Corporate Practice of Medicine Doctrine

This is also known as the “non-corporate practice of medicine doctrine”. Almost every day, I hear some client mention that a consultant built a business model for them and I quickly discover that this well-standing and well-intentioned doctrine has been violated.  The purpose of the doctrine was to prevent non-physicians from controlling or altering our health care delivery system.

 Forty-five out of fifty states prohibit non physicians from owning or operating medical facilities. This includes medical spas or medical practices that engage exclusively in cosmetic, medical procedures.  It may also include laser hair removal centers (this is a complicated situation and will be covered in other blogs). There are limited exclusions to this (such as HMO's).  I do not understand why so many facilities ignore this well-standing premise of law.  In particular, nurses seem to feel that they can own a medical facility and provide treatments since they are fee for service or cosmetic in nature.  Many estheticians seem to believe this as well.  This is a serious and long-standing doctrine of law.  Ignoring it can cause you to lose your license from the state and criminal fines and penalties may be imposed.

The short version of the story is that only physicians can own and operate a medical facility in the forty five out of fifty states (the notable exception is Florida).  Nurses must be employed by such a facility or otherwise contracted with them.  A medical director or supervisor is not enough to enable a nurse to own or operate a medical spa. A medical director or supervisor may not be enough to enable the non-physician to operate a laser, inject dermal fillers (Restylane, Juvederm, etc) or wrinkle relaxers such as Botox Cosmetic.  The reason for this is that lay people… including attorneys, PhD’s and every non-physician…cannot interfere or alter a physician’s “independent medical judgment”. They are to be free to practice medicine in the manner that they deem appropriate outside the business or financial considerations of the corporate (and arguably, governmental) control.

There are legal means in which a nurse and physician may own a medical spa together.  A medical spa is considered to be a medical facility and it must be governed accordingly.

Posted by Paddy Deighan