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You Can’t Pay for Patients and Call it “Marketing”

Posted By Administration, Friday, March 15, 2019

money changing hands

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

Finding customers is the biggest challenge for any business. You can offer the finest product or the best service, but none of it will matter unless you can find people willing to walk in the door and buy from you. Therefore, marketing and advertising are critical to a business’s success. This is especially true for medical spas and others in the aesthetic health industry. There are many effective marketing strategies to use, each with its own legal issues. We’ve previously written about issues with email marketing and text message marketing.

The referral is one of the most effective marketing tools. Satisfied customers can be your best advocates and salespeople by simply going out into the world and telling their friends about how great you are. A recommendation from a friend or trusted acquaintance can be hugely credible, so incentivizing people to make more of these referrals for you might seem like a great idea. However, since medical spas offer medical procedures, they are subject to a slew of laws that make rewarding referrals very difficult to do.  Many states prohibit physicians or licensed healthcare providers from paying or accepting money or other types of value for referring a patient.

Consider the ongoing saga of Forest Park Medical Center in Dallas, where doctors (allegedly) enacted an elaborate plan of paying other physicians for referrals to the center for elective surgeries and ran afoul of anti-bribery laws. Forest Park apparently was paying hundreds of thousands dollars per month to physicians for referrals and calling it “marketing.” Obviously, most medical spas are not able to pay millions a month in “marketing,” and very few seek reimbursement from insurance. So what do they have to worry about? Texas’ patient solicitation law prohibits paying “any remuneration in cash or in kind” for “securing or soliciting” a patient. (Confusingly, this particular law is not the one at play in the Forest Park case, but it does apply to other Texas medical practices). So while it might seem nice to give a gift card to someone for bringing a patient to you, it very likely is an offense under this section.

Texas isn’t the only state to look unkindly at paying for patient referrals. Many other states have similar “anti-kickback” laws or general prohibitions on physicians “fee-splitting” with others. New York, for example, clearly prohibits a licensee from offering, giving or receiving any fee or consideration to a third party for the referral of a patient. If you think this seems broadly written, you would be correct—and New York and Texas are far from the only states that have laws such as these on the books; most traditionally have viewed paying for referrals as subverting a patient’s interests. After all, the patient is relying on the person to provide a recommendation that is in his or her best interest, and the introduction of a financial motive may influence that recommendation.

You also may notice that payments for more traditional advertising could fall into this broad definition if the fee is based on results. Depending on the specific facts of the case and the state in which it occurs, this could be the case. California has accounted for this possibility by providing an exemption for certain advertising relationships in its anti-kickback statute. The California Business and Professions Code § 650 prohibits a licensee from offering or accepting any payment as compensation or to induce the referral of patients. However, it does allow for the payment of services (but not payment for referrals) based on gross revenue or a similar arrangement if it is consistent with the fair market value of those services. But even in states like California that explicitly carve out advertising from the anti-kickback rules, not all advertising relationships are permitted. Paying for advertising based on results or consumer response always will appear to be a paid referral and is certainly a risky arrangement. Before implementing any marketing strategy, it is always a good idea to review your state’s fee-splitting and anti-kickback laws, as well as your licensing board’s guidance on professional conduct.

If you would like to learn more about marketing that won’t land you in the same hot water as the physicians at Forest Park Medical Center, consider attending one of our Boot Camps this year. We also have a number of webinars that cover various issues and aspects of marketing that you may find helpful.

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

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Medical Spas Face the Challenges of Private Equity-Backed Health Care

Posted By Administration, Thursday, March 14, 2019

By James M. Stanford, JD, Partner, ByrdAdatto

Over the last several years, private equity activity progressively made its entrance into the market of dental support and management service organizations. Now, the trend has made its way into the practice of dermatology, and the field is divided over the rise of private equity—not only in dermatology, but in other areas of medicine as well, including plastic surgery, aesthetics, and the medical spa space. The competing schools of thought on private equity in medicine are highlighted in an article recently published by The New York Times entitled, “Why Private Equity is Furious Over a Paper in a Dermatology Journal.”

The article details the backlash a medical research paper received after its data supported a conclusion that private equity firms tend to acquire practices “that perform an unusually high number of well-reimbursed procedures and bill high amounts to Medicare.” The article also highlights the criticisms over the paper’s factual accuracy, its sudden removal from the medical journal’s website, and the questions raised about private equity firms’ growing presence and influence in the practice of dermatology at the expense of patient care.

While the corporatization of healthcare is not a new debate, the research paper’s conclusion is the most recent example to illustrate the challenges that arise in maximizing profits without diminishing patient care. This is because the ability of a practice to effectively align its healthcare and business issues can be the differentiating factor between the success and failure of the practice. On one side of the equation, you have the traditional healthcare practice structure where business innovation and creativity is extremely limited, and the primary focuses are patient care, efficiency in billing and operations, and payer reimbursements. On the other side, you have the retail business structure where there is a limited understanding with healthcare laws and regulations and the correlated risks of excessive monetary penalties and lawsuits, but its experts are skilled in innovative marketing and branding.

Like it or not, private equity has made its way into the dermatology market and other health care spaces. If you have a management service organization and need help navigating the challenges of raising private funds, or if you are currently operating with private equity backers and need guidance, consider attending one of AmSpa's upcoming Boot Camps, where industry leaders can answer your questions and show you how to move your business forward.

James M. Stanford is an attorney and partner at the ByrdAdatto law firm. From transitions, mergers, and acquisitions to structuring complex ownership arrangements, James enjoys the personal reward that comes from bringing parties together and making deals happen. James practices primarily in the areas of health care and corporate law with a focus on intellectual property. A proud father, Jim served in the U.S. Army and is fluent in Russian. In his spare time, he enjoys hunting, fishing, and spending time outdoors.

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

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Fibroblast Plasma Therapy, Who Can Do It?

Posted By Administration, Tuesday, March 5, 2019

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

Fibroblast Plasma Therapy is a new skin tightening procedure that is generating a lot of buzz in the medical aesthetics industry. It delivers tiny arcs of plasma created by an electrical discharge via a “plasma pen” to the skin, singeing the surface and tightening the underlying tissue. Unlike a typical light or other energy based skin tightening treatment where a large area of skin is treated with each firing, a Fibroblast Plasma Therapy treatment only effects a tiny pin-point of tissue with each firing. The whole treatment is then performed by repeatedly applying the pen in grid pattern over the treatment area. It appears that, in general, there are few risks of complications with this treatment. However, there is risk of burning through part of the skin if the plasma is applied for too long or too deep.
 
As is typically the case when such a product emerges, we at AmSpa are getting a number of questions about who can actually perform Fibroblast Plasma Therapy procedures. The treatment appears to be very straightforward—a provider applies the device in a grid pattern to the area of the skin to the skin. Its simplicity raises an obvious question: can an esthetician or licensed vocational nurse (LVN) perform this procedure?
 
It’s great that we get these questions because it shows that medical spa owners and operators care about remaining compliant, but because innovation moves faster than the regulation, it’s sometimes difficult to determine what the answers are when new treatment emerges. However, we can use what we know about similar treatments and technologies to determine the most prudent course of action until government agencies make their rulings.
 
Simply put, the Fibroblast Plasma Therapy is essentially an energy device similar to other IPL, electricity, and radio frequency devices. A lot of the issues we’ve addressed in recent years regarding other energy skin tightening devices are likely also going to apply to it. Every state that has looked into these other energy devices that tighten the skin has found it to be a medical treatment, so a good-faith exam must be performed before the procedure, and if a doctor is not administering the treatment him- or herself, it must be properly delegated. Unfortunately, for practices that would like to use unlicensed practitioners to perform Fibroblast Plasma Therapy procedures, this takes them out of the scopes of practice for estheticians and most LVNs.
 
The only conjecture we can make is that Fibroblast Plasma Therapy will likely be regulated in much the same way as other energy based skin tightening, both in terms of medical board rulings and FDA approval.
 
Unfortunately, since it is so new, we don’t have all the answers yet, however we will stay on top of this as more states weigh in on the procedure and news develops. Look to AmSpa for more about Fibroblast Plasma Therapy treatments. Thus far, it has been safe and well received, but the industry needs to have a firmer grasp on the regulatory issues surrounding it.

To learn about legal and business best-practices to keep your med spa compliant and profitable, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps and be the next med spa success story.

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

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Texas Nursing Board Reiterates That Nurses May Only Use Non-Ablative Lasers

Posted By Administration, Monday, March 4, 2019

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

Unlike many other professional licensing boards, the Texas Nursing Board provides a volume of guidance and answers on their website for nurses wanting to practice in a medical spa. In general, this guidance recognizes that that registered nurses (RNs) and licensed vocational nurses (LVNs) have a scope of practice that is defined partially by their educational background, level of competence, and knowledge. This flexibility seems to carry over to the Board’s position statement 15.9 on Laser Therapy.
 
Position statement 15.9 (available here), begins by acknowledging that the “use of laser therapy and the technology of laser use have changed rapidly” over the years. It goes further on to state that nurses play many important roles in laser therapy and that it may be within their scope of practice to administer such treatments. The statement lays out the basic requirements that the nurse needs to have the education, experience, and knowledge to perform the treatment and must perform it subject to a valid medical order and under appropriate supervision. All through this section references are made to lasers, laser therapy, or laser energy. However, the seeming broadness of this position is quickly undermined by the single use of one term: non-ablative. Non-ablative is used only once in the statement and by its inclusion it excludes many laser skin resurfacing treatments from RNs and LVN’s potential scope of practice.
 
Recently, Sam Pondrom an attorney with the law firm ByrdAdatto, spoke with the Board of Nursing regarding this language in 15.9 he says “The Nursing Board was very clear: that there are no plans to remove the (non-ablative) language from the statement and that they don’t feel a (RN or LVN)’s educational background prepares them to accept these assignments.”
 
This limitation to non-ablative lasers in the position statement appears to be in response to an older practice guideline from the Texas Medical Board (TMB). This TMB guideline was adopted in 2003 but has since been withdrawn and at the time it prohibited physicians from delegating any ablative laser procedures to others. However, the Nursing Board’s statement retains the restriction and in 2013 only removed reference to the withdrawn TMB rules (see here for a discussion of the 2013 amendments). Currently, no other rule or law prohibits a physician from delegating an ablative laser procedure to a nurse.  However, position statement 15.9 makes it clear that it is not within the scope of practice for an RN or LVN to accept such a delegation. It remains to be seen when The Board of Nursing will again recognize that “the use of laser therapy and the technology of laser use have changed rapidly” as they had previously stated in the opening line of 15.9. 

To learn about legal and business best-practices to keep your med spa compliant and profitable, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps and be the next med spa success story.

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

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Suit from Laser Hair Removal Injuries Highlights Need for Training and Oversight

Posted By Administration, Monday, February 25, 2019

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

If you are thinking there is a lot of Medical Spa related news coming from Houston, TX, you would be right. We’ve previously commented on some criminal medical spa issues here. And, today, I want to draw your attention to a recent civil suit filed in Harris County District Court by a man who received multiple painful and sensitive burns on his legs and trunk as a result of an improper laser hair removal procedure. According to the article the specific laser machine was new to the medical spa and during the procedure the plaintiff recalls hearing the employee say “uh-oh.” 

“Uh-oh” is something you never want to hear during a haircut let alone a medical procedure. This highlights a topic we have touched on several times: while laser hair removal (LHR) and other procedures can be very safe, they are not without risk of injury or complication. It is critical that individuals who perform these procedures have proper training and skill not only in the device itself but the underlying human physiology at play. Often this medical knowledge will be gain in acquiring a professional health care license or it may be provided under the supervision of a physician or other qualified health care professional. 

Most states recognize the importance of having this medical oversight of these procedures. Whether it is, as most states do, by treating laser hair removal as a medical procedure or, as in states such as Texas or Florida, by having licensed laser technicians who practice under a consulting physician, a medical professional is involved at some stage in the process. (AmSpa members may review their state summary for details on their state’s laser laws.)

The major exception to this is New York where laser hair removal is not regulated by any organization. We’ve previously discussed the efforts to pass legislation and this year’s Assembly Bill 821 that seek to bring the LHR industry under regulation. AB821 would create training requirements for LHR technicians and require that they practice in facilities overseen by a consulting physician. 

However, 2019 could also see Arizona replace New York as being the wild west of LHR laws. A Bill introduced in Arizona’s Senate this year would reduce oversight of their laser technicians allowing them to practice under a “laser safety officer” who does not require any sort of medical background. Even more notable is that laser technicians in AZ are not limited to LHR but may also perform other laser and light based skin procedures. Procedures that carry a much greater risk of complication or adverse outcome all without any medical professional oversight or supervision.

As covered before, in order for the Medical Aesthetic Industry to continue to grow and thrive it needs to have practical rules. Part of insuring this is operating in a way that maximizes patient outcomes, minimizes complications, and avoids drawing negative attention. Having properly trained and supervised people to perform the procedures is a huge part of this. State Legislatures pass legislation reactively and overly restrictive laws get passed in reaction to shocking news. For instance, Virginia enacted their LHR regulations in the wake of a lurid news story where a patient was burned after receiving treatment performed by the clinic’s janitor.

Again, we don’t have any details on the training or supervision involved in the above LHR lawsuit from Houston. In general, a person with better training, education, and skill in the procedure, the device, and with medical supervision is going to have fewer “uh-oh”  moments than a person who only has the minimum training. Eliminating “uh-oh” moments is a critical step to long term success for both your Medical Spa and the Industry at large.  

Tags:  Med Spa Law 

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Med Spa Slammed with Class Action Lawsuit for Violating TCPA

Posted By Administration, Thursday, February 14, 2019

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

Ever heard of TCPA? 

Most people haven’t. 

It stands for Telephone Consumer Protection Act. And it’s the second most frequent federal lawsuit after employment law claims. And now a med spa is on the receiving end

Simply put, it’s a cash cow for plaintiff’s attorneys. And why not? As Willie Sutton once opined… he robbed banks because that’s where the money was. 

What is it and what triggers it?

In 2019, TCPA is mostly triggered by SMS text message marketing. The business send offers to its prospects by text message. Text messages are generally opened and read. It’s effective.

SMS texting implemented by automated systems is regulated by the Telephone Consumer Protection Act of 1991 (TCPA). TCPA is enforced by the FCC. The FCC updated its TCPA regulations in July of 2015. And there’s a recent appellate court ruling which considered whether the FCC over-reached. That ruling created more questions than answers. The litigation machine roars on. 

Initially, TCPA was designed to prevent dinner being interrupted by pre-recorded junk marketing calls to landlines. That was in 1991. When we had land lines and actually ate dinner together. Today, TCPA mostly tackles text messages. 

The statutory damages for violating TCPA is $500 per text or actual damages, whichever is greater. The statutory damages are up to $1,500 per text for willful or knowing violations. 

It doesn’t take much for this number to get large quickly. 1,000 x $500 = $500,000.

Because the number can get large quickly, class action lawsuits in this domain are enticing to attorneys, even when a business has done everything right. There is no cap on aggregate statutory damages. Multi-million dollar settlements are not uncommon. 

In Kolinek v. Walgreen, Walgreens settled a class action suit for $11 million. What horrible thing did Walgreens do? A consumer provided his mobile number to Walgreens when he picked up a prescription. The pharmacist allegedly stated the number would only be used to verify his identity for future refills. Walgreens then sent messages reminding the consumer to pick up his refills. (Here, the number was not actually used to “verify his identity”; it was just a helpful reminder about refills.) The consumer filed a TCPA class action lawsuit. Multi-million dollar settlement. By the way, each consumer received about $20. The lawyers received millions.

How does a business prevent such mischief? If the text message is advertising or marketing, the business must obtain express prior written consent from each consumer who will receive a text. The consumer cannot be charged for the text. There’s a laundry list of items that must be included in a consumer’s written consent to be TCPA compliant. And the burden is on the business to obtain this consent. Getting this consent is like getting HIPAA consent for every consumer – yet again.

We’re sure a business that sells TCPA services will tell its clients not to worry. But, are they willing to indemnify the client for potential multi-million dollar judgment? Most errors and omissions or general business liability policies do not cover TCPA claims or they explicitly exclude TCPA claims. Medical malpractice insurance claims do not cover TCPA claims. 

At least with medical malpractice, a plaintiff needs to allege an injury. The doctor is typically covered with medical malpractice insurance. And many states cap damages. 

With TCPA, the sky is the limit. The mistake can be innocuous. And insurance is generally not available to ease the sting.

Still, it IS possible to promote robust SMS text message marketing campaigns and comply with TCPA. The time to get this right is before there’s a problem. 

Tags:  Business and Financials  Med Spa Law  Med Spa Ownership 

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Should Your Med Spa Offer Aesthetician Services?

Posted By Administration, Tuesday, January 29, 2019

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

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

What Can Aestheticians Do For You?

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

Some Caveats

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


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

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

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

For more information on medical spa legal best-practices attend The Medical Spa Show 2019 or one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Tags:  Med Spa Law  Med Spa Trends  The Medical Spa Show 2019 

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New York’s Laser Hair Removal Problem

Posted By Administration, Tuesday, January 22, 2019

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

Laser hair removal (LHR) is one of the most commonly performed non-invasive aesthetic procedures in the U.S., and almost everywhere, it is regulated the same. Most states view LHR as a medical procedure that requires proper training and physician supervision. In a few states—including Georgia, Texas and Massachusetts—non-physicians may perform LHR without physician supervision, provided it is within their scope of practice and they meet certain requirements. In Georgia, for example, a non-physician can apply for and obtain a Cosmetic Laser Practitioner’s license, provided they complete certain courses—and pay a $200 fee, of course.

But in New York state, LHR is entirely unregulated, and thanks to a article titled “Marked” by Elizabeth Roy Stanton that was published by Medium in December 2018, this fact is receiving national attention. “Marked” is a harrowing account of how Stanton’s decision to undergo LHR at a salon in Scarsdale, N.Y., resulted in physical scarring. (AmSpa and ByrdAdatto aided Stanton in preparing the article.)

“At some point in the past, the medical board declared that lasers, when used for hair removal only, are not the practice of medicine, so they don’t oversee who does it,” said Patrick O’Brien, legal coordinator for AmSpa. “There’s no other regulatory body, so laser hair removal is unregulated in New York. Essentially, anybody can go buy a laser, open up a shop, and start doing laser hair removal.”

This relates only to laser hair removal—other uses of lasers in aesthetics are considered to be medical in nature and therefore are regulated by the state medical board and require physician supervision. In the years since the board declared that it did not consider laser hair removal to be medical, the state has attempted to close this loophole, but its efforts have as yet been unsuccessful.

“[The state legislature] tried for several years to pass some kind of licensing regulation,” O’Brien said. “They had a bill last year, but I believe it didn’t gain any traction from medical groups because the bill would have allowed non-medical persons to perform [LHR]. I believe the one before allowed you to become licensed, just like you’d become licensed for doing tattoos or becoming an esthetician.”

On January 18, 2019, a new bill that would create a LHR licensure procedure was filed in New York. This would create a situation similar to Texas’ LHR law, which allows licensed individuals to operate largely independently, though they are required to submit to periodic oversight by a physician. However, it remains to be seen if it will be passed into law.

“It seems like the trend is to create a separate license,” O’Brien said. “Most states treat it as a medical procedure, and so a doctor has to supervise it, but many are seeing that it is relatively safe and that people, with training and being properly overseen, can do it. I think you’ll see states move to open it up to more people, just because it’s so common.”

Stay tuned to AmSpa for more details as this story develops. And if you’d like to learn about the laser laws in your state, join AmSpa or consult an experienced health care attorney.

Tags:  Med Spa Law 

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Off-label Considerations for Mid-level Practitioners

Posted By Administration, Friday, January 18, 2019

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

We’ve discussed the issues and legalities with prescribing drugs for uses other than what the FDA originally approved them for here. Known as “off-label use” the practice is often routine and generally acceptable as the FDA does not control the practice of medicine.  Most of the current discussion looks at off-label use from the perspective of licensed physicians.  Generally, physicians are permitted to prescribe drugs for off-label purposes without restriction as part of their license to practice medicine.  However, this isn’t necessarily the case for mid-level prescribers such as physician assistants (PA) and nurse practitioners (NP). Below we’ll discuss some of the common limitations and concerns mid-levels face in prescribing off-label.

One of the least common types of off-label restrictions are placed on particular drugs or for particular purposes.  A few states have adopted specific prohibitions against off-label uses for certain classes of drug or for treatment of specific conditions.  These tend to be passed in relation to controversial topics or as a result of a publicized scandal. As an example, Mississippi prohibits all off-label uses for drugs prescribed for the sole treatment of weight loss.  And in North Carolina prescribers working through telemedicine are prohibited from prescribing medications for the purpose of inducing an abortion and this extends to any drug with a known off-label use as well.  

Far more common are discretionary restrictions that a supervising physician may place on a mid-level practitioner. In most states, PAs and NPs derive their prescriptive authority from a collaborating or supervising physician.  This is normally embodied in a mutually written agreement between the physician and mid-level, sometimes requiring board approval.  These are known by various terms such as “practice guidelines” or “supervision agreements”.  These agreements typically outline the procedures and scope of practices that the mid-level is able to perform.  Where these agreements define the scope of the mid-levels prescription authority it will include the types or classes of drugs prescribe and the situations and conditions when they can prescribe them.  So the ability of PAs and NPs to prescribe off-label in these states is largely dependent on if they are authorized by their physician.  This is the case in North Carolina where a PA’s prescriptive authority is governed by their written supervisory agreement with a physician.  They have no blanket restrictions on off-label uses but a supervising physician could restrict their PA to only prescribing for on-label uses in the practice agreement.   

Most states do not have explicit prohibitions on off-label prescribing by mid-level licensees.  Instead, they may have more general rules on mid-level prescribing that may indirectly impact their ability to prescribe off-label.  These more general rules usually take the form of a Formulary or a restriction as to the standard of care. A formulary is a list of included or excluded drugs that are within the mid-levels prescriptive authority. They are usually collectively developed and maintained by the medical, nursing or pharmacy boards.  Unless each board maintains their own.  For instance, Oklahoma maintains separate formularies for both PAs and NPs.  Each formulary includes a list of drugs the licensees are prohibited from prescribing on their own and the PA also lists classes of drugs that are permitted.  It is in these formularies where some off-label uses for certain drugs may be prohibited directly or indirectly by excluding entirely a class of drugs and not accounting for alternative uses. 

Restrictions on prescribing under “standards of care” are typically found in the statute that grants the prescribing rights to the PA or NP.  The prescription is usually worded to allow prescribing for approved uses unless certain requirements can be met.  Usually, the requirements are that the off-label use is supported by studies or peer-reviewed and is included in the current standard of care for that ailment.  For instance in Pennsylvania  the formulary for PAs allows them to prescribe for a purpose other than what the FDA has listed as indications only if two requirements are met:  1)the supervising physician must authorize the particular off-label use and 2) the use must be supported by peer-reviewed literature from a “recognized body of knowledge”. So PAs in Pennsylvania would be able to prescribe off-label generally if their supervising physician approves it and if the use is already tested and supported by research.  A similar “standard of practice” prescribing restriction can be found in for NPs in Texas.  The Texas Board of Nursing’s administrative code limits NPs to ordering and prescribing medication only for FDA approved uses unless the use is part of an official trial or review board or if the use is both supported by evidence-based research and within the current standard of care for treatment of that particular condition.  While those carve-outs will allow Texas APRNs to prescribe medications for many off-label situations it limits them to only those mainstream off-label uses.  NPs in Alabama have similar requirements to only prescribe off-label if it is part of the current standard of care, supported by evidence-based research, and approved by the collaborating physician. Oregon has a more lax form of this “standard of care” restriction. NPs in Oregon have fully independent prescriptive practice; they don’t have to collaborate separately with a physician.  Oregon NPs are specifically permitted to prescribe for off-label uses but only so long as there are appropriate indications and documentation for those uses.

Restrictions like these can have substantial restrictions on PAs and NPs practicing in medical spas and other similar settings.  Many of the more innovative procedures offered in medical spas do not necessarily have an FDA approved indication and may be too new or too niche to be backed up by the required peer-reviewed studies or research.  Mid-level practitioners who practice in medical spas need to be sure that their state doesn’t have any explicit restrictions on the drugs or the uses that they plan to practice within the medical spa.  But in addition to that, they will want to ensure that they have sufficient documentation and research on file to support these off-label uses as being part of the “standard of care”. 

If you are a physician assistant or nurse practitioner in the aesthetic medical field and are interested in learning about new procedures and legal issues surrounding medical spas you should consider attending the Medical Spa Show taking place in Las Vegas, NV, February, 8-10, 2019.

Tags:  Med Spa Law 

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Blow Struck to Non-Solicitation Agreements in California

Posted By Aly Boeckh, Friday, January 11, 2019

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

Generally, California prohibits the enforcement of most employee non-compete clauses with few exceptions. An appeals court decision this past November saw a commonly used and previously accepted non-solicitation restriction caste into doubt in California. The case known as AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. involves former travel nurse recruiters for AMN, a travel nursing placement agency who went to work for Aya a competing travel nursing agency. Travel nursing agencies seek to recruit and place nurses on temporary work assignments throughout the country.

The defendant nurse recruiters had signed a confidentiality and nondisclosure agreement as a condition of employment with AMN. The AMN confidentiality and nondisclosure agreement contained fairly typical restrictions whereby the employee promised to keep company trade secrets secure and confidential. However, it also included what is commonly known as an “anti-solicitation” clause which prohibited former employees for a period of one year or eighteen months after leaving the company from contacting current employees for the purpose of directly or indirectly inducing or causing them to also leave. As a small quirk in this case, travel nurses are considered employees of the agency when they are placed on assignment but may otherwise be customers of the agency. This anti-solicitation clause would seem to be a prudent safe guard for an employment agency to stop former employees from stealing away your pool of potential employees.

Which is unsurprisingly why AMN sued the former recruiters when they recruited away some of AMN’s travel nurses to work for Aya. This, AMN claimed, was in violation of the anti-solicitation clause of the non-disclosure agreement they had previously signed and agreed to. However the trial court sided with the defendants, Aya Healthcare Services Inc. and the former recruiters, and found the restrictions that AMN was seeking to enforce were void as a matter of public policy. And on November 1, 2018 the 4th District Court of Appeals if California upheld that judgement of the lower court. 

To understand why AMN lost we’ll need to look at some peculiarities of California labor law. California strictly prohibits employee non-compete agreements with few exceptions as embodied in the Business and Professions Code section 16600.  In brief, section 16600 makes any contract that restrains someone from engaging in a lawful profession, trade, or business void and unenforceable.  There are a few exceptions to this rule that aren’t applicable in this case such as allowing owners, partners, and shareholders to be restricted by non-compete clauses when they sell a business. However, and this would seem to be a critical exception in this case, the statute does allow for protection of a company’s trade secrets.  For an employment agency trade secrets include the company’s applicant/customer lists and the statute allows for protections of these lists for one year following termination of the former employee.

It would seem that AMN should be able to enforce their non-disclosure agreement using the trade secrets exception. So why did the case not go in their favor? The devil is, not surprisingly, in the details: travel nurses would apply for employment with an agency and if they were selected for job placement would work as employees of that placement agency (here either AMN or Aya). The nurses, to improve their chances of placement might and often did apply with multiple agencies.  So in the case at hand each of the AMN travel nurses that had been recruited to Aya were already registered with Aya, in some cases years in advance of them leaving AMN.  Because of this the court ruled that the identities and contact information of these employees couldn’t be claimed as a trade secret by AMN since, practically speaking, there was nothing secret about it.  Since there was no trade secret exception the court found that the non-solicitation clause was an “unlawful restraint on trade” under 16600 because it sought to prevent the defendants from engaging in their profession as travel nurse recruiters. While the ruling in this case is very fact specific any California employers will want to carefully review their own non-disclosure agreements in light of this Appeals Court ruling. 

If you have questions or concerns on your own employment issues you might consider using one of your AmSpa member benefits which includes an annual legal consultation with the law firm ByrdAdatto.

Tags:  Med Spa Law 

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