Owning your dream med spa can feel like the ultimate power move — building a thriving business focused on aesthetics and client empowerment. But for some aspiring entrepreneurs, a hurdle called the "corporate practice of medicine" (CPOM) can emerge.
CPOM laws in certain states restrict who can own a medical practice, including med spas. In these states, only licensed physicians can legally hold ownership, direct patient care, and profit directly from specific medical treatments offered. In some states, other licensed healthcare professionals, such as nurse practitioners or physician assistants, may also have ownership rights under specific conditions.
It can be frustrating, but understanding CPOM is key to navigating a path to med spa ownership.
MSOs and their role in med spa ownership
A strategic business structure called a Management Service Organization (MSO) offers a solution. An MSO is a separate legal entity from the med spa. It allows you to handle all the non-medical aspects of the business, such as:
- Marketing and sales: Developing marketing campaigns, managing social media presence, and overseeing client acquisition strategies.
- Human resources: Recruitment, onboarding, payroll, and non-medical staff management.
- Financial management: Bookkeeping, accounting, and financial planning.
- Daily operations: Scheduling appointments, managing inventory, and overseeing daily workflow.
Here's the key advantage: By establishing an MSO, you effectively segregate the business operations from the direct delivery of medical services. The physician you partner with will maintain a separate medical practice entity and oversee all medical care. This ensures compliance with your state’s CPOM regulations while allowing you to manage the business side of a med spa.
The MSO and med spa partnership: A win-win
An MSO and a physician-owned med spa operate in a symbiotic relationship, working together under a formal agreement known as a Management Service Agreement (MSA). This agreement clearly outlines the responsibilities of each party.
Here's how it works:
- The MSO: Handles all the non-medical business functions we mentioned earlier (marketing, HR, finance, operations). Essentially, you provide management services to the med spa, focusing on growth and profitability.
- The physician-owned med spa: The physician remains responsible for overseeing all medical care and treatment provided at the med spa. They'll hold a separate medical practice license and ensure adherence to CPOM regulations.
The payment structure: Your MSO is compensated for its expertise through a management fee outlined in the MSA. This fee can be structured in various ways, such as a flat monthly rate, a percentage of revenue, or a combination of both based on state laws.
The specific details will be negotiated and documented within the MSA. Typically, a fair market value analysis is done to ensure proper fee structure.
Understanding MSOs is empowering, but before you jump in, it's crucial to determine if your state requires one. Here's a breakdown:
- State regulations: The need for an MSO depends on your state's specific CPOM laws. In states with strict CPOM limitations, only physicians can directly own a med spa. Here, an MSO becomes essential for non-physician management.
- Your license type: Even within relaxed CPOM states, your specific healthcare license (Registered Nurse, Physician Assistant, Nurse Practitioner) might influence the requirement. Some states allow certain licensed professionals to own med spas without an MSO, while others might require collaboration agreements with physicians.
The bottom line: Check your state's regulations and consult with a healthcare attorney familiar with med spa ownership in your jurisdiction. They can advise you on the specific requirements based on your license type and ensure you're navigating CPOM legalities smoothly.
This article includes a table summarizing MSO requirements for some states. While it's a helpful starting point, remember that it is not intended as legal advice.
Key
- RN: Registered Nurse
- PA: Physician Assistant
- NP: Nurse Practitioner
- MD: Medical Doctor
- DO: Doctor of Osteopathic Medicine
- CPOM: Corporate Practice of Medicine
- PC: Professional Corporation
- PLLC: Professional Limited Liability Company
- MSO: Management Service Organization
- P&D: Prescriptive and Dispensing Authority
Note: This information is based on third-party research and has been reviewed by a lawyer, but this does not constitute legal advice. There may be specifics that aren’t applicable to your specific license, experience, or state. Plus, these regulations can change. Please consult with a lawyer who is knowledgeable about your specific experience.
Need help with launching your medical spa? Try Moxie
We hope this guide helps you launch and grow your business and attract loyal clients. Moxie empowers med spa owners across the country to grow faster, bring in more profit, and achieve real success.
We take the burden off your shoulders so you can focus on what you do best — providing exceptional care to your clients.
Here's how Moxie can help your med spa thrive:
- Find a trusted medical director: Moxie connects you with pre-vetted, qualified MDs at exclusive rates, ensuring you get the best fit for patient safety, compliance, and affordability.
- Stress-free insurance setup: Moxie works with preferred insurance companies to help you find the perfect fit for your medspa, making the whole process a breeze with a dedicated Moxie representative by your side.
- Marketing done for you: Moxie manages everything from website creation (under your brand) to targeted advertising that drives new clients through your doors.
- Hands-on, expert growth coaching: Our dedicated coaches meet with you regularly to support your growth, give you hands-on help, and guide you through the process of launching, managing, and growing your med spa.
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