Medical spas and state laws

February 27, 2020

What you need to consider before offering spa services to your patients.

Many physicians are interested in offering medical spa and cosmetic services to their patients. In addition to dermatologists and plastic surgeons, obstetric-gynecologists, pain physicians, and even dentists have started offering cosmetic options. I expect to see this trend grow in the future as physicians realize how lucrative these services can be. 

Physicians are not the only ones looking to profit from medical-spa and cosmetic services. Many non-physician providers and non-licensed providers have started to offer services in spa settings, which may not comply with relevant state laws. Some types of “spa” services actually require physician presence and/or oversight and can lead to claims of unlicensed practice of medicine and/or the corporate practice of medicine. For spas that try to get around these laws by asking a physician to serve as token “medical director”, or to co-own the spa, the risk is even more significant.

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Many spa-type services are actually regulated under state laws. In Illinois, for example, the state prohibits typical spa employees like cosmetologists and estheticians from using any technique, product, or practice intended to affect the living layers of the skin. Therefore, they have determined that certain procedures constitute the “practice of medicine” and are not within the scope of practice of a cosmetologist or an esthetician. This includes Botox, chemical peels, collagen injections, colonics (unless there is no representation of health benefits), liposuction, microdermabrasion (except superficial or light microdermabrasion intended only to remove dead skin cells, oil, and other debris from the surface of the skin), dermaplaning, miroblading, microneedling and radio frequency. This list may come as a surprise to physician and non-physicians alike since many spas offer these types of services.

Additionally, in Illinois and many other states, even if the above procedures are overseen and delegated by a licensed physician, an individual cannot hold himself/herself out as a cosmetologist or esthetician while performing the delegated procedure (since those procedures are not within the license of a cosmetologist or an esthetician). More importantly, in states like Illinois, individuals receiving the services listed above must actually be a patient of the physician with an established physician-patient relationship. This requires that a physician examine the patient and determine the appropriateness of a service and course of treatment. A physician serving as a “medical director” who does not see patients or have a physician-patient relationship, is violating these requirements. 

Even for licensed physicians offering services within a medical practice, non-compliance is common. Few physicians personally examine patients or provide oversight of cosmetologists/estheticians for services that are considered quite basic, like chemical peels and colonics. For this reason, physician should be familiar with their own state law requirements to assure compliance and should obtain the necessary training to be able to delegate and provide oversight. It’s also important to note that in states where fee-splitting is prohibited, medical spa staff should not be compensated on a percentage of revenue arrangement for rendering medical-spa services. 

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Some states also classify the different types of lasers that must be used only by a licensed physician. In Illinois, for example, a physician must examine a patient to determine an appropriate course of treatment before any laser procedures are performed. This means that a patient going to a doctor’s office for laser hair removal should visit with the physician before any laser treatments are provided. The physician can delegate the actual performance of laser procedures to a person functioning as an assistant to the licensed physician, as long as that person to whom the physician has delegated the service does not hold themselves out as anything other than an assistant (even if they have some type of cosmetology, massage or other license). 

Medical spa services can be very lucrative and both physicians and non-physicians can benefit financially, as long as proper attention is paid to the law. Practices offering medical-spa services should review the services being offered in their practice to assure proper compliance. Physicians offered payment to serve as “medical director” of a spa should consult with counsel before agreeing to any such arrangement.

Ericka L. Adler, JD, LLM has practiced in the area of regulatory and transactional healthcare law for more than 20 years. She represents physicians and other healthcare providers across the country in their day-to-day legal needs, including contract negotiations, sale transactions, and complex joint ventures. She also works with providers on a wide variety of compliance issues such as Stark Law, Anti-Kickback Statute, and HIPAA. Ericka has been writing for Physicians Practice since 2011.