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Tuesday
Oct102006

Med Spa Legal: How to legally open a medical spa.

 This is an unfinished work in progress... additional information coming.

gavil.jpgIntroduction

 
There are so many factors that go into the formation of a business, let alone a medical one, that each case must be examined individually. State laws and regulations, state medical boards, and your own preferences and goals will need to be addressed. While basic principals remain consistent in most states, topics and examples discussed here are generalized by necessity. Hence, if you just fire from the hip and get yourself in trouble, I'm not to blame. Step one will be to consult a lawyer and accountant. 

Business Entities

Here are the rules in most states. (Do not violate any of these.)

  1. General Business Corporations may not enter into nor supervise the 'practice of medicine'.
  2. Health care professionals may not practice as an employee or shareholder of a corporation.
  3. Health care professionals may not share profits or 'split fees' with a corporation.
  4. Physicians can not partner with non-physicians.
  5. While corporations can not 'practice medicine' they may perform certain limited tasks for medical professionals.

Professional Business Corporations

  • Can only perform certain tasks such as billing and scheduling for a medical professional.

Professional Business Corporations

  • All traditional and licensed professionals can open a 'Professional Corporation'. This structure limits liability to the corporation and for acts of the professional and their staff. So, if a Physician or other Licensed Professional, (NP, PA, etc.) wants to open a med spa, this may be the preferred business structure to use. (Only if there are no other partners and the business is solely owned by the professional.)

Limited Liability Corporations

  • Anyone can open an 'LLC'. This structure limits liability for claims. There are a number of ways in which LLC's may be used if a physician (as a corporation) is seeking to enter into a business relationship with a non-physician (as a corporation).

WARNINGS:

  1. If a licensed professional or paraprofessional (physician, nurse practitioner, physicians assistant, or other) is found to be involved with providing services in disciplines they are not licensed for, or a primary care provider is performing services limited to physicians, it is the 'unauthorized practice of medicine' and can result in criminal penalties.
  2. If a physician directly affiliates with a non-physician, it is a violation of law.
    Physicians may be penalized by the Board of Medical Examiners.
    Non-physicians may be forced to dissolve the business entity among other legal sanctions.
    The best solution in this case is 'licensure', and/or 'independent contractor'.
  3. NO FEE SHARING. Construct an alternative compensation package.

Liability

Pay very close attention to the requirements for coverage on every policy you have. No matter what they tell you, insurance companies look for any possible excuse to deny any claim for coverage. 'Unauthorized Practice' or other violations of law will always be exempted from coverage. (In a worst case scenario (a malpractice claim for example) you could face the suit without insurance while the state dissolves your corporation and prosecutes you.)

Hold-Harmless Agreements

A contract between parties/entities that says, 'I'm responsible for what I do; You're responsible for what you do." (ex. an agreement between a physician providing services and a business entity.) They are used to prevent liability fro imputing from one source to another. This is the most important and necessary component to any arrangement between professionals and licensed paraprofessionals with a business entity.

Waivers and Consent Forms

Mucho Importante! 'Informed Consent' must be obtained in writing before any treatment. 

 

Disclaimer: This material is general and not comprehensive. You are responsible for your own business. If you do something stupid and get yourself in hot water, you only have yourself to blame. Get a lawyer.

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