Corporate practice of medicine

The ‘corporate practice of medicine’ varies from state to state and is a sticky concept that often comes up in my practice. In essence, this doctrine states that only physicians may practice medicine. Non-physicians may not practice medicine, and may not own a business or corporation that practices medicine. In other words, the practice of medicine is the sole domain of physicians and physician-owned corporations. The policy behind this rule is that physicians, and only physicians, should practice medicine and be in charge of medical care.

This has become an issue as the industry has grown. Non-physicians, seeing the potential for large returns, have begun opening laser centres and medspas. While this is allowed in some jurisdictions (the state of Florida being one), in most states this is a huge no-no. In Illinois where I practice, for instance, the state boards have prosecuted many medspas because the ownership structure is improper. In order to run a medical facility in Illinois, the business must be owned solely by physicians.

This becomes problematic when physicians and non-physicians wish to partner in a medspa. In many jurisdictions this is not allowed owing to the corporate practice of medicine doctrine. In these jurisdictions the medical company must be owned only by physicians, with no lay people allowed in the ownership structure at all.

Unauthorised practice of medicine

Here’s a quick question: let’s say you are a physician who owns a medspa that performs laser hair removal. You are properly staffed with nurses, laser technicians, and aestheticians. One day, while you are away from the spa a woman comes in off the street and asks for laser hair removal. Your nurse, who has performed hundreds of these treatments, does a thorough history and physical exam and then delegates the procedure to a very qualified laser technician. The procedure goes smoothly and additional treatments are scheduled. The woman goes on her way as a satisfied customer. All is well, right?

Not quite. Your nurse and laser technician have very likely just engaged in the unauthorised practice of medicine, and if you knowingly allowed this to happen, you, the physician, just aided and abetted in the unauthorised practice of medicine. All three of you could very well face suspension and a hefty fine.

So what’s the problem? The patient, after all, was examined by a qualified medical professional, treatment was delegated to a qualified laser technician, and the patient was happy. The issue here is that medical treatment was performed without the patient ever being examined by a physician or a proper delegate, such as a nurse practitioner. Remember, medical treatment is the domain of physicians. While treatment can be delegated to nurses or other professionals, such delegation must originate from the physician, and that can happen only after a physician–patient relationship is established. In many states, this means a face-to-face consultation with the physician.

This issue is particularly problematic in the medspa industry as physicians are not always present and the medical procedures are not, medically speaking, overly complicated. But medspas are still medical facilities and, as such, all rules applicable to medical facilities apply. This means that an exam from a physician or nurse practitioner is necessary (NB. in some jurisdictions physicians’ assistants may perform initial consults as well).