Run Your Own Clinic With an MSO for Med Spa Management

You don’t have to give up your dream of running a successful med spa just because you're not a doctor. 

Med spas, unlike typical day spas, offer medical-grade treatments and face the challenge of the "corporate practice of medicine" (CPOM) rule, depending on which state you live in.

This rule typically restricts non-physicians from owning and profiting directly from medical services offered in med spas.

So how can you — a non-physician — own and run a med spa? The answer: Management Service Organizations (MSOs). 

Whether you're a registered nurse, a nurse practitioner, a physician assistant, or a passionate entrepreneur without a medical background, MSOs bridge the gap between ambition and regulation in many states.

MSOs are becoming increasingly popular because they offer a strategic advantage: Compliance without compromise. With an MSO structure, you can be the brain behind your med spa business, while a licensed medical professional handles the clinical side of things.

This win-win allows you to contribute your expertise, build your dream business, and ensure that your business meets regulatory requirements.

This article will be your guide to MSOs, explaining how getting an MSO for your med spa model will help you with regulations, work easily with a medical director, and ultimately, build a successful med spa business.

We’ll also share a summary of the rules around MSOs in a few key states.

‍Disclaimer: This information provides a general overview of med spa ownership requirements. State regulations can vary significantly, so consulting a lawyer in your state is crucial for specific guidance. This guide is not a substitute for professional legal advice. We strongly recommend seeking qualified legal counsel to ensure compliance with all applicable laws before moving forward.

What is a Management Service Organization (MSO)?

An MSO is a separate business entity, often an LLC, that handles all the non-medical operations of your med spa.

This setup lets you focus on the business side while a licensed medical professional manages the clinical aspects. Here’s how it works with the help of an example:

• Create an MSO: For example, you establish an MSO called "Blueberry Management LLC."
  
  
• Management services: Blueberry handles everything non-medical, including hiring staff, marketing, and bookkeeping.
  
  
• Clinical services: The doctor's practice (structured as a PC or PLLC) takes care of all clinical responsibilities (good faith exams, treatment plans, treatment administration and oversight)
  
  
• Revenue model: Blueberry earns management fees that grow with your med spa’s profits.
  
  
• Selling advantage: If you decide to sell your med spa, Blueberry benefits from the sale as well.

By keeping the MSO separate from the doctor’s practice, you can operate under one brand name, with Blueberry owning the brand and licensing it to the doctor's practice.

This arrangement allows you to build a successful med spa business without needing a medical degree.

Understanding the med spa MSO model

MSOs and med spas form powerful partnerships that are anchored by a Managed Service Agreement (MSA). This is basically the playbook for how this partnership runs.

Key benefits of an MSO:

• Streamlines business operations: MSOs take care of hiring staff, marketing, bookkeeping, and other administrative tasks. This allows you to focus on strategic growth and client satisfaction without getting bogged down by day-to-day operations.
  
  
• Ensures regulatory compliance: MSOs are well-versed in the complex laws and regulations governing med spas. They ensure your business stays compliant with all necessary regulations, safeguarding you from legal issues.
  
  
• Enhances operational efficiency: By managing HR, marketing, financials, and technology, MSOs boost productivity and streamline your med spa’s daily operations. This leads to a more efficient and effective business, allowing you to deliver top-notch services to your clients.

Managed Service Agreement (MSA)

An MSA makes sure the terms and expectations are clear and compliant. It lays out who does what, ensuring everyone is on the same page. Here's how it plays out:

All-in-one management: The MSO handles everything non-medical, so you can focus on your clients and business growth. This includes:

• HR and staffing: The MSO finds, hires, and manages your team. From skilled aestheticians to efficient front desk staff, they get the right people in place.
  
  
• Marketing magic: They create eye-catching marketing campaigns to attract and keep clients. Think social media strategies, local ads, and client retention programs.
  
  
• Money matters: The MSO takes care of billing, insurance, bookkeeping, and budgeting. They keep your finances in check, so you can focus on what you do best.
  
  
• Tech support: They provide the latest tech and ensure everything runs smoothly. From booking software to data security, they handle the tech hassles.
  
  
• Clinical oversight: The medical director, usually part of the physician-owned practice, handles all clinical decisions and patient care. They ensure top-notch medical services, so you can be confident in the quality of care your med spa offers.
  
  
• Fair compensation: The MSA details how the MSO gets paid. This ensures a fair and transparent setup, where both parties benefit as your med spa thrives.
  
  
• Clear roles and responsibilities: The MSA spells out who does what, keeping things clear and efficient. It separates the MSO's business tasks from the medical director's clinical duties.
  
  
• Exit strategy: The MSA includes conditions for ending the partnership. This ensures both the MSO and the medical entity are protected and can part ways if needed.

Moxie can help you connect with legal resources to draft an ironclad MSA that protects your interests.

Here's an expert breakdown from Michael Byrd, Partner at ByrdAdatto: An MSO has two functions. One ensures everything stays compliant — the medical practice handles patient care, and the MSO tackles the business side.

The other half focuses on the financial model. As an entrepreneur, you deserve to see the rewards of your hard work, so the MSA needs to be structured to ensure profits flow compliantly from the medical practice to your MSO.

When selecting an MSO, look for one with a proven track record in the med spa industry. This ensures they have the necessary experience and expertise to handle the unique challenges and opportunities of running a successful med spa.

Key functions of an MSO for med spa management

Regulatory compliance

MSOs act as a safety net for legal and regulatory compliance. They ensure your med spa adheres to all necessary regulations, including patient privacy laws, health and safety standards, and licensing requirements.

MSOs keep you updated on any changes in the regulations and conduct regular training for your staff, keeping everyone informed and compliant.

Administrative efficiency

MSOs handle all administrative tasks like managing payroll, HR, scheduling, and financial tasks, freeing you to focus on patient care and strategic growth.

By centralizing these administrative functions, MSOs ensure easy coordination and efficient operations across your med spa.

Financial management

MSOs bring expertise to financial operations by handling patient billing and collections, ensuring timely payments. They also negotiate favorable terms with insurance companies and generate detailed financial reports, empowering you to track performance and make informed financial decisions.

MSOs can also leverage bulk purchasing power to negotiate discounts on supplies and equipment, reducing your overhead costs.

Technology integration

Technology plays a crucial role in efficient practice management. MSOs provide comprehensive IT support, implementing and managing electronic health records (EHR) systems to ensure secure patient data management.

They also set up practice management software for scheduling, billing, and overall workflow optimization. Furthermore, MSOs can integrate telehealth capabilities, allowing you to expand your reach through online consultations. They also ensure that data security measures are in place, and maintain user-friendly online booking platforms for increased patient convenience.

Do my state's rules require me to set up an MSO?

If your state has the “corporate practice of medicine law” and only allows doctors to be owners, then an MSO is your solution as it provides a workaround.

But, if your state doesn't have this restriction, or your license and experience allow for independent practice or collaboration agreements, then you might be able to own the med spa entity directly. 

In some states, non-physicians cannot own med spas outright, so an MSO is essential for non-physicians to legally manage and benefit from a med spa's business operations.

Some states, such as Florida and Ohio, have more lenient laws regarding med spa ownership. Here, non-physicians may have more flexibility in owning and operating med spas directly without needing an MSO.

Moxie can help here by providing lawyer-approved templates for common scenarios. We will connect you with legal experts to ensure your MSO is set up correctly. We can even get you in touch with a qualified medical director if you need one. 

Remember, starting a business can feel overwhelming, but Moxie is here to be your supportive partner every step of the way. Book a call with our team today and let's turn your med spa vision into a reality.

Need help figuring out med spa regulations? Talk to Moxie

Moxie empowers aspiring med spa owners to navigate the complexities of medical spa regulations and guidelines –– from designing your service menu, helping you navigate compliance, marketing and advertising, and finding a medical director.

We'll help you turn your vision into reality, all while helping you comply with your state regulations by getting an MSO for your med spa.

Here's how Moxie can help you launch your med spa:

• Find a medical director without hassle: Moxie can pair you with the right and qualified med spa medical director for your practice through our extensive network of professionals.

• Simplify compliance: Moxie provides pre-made consent forms and protocols crafted by industry-leading lawyers and MDs to reduce your legal consultant fees.

• 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 coaching: Our dedicated coaches meet with you regularly to support your growth, give you hands-on help, and guide you through the process of growing your med spa.
  
  
• Software that’s built for med spas: From online appointment scheduling to charting to text message marketing and memberships — we’ve got you covered. With Moxie, it’s easier than ever to run your business and wow your clients.

‍Book a free strategy session today and see how we can help.