New York has launched a major enforcement campaign targeting New York’s med spa industry. Over 200 businesses across the state have already been inspected, dozens have been cited for unlawful practice of medicine, and multiple licenses have been suspended or revoked. With continuing investigations ongoing.
If you own, operate, or plan to open a med spa in New York, this is not just a consumer safety story. It is a warning about how med spas are legally required to be structured, owned, and operated. Many businesses being shut down are not unsafe because of poor technique, they are unsafe because their entire business model violates New York’s medical practice laws.
The core issue behind this crackdown is something called the Corporate Practice of Medicine doctrine. In New York, many of the services offered by med spas are legally considered medical services. That includes:
- Botox and dermal fillers
- Microneedling
- Laser treatments (other than hair removal)
- IV therapy
- Hormone therapy
- Weight-loss injections like semaglutide or Ozempic
- Cryotherapy
- Body-contouring procedures
Once a business offers any of these services, it is no longer just a spa it becomes a medical practice under New York law.
Medical practices in New York cannot be owned or controlled by non-physicians. This rule exists to make sure medical decisions are made by licensed professionals rather than by investors or business owners focused on profit. Only licensed physicians, and in some cases certain licensed medical professionals, are allowed to own professional medical entities and control how patient care is delivered.
This is where many med spas get into trouble!
A very common structure in the med-spa industry looks like this: a business owner or investor forms an LLC, hires staff, markets the business, collects the revenue, and pays a doctor to serve as the “medical director.” The doctor may review charts or be available by phone but does not own the business or control operations.
Under New York law, that structure is illegal even if the doctor is highly qualified and even if patients are being treated competently. Regulators look at the following:
- Who actually owns the medical entity
- Who controls hiring and firing of medical staff
- Who controls clinical decisions, and
- Who controls the flow of medical revenue
If those things are controlled by non-physicians, the practice will be deemed an unlawful corporate practice of medicine.
The recent enforcement actions make clear that New York is no longer tolerating these arrangements. Inspectors found businesses operating as “med spas” that:
- were not licensed as medical facilities
- lacked properly formed professional entities
- used expired or counterfeit medical products
- allowed unlicensed individuals to perform injections and other medical procedures
In many cases, the underlying problem was not just poor safety practices, it was that the businesses were never legally structured as medical practices to begin with.
Physician-Owned Entities and MSOs: What New York Allows and Prohibits
New York law requires that medical practices be operated through professional entities, Professional Corporations (PCs) or Professional Limited Liability Companies (PLLCs), that are owned by licensed physicians. These entities must receive a Certificate of Authorization from the New York State Education Department confirming that all owners are properly licensed. The medical practice must be under the control of a physician or other authorized medical professional who is responsible for patient care and clinical decisions.
Non-physicians can still be involved in the business side of a med spa, but only through properly structured management arrangements. These are often called Management Service Organizations (MSOs). An MSO can provide services like marketing, staffing, billing, and office management, but it cannot control medical decisions, employ physicians in a way that gives it control over care, or take a share of medical revenue in a way that looks like profit sharing for medical services. These arrangements must be carefully designed so that the medical practice remains independent and physician controlled.
Many med spas that are being investigated now use MSO structures that go too far in taking percentage based fees tied to medical revenue, dictating clinical operations, or effectively controlling the practice. These are major red flags for regulators.
What Are the Risks of Operating a Non-Compliant Med Spa in New York?
The risks of getting this wrong are severe.
- Physicians can lose their licenses. Businesses can be shut down.
- The Attorney General can seek disgorgement of profits and civil penalties.
- In extreme cases involving fraud or unsafe care, criminal charges can follow.
- Also, since medical billing is involved, non-compliant structures can also create exposure under state and federal healthcare fraud laws.
This is why New York is stepping up enforcement now. Med spas have grown rapidly, but many have grown on shaky legal foundations. For med spa owners, this does not mean the industry is going away. It means the industry is being forced to grow up.
What New York Law Requires for a Compliant Med Spa
A properly structured med spa in New York can operate legally, profitably, and safely. However, it must be built on the right foundation. To operate legally, a med spa must meet the following requirements:
- Be structured as a physician-owned professional entity with genuine medical oversight and proper licensure
- Comply with all rules governing the delegation of medical tasks
- Maintain a management structure that respects the legal separation between medical practice and business operations
If you already operate a med spa, now is the time to review your structure before regulators do.
Contact Us at Seligson Law Today and Get the Support You Need to Get Your Business Started
If you are planning to open one, the most important decision you will make is not which laser to buy, it is how to legally structure ownership, control, and medical supervision from day one.
Our firm works with med spa owners, physicians, and investors to design and fix these structures. Led by attorney Ken Seligson, our role is to make sure the business model aligns with New York law so that your practice can grow without risking shutdowns, license loss, or enforcement actions.
The state has made its position clear. Med spas that operate like medical practices, and are legally built as medical practices, can continue to thrive. Those that are built like beauty businesses with a doctor attached are now firmly in the crosshairs.
Contact our legal team today to get the support you need to properly structure and run your business.
FAQs
1. Why is New York cracking down on med spas right now?
Regulators are increasing enforcement because many med spas are offering medical services without complying with state medical practice laws. The focus is on ownership, control, licensure, and unlawful corporate practice of medicine, not just patient safety.
2. What services make a med spa a “medical practice” under New York law?
Services like Botox, dermal fillers, microneedling, most laser treatments, IV therapy, hormone therapy, and weight-loss injections are considered medical services. Once offered, the business is treated as a medical practice, not a cosmetic spa.
3. Can a non-physician own a med spa in New York?
No. Medical practices must be owned and controlled by licensed physicians through professional entities such as PCs or PLLCs. Non-physicians may only participate through compliant management arrangements.
4. Is hiring a doctor as a “medical director” enough to comply with the law?
No. Regulators look at who owns the entity, controls staff, makes clinical decisions, and receives medical revenue. If those are controlled by non-physicians, the structure is unlawful.
5. What is an MSO, and why do regulators scrutinize these arrangements?
An MSO can provide non-medical services like marketing and billing but cannot control patient care or share in medical profits. Many enforcement actions involve MSOs that overstep these limits.
6. What are the consequences of operating a non-compliant med spa in New York?
Penalties can include license loss, shutdowns, civil fines, disgorgement of profits, and potential criminal exposure. Fixing structural issues early is far less costly than responding to enforcement action.
