Can a Non-Physician Own a Med Spa?

Can a Non-Physician Own a Med Spa?

Trey Hendershot

Trey Hendershot

August 5, 2021 04:45 PM

The short answer is "no". But don't be discouraged. In Texas, nurse practitioners, estheticians, and other non-physicians cannot own a med spa, also known as a medi-spa or medical spa. Nevertheless, a non-doctor may be involved in the day-to-day operations of a med spa via a management services organization (MSO).

Unfortunately, MSOs are not simple. Failure to operate a med spa or MSO correctly could result in civil liability, administrative penalties, and even criminal charges. To work in the med spa industry, there are a few things you must understand:

What Is a Med Spa?

A med spa is a hybrid between a day spa and an aesthetic medical center. Licensed medical professionals may offer non-invasive medical services like Botox injections, and licensed estheticians may provide day spa services, like skincare, body scrubs, and massages.

In Texas, certain cosmetic procedures offered by med spas are considered the practice of medicine, which means med spas must adhere to specific rules and regulations. For example, not everyone can own and operate a med spa.

Who Can Own a Med Spa in Texas?

Only physicians can own med spas. While a physician assistant can own minority shares in a med spa or serve as a minority partner with a physician or physicians, other health care providers such as nurse practitioners and non-medical professionals cannot.

Fortunately, the MSO model allows anyone to achieve their goals of operating a med spa. Through an MSO, non-medical professionals can help physicians and other health care providers with the administrative and non-clinical aspects of the medical practice.

What Is an MSO?

An MSO is a management services organization, defined as a management entity that helps physicians handle a range of operational issues. MSOs might handle education and training, billing, office space, equipment, regulatory compliance, IT, HR, marketing, and more.

Although non-physicians cannot own med spa practices, they can own the office space and equipment a physician may need to operate his or her practice. Another way to think about this is to imagine the MSO as a landlord and the physician as the tenant. The MSO is compensated for its services, while the physician provides care that complies with Texas law.

Who Regulates Medical Spas in Texas?

Because they are so profitable, the Texas Medical Board keeps a careful eye on med spas and is quick to punish any facility that violates the Corporate Practice of Medicine doctrine. Non-physician owners of med spas risk criminal penalties for the unlicensed practice of medicine. Physicians are similarly prohibited from allowing non-physicians to commercialize their medical license.

The Corporate Practice of Medicine doctrine generally prohibits corporations, private entities, and non-physicians from practicing medicine in Texas. Under this law, non-medical professionals may not own a medical practice nor employ physicians for private gain. The doctrine is meant to provide patients with ethically driven care instead of profit-driven care influenced by someone without medical training.

To avoid pitfalls, please read “Three Ways your MSO May Be Violating the Prohibition against the Corporate Practice of Medicine.”

MSOs may also be responsible for keeping med spas compliant with the Stark Law, the Anti-Kickback Statute, the False Claims Act, and HIPPA.

At the same time, the management service organization must abide by regulatory requirements of its own.

In summary, the physician, their med spa practice, and the MSO they hire must all adhere to a complex web of rules and regulations.

What Are the Penalties of Violating the Corporate Practice of Medicine Doctrine?

The consequences of violating the Corporate Practice of Medicine Doctrine include civil liability, administrative penalties, and even criminal penalties. The Texas Medical Board’s administrative rules governing the corporate practice of medicine include penalties ranging from fines to suspension to revocation of a physician’s license.

Getting involved in a med spa is lucrative, but it is not without risk.

If you want to rent office space or equipment to a med spa practice or provide any other services to a med spa physician, you should first talk to an attorney with experience in med spa set-up and compliance.

Hendershot Cowart P.C. has national recognition in health and medical law issues like yours, and we have over 100 collective years of experience keeping businesses compliant. Whether you’re just getting started or need help with a health care investigation, our team is here to provide you with legal services that exceed your expectations.

Trending Articles

Presenting The Best Lawyers in Australia™ 2025

by Best Lawyers

Best Lawyers is proud to present The Best Lawyers in Australia for 2025, marking the 17th consecutive year of Best Lawyers awards in Australia.

Australia flag over outline of country

How To Find A Pro Bono Lawyer

by Best Lawyers

Best Lawyers dives into the vital role pro bono lawyers play in ensuring access to justice for all and the transformative impact they have on communities.

Hands joined around a table with phone, paper, pen and glasses

How Palworld Is Testing the Limits of Nintendo’s Legal Power

by Gregory Sirico

Many are calling the new game Palworld “Pokémon GO with guns,” noting the games striking similarities. Experts speculate how Nintendo could take legal action.

Animated figures with guns stand on top of creatures

Announcing The Best Lawyers in New Zealand™ 2025 Awards

by Best Lawyers

Best Lawyers is announcing the 16th edition of The Best Lawyers in New Zealand for 2025, including individual Best Lawyers and "Lawyer of the Year" awards.

New Zealand flag over image of country outline

Announcing The Best Lawyers in Japan™ 2025

by Best Lawyers

For a milestone 15th edition, Best Lawyers is proud to announce The Best Lawyers in Japan.

Japan flag over outline of country

The Best Lawyers in Singapore™ 2025 Edition

by Best Lawyers

For 2025, Best Lawyers presents the most esteemed awards for lawyers and law firms in Singapore.

Singapore flag over outline of country

How Much Is a Lawyer Consultation Fee?

by Best Lawyers

Best Lawyers breaks down the key differences between consultation and retainer fees when hiring an attorney, a crucial first step in the legal process.

Client consulting with lawyer wearing a suit

Presenting the 2024 Best Lawyers Employment and Workers’ Compensation Legal Guide

by Best Lawyers

The 2024 Best Lawyers Employment and Workers' Compensation Legal Guide provides exclusive access to all Best Lawyers awards in related practice areas. Read below and explore the legal guide.

Illustration of several men and women in shades of orange and teal

Things to Do Before a Car Accident Happens to You

by Ellie Shaffer

In a car accident, certain things are beyond the point of no return, while some are well within an individual's control. Here's how to stay legally prepared.

Car dashcam recording street ahead

Combating Nuclear Verdicts: Empirically Supported Strategies to Deflate the Effects of Anchoring Bias

by Sloan L. Abernathy

Sometimes a verdict can be the difference between amicability and nuclear level developments. But what is anchoring bias and how can strategy combat this?

Lawyer speaking in courtroom with crowd and judge in the foreground

Attacked From All Sides: What Is Happening in the World of Restrictive Covenants?

by Christine Bestor Townsend

One employment lawyer explains how companies can navigate challenges of federal and state governmental scrutiny on restrictive covenant agreements.

Illustration of two men pulling on string with blue door between them

The Push and Pitfalls of New York’s Attempt to Expand Wrongful Death Recovery

by Elizabeth M. Midgley and V. Christopher Potenza

The New York State Legislature recently went about updating certain wrongful death provisions and how they can be carried out in the future. Here's the latest.

Red tape blocking off a section of street

Georgia Proposes Law Requiring Parental Consent for Minors on Social Media

by Gregory Sirico

With data collection on the rise, Georgia lawmakers are currently petitioning for Senate Bill 351, which would require a user's age before social media use.

Teenager with hood on using phone as notifications pop up

Colorado Attorney General Calls For Cannabis Reclassification

by Gregory Sirico

In this article, Best Lawyers highlights a recent call to action by the Colorado state attorney general, requesting a full drug reclassification of cannabis.

Cannabis buds sitting on a checkerboard tabletop

6 Ways a Lawyer Can Help You With Your Medical Malpractice Claim

by Adam Malone

If you believe you have a medical malpractice claim, contact an experienced medical malpractice lawyer. Read on to learn how they can help with your claim.

Doctor in white lab coat showing x-ray to patient in blue scrubs

An Employer’s Guidebook to Responding to Online Harassment

by Belle Harris and Brent Siler

Navigating online defamation against your business requires strategic responses. Two employment lawyers guide how to leverage contracts, understand social media limitations and the risks of legal action.

Image of person pushing giant phone with mouth and words coming out