Med Spa Regulation and the Corporate Practice of Medicine

Introduction: Can You Own a Med Spa?

If you're trying to figure out whether you can legally own or operate a medical spa, you're not alone. Nurse practitioners, physician assistants, estheticians, and even dentists across the country often find themselves navigating unclear, conflicting, or outdated laws about med spa ownership.

At the heart of this confusion lies the Corporate Practice of Medicine doctrine (CPOM)—a legal concept that shapes who can own a medical practice and how it must be structured. While some states embrace full practice authority for NPs, others strictly prohibit ownership by non-physicians.

In this article, we’ll focus on the CPOM doctrine and its role in regulating medical spas. If you’re planning to start or grow an aesthetic clinic, this is essential reading.

📌 Note: We use the terms “medical spa” and “med spa” interchangeably.

Why Is Med Spa Regulation So Confusing?

Although med spas began to rise in popularity as early as the 1970s and gained momentum in the 1990s, most states still lack consistent legal definitions or ownership rules for these businesses.

The confusion often stems from two competing regulatory forces:

1. States that follow CPOM — These restrict ownership of medical practices to licensed physicians only.

2. Independent practice states — These allow nurse practitioners (NPs or APRNs) to operate medical practices without physician supervision.

   
   

As a result, we generally see three categories of med spa ownership laws:

• ✅ Anyone can own (few states)

• ✅ Only licensed physicians and NPs

• ✅ Physicians only (strict CPOM enforcement)

Why Does CPOM Apply to Med Spas?

You might ask: Why should the Corporate Practice of Medicine apply to cosmetic, elective procedures?

The underlying goal of CPOM is to protect patients by preventing unlicensed individuals or businesses from influencing medical decisions. If a corporation that isn't medically licensed controls a provider’s decisions, there’s a risk that treatment recommendations may be financially motivated rather than medically necessary.

Still, the doctrine is up for debate when applied to med spas—where nearly all procedures are elective and patient-requested. Even so, the word “medical” in “medical spa” often triggers CPOM restrictions, even for purely aesthetic treatments.

How States Apply the Corporate Practice of Medicine

Let’s walk through how a few key states approach med spa ownership under CPOM:

Connecticut: A Case of Conflicting Rules

In Connecticut, the law generally holds that only licensed providers can own medical practices (C.G.S. §20-9(a)). However, state statutes also allow:

• Professional Corporations (PCs) to practice medicine if shareholders are licensed (C.G.S. §33-182(a))

• LLCs to do the same with licensed members (C.G.S. §34-243(h))

  
  

This leaves room for debate over whether CPOM truly restricts ownership—or simply governs how it’s structured.

Additionally, Connecticut is an independent practice state. After three years of licensure and 2,000 hours under physician oversight, NPs can practice independently. A 2014 public act (P.A. 14-119) even confirmed that NPs can perform med spa procedures—though it did not define ownership rights.

➡️ Interpretation: Many believe that as long as a physician, PA, or NP is employed or contracted by the med spa, the practice is in compliance.

Colorado: Contradictions Within State Agencies

Colorado technically follows CPOM but allows licensed providers to form professional service corporations to practice medicine. Importantly:

• PAs may be minority shareholders

• Physicians must retain majority ownership (C.R.S. §12-36-134)

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Colorado is also an independent practice state for NPs (C.R.S. §12-255-104), which should, in theory, allow them to own med spas.

However, a DORA representative once stated to us that NPs are not authorized to serve as Medical Directors because they are “not authorized to practice medicine” in Colorado.

➡️ Interpretation: Even regulators aren’t always aligned. NP ownership might be permitted in Colorado—but physician oversight as Medical Director may still be required as a best practice.

California: Classic CPOM Enforcement with Limited Exceptions

California is one of the most strict CPOM states in the nation. Corporations cannot practice medicine (Cal. B&P Code §2400), and only medical corporations with physician-majority ownership may be formed.

Non-physician ownership is limited to an enumerated list of licensed healthcare professionals (16 Cal. Code Regs. §§1343).

California also does not grant independent practice to NPs, so physician involvement is required—both for ownership and medical supervision.

Med Spa Ownership FAQs

What is the Corporate Practice of Medicine (CPOM)?

CPOM is a legal doctrine that restricts non-physicians from owning or controlling medical practices, to protect medical decision-making from outside influence.

Can a nurse practitioner own a med spa?

It depends on the state. In independent practice states, NPs may own and operate med spas. In CPOM states, NPs may need to structure ownership via a management services organization (MSO).

What is an MSO and how does it help?

A Management Services Organization allows a non-clinical entity to manage business operations (staffing, marketing, equipment), while licensed providers own the clinical entity.

Does elective treatment exempt med spas from CPOM rules?

No. Even though treatments are elective, many states still apply CPOM restrictions because these are considered medical procedures.

Do I need a Medical Director if I’m an NP?

It depends on state law. Even in independent states, having a physician Medical Director may be recommended—or required—depending on your service offerings and corporate structure.

Conclusion: Stay Compliant. Stay Competitive.

With fifty states interpreting the Corporate Practice of Medicine in different ways, med spa owners must tread carefully. Even regulators don’t always agree. But one thing is clear: seeking legal counsel before launching your med spa is non-negotiable.

At Marti Law Group, we help medical and aesthetic practice owners understand CPOM, MSO structures, and the evolving legal landscape. In upcoming blogs, we’ll dive deeper into related topics, including:

• NP and PA scope of practice

• Fee-splitting prohibitions

• Medical Director requirements

• Delegation agreements

  
  

Need guidance on your state’s laws or your current med spa setup?

📞 Call us at (860) 552-7770 or ✉️ email info@martilawgroup.com

[1] C.G.S. §20-9(a). [2] C.G.S §33-182(a). [3] C.G.S. §34-243(h). [4] P.A. 14-119. [5] C.R.S. §12-36-134. [6] C.R.S. §12-255-104. [7] Cal. B&P Code Section 2400 et seq. [8] 16 Cal. Code Regs. §§1343.