The North Carolina Medical Board ("Board") recently issued a guidance document describing a situation involving a physician serving as the medical director of a medical spa, where the medical spa is owned by a non-licensee. 

The physician in question is paid $2,000 per month for his “services” as medical director, but he is not required to be present at the medical spa or participate in any consultations with clients. Several months into the arrangement, the physician learns that he has been listed as the primary supervising physician of a physician assistant employed by the medical spa, and that physician assistant is being investigated by the Board after a client suffered blistering facial burns following a laser facial performed by the physician assistant. When interviewed by the Board, the physician notes he does not know the physician assistant, never agreed to supervise her, and that his supervision of physician assistants or nurse practitioners was never discussed and is not mentioned in his employment agreement with the medical spa.

The fact situation offers a “greatest hits” of circumstances the Board considers indicative of an arrangement that violates North Carolina's corporate practice of medicine doctrine. Key concerns include:

• Certain medical spa services (including the operation of lasers for use in hair removal and other types of medical spa services) are considered the practice of medicine. Accordingly, the medical spa entity itself may not be owned by a person who is not a licensee of the Board. Instead, it must be owned by a Board licensee or a combination of professionals described in NCGS 55B-14(c). 
• An entity owned by a non-licensee of the Board may not employ a physician, as this arrangement implicates both the prohibition against the corporate practice of medicine and the Board's prohibition against physician fee-splitting.
• Nurse practitioners and physician assistants (advance practice providers, or “APPs”) in North Carolina are required to have at least one supervising physician. The APP and supervising physician must maintain a written supervisory or collaborative agreement outlining the services the APP may perform and the drugs and devices the APP may prescribe. The APP and the supervising physician also must meet regularly to discuss clinical problems and quality improvement measures.
• A medical spa arrangement involving a management services organization owned by a non-licensee of the Board must be carefully structured to assure that only the licensed clinicians make decisions impacting clinical care.
• In 2023, the North Carolina legislature considered, but did not pass, a bill that would prohibit physicians from seeking or accepting payment for activities required in supervising APPs. This legislation may resurface and, if enacted, it will complicate the legitimate operation of medical spas in North Carolina under a management services organization model.

For these reasons, physicians and others involved in the set-up and operation of medical spas in North Carolina should familiarize themselves with the Board's new guidance and remain aware of the changing regulatory landscape affecting such operations.