Medical Spa Sublease, Bankruptcy, & Physician Lawsuits

Here's a cautionary tale for physicians: be wary of what the 'medical spa' that you're extending your license to is doing in your absence.

Here's a story about a physician 'medical spa director' and state regulators both being sued by a subtenent that was running a 'medical spa' under the physicians license.

A bankrupt Las Vegas cosmetic procedure clinic is suing a local physician and the State Board of Medical Examiners, charging they’re in part responsible for its financial problems.

The complaint was filed in U.S. Bankruptcy Court on Monday by The Medical Spa at Summerlin, which filed for Chapter 11 bankruptcy reorganization in November.

The clinic complained in its filing Monday that Donald Andreas, an investigator for the Board of Medical Examiners, which regulates medical professionals, induced Dr. Carl Williams to sever his business partnership with the spa. Williams says in court papers he also has been leasing space to the spa.

This effort by Andreas allegedly came after the Board of Medical Examiners investigated patient complaints about allegedly botched Botox and Derma Filler treatments at the spa.

Williams has said he was not the supervising physician for the spa at the time of the procedures, which were performed by a physician assistant, the complaint says.

"The business relationship between Dr. Williams and The Medical Spa has since deteriorated. The Medical Spa continues to work with other supervising physicians, but Dr. Williams and the other defendants are apparently set on working together to shut down the Medical Spa and force it out of its present location," the complaint says.

The complaint says these alleged actions are threatening what could be a lucrative business providing services such as Botox and laser skin treatments.

"At times over the years, the Medical Spa has proven it can be a very successful and highly profitable business," the complaint says.

A request for comment was placed with the Board of Medical Examiners and an attorney for Williams.

Williams, in the meantime, won an order in the bankruptcy case on July 7 requiring the spa to pay him $55,467 for rent due through June for the spa’s premises on Rampart Boulevard.

Despite Williams winning this order, Monday’s complaint says: "Williams claims to be a 'creditor' in the instant bankruptcy proceeding. However, the only possible connection which could create a debtor/creditor relationship between the plaintiff and Dr. Williams is one of bogus 'sublease' agreements created through fraud by Dr. Williams, purportedly to 'protect' his medical license by 'separating’ his practice from the business of the Medical Spa.’’

The complaint also says that Tracy Hurst, who controls the spa, has complained to the state medical board  "about undue influence being asserted upon the Medical Spa’s physicians, as many of the said physicians expressed concerns about continuing to work with a company that the Medical Board apparently wanted shut down.’’

Creditors have filed $1.774 million in claims against the spa, which listed assets of just over $58,000 in an updated filing in February.

In court filings, the spa says it performs $250 Botox treatments as well as – at varying prices -- laser hair removal, ``photo facials,’’ microderm abrasion, "Active FX," "medical weight loss HcG," "bioidentical hormones," B-12 injections, IV therapy, chiropractic care and hair restoration.

If you're going to enter in to some kind of sublease where your medical license is on the line, you better have all of your ducks in a row, your i's dotted and your t's crossed.