So you want to own a medi-spa. Because state law determines what parts of the business you can own, you have to put the puzzle of legal rules together in a compliant way that keeps you protected.
Fee-splitting rules, anti-kickback laws, Stark, scope of practice, corporate practice of medicine – these are some of the legal issues that can blow a deal apart. It takes careful strategic thinking to properly structure a medical spa and determines who owns want.
Some of the issues are canvassed in these articles:
- Managing Fee Splitting Issues in the Integrative Care Center or Medical Spa
- Clinics address Stark, fee-splitting and anti-kickback legal issues
- Fee Splitting and Kickbacks continue to challenge physicians
- Corporate practice of medicine, fee-splitting, and other legal issues in the aesthetic medical practice and medspa
- New York’s Strong Corporate Practice of Medicine Requires a Professional Corporation for Professional Services
- Creating Legally Successful, Multidisciplinary Health Care Practices: Fee-Splitting, Kickbacks, Stark Analysis, Corporate Practice of Medicine, Unlicensed Practice, Employment, and Other Issues
- Key Legal Issues for Medical Spas and Aesthetic Medical Practices
- Clinics address Stark, fee-splitting and anti-kickback legal issues
I’ve also made an updated checklist of legal issues I like to cover when talking to clients who want to own, operate, and open a medi-spa.
Legal Issues/Areas Covered
Structure
o Clinical Services – professional corporation
o Determine who will be an owner (research law & advise)
o Determine who will be an employee or independent contractor
o Management
o If a health care professional – can have management contract
o If a layperson – management company (corporate practice of medicine rule)
o Advise who will own the management company
o Staffing
o Other MD’s
o Allied health providers
o Research and analyze scope of practice
o limits on medical assistants; supervision
o authority re medication: prescribing, administering
o Check limits on number of PAs
o Draft protocols/guidelines if RN/NP or PA; supervision
o Research and advise on supervision requirements
o CAM providers
o Research and analyze scope of practice
o Compensation
o If under Medicare – analyze Stark/AKS exceptions/safe harbors
o DHS? Clinical lab services, PT, MRI/CT/ultrasound, DME, prescriptions
o If under B&P 650 or other state law – analyze fee-splitting exceptions
o Self-interest/PORA
o Kickback/referral fee
o Malpractice & Professional Discipline
o Review therapies for standard of care issues
o Off-label use
o Sale of dietary supplements and nutritional advice
o Review use of diagnostic and therapeutic devices for FDA issues
Marketing Materials
oReview claims in brochures and website
o False and misleading (FTC rules; state law advertising rules)
o No disease claims (FDA rules for supplements)
o Be careful of superiority and scientific claims
o Images – using models, actors (disclose; obtain consent; CMIA)
o Draft disclaimer for website
Practice Issues
o Determine whether MD is primary care physician or specialist
o Discuss medical supervision and liabilities involved as “medical director”
o Laser, Botox, Microdermabrasion
o Who performs? Within their scope of practice?
o Good faith exam documented?
o Specific consent form
o Labor issues – use of employee vs. independent contractor
o Draft or review practice forms:
o Informed consent forms under relevant state law
o Disclosure form for non-licensed practitioners per state law
o Nutrition Notice (if required by state law)
o Other practice forms
o General Practice Information, Patient Intake Sheet, Log of Patient Calls
o Informed Consent
o General
o Specific for each therapy
o Telemedicine
oNotices and Disclosures
o Notice to Cancer Patients (if applicable)
o Disclosure of Conflict of Interest (dietary supplement sales)
o Disclosure form for non-licensed practitioner
o Agreements
o Physician-Patient Agreement
o Arbitration Agreement
o Privacy and Confidentiality
o If submitting claims electronically:
o HIPAA package
o If not submitting claims electronically:
o Notice of Privacy Practices
o Acknowledgement of Notice of Privacy Practices
o Request for Confidential Communication
o Authorization for Use or Disclosure of Health Information
o Business Associate agreements
o Financial Responsibility
o Notice of Insurance Practices and of Patient Financial Responsibility
o (Discuss Medicare participation, non-participation, and opting out.)
o If billing Medicare, discuss Advanced Beneficiary Notice (ABN) for non-covered services.
o If opting out:
o Medicare Opt-Out Affidavit
o Medicare Private Contract
o Discuss/prepare seller’s permit (BOE) required; sales tax charged for goods
Insurance
o Private Insurance
o Review whether will accept private insurance
o Review obligation from private insurance contracts re new location
o Review CPT and E&M coding for superbill
o Medicare
o Is the MD par or non-par, and should MD opt-out
o Discuss opt-out affidavit and Medicare private contract
o Discuss ABN for non-covered services if under Medicare
o Who will bill and collect for the clinician
o Who can be included as “incident to” billing
o Should MD opt-out
o Insurance Coverage
o Professional liability
o Discuss whether it covers the practice/write letter to carrier
o General business liability (including premises liability)
o E&O including for health care billing
o D&O
o Employment practices
o Products liability insurance
o Workers compensation
Drafting Agreements
o Agreement between professional corporation and management company
o Agreement between professional corporation and clinicians
o Agreement between management company and its employees or contractors
o Buy-sell agreement among owners of management company
Business & other Issues
o Advise on choice of entity and incorporation; DBA/FBN/FNP
o Trademark
o License for facility
o Lease
When putting together a business plan for a medical spa, be sure to seek experienced legal counsel. Find an attorney who understands legal issues pertaining to medical spas who can give good legal advice.
Michael H. Cohen is an experienced business law and health care law attorney. He has taught health care law and policy at Harvard University and counseled many different kinds of practitioners and businesses, including:
- entrepreneurial start-up ventures in many different industries
- physicians (MD’s and DO’s)
- physician groups, hospitals, and clinical facilities
- integrative medicine centers
- professional health care educational institutions and associations
- dentists
- registered nurses and advanced practice nurses
- clinical psychologists
- chiropractors
- acupuncturists
- massage therapists
- homeopathic physicians and homeopaths
- naturopathic doctors and naturopaths
- energy healers, hypnotists, medical intuitives
- dietary supplement manufacturers and distributors
- cosmetics manufacturers
- entrepreneurs and start-ups
- publishers
- wellness clinics
- herbalists
- bio-energy companies
- medical device inventors
- telemedicine enterprises
- many different businesses
As an attorney at the cutting edge of health care and business law, he represents enterprises whose leaders are conscious and committed to a better world. He provides legal and regulatory expertise to a multitude of businesses and corporations, as well as to attorneys and law firms involved in various health care legal issues including:
- fee-splitting, Stark and anti-kickback
- corporate practice of medicine (including New York, California, Massachusetts, D.C.)
- medical board disciplinary proceedings and other professional discipline
- negligence, informed consent, and medical malpractice liability (negligence)
- HIPAA and patient privacy and confidentiality issues
- Medicare (including opting out vs. participation vs. non-participation)
- professional liability insurance and insurance (billing and coding) issues
- telemedicine, tele-psychiatry and telehealth
- litigation (plaintiff’s counsel and defense) and negotiation
- other legal and regulatory compliance issues.
To speak with a lawyer about health care law issues pertaining to complementary and alternative medicine, or to consult a business lawyer about laws and legal issues for entrepreneurs and new enterprises that are seeking legal advice, contact attorney Michael H. Cohen today.