Course Description
Medspas are healthcare businesses that administer prescription drugs, operate FDA-regulated devices, and create the same physician-patient relationships as any other clinical practice — yet they are frequently formed, structured, and operated as if they were ordinary consumer service businesses.
This CLE gives counsel a working framework for advising medspa clients across the full lifecycle: how to form the entity correctly under state Corporate Practice of Medicine (CPOM) rules (including the MSO and friendly-PC structures used to navigate those rules), how to staff and license the practice within state-specific scope-of-practice requirements, and how to keep day-to-day operations compliant with federal and state regulators.
The lecture is illustrated with three recent cases — the Jenifer Cleveland (Texas, 2023) wrongful death, the 2024 counterfeit Botox outbreak, and the US Stemology / Trujillo (Washington, 2026) $24M verdict — that demonstrate the consequences when formation, licensure, or compliance fails.
Principles
- Identify the legal triggers that classify a medspa service as the practice of medicine and the consequences for entity selection.
- Advise clients on entity-structure choices among PC, PLLC, LLC, and MSO + friendly-PC arrangements in light of state Corporate Practice of Medicine (CPOM) rules.
- Draft and review the core formation documents specific to medspas — operating agreements, Management Services Agreements (MSAs), and Medical Director agreements.
- Counsel clients on provider scope of practice, Good Faith Exam requirements, and the legal exposure created by a non-functioning Medical Director.
- Recognize and remediate the most common operational compliance failures — HIPAA, OSHA, FDA, advertising, recordkeeping, and employment classification.
- Apply recent case law and regulatory actions to assess client risk across formation, licensure, and compliance.
Syllabus
- Part I — Formation
- Threshold question: when does a business constitute the practice of medicine?
- Corporate Practice of Medicine (CPOM): doctrine, state-by-state framework, and ownership/control implications
- Entity structure: Professional Corporations (PC), Professional LLCs (PLLC), general LLCs, and the MSO + friendly-PC model
- Founding documents and agreements: PC bylaws, MSO operating agreement, Management Services Agreement, stock transfer restrictions, Medical Director agreement, employment and contractor agreements
- Capitalization, banking, and insurance: separation of entities, BAAs, malpractice, general liability, cyber, and EPLI
- Initial regulatory filings: Secretary of State, state medical board, DEA, NPI, pharmacy board, HIPAA designations, and local licensing
- Part II — Licensure
- Scope of practice by provider type: MD/DO, NP, PA, RN, aesthetician, and medical assistant
- The Good Faith Exam (GFE): who may perform it, telehealth requirements, and documentation standards
- The Medical Director role: real authority versus “ghost director” arrangements, supervision duties, compensation rules, and personal liability
- Multi-state compliance: per-state licensure, supervision, advisory opinions, and structuring across CPOM jurisdictions
- Part III — Regulatory Compliance
- Federal overlay: HIPAA (PHI, photos, BAAs), OSHA (bloodborne pathogen, hazcom, laser safety), and FDA (prescription drugs, devices, off-label use, gray market)
- Patient intake and informed consent: treatment-specific consent, photo authorization, and documentation
- Pharmaceutical procurement and the gray market: licensed distributors, cold chain, lot traceability, and counterfeit-product response
- Advertising and marketing compliance: FDA claims, FTC substantiation, influencer disclosure, scope-of-practice claims, and before/after photos
- Employment and contractor classification, fee-splitting prohibitions, and state-by-state non-compete enforceability
- Recordkeeping and audit readiness: retention requirements, EHR access controls, and an audit-ready document checklist
- Practical pitfalls rapid-fire: the highest-frequency operational failures counsel should spot at intake
