Our healthcare and business law firm works with many providers and other allied health professionals who are beginning their journeys of opening a Medical Spa. Medical Spas have been growing in popularity across the country. Medical Spas are unique practices in that they involve many medical and non-medical procedures. There are many factors to consider in opening a medical spa, and this series focuses on key factors to consider when opening a medical spa in Georgia. Although our healthcare law firm has assisted numerous clients in establishing a medical spa from the ground up, each client continues to present unique issues requiring our firm to research and analyze the nuances of each client’s intended setup. This Georgia Medical Spa Series is intended to provide a useful overview of some key laws, rules, and regulations impacting medical spas.
This first post in the Georgia Medical Spa Series focuses on the amorphous Corporate Practice of Medicine Doctrine. If you have questions regarding this blog post or would like to speak with counsel regarding opening your medical spa practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, firstname.lastname@example.org. You may also learn more about our law firm by visiting www.hamillittle.com.
What is the Corporate Practice of Medicine Doctrine?
The Corporate Practice of Medicine Doctrine is easy to understand because it makes sense. Essentially, the doctrine is the answer to the question: “Do we want businesses influencing providers in their medical decision making?” The answer is, of course, no. In general, the corporate practice of medicine doctrine prohibits corporations from practicing medicine or employing a physician to provide professional medical services. How that general principle is carried out differs greatly from state to state.
How Does it Impact a Non-Physician Owning a Medical Spa in Georgia?
In Georgia, the formal statute prohibiting the corporate practice of medicine (former O.C.G.A. § 43-34-37), which generally prohibited physicians from engaging in the practice of medicine as an officer or employee of a business corporation, was repealed in 1982. Since then, there has been no formal statute prohibiting this practice. Now, it is more accurate to say that Georgia legislators have incorporated corporate practice of medicine principles into other code sections as opposed to passing a standalone corporate practice of medicine prohibition. For example, only individuals (not corporations) can be licensed to practice medicine and only licensed professionals can practice medicine. See, e.g., O.C.G.A. §§ 43-34- 22, 43-34-26, 43-34-21(3). Furthermore, Georgia’s Professional Corporate Act provides that only persons licensed in Georgia to practice a profession and who are actively engaged in such professional practice may be shareholders of a “professional corporation” (a “PC”) organized to practice the relevant profession, which includes “medicine,” and only its officers, employees, and agents that are licensed to practice the relevant profession may provide professional services on behalf of the P.C. O.C.G.A. § 14-7-3, 14-7-4, 14-7-5. LLCs are also allowed to employ professionals to provide medical services on behalf of the LLC unless explicitly prohibited by the Georgia Composite medical Board. O.C.G.A § 14-11-100, et seq. For different reasons, there are prohibitions on professionals employing a physician responsible for delegating to or supervising them, but that is not necessarily a corporate practice of medicine concern.
Case law in Georgia makes clear that only the Georgia Composite Medical Board has the authority to take actions against persons who have purportedly violated the corporate practice of medicine doctrine. The Georgia Composite Medical Board has never taken such action. The Georgia Composite Medical Board also routinely is faced with questions relating to ownership of practices by Advanced Practice Registered Nurses, such as Nurse Practitioners, and appears to have no issue with such ownership. See, e.g., Georgia Composite Medical Board Meeting Minutes, February 3, 2022.
As such, the takeaway is that non-physicians in Georgia can own medical practices, such as a medical spas, and the corporate practice of medicine principles incorporated into Georgia laws and rules can typically be satisfied by a corporate and contractual structure that prohibits interference with the clinical judgement of a physician.
If you have questions regarding this blog post or would like to speak with counsel regarding opening your medical spa practice, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, email@example.com. You may also learn more about our law firm by visiting www.hamillittle.com
*Disclaimer: Thoughts shared here do not constitute legal advice.