“Practice drift” or “physician drift” are terms used to describe the phenomenon of physicians practicing outside their specialties. The drift to cosmetic procedures is a popular one, possibly in part because such procedures are performed on a patient self-pay basis. When insurance reimbursements don’t keep pace with overhead costs, cosmetic procedures can be viewed by providers as an effective way to increase practice revenue.1 Also, there are plenty of customers for cosmetic procedures, and the number of patients and types of procedures keeps growing. According to the American Society for Aesthetic Plastic Surgery, patients spent more than 15 billion dollars on cosmetic procedures in 2016.2
Additional Medical Spa Legal Considerations
Few states regulate medical spas; however, if medicine is being practiced in a spa setting, the facility and its healthcare providers are subject to the same laws and regulations as in any other healthcare setting.
Corporate Practice of Medicine
Many states have laws prohibiting what is referred to as the “corporate practice of medicine.” The laws generally prohibit corporations from practicing medicine or hiring physicians to practice medicine for them. A medical spa not owned by physicians is likely to be subject to such statutes. There are various exceptions to these statutes. For example, in some states, hospitals not owned or operated by physicians are generally allowed to hire physicians. The laws have been put in place to avoid a conflict of interest between business interests (profits) and clinical decision-making priorities. Among other penalties, physicians who violate corporate practice of medicine laws can be disciplined by their medical boards.1
Anti-Kickback, Fee-Splitting and Self-Referral
Providing medical services through a medi-spa often raises issues of compliance with federal and state anti-kickback, fee-splitting and self-referral laws. Although these laws have exceptions, it is very important to confer with an attorney knowledgeable in healthcare law to determine whether business arrangements could potentially violate these laws.1
While adding cosmetic services to your current practice may appear straightforward and profitable, cosmetic procedures can expose you to significant liability risk. The claims history of the NORCAL Group of companies indicates a variety of issues associated with liability risk exposure in a cosmetics practice, including:
- Inadequate provider knowledge and/or skills
- Poor supervision of nonphysicians performing services
- Off-label use of medical devices and products
- Inappropriate selection of patients
- Misleading advertising
- Poor communication with patients regarding potential complications of treatment and possible unintended results
- Lack of documented assessment and informed consent Unrealistic patient expectations.
Even the most experienced plastic surgeons encounter serious side effects and treatment complications when performing cosmetic procedures. When these events occur at the hands of a physician practicing out of specialty, the defense of a malpractice claim can be difficult, particularly if the cosmetic procedures were performed by a physician without adequate skills and training. Poor outcomes and unrealistic patient expectations can further increase liability exposure. Applying the medical liability risk management recommendations proposed in the case studies and best practices linked below can mitigate liability exposure and increase patient safety.
Before expanding a practice to include cosmetic services, contact your medical professional liability insurance carrier to determine if there are specific underwriting guidelines and requirements that must be met before the performance of cosmetic services will be approved for coverage under your policy. NORCAL Group policyholders should contact Customer Service at 844.4NORCAL to discuss coverage and to make proper arrangements.
More Information About the Risks Associated with Practice Drift
- Closed Claim Case Study: Laser Tattoo Removal by a Family Practitioner Presents Practice Drift Risks
- Closed Claim Case Study: Lipodissolve Administration by a Pediatrician — Practice Drift Risks
- Closed Claim Case Study: Breast Implant Removal and Mastopexy by an OB/GYN — Practice Drift Risks
- Article: Supervision of Non-Physicians Performing Cosmetic Procedures
1. Medical Board of California. The Bottom Line – The Business of Medical Spas (PDF). Medical Board of California Newsletter April 2009. (accessed 3/27/2017)
2. The American Society for Aesthetic Plastic Surgery. 2016 Cosmetic Surgery National Data Bank Statistics (PDF). (accessed 3/27/2017)