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How to Choose a Business Entity for Your Medical Spa

Posted By Administration, Monday, January 20, 2020

business entities

By Michael S. Byrd, JD, Partner, ByrdAdatto

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

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

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

Filing With the State

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

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

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

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

Filing With the IRS

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

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

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

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

Tags:  Business and Financials  ByrdAdatto  Med Spa Law 

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Hyaluronic Injection Pens: What You Need to Know

Posted By Administration, Wednesday, January 15, 2020

hyaluronic acid

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

 In the past several months, you may have noticed an explosion of ads, social media posts, articles, videos and training events talking about an “incredible” new injection device that can place hyaluronic acid filler in the skin without using a needle. These devices are often marketed as “non-invasive” or “non-medical,” using names such as “hyaluron pen” or “hyaluronic acid atomizer.”

However, make no mistake—just because they do not have needles does not mean these products are not medical devices or that they can be used without risk. On September 13, 2019, the Canadian Department of Health issued a warning regarding these devices. It stated these injectors pose health risks and are not authorized for sale in Canada. In the U.S., while no state has publicly commented on these devices yet, “administering medication,” no matter the method used, is part of the definition of each state’s “practice of medicine.” Therefore, these needle-free injection devices should be treated the same as traditional syringes. People wanting to perform these treatments still need to have the same type of professional license they would need to inject using a needle and syringe, and they will still need to work under the supervision of a physician or another appropriate professional.

No Needle, No Problem?

Needle-free injection devices generally are used to deliver vaccines and medications either intramuscularly or subcutaneously, similar to a traditional needle and syringe. They work by creating a very narrow high-pressure jet of medication that is able to penetrate the skin; the jet is generated using gas or spring pressure to force the medicine through a small opening in a disposable vial. The benefits claimed include lower chances of cross-contamination, reduced needle-stick injuries, and less sharp medical waste. This makes these devices particularly well suited for inoculation campaigns, clinics and home self-administration of insulin or other medication.

Medical devices and substances may not be marketed in the United States without obtaining U.S. Food and Drug Administration (FDA) approval. FDA approved or classified devices may be marketed only for their approved use. For FDA registration, needle-free or jet devices fall into three broad groups:

  1. General-purpose injection devices meant to be used for injecting drugs that work in needle-free systems;
  2. Devices meant for a certain class of drugs, such as insulin, or use with a specific manufacturer’s specific product line—both of these groups are considered class II medical devices; and
  3. Devices intended to be marketed with a specific product, either labeled for use or sold together, and therefore treated as a combination device.

The first and second group of injectors are regulated using the premarket notification process under the 510(k) provision. These premarket notifications are granted when a new device is substantially similar to an existing approved device, and they allow the manufacturer to begin marketing the product while it complies with the more lengthy registration and approval process. In order to be cleared in this process, at least one drug or injectable substance must already be approved for this method of injection.

A number of needle-free and jet injectors have these filed premarket notifications with FDA; however, none of the “hyaluronic pens” currently on the market appear to correspond with any of these premarket notifications or be from manufacturers who have applied for one. Additionally, FDA has approved a number of hyaluronic acid-based fillers for injection using the traditional needle and syringe method. Thus far, no hyaluronic acid fillers have been approved for use in needle-free injectors. So, any pen injector under the premarket category would need to be compatible with an approved substance other than hyaluronic acid, and, once approved, could not be marketed for use with hyaluronic acid-based fillers.

The majority of the hyaluronic pens currently listed online are packaged with a supply of hyaluronic acid, which would most likely place them in the third category. Devices in this category are considered combination products and can be marketed for that specific use and product after approval. It does not appear that any of the currently marketed “hyaluronic pens” have any FDA approval for their use as Class II devices meant for general injections, and certainly not specifically for using hyaluronic acid.

On the Up-and-up

While no needle-free devices have been approved for hyaluronic acid, several needle-free injection devices have received FDA approval for use with specific drugs, which is something a properly marketed hyaluronic filler device would need to receive. For example, in 2014, a needle-free injector manufactured by PharmaJet and Seqirus Pty. Ltd.—manufacturer of the influenza vaccine Afluria—received approval to administer the Afluria vaccine using the PharmaJet Stratis injector for patients from 18 to 64 years old. FDA made clear, however, that it still recommends sterile needles and syringes for other vaccines and for patients younger than 18 and older than 64.

FDA approvals for both injectable drugs and injection devices are narrow and specific. In the above example, a pediatric office would be in violation if it advertised this service to its patients, since using it on those under 18 is not approved.

Many of these devices are marketed for at-home personal use and can be purchased through several online retailers. Some issues with the marketing of these devices are discussed above, but there are other issues for those who want to use these devices at home.

Safe and Sound

Surprisingly, there are relatively few legal issues for those wanting to treat themselves. While hyaluronic pens can’t legally be sold, they can be possessed for personal or non-medical use. Furthermore, people are generally free to do things for themselves that would normally require a professional license if performed by another—you can cut your own hair without a barber’s license, you can write your own contracts without a law license, and you can treat your fever without being a doctor. Similarly, someone can possess a jet injector for their personal use, as well as possess syringes and scalpels if they so choose. It is worth noting, however, that in some states, possessing prescription drugs and substances—such as injectable hyaluronic acid—without a prescription is prohibited. And offering to perform these treatments on others is considered the practice of medicine without a license.

From a practical standpoint, people should think carefully before choosing to perform medical procedures on themselves. The jet injectors being sold are not designed for this use—they appear to be rebranded and repurposed injectors that are not approved in the U.S. The hyaluronic acid fillers sold with them and available online also are not approved for injection into humans and often are of unknown sterility, safety or quality.

Additionally, much like the concept of “cutting hair,” the concept of using the pen injector sounds very simple. However, just as successfully giving yourself a haircut is far more complex than it seems, performing injections on yourself more complicated than it might appear. Those wanting to perform these treatments should first discuss the risks and potential complications—such as infection, contamination or vascular occlusion—with their physician.

Professional Considerations

Medical aesthetics professionals may be interested in bringing needle-free devices into their medical spa practice. This creates its own set of questions—namely, can you? And should you? Licensed health care professionals can be subject to professional penalties and discipline on their license if they are found to be using non-FDA-approved medication or devices. However, physicians generally are able to use otherwise-approved devices and drugs in ways that are not yet approved by the FDA. This is commonly known as “off-label use,” and it is the source of a great deal of innovation and advancement in the medical field. However, physicians are not allowed to advertise and promote off-label uses. Additionally, using unapproved devices in an unapproved way can create standard-of-care and liability issues for the practitioner if the patient experiences an adverse outcome.

So, while it would not be advisable for a nurse or physician to purchase one of these unapproved, illegally marketed devices off eBay, for example, a physician could take an FDA-approved needle-free injector and repurpose it for injecting FDA-approved fillers, so long as they did not market or advertise this practice. The question then becomes—does it make sense to do this? Do such devices bring additional capabilities over the current syringe-and-needle techniques?

While many of the approved devices allow for the dosage per “firing” to be metered, it does not appear that the placement of the medication can be done as precisely as using a syringe and needle—there is no way to ensure that the filler is injected in the precise location or depth, or in the amount desired. According to studies conducted by jet injector manufacturers, the amount of the drug that is actually delivered and the precise location of delivery can vary from injection to injection. The depth and penetration also can be influenced by tissue density, the angle of the injector to the skin, and the pressure applied against the skin prior to firing.

While these variables can be within acceptable limits for administering vaccines and medicine, would they be acceptable for cosmetic treatments on someone’s lips or face? Additionally, in the FDA’s Afluria/PharmaJet announcement on August 15, 2014, both the study performed for the approval and two prior needle-free injector studies (Jackson et. al. Vaccine 2001, Simon et. al. Vaccine 2011) found that needle-free injections had a higher rate of pain, redness and swelling at the injection site than those who received traditional hypodermic injections. Newer devices may remedy some of these issues, but any licensed practitioner should carefully consider the pros and cons before integrating this off-label use into their practice.

Taking Your Chances

The current crop of “hyaluronic pen” devices that are unscrupulously and illegally being marketed to the public create many issues, even beyond their lack of FDA approval. The public should be extremely wary about using these devices, and under no circumstances should anyone perform this treatment—or any other cosmetic injectable—unless they hold an appropriate health care professional license or are working under the supervision of a physician. Licensed health care professionals should educate their patients about the risks of these at-home, unapproved products and should always carefully consider the benefits of adding a new or novel treatment to their practice.

Tags:  Med Spa Law  Med Spa Trends 

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How to Conduct a Practice Assessment for Your Medical Spa

Posted By Administration, Friday, January 10, 2020

assessment

By Jay Reyero, JD, Partner, ByrdAdatto

We are all familiar with New Year’s resolutions. At the end of each year, we conduct a self-assessment and set goals for ourselves heading into the new year. Slowly—or in some cases, on the first day—we drift away from those goals only to repeat the cycle at the end of the year and the beginning of the next. Similarly, businesses can find themselves drifting away from goals or compliance standards over the course of the year. In preparing for a new year, medical providers should conduct a self-assessment in the form of a practice assessment.

Gathering all the documentation and information you wish to analyze is the starting point of any practice assessment. In setting the scope of the assessment, you should start with documentation from the following four areas:

  1. Corporate documents;
  2. Financials;
  3. Staffing; and 
  4. Policies and Procedures.

Once these are gathered, you can begin the assessment by identifying whether anything is missing or conflicts with how things are or are believed to be with your business. The hope, though, is that you confirm everything remains aligned.

It also is important to remember that a practice assessment should include analysis by each member of your advisory team. In addition to legal counsel, you should include your CPA, tax advisor and financial advisor for their respective perspectives. Once again, all aspects of your business should be aligned to prevent any issues.

Finally, like New Year’s resolutions, a practice assessment should be an annual tradition. Compliance is not static, and health care is constantly changing, so you need to ensure your business doesn’t fall out of compliance. Unlike the New Year’s resolutions, hopefully your compliance can last longer than a day.

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

Jay Reyero, JD, is a partner at the business, health care, 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. His 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:  Business and Financials  ByrdAdatto  Med Spa Law 

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Is It Legal to Practice as a Medical Aesthetician?

Posted By Administration, Monday, January 6, 2020

aesthetician

By Sam Pondrom, JD, Associate, ByrdAdatto

Fake or Real: I am licensed as a medical aesthetician.

Fake! Aestheticians must practice within the state-promulgated scope of practice and only use titles authorized by their license.

To determine their scope of practice, an aesthetician should look to three places:

  1. The state laws defining aestheticians’ scopes of practice;
  2. Any rulings or opinions issued by the aesthetician’s licensing board addressing scope of practice or ability to accept delegation from medical practitioners; and
  3. As it pertains to medical services, the supervision and delegation rules applicable to physicians.

The confusion about the existence of medical aestheticians arises from situations where state-licensed aestheticians have obtained additional education, training, certification and experience, or “competence.” These aestheticians who have sought out and acquired additional competence often believe that they have expanded their scope of practice, meaning they may:

  • Perform tasks or accept delegated tasks normally outside of their scope of practice; and/or
  • Perform delegated tasks with less supervision than a standard aesthetician.

However, this is not necessarily true.

The most important thing to understand about aestheticians is that they are creatures of state law. They must obtain a license from the state(s) in which they practice, typically from the state board of cosmetology. These state cosmetology boards have promulgated regulations and rules that determine licensure requirements, scopes of practice and approved titles. The aesthetician license issued by a state board only allows aestheticians to perform work within the prescribed scope of practice and use the approved title. By designating oneself a medical aesthetician, an aesthetician can be viewed as unilaterally expanding their scope of practice or adopting a new title—or both. These actions may subject an aesthetician to disciplinary action from the cosmetology board.

Complicating this further is that state cosmetology boards have no jurisdiction over the practice of medicine. By adding the term “medical,” aestheticians create another issue for themselves with state medical boards. Generally, when state law defines the practice of medicine with the goal of reserving that practice to appropriately licensed persons such as physicians, they include language protecting the use of titles and descriptors that would lead the general public to believe a person is licensed to practice medicine. Thus, if an aesthetician describes themselves as a medical aesthetician or expands their scope of practice to include services considered the practice of medicine—or both—they may be violating their state’s prohibition on practicing medicine without a license.

Often, we find aestheticians have spent their own time and money on courses that purport to train them to be medical aestheticians, but it is important to consider the source of the training. A quick Google search for “medical aesthetician course” returns many results. But if you look at the course information provided by a company offering medical esthetician classes, you almost always will find some variation of a disclaimer that says aestheticians must look to the law of the state that licensed them for the rules and regulations on their practice.  This means that regardless of what the coursework purports to teach (e.g. lasers, injectables, dermabrasion, etc.), you can only perform the functions allowed by your state’s laws.

We do want to clarify that the point of this post is not to discourage aestheticians—or any licensees—from obtaining education, training and certification to expand their knowledge base. Rather, aestheticians must take the time to fully understand their scope of practice and ability to accept delegated medical services before investing time and money on medical aesthetician classes. Moreover, aestheticians must understand that by advertising themselves as medical aestheticians, they can expose themselves to some level of additional risk.

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

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:  ByrdAdatto  Med Spa Law 

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Marketing vs. Laws: Tips That Might Land You in Hot Water

Posted By Administration, Friday, January 3, 2020

marketing

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

In the medical aesthetic industry, marketing is a bit more difficult than in other retail segments. It might seem to make sense for a medical aesthetic facility, medical spa or laser clinic to invest in a flashy ad campaign, complete with lavish praise from patients and offers of discounts; however, going down this path may attract the attention of not only prospective clients, but also state regulators. Here are some ways medical aesthetic practices get in trouble with their marketing efforts, as well as some ways to conduct compliant advertising campaigns.

Understanding the Rules

Even though medical aesthetic businesses tend to engage in the same marketing techniques as other retail businesses—including websites, social media and print advertising—it is important that their owners and operators remember that these practices are, above all, medical practices. And because they are medical in nature, they are subject to the same rules and regulations that govern other, more traditional medical institutions, such as doctor’s offices and hospitals.

Because of this, the ways that a medical aesthetic practice can advertise are very restrictive. The specifics of these restrictions vary from state to state, but they all tend to revolve around the notion that medical care is something that people need rather than choose to indulge in, so any advertising for medical facilities should deal only in facts.

This idea was obviously conceived with traditional medical outlets in mind. For them, the practice of medicine should not be about making money—it should be treating patients in need in their best interest. With this idea in mind, an advertisement for a physician’s services is expected to convey that the physician is an MD, highlight his or her specializations and board certifications, and reveal his or her pricing in an honest and straightforward manner. Furthermore, physicians cannot make grandiose claims of life-changing results or claims of professional superiority—they must only deal in facts.

Of course, medical aesthetic practices are not traditional medical practices, and these somewhat high-minded ideals would seem to run counter to their goals. Medical aesthetic practices deal exclusively in elective procedures and, therefore, may be tempted to make certain claims in order to convince people to choose them over their competitors. However, because medical aesthetic practices are medical practices (it is right there in the name), they must still abide by the rules that govern medical advertising—they must be totally honest.

  • They must specify who is performing medical treatments and what their qualifications are;
  • They must present their pricing in a straightforward manner; and
  • They must not attempt to compare themselves to competitors.

Therefore, if a medical aesthetic practice’s advertising includes words such as “best,” “greatest” or “amazing,” that facility is likely in violation of its state’s medical advertising statutes. A medical spa may operate like a retail outlet, but it cannot advertise itself like one.

Another thing to keep in mind is that if a practice is owned or co-owned by someone who is not a physician—a nurse, nurse practitioner, or entrepreneur, for example—it must make clear in its advertising that it is a physician who is advertising for medical services. For example, if a salon owner contracts with a physician to administer Botox treatments at his or her facility, the salon cannot advertise that it is offering Botox injections—it must specify that the physician is providing that service.

Websites are typically where issues regarding these types of distinctions are found. Many medical aesthetic practice websites state that their treatments are provided by “licensed laser technicians” or “medical aestheticians.” Unfortunately, in most states there are no actual laser certifications, and under no circumstances is any aesthetician permitted to perform medical procedures. The presence of titles such as these on a practice’s website implies that the facility is not structured properly, and it calls into question the credibility of the physician or physicians who are supposed to be overseeing the medical aspects of the practice.

Employees of state regulatory agencies—which are almost always underfunded and understaffed—often simply browse the websites of medical aesthetic practices to determine which of these businesses should be investigated. Using terms such as the ones mentioned above on your website is a good way to attract unwanted attention from regulators, regardless of whether or not your employee swears that he or she is a medical aesthetician. If you distribute advertising materials using these titles, whether online or via other channels, your chances of being investigated are better still.

If a practice is found to be in violation of state regulations regarding medical advertising, it can incur severe financial penalties, and its physicians may even be subject to the suspension or revocation of their licenses. Regulatory agencies take issues such as these—which can rise to the level of “practicing medicine without a license”—extremely seriously.

The bottom line for owners and operators of medical aesthetic practices is that their advertising is under a great deal of scrutiny—far more than they may think. The requirements for medical advertising vary from state to state, so it is important to consult a health care attorney who is familiar with the regulations that govern medical advertising in your state before launching a marketing campaign in order to learn what is and is not legal. (Author’s note: AmSpa works with ByrdAdatto, a national law firm that focuses on medical aesthetic legalities, and as a member, you receive a discount off of your initial consultation, along with a number of other great benefits.)

How to Use Testimonials

If a patient of your medical aesthetic practice is over the moon about an experience there, you may be inclined to ask him or her to provide a testimonial that can be used for marketing purposes. However, there are limitations to the ways in which patient testimonials can be used in advertising for health care providers and, for reasons we’ve previously discussed, medical aesthetic practices must also abide by those rules.

Generally speaking, most states forbid hyperbolic testimonials that use statements such as, “Dr. Brown is the best doctor in the city!” As previously established, advertising for medical institutions must be based on facts, experience and credentials, so medical spa owners and operators must make sure that the testimonials they use are factually correct and address only the customer’s experience with the practice he or she is endorsing.

It is also important that you obtain proper consent from your patients before you post or distribute their testimonials. Even though the patients’ participation may seem to represent tacit consent, you must still go through proper channels to make sure that you are not opening yourself up to patient privacy issues. After all, acknowledging that a patient enjoyed a visit to your facility intrinsically reveals that he or she is your patient, which is a HIPAA violation. Again, speak with a knowledgeable health care attorney to learn what you are required to do to remain compliant when using testimonials.

Mind Your Business Partners

If a medical aesthetic practice is marketing its services via deal websites such as Groupon (which is of questionable legality in the first place—again, consult with your health care attorney before launching such a campaign to determine if it is allowed in your state), it should make sure that everything posted on those sites and disseminated via email by those outlets conforms to the rules of health care advertising previously discussed. These sites sometimes create their own copy and distribute it without running it by the client first. Regardless of whether or not it produced the copy, your practice would be the one facing blowback from state regulatory agencies, so make sure that you see everything associated with your practice before it is posted or sent.

Don’t Offer Incentives for Referrals

A medical spa operator may be inclined to create a promotion that offers, say, 50% off a Restylane treatment if you refer a friend to the practice. Although it might be perfectly fine for a salon or a traditional spa to offer such a deal on a facial, a medical practice making such an offer is essentially telling the world that it is giving monetary value for referrals, which is potentially a direct violation of local anti-kickback or patient solicitation statutes. Laws regarding kickbacks vary from state to state, but most states with powerful, influential medical boards consider such promotions to represent kickbacks. For the same reason, it’s generally a bad idea to offer gift cards in exchange for referrals.

Putting Your Best Foot Forward

Medical aesthetic practices must use a great deal of caution when conducting marketing campaigns. If a medical spa’s ad campaign is properly executed, it can be very effective; however, the practice must be very careful about what it says and what its patients say about it so that it does not run afoul of the strict statutes and regulations that govern medical advertising.

For legal updates and business best practices delivered straight to your inbox, subscribe to AmSpa’s email newsletter. For more information on how AmSpa can help your practice operate legally and profitably, contact us online or call us at 312-981-0993.

Tags:  Business and Financials  Med Spa Law  Med Spa Trends 

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Legal Considerations for Medical Weight Loss Clinics

Posted By Administration, Friday, December 13, 2019

coolsculpting

By Michael S. Byrd, JD, Partner, ByrdAdatto

The obesity rate continues to grow, and so too does the competitive world of weight loss centers. The ability to prescribe medication is what makes medical weight loss clinics stand out in this crowded field. Along with pharmacotherapy, these clinics offer other non-surgical solutions, ranging from menu and exercise planning to counseling, all under the supervision of a physician. While these clinics can be lucrative, health care entrepreneurs should be aware of certain regulations before opening one.

In Texas, California and several other states, the “corporate practice of medicine” rule prohibits lay people or lay entities from employing physicians or offering professional medical services. Simply put, doctors can practice medicine; lay people cannot. The rule is meant to protect the general public from business owners who are more interested in income than quality health care, and its violation can lead to a felony conviction. As the wellness sector expands, the line between business and medicine begins to blur. But to be clear, even non-invasive procedures offered at a medical weight loss center can be considered the practice of medicine, and as such, this prohibition applies.

This begs the question: How are entrepreneurs and other non-physician providers able to own medical weight loss clinics? The answer can be found through a tried and true legal model used in the health care industry: the management services organization (MSO) model. Click here to read a previous post that sheds light on the prevalence and basic inner workings of the MSO model.

Staffing is another major consideration in establishing and owning a weight loss clinic. Each state has differing guidelines that delineate who can provide certain medical services. For example, in some states it is illegal for an unlicensed person to administer an IV or a CoolSculpting treatment, a common practice at a weight loss clinic. But not all states specify what kind of licensing and training are required for someone who provides elective, non-invasive services. This absence can lead to confusion. Some states go in the opposite direction and provide additional guidance on supervision and training. In Texas, for example, the Texas Administrative Code, Section 193.17, “Nonsurgical Medical Cosmetic Procedures,” specifies those parameters. However, even this section does not address all medical procedures that can be found in a medical weight loss clinic.

Medical weight loss clinics provide a necessary service within a multi-billion-dollar industry. However, these businesses are subject to stricter guidelines than the typical weight loss center. As with any health care-related business, certain regulations need to be observed.

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

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

Tags:  ByrdAdatto  Med Spa Law  Med Spa Ownership 

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Can Your Medical Spa Withstand the Wave of Website Inaccessibility Lawsuits?

Posted By Administration, Monday, December 9, 2019

website on several devices

By Kita McCray, JD, ByrdAdatto

The Beach Boys believed, “If everybody had an ocean, across the USA, then everybody’d be surfin’, like Californi-a.” Fast forward 50 years, there has definitely been a rising tide of enthusiasm about surfing, but it’s not the enjoyable surfing experience the Beach Boys crooned about.

Recently, there has been a rise in frivolous “website surf-by lawsuits” alleging website inaccessibility violations based on Title III of the American with Disabilities Act (ADA). Title III prohibits discrimination on the basis of disability in places of public accommodation, requiring that such places be accessible to those with disabilities. Surf-by lawsuits arise when individuals systematically surf the internet looking for vulnerable business websites that are inaccessible or not fully accessible to people with disabilities. The individuals typically send a letter demanding settlement for the alleged violations in lieu of being taken to court, where the cost of litigation may be higher than payment of the settlement. Depending on the jurisdiction, website litigation settlements could range from $4,000 to $20,000.

Exacerbating the issue is an absence of formal government guidelines on ADA website compliance to instruct private businesses on how to ensure their websites comply. The absence of specific government guidelines or a legal consensus on how ADA compliance translates to the web, coupled with a cultural trend toward a more web-based marketplace, has left a wide berth for potential litigation. This loophole is why we counsel clients to be proactive and mitigate their risks by implementing a plan or hiring experts to make sure their website is ADA accessible.

For example, companies such as Crystal Clear Digital Marketing have been building and refining digital marketing tools and strategies to keep businesses profitable, including developing ADA-compliant add-on software, which provides a high level of coverage for its clients.

“Website accessibility standards are not set in stone, and the standards are ever-evolving. The standard for today may not be the standard for tomorrow,” said Joe Amaral, chief operating officer for Crystal Clear Digital Marketing. “This is why compliance requires ongoing monitoring. ADA website compliance is a combination of technology and human evaluation, with the human element constantly reviewing current standards and making updates as necessary.”

Businesses also could mitigate their risks by reviewing the recommendations offered in the Web Content Accessibility Guidelines, or WCAG 2.0 AA, and develop a plan to integrate these recommendations into their existing website accessibility policy.

Until this wave of surf-by lawsuits alleging website inaccessibility violations breaks, no surfboard can navigate these tricky waters. Hire an expert and legal counsel to help you lessen the risk of your company being targeted by these surf-by plaintiffs and their legal representatives, because it’s not a matter of if a plaintiff comes across your website—it’s a matter of when. And when they do, you will get sued if your site is found to not be compliant.

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

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

Tags:  ByrdAdatto  Med Spa Law 

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How to Use Influencers for Medical Spa Advertising

Posted By Administration, Monday, December 2, 2019

influencer

By Sam Pondrom, JD, Associate, ByrdAdatto

Social media is discussed ad nauseam, so it’s always important to begin any discussion of social media by placing it in context. About 3.5 billion (with a “B”) people actively use social media every day, and about 3.46 billion people access it via mobile devices. This amounts to about half of the world’s population. Worldwide, the average person spends around seven hours per day on the internet, and two and a half hours of that seven is spent on social media. This means that roughly one-third of all internet use on a given day is social media-based. Advertisers in the U.S. will spend anywhere from $15 to $30 billion on social media marketing this year alone to reach those users. So, for better or worse, social media is not going anywhere anytime soon.

The engagement of “influencers” is a popular method of advertising on social media. As you likely already know, influencers are social media users who, by virtue of their looks, personality or talent, have developed large follower bases. These follower bases are easily reached by the influencer, and, because follower bases are self-selecting (e.g., the followers choose to follow the influencers), they are particularly susceptible to the influencer’s message. Consequently, influencer advertising is highly valued, since brands borrow the influencer’s reach and credibility to spread their advertising messages, which are often designed to blur the lines between organic user content and paid influencer advertisement.

However, this blurring of the lines often leads to issues with using influencers in medical advertising. So, if you currently use or plan to use social media influencer advertising, here’s what you need to know.

State medical advertising laws. It’s important to remember that no matter how you choose to advertise, you must comply with your state’s medical advertising laws.  While these laws vary from state to state, every state has a standard similar to this: Do not advertise in any manner that is false, deceptive, or misleading. So, what does that mean? You must take care to advertise in such a way that you do not, among other issues, create unjustified expectations about results; advertise or assure a permanent cure for an incurable condition; guarantee results; advertise professional superiority that cannot be verified; provide false, deceptive or misleading testimonials; or fail to identify models and actors used in advertising. Thus, when engaging an influencer for advertising purposes, you must first consider your state’s restrictions to ensure your advertisement is compliant.

FTC advertising requirements. On top of your state’s medical advertising laws, the Federal Trade Commission (FTC) has rules prohibiting “unfair methods of competition and unfair or deceptive acts or practices” in commerce. While this is a broad prohibition, compliance with the FTC can be reduced to three simple concepts: honesty, transparency and disclosure. The FTC is particularly concerned with the fact that the average social media user may have trouble distinguishing between organic user content and paid advertising. To that end, the FTC has determined that anytime an influencer performs marketing services, they are making what the FTC considers an endorsement. Accordingly, the FTC requires that an influencer must disclose any material connections that exist related to the product or service when using social media to make an endorsement. Material connections are connections that might affect the weight or credibility consumers give the endorsement. So, an influencer must disclose a business or family relationship related to the advertisement, a monetary payment connected to the advertisement, or the receipt of free product or services related to the advertisement. The disclosure must be made in plain language that is easy to see or hear, and is clear across all social media platforms and devices.

Use a contract. As made clear in the sections above, using influencers for medical advertising requires careful regulatory consideration. Accordingly, it’s important to use contracts to allocate risk and reduce the potential for unmet expectations.  There are multiple potential pitfalls associated with engaging an influencer for medical advertising. By using a contract, you can address these issues and ensure key items such as content, payment, competition and regulatory compliance are all addressed. For example, you may want to give the influencer creative license in writing the advertisement so their voice comes through (or not). Regardless of who is writing the ad, a physician must have final say over any and all medical claims. You may also want to get creative in compensating the influencer, but you must structure the payment in a manner that is compliant with your state’s anti-kickback laws. By memorializing the important aspects of the influencer-advertiser relationship, you can ensure the advertising meets your standards and expectations and the relationship complies with relevant state and federal law.

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

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:  ByrdAdatto  Med Spa Law  Med Spa Trends 

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Who Can Do What in a Medical Spa?

Posted By Administration, Friday, November 15, 2019

medical spa team

By Bala Mohan, JD, ByrdAdatto

As the new kid on the block, medical spas are breaking the mold of the traditional medical practice model. The merging of medicine and day spa services has created a new industry with multiple governing authorities to regulate it and the varying roles within it.

Most medical spas provide some combination of medical and aesthetic procedures—lasers, Botox, fillers, Kybella, microneedling, microdermabrasion, dermaplaning, chemical peels, dermabrasion and CoolSculpting. Often, this menu of services blurs the line between medical and spa treatments. While these procedures are considered medical in most states, exemptions exist in others. For example, the cosmetology boards of certain states allow aestheticians and cosmetologists to perform microdermabrasion and dermaplaning, as long as the procedure does not penetrate the dermal layer of the skin. On the other hand, more restrictive state regulating boards limit aesthetic and cosmetology practices to the topmost layer of the skin. This leads to the common question—who can do what in a medical spa?

The authority to administer medical aesthetic treatments follows a basic hierarchy:

  1. Physician;
  2. Nurse practitioner (NP) and physician assistant (PA);
  3. Registered nurse (RN);
  4. Licensed practical nurse (LPN)/licensed vocational nurse (LVN); and
  5. Aesthetician, cosmetologist and unlicensed personnel.

Physicians

Physicians have the broadest authority and often fill the role of owner or medical director in medical spas. The delegation of medical treatments to the rest of the staff falls under the supervision of these physicians, and sometimes NPs and PAs.

NPs and PAs

Certain states grant independent practice authority to NPs, and in those states, physician delegation or supervision is not required. Independent practice NPs can provide medical procedures falling under their scope of practice. Where NPs due not have autonomy, state laws generally indicate the level of physician supervision required for both NPs and PAs. In most cases, NPs practice in collaboration with a physician. Depending on the state’s laws, collaboration commonly follows written protocols (e.g., a list of delegated medical tasks, restrictions or limitations, prescriptive authority and level of supervision). Similarly, PAs usually practice pursuant to a supervision or delegation agreement, addressing their scope of practice and any applicable restrictions.

RNs

The scope of practice of an RN is more limited and subject to stricter delegation and supervision than that of an NP or PA. Unless state law dictates otherwise, a qualified physician or independent practice NP may delegate medical tasks to RNs, as long as the procedure is within their scope of practice and competency has been verified. If required, written protocols are delineated and appropriate supervision provided. If state laws do not define the level of supervision, the delegating practitioner must use their professional judgement to identify and engage in it appropriately.

LPN/LVN

The scope of practice of LPNs/LVNs is more limited and subject to stricter delegation and supervision than an NP, PA or RN. State laws generally dictate the medical tasks that a qualified physician or independent practice NP can delegate to LPNs/LVNs, whether written protocols are required, and the appropriate level of supervision. Similar to RNs, if state laws do not define the level of supervision, the delegating practitioner must use professional judgement to identify and engage in it appropriately.

Aestheticians and Cosmetologists

There is much confusion in the medical spa world about who is considered licensed personnel. While aestheticians and cosmetologists are licensed by cosmetology boards, they are considered unlicensed personnel by medical standards. They generally are permitted to perform spa procedures—e.g., facials and certain types of massages—that fall under their cosmetology licensure, but prohibited from doing anything requiring medical training.

Unlicensed Personnel

In addition to estheticians and cosmetologists, medical assistants (MAs) are considered unlicensed personnel for medical treatments and can perform treatments in medical spas only as state law allows. With limited to no medical training, these staff members generally are not permitted to perform medical or invasive procedures. Even if state law allows delegation, it often requires that the delegating practitioner provide onsite direct supervision during procedures. Delegation of medical treatments to unlicensed personnel must be approached with extreme caution.

From state to state, laws related to medical spa treatments vary from the very detailed to the very sparse, leaving room for legal interpretation.

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

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

Tags:  ByrdAdatto  Med Spa Law 

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Proposed Changes to Texas Rule §193.17 Now Available for Comment

Posted By Administration, Friday, November 8, 2019

texas capitol

By Patrick O’Brien, JD, legal coordinator, American Med Spa Association

As we covered previously, the Texas Medical Board (TMB) voted to officially propose a set of changes to Texas Administrative Code Rule §193.17—the rule that provides guidance of the delegation of nonsurgical medical cosmetic procedures. The TMB proposed some changes at a stakeholder meeting in early October (covered here) but did not publicly disclose the final version it approved for publication; it instead intended the publication in Texas Register to serve as the changes’ public debut. The wait is over—this week’s issue of Texas Register contains the TMB’s proposed rule changes (starting on page 6669).

These proposed changes are broadly similar to the initial version discussed at the stakeholder meeting in early October. However, this approved version makes significantly more minor adjustments than the original proposal would have. The prior version would have made significant changes to who can perform procedures and what supervision is needed; the proposed version maintains the current rule and permits physicians to delegate to both licensed and unlicensed people, provided they are “qualified and properly trained.” Similarly, the proposed rules still require that supervision be provided by an advanced practice registered nurse (APRN) or physician assistant (PA) who is onsite or by a physician who may be offsite. The current rule requires that the physician be available for emergency consultation, whereas the proposed rule would require the physician’s “immediate availability… for consultation.” The proposed language does clarify that supervision does not require direct observation.

This new proposal also makes a significant addition to the current rules by adding a requirement that the physician notify the board of their intent to delegate and supervise medical spa-type procedures. This notification would be made on a board-supplied form and would include:

  • Information on the business’s owner, location and phone number;
  • A list of all PAs, APRNs and qualified persons who will be performing procedures; and
  • The name and license information of the supervising physician.

This document would need to be updated within 30 days of changes, additions or terminations.  Additionally, the physician would need to secure an alternate supervising physician if they are unable to provide supervision. The proposed rules go on to state that all physicians who delegate and supervise procedures are responsible for ensuring compliance with all applicable rules and laws, and violations are grounds for discipline. 

It is important to remember that these are only proposed changes—they are not yet official or final. We are currently in a 30-day window during which members of the public can submit comments and feedback. At the end of the 30 days, the TMB, at a public hearing, will vote on whether to formally adopt the changes as they are currently written or to make modifications as a result of public comments. If you would like to submit feedback to the TMB, it can be sent to the attention of Rita Chapin at:

P.O. Box 2018
Austin, Texas 78768-2018

It also can be emailed to rules.development@tmb.state.tx.us.

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Tags:  Med Spa Law 

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