Two RN's and two medical aestheticians with collectively over 30 years of successful experience in the medical spa industry have the opportunity to open a beautiful medical spa in a very affluent area. We have all worked in plastic surgery and would like to find a plastic sugeon to be our medical director. What do we offer? Free rent, exposure, a piece of the profit? We realize that it probably needs to be someone just starting out to be interested. Any suggestions on how to find one?

All of the above. except a BIG PART OF THE PROFIT.

It depends on what the doctor is looking for. If you have a facility large enough for surgery and a surgeon is looking for another office, sounds like a good fit. In my experience younger doctors are a little scared of risking thier license so early in their careers. On the flip side, older semi retired docs looking for something interesting to do and a little extra income would be a great fit. You just have to find a fit that works where all involved are happy with the terms.

We have interest from Dermatologists, but three have passed on the opportunity- each for different reasons, but the main one is they don't want to share the profit of the procedures. Despite the fact they have no financial risk in the build out, or overhead expenses. We are offering an adjacent office to the Medical Spa for their general derm practice and are giving them a biller and receptionist. We are also advertising them heavily to the area as the Medical Director of the spa. It is becoming a challenge to attract the right person for this opportunity. We are scouting out the websites and emailing the local Dermatology programs. Is a percentage/service not feasible? But, we ARE a start up and expect to have debt in the beginning. Many challenges, but we are sticking to the dermatologists to pursue, any advice would be appreciated!

Is it legal for a MD to be a director without owning the business? I read that in CA this is not legal.

It's illegal for a non-physician to own a majority of a 'medical' business. That's why Health West and John Buckingham were shut down by the State of California... They were selling medical businesses to non-physicians. Not something you want to be doing.

I failed to mention the MediSpa will be physician owned (my husband) who wants no main part of operations since it's not his specialty. So, there is no violation of the Corporate Practice of Medicine Doctrine.

We are also having our attorney consult with the Medical Board of Examiners in regards to our set up and if it causes a 'self referral' violation. We may have to set up a corporation initially including the physician as part owner or he cannot refer patients from his practice to the Medispa next door.

So, if fee splitting wont work, how is it possible for a start up? What is a reasonable salary to offer? I read an article in the Wall Street Journal that has Medical Directors in Florida getting 60K/year, but I am not sure if this Medical Director was also a Practicing Physician. Apparently, the two terms are considered separate in legal jargon.

lexMD,

How is it possible for the state of California to shutdown Healthwest but still allow Mr. Buckingham to sell medical spa franchises with his new company, Solana Medspa? It just seems like there should be some kind of measure taken to prevent a business operating illegally from being able to turn around and create a new company doing the same type of work. Also, they've recently opened Aria Medspa in California but I'm not sure it's physician owned (according to the staff listed on their website). Is California changing its laws and is medspa ownership regulated by each state? I assume ownership is regulated by each state since there are multiple Solana Medspa franchises (as well as medspas not affiliated with Solana) around the country that are not physician owned.

Thanks and best regards!

we have done this and set it up as a administrative support company that supports the medical aesthetics portion of a physician's company. it is really bypassing the system. there was actually an article about this in medical estheitcs magaize this month.
Really the best thing is that your husband would own and supervise it, it does not matter if it is his specility or not. I don't think you will find a PS or Derm to do this for the reasons stated above.
you can create a company to sell franchises but it really should be to physicians. there is a guy on the east coast starting to do that also.
I wish you luck, the fact is that three years into it, I know that if anyone looks to deep we will have a leagal battle on our hands that we very well could loose, hopefully nothing worse will happen.

Aesthic Nurse, You may not like my opinion, but here it is. My initial instinct is that it's going to be difficult for you to find an MD to be a "medical director" who is a plastic surgeon or dermatologist and you are going to pay them $60K. Most of them can make $500K - 1 Mill+ by doing this on their own. So free rent and exposure wouldn't really make up for that.

"Medical director" is a bit more than just a figurehead who works on their own in the office next door and you use their name. You say that they won't be sharing in the build-out, financial risk, etc. But you won't really be sharing in the medical liability since, as medical director, they are assuming almost 100% of the medical liability for the procedures that you will be doing. And they have never worked with you, so despite all your years of experience, they don't know what your skills really are. But what might make them most nervous is that they'll have all that risk and none of the power to say what they do or don't feel comfortable with you doing under their license since you'll be the owners and not him/her.

Course I'm sure if you look long and hard enough you'll find somebody to fill those shoes. It just might not be somebody responsible or reliable.

So, is it possible to start a small aesthetic business as an RN where the Medical Director is not employed by the nurses, but contracted. Where a set percentage of all procedures are paid to the MD? I am planning on starting a small aesthetics business and perform Botox, Restylane , sclerotherapy and chemical peels at various local salons. A percentage will be paid to the salon and to the MD. The MD will have standing orders for me to perform these procedures. Nusring history will be done. Contraindications will be be set by the MD.

Tanya RN,

I would check with your State Nursing Board -- What about complications that could arise as a result of the procedures?
Your scope of practice does not allow you to diagnose or treat - is the Medical Director willing to accept the liability? I would proceed very cautiously if I were you, and seek the services of an attorney who is knowledgeable in this area.

LS,
I treat patients all the time. I am an ICU nurse and take telephone orders and have standing orders that I follow. I IV push meds like Norcuron, Versed and Insulin, etc on a regular basis. My scope of practice allows me to treat, with a Dr's Order. But not to diagnose. The magnitude of the adverse effects of cosmentic procedures are very small in contrast to the treatment and procedures that I perform on a daily basis in the ICU.
Are you up to date with the Nurse Practice Act?

When I contacted the Board of Nursing, I was told that the NPA does not address treatments such as Botox, sclero and IPL. There are meny nurses throughout the country that perfrom these duties all the time and there are many organizations that support it.

LS, what area in the medical profession are you in?

Tanya,
From the CA medical Board

"I've been approached by a nurse to be her 'sponsoring physician' for her laser and Botox practice; would that be legal?

No. There is no such thing as a 'sponsoring physician'. Nurses may not, under California law, employ or contract with a physician for supervision. A nurse may not have a private practice with no actual supervision. While the laws governing nursing recognize "the existence of overlapping functions between physicians and registered nurses" and permit "additional sharing of functions within organized health care systems that provide for collaboration between physicians and registered nurses" (Business and Professions Code section 2725), nurses may only perform medical functions under "standardized procedures." The board does not believe this allows a nurse to have a private medical cosmetic practice without physician supervision."
Dispensing meds and following orders in an ICU does not make you qualified to do cosmetic procedures on your own. Although they seem like low risk procedures(and a lot of them are) you are NOT a doctor and in California, can not have your own practice. Laws are changing and other states may follow.
I agree with LS-proceed with caution.

Tanya RN,

I am a PA who has worked in cosmetic derm for several years; I have no knowledge of NPA (which is why I advised you to contact your State Board). True, the risk of complications may be small but they do occur -- I guess you (and your Medical Director)need to decide if you are willing to accept the liability.

Recently, I heard of a doctor that is a Medical Director for hire in Northern California. I met a nurse that has him as her medical director.

He is never on the premises so he advised the nurse to have a PA or NP come in and do good faith exams prior to doing any laser or injectable procedures. After that, she can treat the client indefinately. She pays the doctor a flat fee each month. This is where I am confused. On paper he owns 51% of the business and she owns 49%. This satifies the way California legislation is headed. The Medical Board and the Nursing Board are in agreement with this. However, according to this nurse she can replace this Medical Director at anytime. So in effect she owns 100% of the business. I don't get it.

Otherwise, he sounded ethical and above board and I respect his insistance on honoring the California Board of Nursing and Medical Board's direction re RN's owning cosmetic practices and having good faith exams done by a higher license. I have actually seen these issues written about in the Medical Board and Nursing Board's Newsletters within the last year and have read pending legislation.

I am considering meeting with him myself to get the low down. Does anyone have any suggestions on questions I should ask him?

Do you think it is legal for an RN to own a laser rental company (in California) that rents out lasers to dermatologists, medspas, plastic surgeons, family practice physicians etc. Also, do you think it is legal for the RN to offer her services to physician's to assist with patient load?

CANexpatRN,
What is the name of the office? The medical board of california would be very interested. If anyone else on this blog has similar information it would be appreciated !

I've been approached by a nurse to be her "sponsoring physician" for her laser and Botox practice; would that be legal?
No. There is no such thing as a "sponsoring physician." Nurses may not, under California law, employ or contract with a physician for supervision. A nurse may not have a private practice with no actual supervision. While the laws governing nursing recognize "the existence of overlapping functions between physicians and registered nurses" and permit "additional sharing of functions within organized health care systems that provide for collaboration between physicians and registered nurses" (Business and Professions Code section 2725), nurses only may perform medical functions under "standardized procedures." The board does not believe this allows a nurse to have a private medical cosmetic practice without any physician supervision.

I've been asked by a layperson to serve as "medical director" for a "medi-spa" that provides laser and other cosmetic medical services; would that be legal?
No. No one who cannot legally practice medicine can offer or provide medical services (Business and Professions Code section 2052). A physician contracting with or acting as an employee of a lay-owned business would be aiding and abetting the unlicensed practice of medicine (Business and Professions Code section 2264, 2286, and 2400). To offer or provide these services, the business must be a physician-owned medical practice or professional medical corporation with a physician being the majority shareholder.

What is the penalty if I get caught using or helping an unlicensed person to perform medical treatment?
The law provides a number of sanctions, ranging from license discipline to criminal prosecution, for aiding and abetting the unlicensed practice of medicine. Physicians could be charged with aiding and abetting unlicensed practice, and the employee could be charged with unlicensed practice.

I understand that all of these practices may be illegal, but I see advertisements all the time for these kinds of illegal practices. What should I do?
You may file a complaint with the Medical Board. To do so, please send the advertisement, the publication name and date, and your address and telephone number where you may be reached for further information, to our Central Complaint Unit at 1426 Howe Avenue, Suite 54, Sacramento, CA 95825. The board will contact the business, inform them of the law, and direct them to cease any illegal practice. If it is simply the advertisement that is misleading, they will be directed to change or clarify the ad.

It is impossible to cover all of the relevant legal issues in a short article, and these questions and answers are not a substitute for professional legal advice. Physicians may want to consult with their attorneys or malpractice carriers about the use of their office personnel. In addition, the board has a number of written materials with more thorough information on this subject. There are legal opinions on the use of lasers and dermabrasion, materials outlining the legal limitations on use of medical assistants, as well as the actual statutes and regulations. To request any of these documents, please contact the Medical Board of California, 1426 Howe Avenue, Suite 92, Sacramento, CA 95825, or call (916) 263-2389.

I would offer a share of the profits and similar perks. It doesn't necessarily have to be a doctor who is starting out. Many doctors are looking for a lifestyle change and more time to spend with their family. Good Luck!

Proposed Transaction between a Physician and Medical Spa Owner (MSO)

The following is based on my experience with other transactions; and I believe it would fit with the laws of most states, subject to the final details being negotiated, and a confirmation by specialist legal counsel. This report is for discussion purposes only on not meant to offer legal advice. There are variations on this model that may work for this circumstance, subject to negotiation and attorney confirmation. I'll leave out the reams of reasoning and laws behind the details.

Proposal:
• MSO creates a Management Services Company that owns the tangible assets including the tenant improvements and equipment, and rents them at market rate (ie prime plus X) to a professional medical corporation ("PC") owned by a physician. This gives MSO an income based on return-on-investment proportionate to their investment.
• The physician forms a PC and becomes the owner of the professional medical practice, and employs all the staff, including the MSO and any employed physicians or licensed providers. MSO gets an employment contract with the PC.
• MSO gets market rate pay for management labor and any other services rendered as "Spa Manager".
• Doctor gets market rate compensation for clinical services performed, at market rate.
• MSO also gets a negotiated percentage of Normalized PC earnings before interest, taxes, depreciation, amortization and owner benefits ("EBITDA”) as a bona-fide employee bonus/commission (equivalent to "profit sharing"), which will mostly be based on the shared profits from the nurse work, employed doctors and cosmeceutical sales.
So in summary, the non-physician spa owner gets income from ownership of the assets, labor provided, plus profit-sharing as an employee of the PC.
I think this model, certainly with some tweaking and additions by the attorneys, should provide a fair and legal arrangement between the parties. I would propose that the PC in this case can be changed, but not without some difficulty. Nobody said it was easy! Of course it will take an attorney to prepare and proof for your state.

--

Keith C. Borglum

Licensed Medical Practice Broker & Appraiser Lic#s: CA-00767129 FL-BK3206346
Certified Healthcare Business Consultant (CHBC)
Professional Management & Marketing, 3468 Piner Rd, Santa Rosa CA 95401-3954
ph (707) 546-4433 fax 546-4437
Web Page at http://www.MedicalPracticeAppraisal.com
CV/Credentials at http://www.MedicalPracticeAppraisal.com/kbcv
Member: Institute of Business Appraisers; National Society of Certified Healthcare Business Consultants;
Industry Expert in Medical Practice Valuation: Business Brokerage Press;
Author:Medical Practice Valuation Appraisal Guidelines & Workbook by PSR Inc.2006

What doctor earning 500k plus would want your measly stipend? Not even knowing how you perform as a nurse...trust me shit happens....cosmetic procedures have nothing to do with ICU and errors in the Med Spa business happen all the time nationwide...just check out the lawsuits..listen to the Medical Director..they know. Nursing is a joke.. associate two year graduates want to be doctors.

I am a cosmetologist who is laser certified in tattoo removal in the state of Michigan. I want to open a tiny business where I am the only employee, but I still need a medical director for supervision. Supervision in Michigan as I understand it does not have to be on the property. As long as they can be contacted .What kind of lawyer would I need? And who would be interested in directing such a small business?

where are you located

there is a lot of mis-information about med spa supervision and related issues. The issues change frequently as does the manner in which we address them. I consult with two prominent boards of medicine and one board of cosmetology and I am former general counsel of three laser companies,,,,I also consult to the Federation of State Boards of Medicine.

For the laser tattoo business in Michigan...your scenario is doable but you must be careful....to the RN owning a laser rental company...this is problematic but yo can do this but as it is, you are probably acting illegally...

Paddy Deighan

Interesting information.

*Botox is a "Cosmetic" treatment. There is no diagnosis code for Cosmetic Botox. It is a Rx but so is b12 for injection.

You are not treating a Medical Problem.

Juvederm and other fillers are not treating a Medical Diagnosis. Hence the key word "Cosmetic".

Therefore you are not "diagnosing" nor treating per se.

As an RN you are simply performing under the direct orders of MD just like verbal orders, telephone or those famous "standing Orders".

A med spa is not a medical facility.

California has too many MD voters and that is why it has the silly laws regarding the "Complimentary" but required assessment by MD prior to a treatment.

Too many docs intimidated by RN or others taking a bite out of their profits.

Which due to their constant war with prices are now only earning a buck profit per unit.

Enjoy!

I am a trainer for an IPL Company. We are hoping to expand to various states, and realize there are different regulations in each state regarding MD supervision. Therefore, what is the best route in locating/hiring a Medical Director for each individual state??

this scenario is a legal and medical minefield and you have to be very careful. yo will not be able to have a set form of agreement with the medical directors - it will vary from state to state. The relationship of the RN's to the business is a critical element too. It is also not advisable to refer to the estheticians as "medical estheticians" as under FTC guidelines this is a deceitful practice since there is no legal designation for medical estheticians.

Also, in response to some of the other poss - they are not accurate and they are missing the point. The procedures that you are probably looking to do...IPL, laser, dermal fillers, Botox Cosmetic etc ARE the p[practice of medicine and they ARE medical procedures. Additionally, not only is th e above the practice of medicine, but you are utilizing medical devices (IPLs, laser fillers, Botox Cosmetic) - they are all medical devices.

Paddy Deighan JD PhD Paddy@medicalandspaconsulting.com

Yo Carol RN..... There are many "tasks", and procedures that are part of a thorough examination. They are needed to gather information so that a diagnosis can be made. A perfect example would be taking a temp, counting respirations, taking a pulse and (the BIG ONE) BLOOD PRESSURE which is very often NOT DONE CORRECTLY. etc.. A doctor assigns this to an assistant to save time and money. Patients visit intermittently and changes take place in these VITAL signs from visit to visit. By following these signs it is possible to see what direction a patient's condition is going (is she getting better or worse) as well as does the patient have an illness at all. Many serious illnesses do NOT have any changes in vital signs at the beginning (lupus, heart conditions, and so on) but a careful examination can pick up some of them. That is the reason for regular check ups. It is always better to find some conditions, or diseases before they become very serious.

This leads to another problem.... too many people think, erroneously, anybody can do this. I would agree IF THE PERSON DOING THESE PROCEDURES IS WELL TAUGHT AND FOLLOWS INSTRUCTIONS. Most docs will take the BP again to see if during the time the BP was taken initially, and the doc finally gets to see the patient, the pressure "calms down" to the ACTUAL pressure. The same is true for "CLEANING THE COLON" before a procedure like a colonoscopy.

A whole "industry" was born with terminology like "TOXIC" bowel, toxins in the bowel that have to be FLUSHED OUT and so on. People who have minimal knowledge of medicine get sick and they number in the zillions. When they go for help (TREATMENT) and end up an office where customers are called CLIENTS (NOT PATIENTS, for a REASON. Treatments in the office of a licensed MD are "medical " and most often covered by insurance. If it is not covered that is a strong possibility you are not in the office of a REAL MD.)... that should be a CLUE that the person "helping" them is NOT a DOCTOR. The use of ENEMAS can be helpful to many patients FOR SPECIFIC DISORDERSs, however, the OVERUSED COFFEE ENEMA IS RIDICULOUS and is most often "ordered" by those who can not write a legal prescription. Consequently, HYDROTHERAPY of the colon, is promoted here in this magajine as another way to make money. The ad does not go into how much the "client " can be helped. The advertisment does go into the amount of money that can be made beyond what is covered by insurance if you add HYDROTHERAPY to your practice. When money is the main attraction as opposed to a legitimate INDICATION for a diagnosable condition... the patient is in trouble because no licensed, ethical MD would do that. To me, that indicates, R. Quini, does NOT have the required credentials of qn MD from an accredited school but relies on naturopathy, accupuncture, holistic techniques and so on vs PROVEN scientific solutions to medical problems. To me "scientific" means "TRUTH".

kyleigh-
Ask for referrals from your existing Medical Directors, oftentimes they have gone to medical school out of the state they practice in and will give you referrals for the states you are expanding in.

If you are training on IPLs ask the manufacturers for referrals- maybe some of their MD customers would be interested in acting as your medical director-it's a good way to source candidates to fill the high turnover laser technician positions in their offices.

If that doesn't help, contact several prominent Plastis in each state you are expanding in and approach them to act as your medical director.

I have been asked to perform botox and dermal fillers in a local Day Spa. In addition, the owner has been licensed to perform laser hair removal and therefore needs a physician supervisor. The owner of the spa is not a physician. In reading the above posts, I feel that this is a very sticky situation. I have not been asked to become the owner of the salon, but an independent contractor. Does this seem right?

MD in NY
You have to be very careful. Basically as the director you are shouldering all of the responsibility and liability.
If that non MD owner causes a burn you get hit. She does too but you have the deeper pockets.

It is also important to check your carrier and determine if they will cover botox in this setting, you may be suprised to find that they do not cover injectables outside of a medical office.

You also have to make sure your carrier knows that others will be performing procedures under your direction. This is just like hiring a NP or PA basically you are responsible and your carrier will want to know just who is adding to you liability.

Be careful about ownership, these are not like medical practices. Many services are rendered as "packages " that are prepaid. Many buy into a spa only to find alot of the clients to them , patients to you have prepaid and you get in my best italian un gatz! Just be careful, many instances occur where the laser operators slide into medical procedures and essentially practicing medicine without a license and the MD director is aiding that. Areas of concern laser veins, skin tightening, blemish solar lentignes, laser tattoo, ablaitive resurfacing and non ablaitive are all medical. People on this site will argue the point but alas they are not the ones who's livelyhood and license is on the line.

We are selling this long established very profitable medical day spa...http://businessforsaleinsandiego.com/BusinessListing/Beauty+Tanning-San+Diego-CA-S2-E2946

The current Doctor owner is retiring and the RN manager is moving with her husband to Nor Cal

Does anyone know of a template for a letter to send out to local physicians in order to find anew medical director? I am an existing medical spa of 6 years, the MD lives 45 m ile away and is tired of the drive(can't blame him). I need another MD. He is quitting his smartlipo practice that I built for him that is doing about 30k per month! That hurts but we can still do lasers and injectables if we had a new MD that would want to do it or their NP. The MD just has to show up. My staff and I take care of everything else. Any suggestions on how to approach MDs and where to start? Really not sure if I want they to do services or just oversite. I am afraid they will take my injectable patients to their practice and make 100% profit. Thanks

Patrick Im not sure you really can perform lasers and injectables, In your letter its stated you are looking for an MD RN or PA I hate to inform you that they are the only ones legally to inject and I many states the only ones that can use invasive lasers.

Patrick Im not sure you really can perform lasers and injectables, In your letter its stated you are looking for an MD RN or PA I hate to inform you that they are the only ones legally to inject and I many states the only ones that can use invasive lasers.

There are a lot of problems relative to your short question/submission. First, the FTC and state boards of medicine and state boards of cosmetology have a major problem with the use of the term "medical aesthetician". The reason for this is that the professional designation does not exist and the public is arguably being deceived by the use of the title since it infers a higher level of competency and treatment capabilities but the scope of the aesthetic license remains the same. I am a consultant to several state boards of medicine and state boards of cosmetology...this is Gospel.

I would stop using that title immediately. I know that there are thousands of "medical aestheticians" on LinkedIn and I have told a lot of them the same thing, yet they do not listen. Your license is in jeopardy.

Secondly, RNs and estheticians can only own medical spas under limited situations and the situations involve agreements with physician that go well beyond a medical supervision agreement. RNs cannot (with the exception of limited situations) practice medicine absent direct employment by a medical facility or physician.

California has begun filing Unauthorized Practice of Medicine CRIMINAL complaints against non-physician medical spas....do it properly, or do not do it. you are playing in a heavily regulated industry and the penalties are severe (loss of license, money and jail for the most egregious of offenders).

In response to the original question and I did not read all the comments so my apologies if this has already been submitted. I would offer the MD a monthly fee for their services and include them in major decision like "who are we hiring" I thinks its important to get the buy in of the MD on all staff because it builds trust. There is no need to offer space as most will not be interested in that. The standard fee here in Texas for a medical director with medium level involvement is around 2K to 2500 a month. You could also sell them on scalable business (maybe this will just be your first location) so instead of thinking about oh it's just 2K a month that’s just change well that 2 could turn into 6K of mail money. I would try and find someone that you have already done business with that knows your reputation. Trust me there are many PS and Derms out there that would like to be a part of something and to be honest most already are but you don’t know about it bc their name is not advertised, they just sign the charts. Another problem that I see if the ranking level of your staff I know here in TX you MUST be seen by a Physician, PA, of NP first before you can rec. treatment like Botox and Dermal fillers. So this could be a problem for the future if the laws change you must have this ranked person on staff if could kill your salary % putting you under water. For example I have a Derm PA on staff and she can make up to 150K a year in our practice based on sales and that’s not even that much $ some PA's can make up to 200K a year. Plus I have a part time person and 2 office managers and the MD and we ONLY do injectables and fillers in our practice specializing on one service.

excuse the gazzllion typos in my post -

First its becoming difficult to find a doctor willing not only to place their license on the line but their assets as well for the 2-2500/mo. Nationally these is about a 75% increase in malpractice claims for skin spas practicing laser medicine. If there was a doctor as " director" they were sued financially 100% of the cases.
Second you cant hire a doctor.
Third the PA needs MD collaboration and in most stated the NP. Ipineyro you wrote that before injectables the pt must be seen by an MD RN or PA so just who is performing your injectables? Don't tell me its a cosmetologist or aesthetician because that is out and out the illegal practice of medicine.

there are many RNs in california renting an MD's license, i.e., making them the medical director and paying them a flat fee monthly to practice medicine. Most of these "spas" make about 50k/month. How is this tolerated by medical board and BRN? There is never any doctors present and a lot of times, RNs are not very educated on what they're doing. Taking a weekend course to get certified and practicing medicine is illegal and the board of nursing and medical board should investigate.