also unquestionably medical practices, so in states where the corporate practice of medicine is observed, medical spas must be entirely owned by a doctor or his or her corporation. 

This can present difficulties for a core doctor who wishes to partner with a businessperson to run a medical spa, because it is likely that said businessperson is going to want some equity in the practice. If the state in which the medical spa is located observes the corporate practice of medicine, this would be illegal.

Ownership Options

There are options, however. If a core doctor wishes to partner with an entrepreneur to open a medical spa in a corporate-practice-of-medicine state, they can look into setting up a management services organization (MSO). As its name suggests, an MSO provides management services. It partners with a doctor, for whom a separate company is created; this doctor’s company exclusively provides medical services. 

This arrangement, known as a management service agreement (MSA), allows a non-physician to supervise almost every aspect of a medical aesthetic business, including branding, marketing, owning the real estate, payroll, human resources, accounting, and billing—everything except the actual administration of medical services.

Essentially, this is a lessor/lessee situation. More often than not, the MSO owns and maintains the facility, while the doctor occupies the space. The doctor pays the MSO “rent” for the right to occupy the space, and the MSO functions in much the same way as a landlord, maintaining the facility and keeping the doctor as comfortable as possible. 

However, unlike a rental agreement that is governed by a lease that dictates the occupant pay a set amount of money for a certain term, the amount paid to the MSO fluctuates according to the amount of business conducted by the physician. If the medical organization treats more patients in a month or quarter (depending on the terms of the agreement) than it did the previous month, the MSO will also make more money. This represents the sort of equity a core doctor’s business partner might seek—in function, if not form. Read more on MSOs here.

The corporate practice of medicine also dictates the ways in which rank-and-file medical spa employees can be incentivized. In the world of retail, salespeople are often offered commission—they receive a percentage of the sales they make that meet certain conditions set by their employers. However, in states that observe the corporate practice of medicine, all payments for medical services must be made in full to a physician or physician-owned corporation. In these states, if a medical spa owner is paying employees commission, he or she is engaging in an illegal practice known as fee-splitting. 

This is somewhat common at medical spas—the people who own and operate these establishments generally only wish to reward the people who bring business to the practice. But the fact remains that if a medical spa is found to be engaging in fee-splitting in a state in which it is illegal, the doctor who owns the practice could face the suspension or revocation of his or her license, as well as a significant fine. What’s more, the person who receives the commission payment is also subject to a fine. Again, a performance-based bonus structure can be offered as an alternative to commission. Read more about med spa compensation here.

Medical spa owners and operators who are not familiar with the ownership requirements in their states should contact an experienced health care attorney to learn what is expected of them. 

Becoming a medical director for a medical spa, rather than opening his or her own facility, is another option for a core doctor. A lot of core doctors I have represented are doing this very successfully. The advantage of this arrangement is that the core doctors don’t need to deal with actual day-to-day operation of a retail store; they can simply lend their name to a medical spa, perform some consultations, oversee the practice’s other medical professionals, and then high-tail it back to their own practice rather than needing to worry about the minutiae of the business. This can provide a core doctor with a look at the industry without requiring him or her to make the enormous ownership commitment. It’s important, however, to understand the risks and responsibilities of med spa medical directors before making this decision.

Conclusion

The core doctors who oversee a properly maintained and operated medical spa stand to gain a great deal from the arrangement. A successful medical spa can earn a lot of money by itself and, if a medical spa has a lot of patients, it makes sense that the number of referrals to an affiliated core doctor’s surgical practice would be higher than if the medical spa is struggling.

If a core doctor wants to enter the medical aesthetic industry, he or she cannot engage in half-measures. A medical spa that is created to function primarily as an addition to a surgical practice is unlikely to find a great deal of success; a medical spa that is designed to succeed on its own terms, however, offers numerous benefits to its owners, not the least of which is the possibility of increased surgical business.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn the legal and business best-practices to build and run a successful medical spa practice.

 

Tags:  Business and Financials  Med Spa Ownership 

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5 Tips to Make Med Spa Consultations More Effective For Your Practice

Posted By Administration, Wednesday, October 3, 2018

By Dori Soukup, CEO and Founder of InSPAration Management

A consultation in a medical spa isn’t just the introductory part of a treatment, it’s a key piece of your med spa process that can lead to better results for your patients and better profitability for your practice. 

The “GUEST” is the most essential component to the success of any medical spa business. The way we take care of our guests while they are in the med spa is what determines whether they come back or disappear forever. 

When I ask industry professionals why they chose a career in the med spa industry, most of them say it was so that they could help people. Yet when a new guest visits a spa, they are normally expected to simply select a treatment from the menu, with is then administered with little (if any) discussion. Sometimes I intentionally select a treatment from the menu that is wrong for me to see if the provider will recommend something else more ideally suited for me. They rarely do. 

Why? Because in most cases, med spa professionals don’t take the time to conduct a proper guest consultation. To me, the guest consultation is the most important step of the entire experience. The consultation insures that providers are going to provide the guest with exactly what they need, address their challenges and deliver the results they are looking for. Without a consultation, we are disappointing our guests and hurting our retention rate.

If you want to improve your guest satisfaction, retention rate and income, I suggest implementing the following five steps to generating revenue through guest consultation. 

Check the AmSpa Store for more resources to help you implement your own successful consultation process.

1. Schedule Time to Conduct a Detailed Consultation

When you have a new patient, you should always reserve a consultation first in order to learn and discover their concerns and needs. It’s wise to have the receptionist reserve time for both a treatment and a consultation. 

Have the provider decide which treatment is ideal for the patient once a consultation is performed. To do this, your receptionist must be trained on how to present the consultation appointment and make the reservation for it. 

2. Identify Guest Concerns 

To identify the guest’s concerns, you can use analysis equipment for face and body depending on the type of treatments you offer. We found that when people see their skin care issues with their own eyes, they are more motivated to take action on your recommendations. You can also use consultation forms; just make sure the form includes problems that guests could be experiencing with their face and body. The guest will mark the concerns they have, which gives you the opportunity to make the appropriate recommendations. You should focus on solving their problems via your menu of services. 

3. Develop a Customized Treatment Program 

Addressing people’s concerns and gaining results normally requires multiple treatments. As a medical spa professional, you should recommend a series of treatments, not just one. One treatment is not going to solve problems or produce the results your guests are looking for. 

4. Recommend a Home Care Program 

At the end of the first treatment, take the time to help your guests by recommending a home care regimen. Home care is an important part of gaining results. Don’t cheat your guests of your professional advice or lose the additional income you could generate from home care products.  Find resources to help you train your team to better recommend products here in the AmSpa store.

5. Measure Results

 Since the goal is to recommend a series of treatments with your consultation, it’s important to measure results and gain a testimonial from happy clients. You can take before and after pictures, document conditions or measure improvements. Whichever method you choose, make sure you gain a raving fan to help build your business. 

When establishing your consultation procedure also remember that medical spas are medical practices, so before a treatment plan is finalized, and especially before a patient receives a procedure he or she must be seen by a physician or mid-level practitioner. Conducting the initial exam (or good faith exam) is one of the top legal issues in the medical spa industry so make sure your patients see the required medical professional prior to their first treatment.

Conducting a guest consultation is truly the most important function of your practice. It is the foundation of the entire experience. Don’t dismiss it, embrace it! Implementing the consultation process with every new guest will help you boost client satisfaction and your income! 

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  Guest Post 

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What Does Certification Mean in a Medical Spa?

Posted By Administration, Tuesday, October 2, 2018

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

Certifications are common in medical spas, but some of them mean more than others. In some cases, for instance, a certification doesn’t necessarily even mean you can perform the treatment in your state. Understand the difference between Board Certification, training programs that offer certificates, and state licenses so you don’t end up purchasing equipment you can’t legally use or worse, on the wrong side of an investigation.

Board Certified

In many fields of medicine, board certification can inform patients of a doctor’s specialization and help them choose which doctor is right for them. In the medical aesthetic and medical spa space, however, there are multiple types of certification to consider, and determining which are meaningful and which should be looked at with some trepidation is a dilemma for both consumers and medical spa operators.

“Board certification” is a state or nationally recognized certification by a board that has been created to keep certain standards in a particular profession. For example, in order for a plastic surgeon to achieve board certification, he or she must go to school, train for a certain amount of time under another surgeon, and take a board exam, among other requirements. There are numerous specialties in which a doctor can achieve board certification, including obstetrician/gynecologist, family practice, neurology, and general surgery. 

These certifications are extremely precise, and they help inform consumers who are searching for a very specific type of doctor. If you need surgery, for instance, you are going to look for a board-certified surgeon, because this guarantees that the surgeon in question has met a governing body’s standard, and it can be presumed that standard is reasonably high.

Certification Classes

However, in medical spas, you’re much more likely to come across people who claim to be certified in areas such as laser use and injectables. This is a whole different world of certifications—these are not based on state or national standards, since those standards don’t yet exist, generally speaking. (Some states—including Georgia, New York, and Texas—have enacted laser certification laws that provide for a certain level of training, but the focuses of these certifications is very narrow and typically are relegated to laser hair removal. See AmSpa’s medical aesthetic legal summary to see if there are aesthetic certifications in your state.)

The “certified” laser technician is the most common of these types of professionals, but being certified in laser use typically means that a person passed a course administered by the manufacturer of a laser he or she is using. In most cases, this does not, in any way, mean that a state medical board or state licensing board recognizes that training as being substantial enough to warrant certification. Any private company can train someone and provide a certificate that states the person completed that training. In fact, many people who complete these courses declare themselves to be “certified,” but this is not the same thing as being board-certified.

In the medical aesthetics industry, many of these certifications are available, but none should provide the public with the same level of confidence that a doctor’s board certification does. It is up to the medical spa industry and the providers of the services to ensure that the public is not misled. 

Additionally, these certification classes may offer some level of training in the procedure but generally do necessarily allow a practitioner to perform the treatment in their state with or without supervision or delegation of a doctor. Check with your state boards, the AmSpa legal summary, or an attorney familiar with aesthetics before offering a new procedure. 

Truth in Advertising

Medical providers are bound to very specific requirements when it comes to advertising. If you say you are certified in something, you need to be able to prove that’s true. If a laser tech is certified by a laser manufacturer rather than an actual medical board, this must be made clear in any public-facing material. And though this should go without saying, a certification to fire a laser in a particular state is very different than a license to practice medicine, so saying that anyone other than a doctor is “board certified” likely is a good way to get a practice investigated.

(Note: Physician assistants can be certified through the National Commission on Certification of Physician Assistants, but this also does not imply a focus on aesthetics. The NCCPA provides an online tool to check if someone with a PA-C has actually been certified by the organization.)

All practitioners need to be careful about how they represent themselves to the public, and they need to be somewhat wary when a laser company says it can certify someone for a particular procedure, because that does not necessarily mean that the state recognizes their ability to perform it. Ultimately, responsibility and accountability lies with the on-site doctor to determine if a person is able to perform a procedure, regardless of whether or not he or she has been certified by a manufacturer.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn what you can and can’t do in a med spa, and to find ways to build an efficient and profitable medical spa practice.

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

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FTC Announces Enforcement Action Against IV Therapy Clinic for Misleading Advertising

Posted By Administration, Monday, October 1, 2018

By Patrick O’Brien, J.D., Legal Coordinator for the American Med Spa Association

The Federal Trade Commission (FTC) recently announced their first ever enforcement action against a provider of intravenous therapy (IV therapy) for making unsupported claims about the health benefits of their IV treatments. You can read the complaint and press release by clicking here. But in brief the FTC alleges that iV Bar’s website contained multiple false, and unsubstantiated representations as to the clinical or scientific effectiveness of the treatments. Setting aside the merit of the FTC’s claims, this case does highlight a hidden danger of medical spa and IV bar ownership: advertising.

Advertising is a critical part of a successful med spa or IV therapy clinic. Effective advertising is vitally important in attracting new patients and informing existing patients of other services you offer. You want to let consumers know of your expertise, the benefits you can provide, and to distinguish your practice above your competitors. However, med spa and IV therapy clinic advertisements, as with other medical practices, fall under several layers of rules and regulations. Since advertising by its very nature is easily accessible out in the public sphere it makes it a simple matter for regulatory bodies to locate advertisements that violate the laws. Therefore it is beneficial for med spa and IV bar owners to have at least some familiarity with the limitations of what they can say in ads.

Read more about legal issues in medical spa advertising here.

Deceptive Practices Acts

In addition to the Federal Trade Commission Act, many states have adopted some form of a deceptive trade practices act designed to protect consumers from fraudulent and deceptive advertising and statements. These are usually enforced by the State’s attorney general and many provide private rights of action allowing the consumer to sue the business directly. For example the Texas Deceptive Trade Practices Act makes it a deceptive practice to represent that goods or services have approval, uses, benefits which they do not. Damages in the Texas statute can include compensation for economic and mental anguish and if the court finds that the conduct was “knowing” and “intentional” it can result in three times the economic and mental anguish damages being awarded to the consumer. 

Medical Licensing Boards

Med spas and IV therapy clinics are medical practices and as such will fall under their state’s rules for physician advertising and professional conduct. Many state Medical Practice Acts, including Florida’s, prohibit physicians from using false, deceptive, or misleading advertising or as is the case in New Hampshire claiming professional superiority. Even if not explicitly in the statutes, state medical board’s ethics rules and opinions often contain similar prohibitions. For a good general overview there are the American Medical Association’s ethics opinions such as this one which states, in part:

Because the public can sometimes be deceived by the use of medical terms or illustrations that are difficult to understand, physicians should design the form of communication to communicate the information contained therein to the public in a readily comprehensible manner. Aggressive, high pressure advertising and publicity should be avoided if they create unjustified medical expectations or are accompanied by deceptive claims. The key issue, however, is whether advertising or publicity, regardless of format or content, is true and not materially misleading.

Often, state medical disciplinary boards are influenced or adopt guidelines similar to the AMA’s.  
The business name you advertise under can also be subject to various rules. Several states, one such being California, prohibit a physician from doing business under a name different than their own unless they obtain a fictitious or assumed name registration. Still other states limit the use of words such as “spa”, “clinic”, or “medical” unless certain requirements are met or procedures offered.

AmSpa members can utilize their annual compliance consultation call with the law firm of ByrdAdatto to understand the medical advertising requirements in their particular state.

Conclusion

False, misleading, and deceptive. If you feel like you are seeing a trend you are right. Generally these laws and boards use similar language to protect consumers and patients. However the specific interpretation and implementation of these terms is not identical and one type of ad or commercial may be acceptable in one state and not in another. So before you launch a “too good to be true” campaign you would do well have it reviewed by your counsel or to read up on your jurisdiction’s advertising rules.  

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn how to build and run a profitable, efficient, and legally compliant medical spa practice.

Patrick O'Brien grew up in west Texas loving the outdoors and Scouting, earning the rank of Eagle Scout. After attending Southwestern University, he worked in Margin trading with a major investment brokerage. There, he saw how yesterday’s decisions affect tomorrow, and learned how to proactively navigate situations to give clients the best possible outcome. This problem solving inspired his return to school and pursuit of a law degree from Southern Methodist University. He brings his legal training and business acumen to AmSpa to get ahead of legislative changes which affect our members. When he is not in the office he enjoys reading the same book to his toddler for literally the twentieth time today. But he laughs every time so it is worth it. He also loves cooking and spending time outdoors with his wife, son, and loyal hound.

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

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The Keys to Private Equity in Med Spas for DSOs and MSOs

Posted By Administration, Friday, September 28, 2018

By Michael S. Byrd, JD, Partner, ByrdAdatto

In many states, only doctors can own a medical spa, unless you set up a special organizational structure to manage your practice.

Dental Service Organizations (DSOs) and Management Service Organizations (MSOs) share similar business and legal compliance characteristics. DSOs are management organizations in the business of providing all back-office business management services to dental practices. MSOs, on the other hand, provide similar business services to support medical practices.

Learn more about MSOs by reading here or by watching our webinar on the topic.

The common thread between MSOs and DSOs in the private equity world is that they tend to manage practices that operate like a retail store from a business perspective and like a health care practice from a regulatory compliance perspective. In the DSO market, this looks like branded chain of dental offices typically found in retail real estate space. Similarly, the MSO market looks like retail elective health care services, such as medical spas, weight loss centers, and IV therapy centers. In addition to the business similarities of DSOs and MSOs, the regulatory hurdles are similar for the management of dental and medical practices, and the legal solutions to these regulatory hurdles are structurally the same.

The DSO market is the mature older brother of the emerging MSO market. Tusk Partners recently with fascinating insights titled “What private equity looks for in acquiring a DSO.” The article highlights the financial condition of private equity in the DSO market, noting a strong seller’s market. The key indicator of this financial market for 2017 is a valuation multiple of around 10.5 times EBITDA. The article additionally highlighted feedback from private equity professionals on the question of what private equity looks for when evaluating a DSO business. The salient points from the feedback highlighted in this article is:

  • PE Investors are typically growth oriented, versus value oriented. It’s important to be clear that the business strategy is in alignment with private equity strategy.
  • The founders must be able to clearly articulate a vision for the next 3-5 years.
  • The founders must be able to clearly communicate the competitive advantage (secret sauce) over the competition.
  • The DSO must be compliant from a regulatory standpoint. Compliance includes the legal structure from a corporate practice perspective, as well as patient privacy and patient billing.
  • The DSO must be able to articulate a strategy to attract and keep clinicians.

Businesses in the younger and emerging MSO market would be wise to pay attention to the trends and developments in the DSO market. Private equity is coming in to the MSO market even though it is several years younger than the more developed DSO market. Clint Carnell, the CEO of The HydraFacial Company and founder and chairman of Orange Twist Brands, has a deep background in private equity funding. After discussing the legal regulatory complexities of the MSO model and the insights from the Tusk Partners article, I asked Clint what he believed to be the most important strategy in building an MSO towards private equity funding. Clint succinctly and profoundly responded “You have to keep it simple.” Clint’s response is telling, as it spotlights the business from the view of a potential private equity investor. Private equity investors must be able to clearly understand the business itself, the value proposition, and the business’s vision. If the MSO house is not in order from either a regulatory or business perspective, private equity will quickly run.

ByrdAdatto represents DSOs and MSOs in all stages and helps build and maintain compliant structures that are designed to withstand the scrutiny of private equity due diligence. If you have any questions regarding your DSO or MSO business, need assistance with corporate structure, or merger and acquisition activity, please contact ByrdAdatto. AmSpa members receive a complimentary 15-20 minute annual compliance consultation call.

Michael S. Byrd , JD, is a partner with the law firm of ByrdAdatto. With his background as both a litigator and transactional attorney, Michael brings a comprehensive perspective to business and health care issues. He has been named to Texas Rising Stars and Texas Super Lawyers, published by Thompson Reuters, for multiple years (2009-2016) and recognized as a Best Lawyer in Dallas by D Magazine (2013, 2016).

Tags:  Business and Financials  Med Spa Ownership 

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