Many of our physician clients contact us to say that they have been approached by the owner of a salon or spa with an offer to serve as the facility’s Medical Director. Typically, the facility is offering its customers cosmetology, aesthetics and similar services, but wishes to expand its menu to include services that may require the oversight or other involvement of a licensed medical professional. In short, the facility wishes to become what is commonly referred to as a medical spa or medspa. The pitch, as related to us by the physicians, can be very appealing. In exchange for infrequent site visits and occasional telephone availability (and, of course, the medspa’s display to customers of the physician’s name and credentials), the physician will receive a flat monthly fee, an hourly rate, or a percentage of certain revenue or profits.
While tempting, such a proposal creates a variety of risks. This is because the services that the physician would be providing for the medspa as its Medical Director rely on the physician’s medical license. That is, the medspa provides cosmetology, aesthetics and similar services within the regulatory scope of the state’s cosmetology board, but once the medspa’s menu expands to include services that may fall outside of such board’s regulatory scope (e.g., depending on state regulations, laser treatments, dermal fillers and other injectables, and microneedling), then the medspa is providing those services outside the scope of its medspa license and those licenses of its aestheticians and cosmetologists. Thus, in providing that expanded scope of services, the medspa would need to rely on a licensed medical professional to provide such services or properly delegate certain services to medspa personnel who have all necessary training and credentials.
All of a sudden, what appears at first to be an easy, no-show role turns out instead to be a substantial amount of responsibility resting firmly on a hard-earned medical license. Therefore, it is critical that a physician presented with such a proposal ask for a detailed list of terms for review and consideration. Only with such detail can a physician determine whether the Medical Director role can be undertaken in accordance with applicable laws and regulations. Below is a non-exhaustive set of questions for which any such proposal should have detailed answers:
- Status: Will the Medical Director be an independent contractor of the medspa?
- Organization: What is the ownership and management structure of the medspa?
- Payment: Will the Medical Director be paid a flat fee, an hourly rate, a percentage of certain revenue or profits, or by some other arrangement?
- Personnel: What licenses, credentials, and training do the medspa’s personnel possess?
- Authority: What authority, if any, does the medspa intend to exercise over the Medical Director’s professional judgment?
- Services: What is the specific menu of services that the medspa intends to provide customers once it has a Medical Director? Will the Medical Director be required/permitted to perform the initial consultation with all or some medspa customers seeking the new services? What services will the Medical Director provide personally? To what medspa personnel would the Medical Director be able to delegate services? Will the Medical Director have any training or administrative duties?
- Schedule: With what frequency will the medspa require the Medical Director to be on-site?
In addition, the physician would need to discuss malpractice coverage with a reputable broker or carrier to determine whether the physician can obtain coverage for the relevant services at an acceptable rate. Moreover, there are obviously a number of additional business terms that the physician and the medspa would need to discuss (e.g., term, termination, restrictive covenants and others), but the foregoing list represents a number of determinative, threshold issues. In our experience, medspa owners are eager to work with their prospective Medical Directors to create a compliant, mutually-beneficial arrangement. However, if the answer to even one of the above questions represents a risk to the physician’s license and the medspa owner is unwilling to make necessary changes to the arrangement, the physician should heed that red flag.