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How Practices Can Effectively Use Social Media

Posted By Administration, Thursday, August 22, 2019

filming surgery

By Renee E. Coover, JD, ByrdAdatto

Social media in plastic surgery practice continues to explode, driven by the marketing opportunities created by the public’s unabashed desire for before-and-after photos and live patient surgeries. But with this reliance on social media to market and advertise, a plastic surgeon’s practice assumes often unknown risks. In a recent Los Angeles Magazine article, Beverly Hills Plastic Surgeon Ashkam Ghavami, MD, who has almost 400,000 Instagram followers to his practice, acknowledged the challenges in balancing ethics with entertainment. According to Ghavami, “Because social media is the most valuable marketing tool of our trade, some surgeons post deceptive before-and-after photos of patients on social media. This creates an uneven playing field and, worse, harms the potential patients who are trying to choose their surgeon.”

Questions arise as to what is appropriate or legal for a physician to advertise on social media: Does it require patient consent? Who ultimately owns the content that is posted to social media?

Here are some key compliance considerations for social media in your plastic surgery practice:

  1. Obtaining patient consent. Patient consent for social media use should be separate from other consents. Consent must deal with the circumstances of the social media use. A wide range of circumstances that can impact consent. Before you ever post before-and-after photos of a patient’s Brazilian butt lift, you must obtain written consent from your patient. Likewise, if your patient brings in a friend or relative to live-stream a video of his or her medical procedure, it still requires direct consent from the patient. Without patient consent, a plastic surgeon puts his or her license at risk by posting patient photos or videos to social media.
  2. Physician advertising rules. Physicians are subject to specific state medical board advertising rules that control the messages they advertise so as not to be deceptive or misleading to the public. The Federal Trade Commission (FTC) also regulates physician advertising. (For more on this, read Michael Byrd’s recent article “FTC Focuses on Social Media for Truth in Advertising.”) The American Society for Aesthetic Plastic Surgery (ASAPS) and the American Society of Plastic Surgeons (ASPS) also regulate physician advertising; for example, check out this article, which discusses the first code of ethical behavior for sharing videos of plastic surgery on social media, published by Northwestern plastic surgeon Clark Schierle, MD, and presented at the ASPS annual meeting. Using “enhanced” before-and-after photos or stock image photos, using models, allowing staff to post their personal beliefs and opinions on your social media accounts, and communicating directly with patients via social media are just a few ways plastic surgeons get in deep trouble with physician advertising laws.
  3. Ownership of social media. The ownership of content posted by employees often is unaddressed. For example, physicians and nurses often post before-and-after photos to their personal social media accounts. This creates both potential infringement issues and patient privacy issues. As attorney Bradford Adatto noted in his recent article, “5 Key Details Every Plastic Surgeon Should Know About Their Employment Agreement,” relating to plastic surgeon’s employment agreements, there are a substantial number of patient privacy laws to understand before posting patient photos to social media. Further, if the practice intends to keep all social media content as its property, whether it is posted to a practice account or an employee’s personal account, this needs to be addressed in a social media policy.
  4. Social media policy. A variety of issues arise when using social media to advertise medical services; thus, it is crucial for every plastic surgery practice to develop a social media policy to address issues such as employees’ use of social media and ownership of the content. The social media policy also should be mentioned in your employee handbook. Simply having a social media policy is not effective unless all staff have been informed of the policy and management is trained to implement and enforce the policy.

All this information also applies to medical spas. To learn more about how to effectively use social media in a medical aesthetic setting, consider attending an AmSpa Medical Spa & Aesthetic Boot Camp. Each Boot Camp features a session on social media, as well as useful information about all aspects of running an effective medical aesthetic practice. AmSpa Members save when registering for Boot Camps—click here to learn how to join.

Tags:  ByrdAdatto  Med Spa Law  Med Spa Trends 

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Should Your Medical Spa Tell Yelp to Buzz Off?

Posted By Administration, Thursday, August 15, 2019

negative reviews

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

Have you heard of Botto Bistro? It’s a pizzeria in the Bay Area. Chef Davide Cerrentini, who emigrated to the US in the ‘90s, opened the restaurant’s doors in 2009.

Cerrentini is famous for asking happy diners to give him a one-star Yelp review. That’s right—one star.

Botto Bistro has accrued thousands of these reviews, and was at one time ranked as the worst-rated restaurant on Yelp. To Cerrentini, that was a badge of honor.

By the way, he is immensely successful.

Here’s what happened, and why Cerrentini embraced the lowest of the low reviews.

Shortly after the restaurant opened, he received calls from Yelp salespeople. They suggested he buy ads on Yelp. When he told the salespeople, “No thanks,” he observed that some recent five-star reviews had disappeared.

“I came from Italy, and know exactly what mafia extortion looks like,” he said. “Yelp was manipulating reviews and hoping I would pay a protection fee. I didn’t come to America and work for 25 years to be extorted by some idiot in Silicon Valley.”

Cerrentini then turned to the dark side. He wrote his own five-star reviews to replace the real ones that were removed. He also wrote negative reviews of neighboring restaurants.

Ultimately, he gave in. He started spending $270 per month to advertise on Yelp.

After six months, he pulled the plug. He found the service “useless” and cancelled his advertising. Then, his star rating dropped.

In the spring of 2014, after turning down another Yelp salesperson, Cerretini claims that four five-star reviews were filtered from his page, and three one-star reviews were suddenly catapulted to the top of the page. For the chef, this was the final straw.

“What if I don’t give a s*** about reputation?” he said. “What if I take away their power by actually making it worse?”

One morning in September 2014, he placed a simple sign in front of Botto Bistro: “Give us a one-star review on Yelp and get 25% off any pizza! Hate us on Yelp.” (The discount was later increased to 50%.)

The next day, business exploded. Cerretini was making money hand over fist. Botto Bistro quickly had more than 2,000 reviews. Most of the ratings praised the food and the service, and then gave it one star.

“Botto Bistro sucks,” wrote one reviewer. “Delicious food priced fairly. One star.”

“Seriously, who puts meat on pizza?”

“Don’t try the pizza, it’s so good you will come back every night, it completely ruined my social life cause each night I only want to go there. I hate this place.”

“I ordered meatballs and they were served upside down.”

A Yelp support member sent Cerrentini an email chiding him for offering incentives in exchange for a review. That was a violation of Yelp’s terms of service. Hmm.

Other business owners have followed Cerrentini’s lead. Some have posed “No Yelpers” signs in their windows.

A new documentary called Billion Dollar Bully catalogues the Yelp controversy. Click here to check out the trailer.

Cerrentini has been very successful with his high-risk gambit. It took a lot of guts.

“Most people are not ready to stop caring about reviews—it’s a big risk,” he said. “But I’d rather sit alone in my restaurant then get business from Yelpers.”

What do you think? Particularly related to Yelp in the health care space?

We understand the temptation to ignore outlets like Yelp is strong, but we urge doctors to resist the urge. By ignoring a problem post on Yelp, you are denying patients access to a counter-narrative. And if there is no counter-narrative, there’s an increased risk the doctor will be defined by that problem post.

This is a bad outcome—patients prematurely reject doctors who are qualified to treat them, and doctors miss the opportunity to treat patients.

So what’s the remedy? We advise doctors take a proactive approach. Before you get blasted online, populate the internet with accurate descriptions of your quality of care. In this way, when the inevitable happens, you have a defense against the angry, the uninformed and the malevolent.

Medical Justice has designed a program that addresses these obstacles. The program exists for two reasons—the first is to keep your online reputation out of the crosshairs, and the second is to help new patients find you.

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

Tags:  Business and Financials  ByrdAdatto  Med Spa Law 

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Crackdown on Fraud and Abuse Serves as Warning to Medical Practices

Posted By Administration, Wednesday, July 24, 2019

doctor in handcuffs

Jay Reyero, JD, Partner, ByrdAdatto

In addition to the bright sun being so prevalent during these warm summer months, the fraud and abuse enforcement spotlight shines bright on Oklahoma and Florida.

In Oklahoma, two cases were filed involving a total of three physicians and five marketers, who all were charged with anti-kickback violations involving compounded prescription drugs. In one case, the fallout continues from the compounding pharmacy prescription scheme involving OK Compounding, where three physicians and a marketer were charged with anti-kickback violations and other criminal offenses. The allegations involve kickback payments disguised through medical director and consulting arrangements with the pharmacies. In a second case, a Texas marketer was charged with conspiracy to pay health care kickbacks for recruiting physicians to prescribe compounded drugs in exchange for a commission based upon reimbursed prescriptions. In a final case, three marketers were charged with kickback violations for a direct payment to a prescribing physician.

These cases offer a reminder that medical director, consulting and marketing arrangements are heavily scrutinized and will not disguise any intent to pay for referrals. Parties must carefully analyze their arrangements and ensure the intent and substance behind the arrangement matches the form of the contract.

In Florida, an owner of a substance abuse facility pled guilty in a massive $57-million money laundering conspiracy involving hospital pass-through billing. In the scheme, the owner arranged for his facility to send patient urine samples to a laboratory for testing in exchange for 40% of the insurance reimbursement. The laboratory, in turn, entered into arrangements with rural hospitals to have the testing billed under the hospital’s provider number using hospital in-network contracts. The owner also arranged for other substance abuse facilities to participate and receive 30% of the insurance reimbursement while he received the other 10%.

Hospital pass-through billing arrangements have become problematic as hospitals, clinical laboratories, and other parties seek arrangements to maximize both operations and profits.  Arrangements between hospitals and laboratories must be closely scrutinized and regulatory compliance carefully analyzed.

If you want to keep your medical spa compliant with state regulations and move your business forward without engaging in illegal activities, click here to learn how to join AmSpa.

Tags:  ByrdAdatto  Med Spa Law 

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This Name’s Taken: The Importance of Trademark Law in Your Practice

Posted By Administration, Monday, June 24, 2019

trademark law

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

A medical aesthetic practice’s brand is among its most valuable assets. When your patients think of your facility, your brand is the first thing that enters their minds. Therefore, it is vital that you take the utmost care in creating and protecting your brand, and obtaining trademark protection for it is an important part of this process. Whether you are already operating a practice or are planning to open one in the near future, this is important information to have. Here is a quick primer.

In on the Ground Floor

The American Medical Spa Association (AmSpa) recommends that before opening, dermatology practices, cosmetic surgical practices, and medical spas do a trademark search for the name that they plan on using. This isn’t necessarily important if you are a plastic surgeon who plans on using his or her name for the practice (for example, Dr. Meredith Anderson’s Plastic Surgery), but if your practice is a medical spa that is planning to use a name such as, say, Effervescence Medical Spa, you need to make sure that this name or a confusing similar name is not already in use.

“[Businesses] should engage an attorney experienced with trademark law to perform a searches to determine whether there may be any conflicts before they even hire a graphic designer to develop a logo or business name,” says Jim Stanford, partner at ByrdAdatto, a business and health care law firm based in Dallas. “I’ve run into problems so many times where a company has spent all sorts of money and resources developing its name and logo only to find out that there’s a conflicting use out there and they have to change everything. This typically occurs when they receive a cease and desist letter from the other party’s attorney or when they are seeking trademark registration.”

A properly conducted trademark search is a much more labor-intensive process than one might imagine.

“Typically, we hire an outside company such as Corsearch, and they’ll provide a comprehensive report that’s usually 200-300 pages long,” Stanford explains. “We review the various uses in the report that might be similar or conflicting with the proposed mark. If there aren’t any conflicts at all or registration appears feasible subject to potential challenges that are acceptable to the client, we’ll proceed with the application process. But if it looks like there might be a problem, we point that out to the client and discuss the risks, and sometimes we advise the client not to use their proposed trademark and search for another.”

The attorney may give the client the go-ahead to submit an application, but that doesn’t mean that the process is over. First, the attorney and the client must decide what elements of the branding they need to protect.

“The application part is somewhat administrative—we need to identify the goods and services that are associated with the mark so we can determine what classes they go into, prepare a description of the goods or services, and put the application together,” Stanford says. “If the client has a logo or design element to the mark in addition to the word mark itself, its often advisable to seek registration of both through separate applications to obtain broader protection.”

After the application is completed and submitted, the waiting game begins.

“Once the application is finalized, prosecution of the application, that is, seeking registration with the U.S. Patent and Trademark Office (USPTO) is a pretty lengthy process,” Stanford says. “We’re not going to hear back from the USPTO for at least four months. From there, if there are any issues or conflicts, we have to address them with the USPTO examining attorney, and there may be some back and forth. From my experience, the quickest a trademark may be registered with the USPTO is probably 9-10 months or so—it typically takes close to a year or longer to finally get it registered, if you don’t have any major issues.”

The total cost of the trademark process can vary greatly from case to case, but generally speaking, it is a somewhat notable financial commitment, especially since the medical spa or practice is just beginning its journey.

“The more classes you have, the more the initial cost is,” Stanford says. “The initial filing and search and clearance is typically $2,000-3,000, on average, but it’s much better to spend this money up front than to have to deal with potential conflicts or lawsuits in the future that will cost tremendous amount more to resolve.”

A Question of Complexity

Stanford recommends that those who seek trademark protection for their medical spa or medical practice’s name and logo make sure that it meets certain conditions before the filing process begins.

“The client [should do] their best to pick something that is not descriptive of what they’re doing, because that hurts the value of a mark,” he says. “The marketing world and clients in general prefer to select names and trademarks that either say or describe exactly what they’re offering and, from a trademark law perspective, this weakens the trademark or ability to get it registered as a trademark. [For example], ‘Star Medical Spa and Skin Care Center’—would be a challenge and likely would not get registered on the principal register as a trademark because it’s descriptive of the services that are associated with the mark and the only non-descriptive element is ‘Star’. The more the mark is arbitrary or at least only suggestive of the goods or services associated with the mark, the stronger the trademark will be, and the better chance of obtaining registration. Assuming there were no conflicting uses, ‘Effervescence’ as the sole trademark and only word in any logo or design mark would be a much better mark. When you put your sign on your wall or launch your website, you can always  use your trademark next to the words ‘medical spa’, for example, but they should not be part of the trademark itself.”

Investigating Infringement

Making sure that your practice’s brand isn’t already in use is important because the penalties for trademark or trade name infringement can be severe.

“If another party has a trademark registered with the USPTO and your mark is infringing, you have constructive notice, even if you didn’t actually know about the other mark, and you could potentially get hit with the other party’s actual damages, a reasonable royalty, and damages equal to your profits,” Stanford said. “Including possible treble damages if your infringement was determined to be willful--it could be a nightmare and it could cost you  your business.”

A trademark violation could lead to major financial problems for a medical aesthetic business. Even if you’ve registered a trademark with your state’s department of business services (which is usually associated with the secretary of state’s office), you may still be infringing on a national mark, which could lead to major problems.

Typically, however, the party owing the registered trademark will send a cease-and-desist letter and you should have the opportunity to negotiate a settlement. Although this certainly is preferable to court, the cost can still be substantial.

“The legal fees in just settling that situation could easily be $10,000-30,000, depending on how much it goes back and forth,” Stanford says. “In any potential dispute, the legal fees add up very quickly.”

The winners of these disputes tend to be the entity with the deeper pockets, even if they don’t have a legal position that ultimately would be successful in court—they simply want to cut out competition. If your medical practice is just starting out or establishing itself in the industry, chances are that won’t be you.

“I’ve had matters where I didn’t believe our client was infringing, but the party on the other side had more than enough money to pound our client into the dirt and we had to concede as our clientcouldn’t afford or at least justify the legal fees to fight it,” Stanford says.

A business can sink tens of thousands of dollars into marketing, product development, and branding, only to have to choose whether to redo all their branding because they’ve been hit with a trademark claim, or spend at least as much money on attorneys to fight an infringement claim, even though they have a fairly decent shot of winning in the end. The enormous expense associated with court cases such as these underscores the importance of making sure that your trademark protection is squared away as soon as possible.

“You spend $5,000 up front to try to make sure you do it right to avoid $50,000 to change your mark once you find out you have a conflict,” Stanford states.

Making Your Mark

One of the things ByrdAdatto always tells its clients at the beginning is that, if there is a specific name that you want to use, a trademark search should be done and, if advisable based on the situation, a trademark application should be filed. As the medical aesthetic industry grows, brands expand, and more and more large franchises emerge with a great deal of financial backing, it is simply not smart to operate without properly vetted trademark protection. Thanks to the Internet, it is easy to find a business that’s violating a company’s trademark, and you’d better believe that company’s lawyers are actively looking for just that opportunity. You might think you have the greatest name in the world, but if you can’t actually use it, it will do you far more harm than good.

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

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Join AmSpa at the Atlanta Medical Spa & Aesthetic Boot Camp

Posted By Administration, Friday, June 21, 2019

loews atlanta

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

Starting next Saturday, June 29, AmSpa will host its Atlanta Medical Spa & Aesthetic Boot Camp at the Loews Atlanta Hotel. We’re extremely excited for the opportunity to help medical aesthetic professionals develop their practices, and we can’t wait to visit Atlanta again. There’s still time to register for the event—just click here to sign up. Here is a quick overview of the program:

Saturday, June 29

The Boot Camp begins at 8 a.m. with a continental breakfast, followed at 8:30 a.m. with my opening keynote. From there, we will move into the main program:

  • 9 – 10:30 a.m.: The Plan, presented by Bryan Durocher (Durocher Enterprises)—What are the most effective ways to develop a business plan for your medical spa? Medical Spa Consultant Bryan Durocher discusses the ins and outs of the planning process and helps determine how long it realistically takes to open a practice.
  • 10:45 – 11:45 a.m.: The Lessons, presented by Louis Frisina—Every medical spa is different, but the successful ones share several common traits. In this session, Business Strategy Consultant Louis Frisina discusses the qualities that are typically found in practices that bring in a significant amount of revenue.
  • 12:45 – 1:30 p.m.: Medical Aesthetic Hot Topics Panel, featuring Tim Sawyer (Crystal Clear Digital Marketing), James David Brown (Environ Skincare), Helen Haynes (Bellus Medical) and a representative from Galderma—This panel, moderated by yours truly, will feature a spirited discussion of the current issues and events that concern medical spa owners and operators.
  • 1:30 – 3:30 p.m.: The Law, presented by Alex Thiersch (AmSpa) and Jay D. Reyero (ByrdAdatto)—In this presentation, we’ll discuss the long-standing and emerging legal issues that every medical spa owner needs to know about. As you can imagine, there is a lot to cover here, since new concerns seem to be arising daily lately.
  • 4:15 – 5 p.m.: The Treatments, presented by Terri Ross (Terri Ross Consulting)—Learn about the most profitable and popular treatments available to your practice, and find out how to best determine which treatments are right for you based on the state of your practice.
  • 5 – 6 p.m.: The Digital Marketing Ecosystem, presented by Tim Sawyer (Crystal Clear Digital Marketing)—Find out how to effectively spread the word about your medical aesthetic practice and how best to determine what’s working and what’s not. Your practice’s digital presence is more important than ever before, and curating it should be a top priority.

Saturday will wrap up with a cocktail reception from 6 – 7:30 p.m.

Sunday, June 30

Once again, the Boot Camp begins at 8 a.m. with a continental breakfast.

  • 8:30 – 9 a.m.: Anatomy of a $5-Million Med Spa, presented by Alex Thiersch (AmSpa)—Have you ever wondered what the difference is between your medical spa and one that’s mega-successful? It might be less significant than you think. This presentation will show what a $5-million med spa is doing right—and what you might be doing wrong.
  • 9 – 10 a.m.: The Financials, presented by Bryan Durocher (Durocher Enterprises)—At the end of the day, the money you’re bringing in is the most important measure of your practice’s success. This presentation will, among other things, demonstrate how to properly develop a budget and use metrics to determine your med spa’s strengths and weaknesses.
  • 10:30 – 11:30 a.m.: The Long-term Revenue, presented by Brandon and Jenny Robinson (Skin Body Soul MedSpa)—Simply being successful isn’t enough for a medical aesthetic practice; you have to know how to maintain and grow your success. In this session, Brandon and Jenny will show you how to build patient loyalty and move your business forward.
  • 11:30 a.m. – 12:15 p.m.: The Consultation, presented by Terri Ross (Terri Ross Consulting)—As the old saying goes, you never get a second chance to make a first impression. Learn how to put your best foot forward with effective patient consultations—and how to turn them into consistent business.
  • 1 – 2 p.m.: The Team, presented by Bryan Durocher (Durocher Enterprises)—A medical spa is only as good as its personnel, so it’s important to make sure that you hire a staff that can do everything you want it to—and more. In this session, you’ll learn about recruiting, hiring and retaining employees who can make your medical spa dreams come true.
  • 2 – 3 p.m.: The Marketing Plan and Social Media, presented by Brandon and Jenny Robinson (Skin Body Soul MedSpa)—This session will help you determine how to most effectively market your medical aesthetic practice using both traditional methods and cutting-edge techniques.

Also, you’ll have the chance to visit with a number of exceptional vendors during this event. Attend the Atlanta Medical Spa & Aesthetic Boot Camp to check out the latest and greatest from the following companies:

We hope you can join us in Atlanta next weekend. This Boot Camp is a tremendous opportunity to get your medical aesthetic business headed in the right direction and learn some tips and tricks that can take it to the next level. Click here to register!

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

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How to Find Legal Answers for Your Medical Spa

Posted By Administration, Wednesday, May 29, 2019

lawyer and statue

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

At AmSpa and ByrdAdatto, we are asked every day about the legalities of the medical aesthetic industry. We constantly hear from professionals wondering, for example, if an aesthetician can perform a particular procedure, or whether a licensed vocational nurse can inject a certain product, among many others. The number and types of questions we receive speak to the complexities of the industry.

Providing information such as this to medical aesthetic professionals is the reason why AmSpa was started in the first place, but people often question our conclusions or wonder why, if the law is what we say it is, no one is following it. As it turns out, finding legal answers in the medical aesthetic industry is not easy, and the answers themselves are not simple, and there are numerous reasons why.

Some conversations about the legalities of the industry repeatedly occur. For example, I will explain the requirement that a physician, physician assistant or nurse practitioner perform a face-to-face examination of a patient before a laser treatment or filler injection, and the person with whom I’m speaking will say that can’t be true—nobody does that. If that is what’s required, they say, you could shut down every medical spa in the state for violating this law. But it is true, it is the law, and yes, a regulatory agency probably could shut down most medical spas in a given state if it had the manpower to investigate them all.

The medical aesthetic industry is unique in many ways. First of all, its procedures are all elective, so medical spas must market to people who choose to undergo their procedures rather than require it. Also, medical spas do not deal with insurance—the industry is entirely cash-based. Because of these factors, medical spas have to market themselves to a degree that traditional medical outlets do not.

As a result of this need for effective marketing, non-physicians play key roles in the health of these businesses. For example, a registered nurse who is a skilled injector can be the person patients come to see, as opposed to the physician. This is a much different dynamic than can be found anywhere else in the world of medicine.

Additionally, medical aesthetic practices typically have to deal with multiple practice groups, including medical boards, nursing boards and boards of cosmetology. And because the medical aesthetics industry is so young, many of these agencies are dealing with questions that are being raised for the first time. Essentially, the industry is governed by laws that are not designed to govern it and people who are more concerned with other issues.

For example, nursing boards probably won’t have too much to say about CoolSculpting, since much of their time is spent dealing with pressing matters such as opioids. They have so much to deal with that they can’t reasonably be expected to understand the nuances of the medical aesthetics industry.

When AmSpa researches the laws that apply to medical aesthetics practices in a particular state, we start by finding what we can in the state’s legislation, but most of the time, these laws’ use in relation to medical aesthetic situations is tangential; they’re typically written to deal with other areas of medicine and nursing. Therefore, regulatory interpretation of these laws with regard to medical aesthetics is vital. If a board has not published an opinion on a matter, that does not necessarily mean it does not actually have an opinion—it means that it has not yet presided over an incident that has caused it to issue an opinion. When you’re dealing with multiple boards with multiple opinions, the situation is further complicated.

All this makes AmSpa’s job very challenging. Usually, we have to take what we know about the laws and the boards and try to determine what a ruling would be. When we say, “This is what we believe the rule is in this particular state,” it’s unlikely that it is taken directly from legislation, because there’s a good chance that specific legislation doesn’t exist. We can, however, combine precedents with our legal knowledge to give you the most complete possible interpretation of the situation.

Our attorneys have been researching these regulations for years. They have appeared before nursing and medical boards to argue cases, and they have spoken with officials about these issues. This is how we learn about these issues. It’s very difficult work, but we’re confident that our attorneys provide our members the best possible information.

For more information about med spa laws, become an AmSpa Member to schedule a complimentary initial consult with our partners at ByrdAdatto.

Tags:  ByrdAdatto  Med Spa Law  Med Spa Trends 

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What You Need to Know About Parallel Importation

Posted By Administration, Wednesday, May 22, 2019

package delivery

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

In June 2018, Oregon-based physician Brenda Roberts had her medical license revoked for obtaining and using prescription medication from foreign countries. Roberts was a family practice doctor who was administering Botox treatments at her home on the side. She wasn’t necessarily doing anything inappropriate in terms of patient care, and she kept detailed records on her patients, but she was buying Botox from United Pharmacies—a “rogue pharmacy” that operates outside of U.S. Food and Drug Administration (FDA) governance—because Allergan noticed it was sending Botox to her home and cut off her account. FDA agents went through her trash and found that the Botox she used was intended for sale in Europe.

Roberts was participating in a practice called parallel importation, and while it is extremely enticing for medical spa owners looking after their bottom lines, it should be avoided at all costs, as Roberts’ case demonstrates.

A Controversial Practice

In countries such as the United Kingdom, Germany, France, Sweden and Canada, governments regulate the cost of pharmaceuticals. These measures are ostensibly designed to prevent drug manufacturers from charging excessive prices for essential medicine, but they also apply to pharmaceuticals used for elective procedures, including Botox.

In the U.S., however, FDA does not regulate drug prices, so drug manufacturers essentially can charge whatever they feel the market will bear for their products; that price is invariably much higher than what is charged in countries that have cost controls.

Because of this, it has become somewhat common for U.S.-based providers to buy drugs from licensed dealers in countries where cost controls are enforced. The prices are up to 50% lower than what the buyers would have to pay if they were purchasing the drugs directly from the manufacturer.

Both parties benefit from this arrangement. The buyers get legitimate pharmaceuticals for much less than they would pay if they bought directly from the manufacturers, and the dealers can make their money simply by marking the product up slightly. These are not counterfeit pharmaceuticals like the ones that are typically manufactured in China that have flooded the market in recent years—these are almost invariably the same drugs that are approved by the FDA and sold in the U.S.

Understanding the Rules

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

Despite the relatively low risk of being caught, ByrdAdatto and AmSpa steadfastly believe that medical aesthetics practices should not participate in parallel importation. The potential consequences definitely outweigh the cost savings. If your practice’s profitability depends on buying cheap drugs, you need to re-evaluate the way you do business. Practices should remain compliant with FDA and other regulatory agencies, regardless of whether they think a drug is overpriced. It is absolutely possible to run a medical aesthetic practice that is both very profitable and compliant with all laws and regulations.

If you need more information about parallel importation, consult with your healthcare attorney. AmSpa members can take advantage of their annual compliance consultation with ByrdAdatto. You can also learn the keys to running a medical spa practice profitably and compliantly at an AmSpa Medical Spa & Aesthetic Boot Camp.

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

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What Is Required of a Medical Spa’s Good Faith Exams?

Posted By Administration, Tuesday, May 21, 2019

doctor consultation

By Sam Pondrom, JD, Associate at ByrdAdatto

There are two points that we can never reiterate enough regarding med spas: They are medical practices, and many of the services they render are considered the practice of medicine.

Accordingly, it is a crucial first step for med spas to establish the physician-patient relationship and ensure that a med spa patient is a good candidate for the procedures he or she is seeking. This is the purpose of the good faith exam. Good faith exams go by many names, and, in fact, the term “good faith examination” has been replaced in many states’ laws. It is common to hear the good faith exam referred to as the “initial exam,” “physical exam” or “initial consult.” Regardless of the nomenclature, it is important to remember that the good faith exam is an encounter that must happen before a patient receives a treatment to assess their current condition, note their medical history and ensure they are fit for the procedure. The goal of the good faith exam is to make a diagnosis and determine an appropriate treatment plan for the patient.

Here’s what you need to know about the good faith exam:

  • Who can do it? The good faith exam must be performed by a physician, physician assistant (PA) or advanced practice nurse (APN). Typically, the PA or APN must be delegated the ability to perform good faith exams by their supervising or collaborating physician. Registered nurses (RN) may aid the physician, PA or APN in administering the good faith exam, but they cannot generate orders for treatment based on the exam. A physician, PA or APN would need to review the RN’s findings and generate the treatment plan and order.
  • What constitutes a good faith exam? The good faith exam proceeds in two parts: obtaining a patient’s medical history and performing an appropriate physical examination of the patient. The medical history is a brief account of the patient’s general lifestyle, medical events and on-going treatments that may contain relevant information regarding the patient’s health. The appropriate physical examination is an assessment of the patient’s physical condition, generally and specifically, of the areas where the patient will receive treatment.
  • When does the good faith exam need to be performed? The good faith exam should be performed prior to a patient receiving a treatment for the first time, but it does not have to be performed every time you see the patient. Especially in the med spa context, a treatment plan will likely encompass multiple treatments over a period of time. If a patient seeks additional treatments not covered in the initial treatment plan, the patient’s health substantially changes or enough time has elapsed since the initial good faith exam, a new good faith exam should be performed. It is a good rule of thumb that a good faith exam should be performed at least annually on a patient.

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 AmSpa’s 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  ByrdAdatto  Med Spa Law 

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Forest Park Verdicts Reshape Health Care Compliance in Texas

Posted By Administration, Tuesday, May 14, 2019

gavel

By Jay Reyero, JD, Partner, ByrdAdatto

After years of anticipation, seven guilty verdicts in the Forest Park Medical Center criminal trial—in addition to the 10 pre-trial guilty pleas—have reshaped the health care landscape in Texas, and the nation is watching. While the exact fallout from the stunning conclusion will take some time to play out (appeals will be filed), there are two immediate takeaways of how health care compliance has permanently been impacted.

The federal government’s use of the Travel Act, a federal law criminalizing business activities that are illegal on the state level, was one of the most closely watched elements of the Forest Park case. While originally geared towards organized crime, prosecutors in the Forest Park case used the Travel Act in the health care context to target a physician kickback scheme where federal programs were not involved. The most interesting but unresolved issue is exactly how successful, if at all, the Travel Act can be in health care enforcement efforts in Texas. Unlike the federal government’s success in New Jersey, the verdicts in Forest Park reveal the Travel Act was not expressly relied upon by the jury to convict the physicians involved.

Nevertheless, Forest Park demonstrates that the Travel Act is a very real and controversial enforcement tool the federal government believes can be successful and is willing to use to combat fraud and abuse. Based on this new federal strategy, health care arrangements in Texas must include a risk assessment of the application of the Travel Act. We would recommend this risk assessment even when no funds from federal programs are involved. The possibility of the federal government’s involvement naturally increases risk and the specter of scrutiny. Anyone involved in a health care arrangement should take immediate steps to reevaluate the arrangement, taking into account this heightened level of risk.

The importance placed on the intent of the parties involved is another aspect of the Forest Park case that was illuminating. At the center of the case were marketing agreements developed with the assistance of qualified health care counsel, which on their face appeared to be bona fide arrangements. More importantly, the agreements were developed and appeared to be structured in compliance with applicable kickback regulations. However, throughout trial, the federal government pressed that the parties intended to induce referrals, despite what the terms of the marketing agreement indicated. The Forest Park case reinforces a critical understanding in health care compliance that form must equal substance. Even when parties attempt to structure arrangements within the requirements of applicable rules and regulations, the underlying intent must be aligned, as any deviation can give rise to significant issues regardless of the form. As evidenced by the Forest Park case and the testimony supplied by many of those involved in the scheme who had already pled guilty, the greatest risk of exposing the truth behind the intent of the parties of any arrangement is those individuals involved in the arrangement. Therefore, anyone involved in a health care arrangement should examine the circumstances beyond the document and ensure the intent and actions of all involved are consistent with compliance expectations.

The Forest Park case is a signal that a bigger and brighter spotlight is now shining on the health care industry in Texas from a fraud and abuse perspective. Gone are the days when one could be comfortable with the historical inaction of the Texas government in kickback enforcement efforts, as now the federal government has a powerful new tool that allows it to step in to enforce state laws. Even if the Travel Act is not successful on the technical merits, the Forest Park case is a clear signal the federal government can still use it to get in the door to obtain criminal indictments and potentially lead to convictions. With the use—and possible success—of the Travel Act, all health care arrangements in Texas, regardless of which payors are involved, are facing a heightened level of scrutiny. Every provider in the state should be reevaluating their arrangements from a regulatory compliance risk perspective.

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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How to Legally Offer Anti-Aging Treatments at Your Medical Spa

Posted By Administration, Tuesday, May 7, 2019

legalities medical

By Brad Adatto, JD, Partner, ByrdAdatto

“Alternative medicine,” “wellness treatments” and “anti-aging procedures” all have one element in common: Each has treatments and procedures that fall within the practice of medicine. Most states’ statutory definition of “the practice of medicine” includes any diagnosis, treatment or offer to treat a physical disease, disorder, deformity or injury by any system or method. Further, anytime the outermost layer of the epidermis is penetrated—whether by injection, abrasion or incision—the procedure is considered a medical treatment.

As such, treatments or therapy that include hormone replacement, stem cell and ozone administration are considered the practice of medicine. This limits who can actually perform these procedures and where these procedures can be performed. Over the years, we have had many individuals that choose to either ignore this advice or push back on this explanation, asking, “How is everyone else doing it?” As more individuals open “alternative medicine facilities,” “wellness clinics” and “anti-aging centers,” we have seen an increase in enforcement from state agencies, medical boards and law enforcement. Therefore, businesses must be extremely careful when navigating state laws regulating the practice of medicine, including anti-aging therapies. Here’s what you need to know.

  • The practice of medicine. Every state’s statutory definition of the practice of medicine includes diagnosis and treatment of a medical condition. Specifically, Texas’s definition of the practice of medicine includes diagnosing or treating any physical disease or disorder. Florida’s definition includes the diagnosis, treatment, operation or prescription for any human disease, pain, deformity or other physical or mental condition. As an example, diagnosing a person as an appropriate candidate for hormone therapy and giving orders for such treatment is the practice of medicine. Furthermore, facilities that offer ozone therapy as a medical treatment may be outside the scope of what is consistent with the standard of care for that state. At this time, the FDA has not approved of ozone therapy as a drug or device. Additionally, ozone therapy is not recognized nor approved as part of the practice of allopathic medicine by federal law or any state medical board. As such, providers offering this as a treatment must check with their state medical boards to confirm restrictions apply on “who” can provide complementary and alternative medicine.
  • Ownership. Essentially, the corporate practice of medicine doctrine prohibits non-physician-owned business entities from engaging in the practice of medicine. States adopting the doctrine are attempting to ensure a medical provider is responsible for the control and direction of a medical facility. You should develop your business and ownership model according to the laws of the state(s) in which you plan to practice. Because these laws vary from state to state, you need to know how to legally structure your business and the type of liability that may be associated with the structure you choose. For example, in New York, the state limits the ownership of businesses that provide medical treatments to licensed physicians; other non-physician health care providers are prohibited from ownership of the medical facility.
  • Staffing. Medical professional scopes of practice not only vary from state to state, but also vary depending on the training, experience and skill of a medical professional. Therefore, you need to know who can legally perform anti-aging treatments in your facility. For example, let’s assume you meet the state requirements to provide stem cell therapy, and you recommend the injection of mesenchymal stem cells into a patient’s skin to improve skin tone. This is the practice of medicine. Who has the authority to recommend the treatment—physician, NP or PA? Who can actually inject the patient—RN or MA? It is critical to understand the diagnoses, delegation and supervision regulations before performing these procedures.

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:  ByrdAdatto  Med Spa Law  Med Spa Trends 

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